An Alexandria, Louisiana, physician pleaded guilty to conspiring to violate three federal statutes in connection with a kickback scheme to defraud both federal and private workers' compensation insurers, according to an announcement by the U.S. Attorney’s office of the Western District of Arkansas.

Dr. Robert Clay Smith, who faces up to five years in prison, on Tuesday waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conspiracy to commit health care fraud, wire fraud and illegal remunerations. He is the second doctor to plead guilty in a scheme involving pain creams.

Court documents allege that the basic premise of the scheme, which ran from 2013 until 2017, was that individuals associated with a Rogers-based medical supply and billing company recruited Smith to dispense pain creams and patches to his workers' comp patients by offering him a split of the profits. The Rogers company acted as the billing agent for Smith, handling all the paperwork and submitting the allegedly fraudulent claims to the Office of Workers’ Compensation Programs, which covers all federal employees, and to private insurers as well.

In exchange, Smith admitted, the company paid him up to 55% of the profits collected from successfully billing insurers, at markups of 15 to 20 times what the medications actually cost.

According to court documents, Smith made more than $650,000 from the scheme. He admitted that in addition to receiving illegal kickbacks, he knew he did not have a license to dispense medications from his clinic, as required under Louisiana law, and nonetheless bought topical medications from the Rogers company and dispensed them to his workers' comp patients from his clinic.

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