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Former Owner of Watauga Recovery Clinics Sentenced to Prison

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Department of Justice
U.S. Attorney’s Office
Western District of Virginia

FOR IMMEDIATE RELEASE
Wednesday, June 7, 2023

Dr. Ralph Reach to Serve Six Months in Federal Prison to be Followed by 18 Months of Home Detention

ABINGDON, Va. – The former owner of a chain of buprenorphine clinics, with locations in Southwest Virginia and Northeast Tennessee, was sentenced today in U.S. District Court in Abingdon on three drug charges.

Dr. Ralph Thomas Reach, 63, of Bristol, Virginia, pleaded guilty in March 2023 to three counts of causing drugs to be misbranded while held for sale after shipment in interstate commerce by inducing various quantities of prescription drugs Subutex (Schedule III), Suboxone (Schedule III), clonazepam (Schedule IV controlled substance) and gabapentin to be dispensed without valid prescriptions by the actions of health care providers at Watauga Recovery Centers.

“Opioid poisoning continues to be a leading cause of death for Virginians of all ages, despite the continued efforts of law enforcement and community groups to warn of the adverse effects of misuse,” United States Attorney Christopher R. Kavanaugh said today. “When doctors add to this mounting problem by overprescribing these powerful drugs, they must be held accountable, and we will continue to do exactly that.”

“Virginians have suffered at the hands of pharmaceutical corporations and greedy doctors by overprescribing opioids - treating our population  like a science experiment. Now, corrupt health care providers are manipulating the sale of drugs designed for opioids abuse recovery. Enough is enough. I'm proud of the role we’re playing in holding accountable bad actors who abuse the system and illegally prioritize profit over recovery,” Attorney General Jason Miyares said today

“Buprenorphine, when properly prescribed, is an important tool in battling the opioid crisis. Medical professionals who abuse their access to and power to prescribe these drugs put profits over patients,” said Special Agent in Charge George A. Scavdis, FDA Office of Criminal Investigations Metro Washington Field Office.  “Our office will continue to pursue and bring to justice those involved in the illegal prescribing and distribution of these drugs.”

Reach, a physician, was the primary owner of Watauga Recovery Centers which operated substance abuse treatment clinics in Virginia and Tennessee. At his clinics, Reach and other medical providers wrote prescriptions for buprenorphine (including Suboxone and Subutex), clonazepam, gabapentin, and other drugs.  The prescriptions at issue were not valid because they were dispensed without a legitimate medical purpose and beyond the bounds of professional practice.

Senior United States District Judge James P. Jones sentenced Reach to imprisonment for a term of six months to be followed by 18 months of home detention. Upon release from prison, Reach will serve a five year term of probation. In addition, he was ordered to forfeit $50,000 and pay a fine of $100,000.

The U.S. Food and Drug Administration, the Department of Health and Human Services—Office of Inspector General, the Drug Enforcement Administration, the Virginia State Police, the Virginia Office of the Attorney General—Medicaid Fraud Control Unit, and the Tennessee Bureau of Investigation investigated the case.

Reach’s conviction and sentencing was the result of an investigation that previously led to convictions of:

  1. Matthew Sykes (former Watauga Recovery Centers employee);
  2. John Paul Linke (former Watauga Recovery Centers employee);
  3. Michael Dube (owner of screening laboratory used by Watauga Recovery Centers);
  4. Regan Dube (registered agent of screening laboratory used by Watauga Recovery Centers);
  5. Michael Olshavsky (sales representative of a Florida confirmation laboratory used by Watauga Recovery Centers); and
  6. Rakesh Kothuru (owner of a Las Vegas confirmation laboratory).

Over $9.9 million dollars in fines, forfeitures and restitution were ordered as a result of these convictions.

Special Assistant U.S. Attorney and Virginia Assistant Attorney General Janine M. Myatt and Assistant U.S. Attorneys Whit Pierce and Randy Ramseyer prosecuted Reach and the related cases.

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Topic
OPIOIDS

Component
USAO - Virginia, Western

 
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