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Feds: Former foot doctor should get probation, fine

Petty's help with nationwide investigation of health care fraud prompted recommendation by Lynn LaRowe | August 15, 2018 at 2:04 a.m. | Updated August 15, 2018 at 1:57 a.m.

A former Texarkana, Texas, foot doctor's cooperation in an investigation of a nationwide healthcare fraud scheme has resulted in the federal government's recommendation for his probation instead of jail time.

Glenn Gregg Petty, 53, appeared for sentencing Tuesday before U.S. District Judge Robert Schroeder III in Texarkana's downtown federal building with Texarkana lawyer Tommy Johnson. Petty, who once operated Dr. Petty's Foot Clinic in Texarkana, Texas, pleaded guilty in September 2017 to one of 31 counts listed in an indictment accusing him of healthcare fraud and aggravated identity theft.

Assistant U.S. Attorney Ryan Locker conceded that under federal sentencing guidelines Petty would normally be facing time in prison instead of the five-year term of probation he received Tuesday in the Texarkana Division of the Eastern District of Texas. Locker said Petty's "instrumental" role in uncovering a health-related scheme involving laboratory testing led the government to agree to a lesser punishment. Locker said a sentencing memorandum outlining the details of the broader fraud investigation is filed under seal in Petty's case.

Locker did say in court that the scheme involves a marketing strategy by which healthcare providers are encouraged to order lab testing not used in a patient's care. In some cases, a lab may receive Medicaid or Medicare payments for the testing and "marketers" then compensate providers for each sample sent for testing. Locker said the illegal kickback scheme may result in the recovery of millions paid under government-funded healthcare programs once the investigation is complete.

Locker lamented that the public may be dissatisfied with Petty's plea deal, particularly in light of Petty's past criminal conduct. Locker said Petty was charged with similar wrongdoing in 2004 for which he received pretrial diversion in lieu of a conviction.

"But the ability for us to kick open the door on this significant scheme is huge," Locker said.

Locker said that while the consequences of Petty's misdeeds don't include prison time they are significant. At least two states are in the process of revoking Petty's certification to practice podiatry.

"He is now a convicted felon," Locker said, noting the conviction's accompanying loss of rights such as to possess firearms.

Locker also encouraged Schroeder to impose a fine for Petty's behavior, one exceeding the amount recommended under federal guidelines, given Petty's history and conduct. Federal probation officials tasked with preparing a presentence investigation report recommended Petty be assessed a $30,000 fine. Locker argued for a fine equal to the amount of Petty's proven fraud. Schroeder agreed and assessed Petty a fine of $157,660, which is the same amount Schroeder ordered Petty to pay in restitution. Petty must also pay interest on the restitution and fine amounts, Schroeder ordered.

Assistant U.S. Attorney Robert Wells said Petty's pending bankruptcy, filed in February, will not impede the government's ability to collect restitution and fine amounts and that a sale of Petty's assets is under way. Should Petty commit a new crime or violate the terms of his probation, he could be ordered to serve time in prison.

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