An Indiana addiction doctor who law enforcement once dubbed the “Pablo Escobar of Suboxone” is suing the Drug Enforcement Administration and the tony Indianapolis suburb of Carmel for allegedly conspiring to run him out of town as part of a politically motivated ploy to scrub the city of undesirables.
Dr. Larry Ley was acquitted of 10 felony drug charges in August 2016, two years after police raided his Carmel clinic and four area satellite offices and accused him of running a “cash and carry” operation that provided Suboxone prescriptions to anyone willing to pay for them.
Authorities spent nine months investigating Ley’s clinics, compiling more than 26,000 hours of video surveillance in the process. But they were unable to identify a single individual who was paying for a drug they didn’t legitimately need. So they invented some themselves by sending undercover officers into Ley’s Drug and Opiate Recovery Network (DORN) and Living Life Clean addiction centers to lie about being dependent on opiates, according to a lengthy affidavit of probable cause.
Despite being told twice by the U.S. attorney’s office that they didn’t have a case against Ley, in July 2014 members of a local anti-drug task force backed by agents from the DEA arrested Ley and 11 of his employees for providing Suboxone prescriptions to the undercover officers who had no legitimate medical need for them.
As the suspected “ringleader” of the operation Ley was booked on $1 million bond. His assets were seized, and he spent a month in jail before he could borrow enough money to be released. He is now working to get his record expunged.
In a complaint filed this month in federal court in Indianapolis, Ley and three other addiction doctors who helped him treat patients accuse Carmel city officials, the DEA, and two lead investigators of false arrest and violating their right to due process.
The plaintiffs claim they were targeted for prosecution because the presence of their office full of drug addicts didn’t align with Carmel Mayor James Brainard’s vision for his burgeoning city.
“[A] clinic specializing in the treatment of opioid dependency in Carmel, Indiana, was in visible contrast to the political position of the Carmel city administration that there was no significant… addiction problem that would require such a facility,” the lawsuit reads. “[The] head of the Carmel drug task force… was under pressure to respond to his employer’s discomfort with the presence of an addiction treatment center in [Carmel].”
Calls to Mayor Brainard’s office were transferred to the city’s Director of Community Relations and Economic Development, Nancy S. Heck, who declined to an offer to comment citing the city’s policy of not discussing ongoing litigation.
A detailed review of public records shows that the city had its eye on property adjacent to Ley’s clinic well before he became a subject of a criminal investigation. It turns out the DORN clinic’s primary office in Carmel sat in the center of a prime area of real estate. And it’s now slated for a multimillion-dollar makeover financed in part by the taxpayers of Carmel.
But the real price was paid by nearly 700 of Ley’s former patients, some of whom began posting desperate messages on online recovery forums in Indiana within days of the doctor’s arrest.
One poster pleaded: “My husband was on suboxone but his Dr got arrested [and] has to get back to work..I need a list of Dr’s who are taking new patients!! We are from the Indiana area…Need Help ASAP!!.”
“Good luck finding a doctor if yours got busted because most won’t take you as a patient without your medical records,” another remarked. “The DEA seized the records and won’t release them so 99 of 100 doctors say no… So I say the DEA has caused unwarranted interference in my recovery. I do find it ridiculous how they can arrest your doctor with no plan in place for the patients who followed his rules…”
A local TV news station even reported finding one of them wandering outside Ley’s shuttered office.
Thanks in part to the policies of former Indiana Governor Mike Pence, treatment options in Indiana were limited even before Ley’s arrest. The state ranks 47th out of 50 states for availability of drug and alcohol treatment, according to Pew Research. Availability of Suboxone treatment is among the worst in the nation.
Carmel is the largest of eight municipalities in Hamilton County—which in 2015 ranked ninth in the state (out of 92 Indiana counties) for heroin overdoses. Thirty minutes south is Indianapolis, where drug overdose fatalities have increased seven-fold since 2000. According to one report Hamilton County alone has seen a 45 percent increase in heroin-related deaths. In 2015 more than 300 non-fatal overdoses were recorded in the four counties where Ley practiced.
Since Ley first began prescribing Suboxone at his clinic in Carmel’s burgeoning “Arts & Design District” in 2007, Mayor Brainard has funneled hundreds of millions of dollars into a public-private initiative aimed at transforming the city into a regional magnet for commercial investment.
Much of the growth has been subsidized by tax dollars through the Carmel Redevelopment Commission, which is reportedly stacked with Brainard appointees and has been scrutinized for its cavalier use of a controversial public funding vehicle known as tax-increment financing (TIF) to funnel money into the pockets of developers.
One of the largest beneficiaries of TIF money in Carmel is Pedcor, a real-estate development firm and major Brainard donor. Pedcor registered a company in the mayor’s name—Brainard Housing Company LLC—and appears to have named an apartment complex in Illinois after him.
Property records show that Pedcor and the Carmel Redevelopment Commission own most of the land around the building that formerly housed the DORN main clinic office, which Ley purchased from Pedcor in 2006. The mayor was particularly interested in four parcels across the street from Ley’s clinic, on the site of Carmel’s PNC Bank branch.
According to public records, in January 2013—less than a year before surveillance of Ley’s addiction clinic began—Mayor Brainard met with the president of PNC Bank’s Indiana operations to “to discuss the bank’s long range plans” for its property.
Months later, according to court records, the investigation across the street began.
Major Aaron Dietz of the Hamilton/Boone County Drug Task Force and DEA investigator Gary Whisenand began looking into DORN in late 2013 based on a handful of complaints from patients who felt the doctor was not spending enough time with them and/or objected to his practice of accepting only cash, according to investigation reports.
Over a period of several months, the pair labored to build a case. They watched hundreds of patients comes and go from Ley’s five clinics. These were usually brief follow-up visits to pick up a new prescription.
“This type of ruse of a clinic perpetuates the problem because people are still addicted to the drug, and this is what is happening,” said Dietz, in a press conference held after Ley’s arrest. “This is not fixing the problem.”
Dietz did not respond to a request to be interviewed for this story; but in a court filing his attorneys claim he was acting in good faith and is therefore immune from civil action under law.
A check of Indiana’s prescription monitoring database altered police to the large number of prescriptions coming out of the DORN facilities. In 2013, for instance, Ley saw 1,600 patients and signed more than 8,400 Suboxone prescriptions, according to trial records.
Federal law limits Suboxone doctors to treating 100 patients for addiction. But there is no limit on Suboxone prescribing for pain. Ley claims he was also using the drug to treat chronic pain in patients who had become dependent on other opioids—which allowed him to exceed the cap.
By March 2014, Whisenand and Dietz started sending undercover officers into Ley’s treatment facilities. Seven cops posing as drug addicts or opioid dependent pain patients enrolled in DORN using falsified medical histories and sat through a two-hour-long orientation to receive their initial prescription of Suboxone, according to surveillance reports.
Like all patients, the officers were required to sign a treatment contract agreeing to seek outside counseling, and to submit to random urine screens. Non-compliance with clinic protocols was grounds for dismissal.
By June, two of the officers had already been discharged from Ley’s practice—one for refusing to take a drug test, and the other for providing a urine sample that tested negative for buprenorphine (proving he had not been taking the drug as prescribed).
It was then that Whisenand and Dietz decided it was time to move in. First they took their case to the U.S. attorney’s office, but the feds refused to prosecute.
In a terse email exchange between then Assistant U.S. Attorney Josh Minkler and a colleague of Whisenand’s at the DEA, the federal prosecutor described being offended by the condescending “attitude” he was subjected to by Whisenand and Dietz when he met with them about the Ley case.
The exchange was provided to The Daily Beast by Ley’s attorney.
“They treated me like a first year deputy prosecutor assigned to screening misdemeanors, rather than the 1st Assistant U.S. Attorney who has also prosecuted drug cases…for the last 20 years,” Minkler wrote. “It was almost like they wanted us to tell them no.”
Minkler nevertheless agreed to pass the case files on to his colleague Matt Brookman for a second opinion. Brookman also concluded that the case was not prosecutable, according to emails. (As the acting U.S. Attorney for the Southern District of Indiana, Minkler’s office is now representing Whisenand in the civil suit.)
In a response to Ley’s complaint filed on March 21, Whisenand’s attorneys largely substantiates Ley’s claims regarding the activity of the undercover officers, but they deny that the investigation of DORN was influenced by Mayor Brainard or any other Carmel city official. He also denies that two federal prosecutors declined to pursue the case, despite emails that appear to indicate the contrary.
The DEA declined to comment for this story, but provided transcripts from the surveillance audio captured by the undercover agents sent into the DORN facilities.
The encounters support much of what is included in the affidavit for probable cause. Dr. Ley saw patients in groups, relied on them to be honest about their medical conditions, skipped diagnostics like taking a new patient’s vital signs, and accepted only cash for service (a common and legal practice among many Suboxone providers).
Surveillance further revealed that DORN relied on clinic staff to conduct tasks Ley or other doctors should have been doing themselves.
On July 25, 2014, three weeks after meeting with federal prosecutors, members of Dietz’s task force and agents from the DEA raided the DORN clinics. They sent the case to the Hamilton County Prosecuting Attorney’s Office which agreed to pursue a case against the defendants.
One by one cases against Ley’s 11 co-defendants fell apart, as prosecutors failed to provide enough evidence that a crime had been committed. Ley was the only DORN defendant to go to trial.
The charges against him applied to just 22 prescriptions for Suboxone—all written to police officers pretending to legitimately need them. That fact was not lost on Hamilton County Judge Steven R. Nation, who presided over Ley’s trial.
“I struggled with this case the minute I started to watch the surveillance videos [of the undercover agents],” Nation said, prior to announcing Ley’s acquittal. “I’ve got conditions that people were asking to be treated for [and] the drug that was issued was appropriate for what they were being asked to be treated for.”
Hamilton County’s Chief Deputy Prosecutor, Andre Miksha, said he stands by the case against Ley. In a statement provided to The Daily Beast, Miksha said he disagrees with the allegation that Dr. Ley was falsely arrested or that he was targeted in spite of any alleged lack of evidence of criminal wrongdoing.
“Dr. Ley himself testified that, where he was familiar with the standards of care set forth by the various bodies of physicians governing the sort of care he purported to be providing, that he disagreed with many of those standards of care and that, due to the disagreement, he simply didn’t follow those standards,” said Miksha.
But none of the standards he is accused of violating—including his failure to obtain a urine sample during a patient’s first visit, or following up to ensure they are receiving outside counseling—aren’t in federal or state law. Instead they are merely guidelines developed by the Substance Abuse and Mental Health Services Administration, albeit important ones according to most addiction doctors.
“Our position has been, and the judge agreed, that the judges point that if there was a violation of anything here it’s a licensing issue, is he following the rules exactly,” said Jim Crum, the attorney who defended Ley at trial. “But even if he wasn’t that doesn’t rise to the level of a criminal offense. There was no intent to deal, everything was in the confines of the normal practice of medicine.”
In the end, the drug cartel Ley was supposedly running was by all appearances just an overwhelmed network of clinics struggling to keep up with the rising tide of opioid addiction in a state with a drastic shortage of treatment options.
But if the goal was to force Ley out of Carmel, a conviction wasn’t necessary. DORN’s main office in Carmel never reopened, and Ley sold it for a loss to a Florida-based real-estate investor last May. The rest of the DORN properties are in various stages of foreclosure.
Last year, just months before the start of Ley’s trial, the city of Carmel revealed it was in talks with PNC to take over their property across from his clinic and construct a new mixed-use development on the site. The city paid $752,000 to acquire the three-story office building directly across from the former DORN facility. Architectural designs show the “PNC Block Redevelopment” would stretch nearly the entire block condominiums, commercial office space, underground parking, and an outdoor beer garden.
Ley says he has been left nearly penniless by the ordeal. The real victims, though, are the thousands of opioid-dependant Hoosiers who have even fewer options for treatment today.
Two years after the closure of the DORN clinic, fatal overdoses in Indiana had risen by double digits, but there were still only three providers certified to prescribe Suboxone in the entire city of Carmel, which has a population of 85,000.