The government has seized nearly $300,000 from the bank account for a medical clinic owned by Missouri State Rep. Patricia Derges, who is facing multiple felony charges for defrauding customers and the government.
The seizure was disclosed Wednesday after court documents related to the seizure were unsealed at the request of federal prosecutors. The documents included a sworn affidavit by an FBI special agent in support of the seizure.
Derges, an assistant physician, was indicted last month on charges of marketing bogus stem cell treatments and illegally providing prescription drugs through her Ozark Valley Medical Clinic in southern Missouri.
Additional charges were brought two weeks ago, when a superseding indictment alleged that Derges, a Nixa Republican, fraudulently obtained nearly $297,000 in CARES Act funds for a nonprofit she formed called Lift Up Someone Today Inc. Derges sought the money as reimbursement for COVID-19 testing and related expenses.
In fact, the indictment alleged, Ozark Valley performed the testing and had actually been reimbursed by patients to the tune of $517,000.
Congress passed the $2.2 trillion CARES Act in March 2020 in response to the economic devastation caused by the COVID-19 pandemic.
Derges, a first-term representative who was elected in November, has entered a plea of not guilty to all 23 counts of the superseding indictment.
Her attorney, Albert Watkins, accused the government of acting rashly in bringing the charges and told KCUR the case was not only doing damage to his client but “causing suffering” to thousands of Derges’ patients.
“If the government had even a casual familiarity with the facts that are open and notorious about the CARES Act money that was granted to the company of Dr. Derges, then the government would not have taken the action that they took,” Watkins said.
“They did so without contacting our client, they did so without contacting our clients’ counsel and they did so in a heavy-handed fashion, which unfortunately employed a low level of professionalism by all and to the detriment, I might add, of the government.”
Derges received a medical degree from Caribbean Medical University in Curacao in 2014 but wasn’t offered a residency. In Missouri, assistant physicians are defined as medical school graduates who haven’t been accepted into residency programs but have passed the first two steps of the U.S. Medical Licensing Examination. They can only practice under collaborative arrangements with licensed physicians.
Derges' business operations
Derges opened Ozark Valley in 2014. The for-profit clinic operates in three locations – Springfield, Ozark and Branson, Missouri. She opened Lift Up, the nonprofit, in 2016. It operates a medical and dental clinic in Springfield that it promotes as providing services for poor, uninsured and homeless people.
In the sworn affidavit unsealed on Wednesday, FBI special agent K. Michael Effland said that Lift Up fraudulently obtained $296,574 in CARES Act funds from Greene County as reimbursement for 3,000 COVID-19 tests that were actually performed by Ozark Valley.
“Not only were these invoiced amounts not costs incurred by, or expenses paid by, Lift Up, (Ozark Valley’s) patients had already paid (Ozark Valley) $167 per COVID-19 test,” Effland stated.
In support of her request for CARES Act money, Effland said Derges submitted images of invoices from a company called Dynamic DNA with which Ozark Valley contracted to conduct the COVID-19 tests. Effland said Dynamic DNA originally charged $99.99 per test but later reduced the price to $94.99.
According to his affidavit, Ozark Valley received “a significant number of deposits for $167” in its bank account with Great Southern Bank throughout 2020, while the pandemic was raging.
Watkins, Derges’ attorney, countered that Derges made clear in applying for the CARES Act money that Ozark Valley provided free COVID-19 testing to patients who were otherwise eligible for services at Lift Up. He said Lift Up, which was staffed by unpaid volunteers, didn’t have the resources to provide the testing. He added that Ozark Valley made very little money in any case.
In addition to denying the charges against Derges, Watkins has filed an unusual motion seeking to compel the government to remove the “Secret” stamp from the indictment and superseding indictment.
The motion claimed that classifying the documents as secret “unfairly cast” Derges “in an unfavorable light in the eyes of the public” because it implied she had somehow breached national security.
Both the original and superseding indictments against Derges were initially sealed. Sealed indictments are not uncommon and are sometimes referred to as secret indictments.
Asked about the motion, Watkins said he filed it because he’d received inquiries from national media outlets about the “secret” classification. He said he has since learned that the clerk of the court, not prosecutors, stamped the documents secret in accordance with long-standing protocol by the court for sealed indictments.
“So now I’ll file a follow-up, less caustic and more pleasant request of the court to direct the clerk … not to mark anything secret in the case,” Watkins said.
Watkins, a St. Louis-area attorney, is known for his flamboyance. His website bio describes him as “quite candidly, beyond description” and as demonstrating “unrelenting trial skills which have rendered witnesses subjected to his cross examination incapable of speaking; caused multinational billion dollar companies and their teams of legal counsel to capitulate; and otherwise garner favorable media attention for even the most disgraced clients.”
Watkins represented the ex-husband of the woman with whom former Missouri Gov. Eric Greitens had an affair, ultimately leading to his resignation as governor in June 2018.
