They Got Capone on Income Tax. So Why not Frauds?

[Gord_in_Toronto]

From https://quackwatch.org/11ind/robert-rowen-sentenced-to-prison-2022/

In February 2022, Robert Jay Rowen, M.D. was sentenced to serve 18 months in federal prison to be followed by three years of supervised release. He was also ordered to pay $242,156 in restitution plus a fine of $95,000.

His clinic is (was?) a patient-centered holistic medicine clinic:

that focuses on treating you, not just your “disease.” The clinic regularly treats patients who exhibit a wide range of medical symptoms, both chronic and acute. We also treat female incontinence and sexual issues, and male erectile dysfunction. Among the clinic’s therapeutic solutions: ozone, ultraviolet and oxidation therapies; ozone “dialysis”; prolozone joint & soft tissue therapy (localized ozone injections); neural therapy; platelet rich plasma (PPP) therapy; hidden dental infections/disturbances affecting-medical health evaluation (see neural therapy description).; chelation to remove heavy metals; ocean IV therapy: biocean; hocatt carbonic acid and ozone sauna with simultaneous optional microcurrent electrical frequencies, pulsating electromagnetic fields (PEMF) and far infra-red therapies; energy healing devices; diet counseling; homeopathic medications; herbs and nutritional supplements; bio-identical natural hormone therapy; detox strategies; essential oils.

Is there a single alt-med lunacy not used?

I guess in 18 months he'll be back at "work" again.

 

[xjx388]

Well, the question for the Feds is: Did the doctors bill Medicare for services provided under fraud? I can’t find anything along those lines. However, the tax evasion case seems pretty clear cut.

They are really two separate questions.

 

[theprestige]

But they do get frauds. I don't understand the question.

 

[Gord_in_Toronto]

But they do get frauds. I don't understand the question.

But not this one. Not for his alt-med medical nonsense. For that he got to be appointed to the state medical board.

Holistic-clinic doctor sentenced to prison. Robert Jay Rowen, M.D., of the RowenSu Clinic in Santa Rosa, California, has been sentenced to serve 18 months in federal prison after pleading guilty to income tax evasion. The prison sentence will be followed by three years of supervised release. He was also ordered to pay $241,156 in restitution plus a $95,000 fine. In 1997, he was sentenced to 10 months of probation (including two months in a halfway house and eight months in home detention) and ordered to pay $10,003.91 in restitution plus a $2,000 fine after pleading guilty to a federal felony charge of “corrupt endeavor to impede” an agent of the Internal Revenue Service.

In 1990, Rowen spearheaded passage of a bill to make it difficult for Alaska’s medical board to stop doctors from using “alternative” medical approaches. In 1993, Alaska’s governor appointed him to a four-year term on the state’s medical board. In 2014, he was designated “Member of the Month” by the American College of Advancement of Medicine, the primary group that promotes chelation therapy. In 2020, the Federal Trade Commission warned the RowenSu Clinic to stop making unsubstantiated claims that “innovative biologic treatments” offered at the clinic were effective against COVID-19.

 

[theprestige]

But not this one. Not for his alt-med medical nonsense. For that he got to be appointed to the state medical board.

It sounds like you're asking why they don't go after alt-med peddlers for tax evasion. Is that what you're asking?

 

[TurkeysGhost]

It sounds like you're asking why they don't go after alt-med peddlers for tax evasion. Is that what you're asking?

Seems to be. The obvious answer is there is no reason why an alt-med quack also has to evade income taxes. Capone couldn't declare his income because it was illegally generated, which is often not the case for quacks and woo peddlers.

Selling "wellness" snake oil in this country is often entirely legal. Just pay your taxes on your ill-gotten gains and the law won't care.

 

[theprestige]

Seems to be. The obvious answer is there is no reason why an alt-med quack also has to evade income taxes. Capone couldn't declare his income because it was illegally generated, which is often not the case for quacks and woo peddlers.

Selling "wellness" snake oil in this country is often entirely legal. Just pay your taxes on your ill-gotten gains and the law won't care.

Yeah, that's what I'm getting. They're not committing fraud under the law, but why not spin up a completely persecutory investigation into their tax returns, or something like that.

The answer being, of course, that there's not nearly as much concern about snake oil salesmen as there is about organized crime bosses. The fact that it's legal to sell snake oil probably being the big fat clue. They went after Capone's tax returns because they couldn't easily go after him for the real crimes. They hoped that his tax returns, hiding his illegally-generated revenue, would give them a law-enforcement loophole to actually bring him to (some form of) justice.

But legal snake-oil salesmen wouldn't be hiding illegal revenue on their tax returns. There's no reason to persecute them on their taxes just because you don't like the legal product they're legally selling. That's just an abuse of power that undermines the rule of law.

And that right there is the answer to the OP's question: They're not actually frauds, and thus the income tax angle is a perversion of justice. Sorrynotsorry.

(Assuming that's actually what Gord is trying to get at. Who really knows for sure, though.)

 

[TurkeysGhost]

Yeah, that's what I'm getting. They're not committing fraud under the law, but why not spin up a completely persecutory investigation into their tax returns, or something like that.

The answer being, of course, that there's not nearly as much concern about snake oil salesmen as there is about organized crime bosses. The fact that it's legal to sell snake oil probably being the big fat clue. They went after Capone's tax returns because they couldn't easily go after him for the real crimes. They hoped that his tax returns, hiding his illegally-generated revenue, would give them a law-enforcement loophole to actually bring him to (some form of) justice.

But legal snake-oil salesmen wouldn't be hiding illegal revenue on their tax returns. There's no reason to persecute them on their taxes just because you don't like the legal product they're legally selling. That's just an abuse of power that undermines the rule of law.

And that right there is the answer to the OP's question: They're not actually frauds, and thus the income tax angle is a perversion of justice. Sorrynotsorry.

(Assuming that's actually what Gord is trying to get at. Who really knows for sure, though.)

I agree mostly, but I don't see how this case is a perversion of justice. Sounds a lot like this guy was a tax cheat. A cool quarter million in restitution makes it seem like he was cheating pretty hard, hard enough to merit investigation.

Being a snake oil peddler seems mostly coincidental. The government indictment merely describes the married couple as doctors who hid their money from the tax man:

According to the indictment, Rowen and Su, ages 69 and 66, respectively, of Sebastopol, Calif., are a married couple who practiced medicine from their clinic in Santa Rosa. The medical doctors allegedly conspired to evade payment of Rowen’s federal income tax liabilities by concealing Rowen’s ability to pay his 1992 through 1997 and 2003 through 2008 federal income tax liabilities. Specifically, Rowen and Su allegedly placed his assets out of the reach of the United States Government, placed assets in the names of other persons or entities, deposited Rowen’s revenue into nominee bank accounts, used cash to conduct personal and professional business, converted his revenue into gold and silver coins, and provided false information to the IRS.

The indictment provides a description of various methods the couple allegedly used to conceal Rowen’s income. For example, the indictment describes how the couple instructed patients to make their checks for medical services payable to gold dealers who, in turn, purchased gold and silver coins. In addition, the indictment alleges Rowen formed a company named Lotus Management LLC to receive revenue from a different company. Rowen then deposited the funds into a bank account opened in the name of Lotus Management LLC, and used the proceeds to purchase gold and silver coins. Further, the couple allegedly used cash to pay the rent for the medical practice as well as to pay the balance on credit cards used to cover various business and personal expenses.

https://www.justice.gov/usao-ndca/pr/santa-rosa-doctors-indicted-tax-fraud

 

[theprestige]

I agree mostly, but I don't see how this case is a perversion of justice. Sounds a lot like this guy was a tax cheat. A cool quarter million in restitution makes it seem like he was cheating pretty hard, hard enough to merit investigation.

Being a snake oil peddler seems mostly coincidental. The government indictment merely describes the married couple as doctors who hid their money from the tax man:



https://www.justice.gov/usao-ndca/pr/santa-rosa-doctors-indicted-tax-fraud

Enh. Sometimes confusion happens, when rhetorical ambiguity is prized over clear communication.

 

[xjx388]

If you are asking why they don’t prosecute medical fraud, I think that’s a good question with a complicated answer.

First of all, the regulation of medicine is a State issue, not a federal one. Yeah, the FTC has some jurisdiction over the advertising claims made, but they are mostly toothless.

Primarily, though, it’s really up to State medical boards to police this kind of stuff. For the most part, medical boards are concerned with 1)Keeping people who aren’t doctors from pretending they are and 2)protect the public from doctors who cause harm, are impaired, etc. They are not really about defining what “valid medicine,” is except in very vague words.

In some ways, this is a good thing. “Off-label” use of drugs has a lot of legitimate uses and would be curtailed by stricter definitions. However, they also don’t look too closely at “alt med” craziness unless patients are being harmed. As long as you use the appropriate disclaimers, you can avoid scrutiny.

Also, medical boards rely on patient or other complaints in order to initiate action. They aren’t out there patrolling medical clinics looking for violations.

Finally, as others have pointed out, there is no law against selling medical bull poop -unless you hurt people or make probably false claims that a particular form of woo can cure or treat a disease.

 

[ponderingturtle]

If you are asking why they don’t prosecute medical fraud, I think that’s a good question with a complicated answer.

First of all, the regulation of medicine is a State issue, not a federal one. Yeah, the FTC has some jurisdiction over the advertising claims made, but they are mostly toothless.

Primarily, though, it’s really up to State medical boards to police this kind of stuff. For the most part, medical boards are concerned with 1)Keeping people who aren’t doctors from pretending they are and 2)protect the public from doctors who cause harm, are impaired, etc. They are not really about defining what “valid medicine,” is except in very vague words.

In some ways, this is a good thing. “Off-label” use of drugs has a lot of legitimate uses and would be curtailed by stricter definitions. However, they also don’t look too closely at “alt med” craziness unless patients are being harmed. As long as you use the appropriate disclaimers, you can avoid scrutiny.

Also, medical boards rely on patient or other complaints in order to initiate action. They aren’t out there patrolling medical clinics looking for violations.

Finally, as others have pointed out, there is no law against selling medical bull poop -unless you hurt people or make probably false claims that a particular form of woo can cure or treat a disease.

Which is why it is important to separate the advocation of Bull Poop as a treatment for everything, which is allowed as a free speech issue, with the sale of Bull Poop that only implies a connection to the Bull Poop being advocated by you for free speech.