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SPRINGVILLE — The physician poised to oversee cannabidiol oil studies for the recently formed Endo-C, a limited liability company based in Springville, could also be facing 80 counts of Medicare fraud in federal court. 

According to a federal complaint filed Jan. 10, 2017, in Salt Lake City’s U.S. District Court, Dr. Steven Warren of Bountiful allegedly billed Medicare 80 times from February 2012 to July 2014 for visits to nursing home patients outside of Utah, and received $4,230 in overpayments as a result.

If found guilty under the federal False Claims Act, Warren could be on the hook for treble damages — or three times the amount overpaid — and could also face civil penalties of $5,500 to $11,000 per claim. For 80 claims, that total could fall somewhere between $440,000 and $880,000.

Warren is listed on Endo-C’s website as the company’s primary investigator for its CBD oil study, and Chris Cannon, a former U.S. representative from Utah, serves as its chairman. The business took root after state lawmakers approved House Bill 130 in March, legislation that Cannon, an attorney, helped craft. Sponsored by Rep. Brad Daw of Orem, HB 130 paved the way for CBD oil research to be conducted under the supervision of a doctor and an institutional review board.

The case against Warren came close to dismissal due to U.S. Marshals’ inability to serve him with the complaint at his residence on three occasions between Feb. 21 and March 3. On Feb. 27, Warren filed for Chapter 7 bankruptcy, and in September, federal prosecutors signaled their intent to pursue the Medicare fraud charges once the bankruptcy case is finalized. 

Melodie Rydalch, spokeswoman for the U.S. Attorney’s office, said Thursday that the Medicare fraud case against Warren is temporarily stayed until the bankruptcy action concludes.

“We’re waiting for full completion of that case to move forward,” Rydalch said.

Neither Warren nor his attorney could be reached for comment regarding the Medicare fraud claims. But in an interview last month, Warren attributed his bankruptcy woes in part to former partners who failed to fulfill their financial obligations.

Reached Wednesday, Cannon said he’d been unaware of the federal case against Warren. But after viewing court documents, he preferred to give him the benefit of the doubt.

“We’re all mortals, we all make mistakes. Centers for Medicare & Medicaid Services often overreaches, and people who are caught often think they’re innocent,” Cannon said. “I don’t have an insight into this particular issue, but $4,230 doesn’t seem to be worth an $880,000 complaint.”

More than two decades ago, Warren briefly abused prescription narcotics while serving as the only physician in San Juan County. In 1993, he pleaded guilty to five felonies and served five years on probation. He was also prohibited from reapplying for a controlled substance license for two years. But he currently holds licenses in Utah to practice family medicine and to prescribe controlled substances and has had no disciplinary actions for at least 10 years.

“I like Dr. Warren immensely. We’re working through our relationship and think his personal experience with opioid addiction is helpful,” Cannon said. “So he will always be at least an advisor (with Endo-C).”