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Wednesday, Jul. 08, 2009

2 Pikeville business owners sentenced for accepting kickbacks

Two operators of a Pike-ville medical supply business were sentenced for accepting kickbacks from a pharmaceutical mail-order company to which they referred patients.

Carolyn Sue Davis, 60, and Otis Davis, 76, of Pikeville, owners of J&J Medical Inc., were sentenced July 1 to two years' supervised release, according to a news release from U.S. District Court in Louisville.

Carolyn Sue Davis was sentenced to eight months, to be served concurrently with a five-year sentence on a previous conviction in a 2005 fraud case. Otis Davis, also convicted in the 2005 case, was released in fall 2008. Each will be fined $800.

J&J Medical received more than $55,000 from Life Medical Systems, the pharmaceutical mail-order company, from 2003 to 2004, court records said. Both companies received most of their income from Medicare and Medicaid, according to court records.

The operator and part owner of Life Medical, Dewayne Logan, 46, of Peebles, Ohio, also was sentenced to six months' home incarceration and two years' probation. He was fined $500.

In a separate case last year, federal prosecutors won a civil judgment of more than $433,000 against the Davises. Court records said they committed Medicare fraud and used Carolyn Davis' position in the Kentucky Black Lung Association to get customers for the medical supply business. In 2005, Carolyn and Otis Davis were found guilty of criminal charges in the same scheme and sentenced to five years in prison and ordered to pay restitution of $171,000.