Dr. William Kincaid and attorney Guy Blackwell leave federal court in Greeneville on Monday (Becky Campbell, Johnson City Press).
GREENEVILLE — A federal judge showed little leniency Monday for a Johnson City cancer doctor who pleaded guilty to receiving misbranded cancer drugs by sending him to prison for two years and imposing a $10,000 fine.
U.S. District Judge Ronnie Greer also ordered Dr. William Kincaid to be on supervised release for one year after he serves the two-year prison term.
When Greer announced Kincaid will serve two years in prison, there was an audible gasp through the audience — close to 100 family and friends of Kincaid’s. The fine is in addition to part of a $4.5 million settlement that Kincaid and two other physicians in the partnership that was McLeod Blood and Cancer Center in Johnson City have agreed to repay the U.S. government’s Medicare program and TennCare. Kincaid is responsible for 60 percent of the settlement.
The settlement will reimburse the defrauded money as well as cover costs of the investigation, officials said. The fraud stemmed from McLeod billing Medicare and TennCare full price for cancer drugs the center purchased at lower-than-normal costs.
Kincaid reached that financial agreement Friday with the U.S. government, and submitted a $500,000 payment before his sentencing Monday, according to his attorney, Guy Blackwell.
After the four-hour sentencing hearing, Blackwell said he respects U.S. District Judge Ronnie Greer, but was disappointed at the prison term for Kincaid. Blackwell had asked Greer to place Kincaid on probation.
“It was my hope Dr. Kincaid would be placed on probation. I’m disappointed in the result, but Dr. Kincaid is man enough to accept responsibility,” he said.
Blackwell said Kincaid will not appeal the sentence.
During the sentencing hearing, Blackwell presented three character witnesses on Kincaid’s behalf and had already filed nearly 160 letters — Greer said he read each one — from the family, supporters and the disgraced doctor himself.
Two of those letters came from Washington County Sheriff Ed Graybeal and U.S. Rep. Phil Roe.
In his sentencing, Greer commended Kincaid for taking responsibility for the fraud, but said his decision couldn’t be based on all the good works the doctor has done during his life when compared to the crime. Greer also said the case boiled down to greed.
“I am troubled somewhat by the nature and circumstances of your involvement in this case,” Greer said.
Blackwell asked Greer to consider Kincaid’s age, the impact on his family, his loss of income, reputation in the community and remorse for sentencing. Greer said he took Kincaid’s remorse “at face value,” and said most defendants stand before him and express remorse.
“To your credit, you don’t appear to shift the blame to anyone else .... you tend to indicate somewhat all this might not have happened if you’d been a little more business savvy,” Greer said. “The simple fact of the matter is, it was your responsibility.
“I don’t have any doubt that you have, in fact, cared about patients, cared for them diligently. I don’t have any doubt about you providing care for people who can’t afford it and I don’t have any doubt you have established a list of good work,” Greer said. But he also said a defendant cannot “bank credits” to outweigh a criminal act.
“I’ve got to tell you, Dr. Kincaid, the person that’s been painted by all these letters ... I’m having a difficult time squaring that with what you did here. I truly hope, as I’m sure you do, that no patient was physically harmed,” he said.
“Yes, sir,” Kincaid responded.
“But we don’t know that,” Greer said.
While most who attended the hearing were there to support Kincaid, Dannie Pate was there to honor his late wife. She was a patient of Kincaide’s for 84 days when she died, he said. He was wearing his and her wedding bands on a chain around his neck. “She was there with me,” he said.
The medications seized by federal investigators in February 2012 were eventually tested and proven to contain the proper cancer-fighting ingredients, but Greer noted no one had shown if the medications contained the proper amounts of those ingredients.
According to information in Kincaid’s plea agreement, the federal government said McLeod purchased $2 million worth of cancer medications from a company named Quality Specialty Products, located in Canada, but the drugs were not processed through an FDA-approved supplier.
McLeod purchased the medications during two different periods of time, the first from late 2007 to early 2009 and the second from August 2009 until early 2012.
The center ended its relationship with QSP in 2008 after nurses at the center began to question being instructed to use drugs with foreign languages on the labels.
When Kincaid made the decision to re-establish purchases from QSP, he had the drugs shipped to a storage unit he owned, with instructions to his then-office manager, Michael Combs, of Piney Flats, to have the drugs shipped to a storage business Kincaid owns in Johnson City. From there, the medications were taken to Combs’ office at the clinic and then mingled into FDA-approved drugs in the clinic’s drug-storage area.
Combs was also charged after the federal investigation began in February 2012 and pleaded guilty to receiving misbranded drugs and was sentenced to three years of probation and assessed a $4,000 fine.
There is no parole in the federal correctional system, so Kincaid will serve the entire 24 months. At Blackwell’s request, Greer agreed to recommend to the Bureau of Prisons that Kincaid be assigned to a federal facility in Pensacola, Fla., or Montgomery, Ala.
Greer also agreed to allow Kincaid to report to prison on his own on a date determined by the prison system, so Kincaid remains free on bond.