Summit County man implicated in prescription drug scheme denied bail
A Summit County resident indicted on multiple charges in connection with a federal bust of a local prescription drug distribution operation was denied bail this week due to four prior felony convictions, even as the doctor implicated in the case was released on a $100,000 bond.
Keith Schwartz “was considered a danger to the community,” U.S. Attorney’s Office spokesman Jeff Dorschner stated in an email to the Daily. “In fact, he waived his right to contest his detention.”
The nature of his criminal history is unknown.
Schwartz was one of six people indicted by a grand jury in connection with the case. All of the other defendants, who include his wife Lauren Schwartz and former Dillon-area doctor Joseph Ferrara, are out of jail on bond.
Schwartz, who reportedly also used the alias Bernie Kype, is charged with one count of conspiracy to distribute and dispense controlled substances resulting in the death of an individual, six counts of using a telephone to facilitate drug crime and 36 counts of money laundering among others.
Schwartz was allegedly an employee of Ferrara’s obstetrics and gynecology practice. The indictment accuses he and several other of Ferrara’s employees of helping the doctor prescribe and collect payment for a variety of controlled drugs to patients who had no medical need for them over the course of several years. At least one person died as a result, according to the indictment.
It alleges the victim, who was not named, died after taking oxycodone, methodone and alprazolam, the drug in Xanax, all medications Ferrara is accused of prescribing outside the scope of medical practice.
Schwartz and Ferrara were arrested in Summit County May 23.
Neither could be reached for comment.
The wife of one of Ferrara’s former patients said he appeared to be a knowledgeable and competent doctor, but that the character of his office in Dillon and his refusal to accept insurance or Medicaid roused suspicions.
“It was always pretty sketchy,” said Leadville resident Bonnie Wells, who’s husband saw Ferrara for pain management. “But he was very smart and intelligent as to what he was doing. He really impressed me.”
Wells’ pharmacist informed her in early 2012 that Ferrara had lost his license. Her husband had an appointment scheduled with him the following week.
The indictment alleges Ferrara prescribed drugs such as oxycodone, morphine, methadone, oxymorphone, hydromorphone, hydrocodone, amphetamines, carisoprodol, alprazolam, clonazepam, lorazepam, triazolam and zolpidem tartrate and marijuana.
The money laundering charges against Schwartz stem from a series of high-dollar transactions at local banks in 2011 and 2012, involving transfers of funds and payments, using money from unlawful activity, according to the indictment. Ferrara and his cohorts are accused of working independently to collect payment for the drugs in cash or by check or credit cards, but not through insurance. The indictment charges they used the money to make personal purchases, including, in the Schwartz’s case, more than $207,000 toward the purchase of a house on Ptarmigan Ranch Road.
The scheme was discovered after retail pharmaceutical companies noticed Ferrara was dispensing high quantities and suspicious combinations of controlled substances and notified the Drug Enforcement Administration. A federal investigation into his prescribing practices began in May of 2011.
The charge of conspiracy to distribute and dispense controlled substances resulting in death carries a penalty of up to life in prison and up to $1 million in fines.
A grand jury indictment is only the first step in the prosecution process, giving law enforcement license to make arrests. Ferrara and the other defendants are presumed innocent unless found guilty by a traditional jury after a trial.
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