AGENTS RAID PAIN CLINICS, ARREST OWNER, 3 DOCTORS THEY'RE ACCUSED OF
RUNNING 'PILL MILL'

Doctor's visits as brief as 11 seconds. Preprinted prescriptions doled out
in assembly-line fashion to hundreds of patients in a day, many of them
with no medical problems. Pharmacies in which up to 88 percent of
first-time customers in a single day presented identical prescriptions
written by the same physician.

Those are some of the allegations made by federal authorities against a
nurse and three local doctors who were arrested Tuesday in a sweeping
investigation that accuses them of running a highly lucrative "pill mill,"
dispensing dangerous and addictive narcotics to just about anybody who
complained of aches and pains, some real, some made up.

At dawn, agents with the Drug Enforcement Administration arrested the owner
and operator of the clinics, Cherlyn "Cookie" Armstrong, at her Eastover
home. Armstrong, 45, runs three clinics operating as Scherer's Medical
Center, an outgrowth of a string of weight loss clinics that she started in
the 1990s. She is a registered nurse who is still facing state narcotics
charges in Slidell for allegedly dispensing drugs in 2000 without a
doctor's oversight, authorities said.

Agents also arrested three of Armstrong's staff doctors, sending a seismic
wave through the local medical community, especially those involved in pain
management, a controversial new specialty that has mushroomed in the past
few years to include more than 60 pain clinics in the metro area. The
unchecked proliferation of pain management clinics, along with allegations
of shady practices geared at maximizing profits, recently sparked
moratoriums against such clinics in Orleans, St. Bernard and St. Tammany
parishes.

The doctors who were arrested Tuesday -- Betty De Loach, 66, of Kenner;
Suzette Cullins, 43, of New Orleans; and Joseph Guenther, 71, of Metairie
- -- were ordered along with Armstrong to remain in jail overnight until
detention hearings can be held today. The government has asked that the
defendants be held without bail indefinitely because they might be flight
risks. Federal authorities immediately sought suspension of the licenses of
the doctors, clinics and pharmacies involved in the case, local DEA chief
William Renton said.

Millions in cash

The DEA, aided by the FBI, Internal Revenue Service and local police
agencies, also confiscated more than $10 million in assets. Of that total,
$4 million was frozen in 17 of Armstrong's bank accounts, acting U.S.
Attorney Jim Letten said. Another $1.6 million was found in Armstrong's
home, much of it in stacks of hundred-dollar bills stashed in safes, cans
and garbage bags.

In the criminal complaint, supported by a 65-page affidavit outlining the
details of the yearlong probe, each defendant faces a charge of conspiracy
to illegally distribute controlled substances. Armstrong and Cullins face
an additional charge of distributing controlled substances to people
younger than 21. Both drug charges carry a five-year maximum prison
sentence. Armstrong also faces a money-laundering charge, which carries up
to 10 years.

Letten noted that 16 others, including doctors and pharmacists, are listed
by their initials in the affidavit as employees or participants in
Armstrong's operation. Several of the people listed are members of
Armstrong's family, including her husband, Steven Prejean, a lawyer who is
co-owner of the clinics.

"This investigation is by no means over," Letten said. "In fact, this is
really very much the beginning of a second, much more active phase. . . . I
can tell you we're looking at everyone involved with these clinics."

After the arrests, agents raided Scherer's clinics in Metairie, Gretna and
Slidell, loading U-Haul trucks with boxes of records. In Metairie and
Slidell, steady streams of cars crept past the clinics, some circling the
block amid the commotion, others speeding away. Agents questioned the
persistent drivers who pulled into the parking lots of the clinics and
arrested more than two dozen of them on unrelated charges such as
possession of marijuana, possession of illegal pharmaceuticals and
outstanding warrants.

In addition, agents raided four pharmacies, two of them owned by Armstrong
and located next to her Metairie and Slidell clinics. The other two
pharmacies that were raided and shuttered are The Medicine Shoppe in
Slidell and Michael's Discount Pharmacy in Kenner. Armstrong's pharmacies,
which operate under the name "Mia's," sport the storefront sign "Medicine
in a Snap."

That logo is the perfect description of what took place inside the clinics,
Renton said.

"This operation was a sham to make money by dispensing narcotics regardless
of whether there was any medical necessity," he said.

A tight schedule

The affidavit is full of allegations that support Renton's characterization:

- -- The clinics accepted only cash, $220 for an initial visit and $80 for
each follow-up visit. The associated pharmacies also operated on a
cash-only basis, charging $40 for the most commonly prescribed pill
regimen: hydrocodone (most commonly sold under the brand name Lorcet),
alprazolam (Xanax) and carisoprodol (Soma). The combination is known on the
street as the "holy trinity" or "cocktail."

- -- The clinics are run "with the express goal that each full-time doctor
will see 700 patients per 35-hour work week, i.e. one patient every 3.3
minutes," the affidavit states.

- -- While patients were usually prescribed a two-week supply of pills, many
patients amassed much more than that by visiting different clinic locations
on different days of the week. This practice is referred to in the
affidavit as "doctor shopping."

- -- The DEA used informants as well as undercover agents to make dozens of
doctor's visits and high-volume purchases. Most of the visits lasted less
than 60 seconds and involved little or no medical examination. In one
instance, Cullins expresses concern that an informant visited her twice in
four days. In the affidavit, Cullins is quoted as saying, "You need to back
off from me or you need to go see Dr. Guenther when he's available. Do we
have an understanding?" The visit lasted 25 seconds.

- -- On a subsequent visit to Guenther a month later, the same informant
brought in a clean MRI. Guenther looked at the MRI and said, "There's
really nothing wrong with you. . . . I told you to see an orthopedist a
long time ago. I can't do much for you." Guenther then signed a prewritten
prescription for "the trinity," the affidavit alleges. The visit lasted 85
seconds.

"They're street peddlers with an M.D. after their names," said Dr. John
Bobear, executive director of the state Board of Medical Examiners.

Bobear and others said unscrupulous clinics pose a dangerous double whammy:
They illegally provide narcotics to addicts with no underlying medical
basis, and they tarnish the work of legitimate pain management clinics that
offer a range of therapies from massage to exercise to graduated doses of
medicine if needed.

"Prescription drug abuse is the No. 2 class of abuse after marijuana in the
United States right now," Renton said. "This is a serious, serious problem."

The defendants, handcuffed and shackled in prison-issued jumpsuits, made a
Tuesday afternoon appearance before U.S. Magistrate Louis Moore Jr.

Moore ordered them to return to Orleans Parish Prison pending a hearing
today at 2 p.m. to determine their bail amounts or, as requested by
prosecutors, whether they will be detained until trial. Assistant U.S.
Attorney Tony Sanders, the lead prosecutor on the case, said he will ask
for detention for all four defendants on grounds that they are flight risks
or a danger to the community. Sanders also asked Moore to order all four
defendants to undergo drug tests.

Begging for bail

Armstrong's attorney, Sal Panzeca, pleaded to Moore that his 45-year-old
client is the mother of a 12-year-old girl and has never been convicted of
anything. He added that similar allegations were made against her a few
years ago, but no charges were filed.

"No way she is a flight risk or a threat," Panzeca said.

Then Armstrong spoke up: "I'm not a flight risk. I would really like to go
home to my little girl, and I'll be back tomorrow."

Neither Panzeca nor Armstrong mentioned the pending charges in Slidell,
allegations that in November forced Armstrong to enter into a consent
agreement with the state nursing board, according to the DEA affidavit.