Former Union General Hospital CEO John Michael “Mike” Gowder and Dr. James Lanier Heaton were found guilty Thursday in federal court on charges they conspired to illegally distribute prescription drugs on a massive scale.
The verdict ended a three-year scandal that rocked Union County and shocked patients across the region — including many in Cherokee County, N.C. — who went to Heaton for medical care. The conspiracy stretched across the region, as indictments against the pair in Cherokee County as well as Fannin, Towns, Union and White counties in north Georgia were combined into the federal case.
Gowder was found guilty on 102 counts and Heaton was found guilty on 129 counts involving illegal prescription drug practices. The case against Gowder and Heaton actually began in Cherokee County, as Sheriff Derrick Palmer’s office opened a case with local pharmacies issuing prescriptions to fictitious people.
“When doctors prescribe opioids outside of the applicable rules, they are nothing but drug traffickers with a medical degree,” U.S. Attorney Byung J. Pak said. “Therefore, we will accordingly treat them as such.”
From 2011 to 2016, Gowder was the chief operating officer and later chief executive officer of Union General Hospital, and Heaton operated a family practice clinic in Blairsville and worked as the Medical Director of the Nursing Home of Union General Hospital.
In 2016, Palmer said there were red flags showing up with prescriptions that were being sent from Union County and filled in Cherokee County.
“There were prescriptions to people that didn’t exist and there were prescriptions to people who were not patients and who were not being seen by the doctor,” he said.
Palmer said at the time that an inmate incarcerated in the Cherokee County Detention Center in Murphy was found to be receiving 250 oxycodone pills per month through this operation.
“The investigation led to us discovering that Gowder and some of his family members were picking up the scripts,” Palmer said Monday, adding that he was gratified to see the investigation result in convictions.
“When we originally wanted to charge it here, we met with Sheriff (Mack) Mason in Union County, and he said the powers-that-be down there were trying to hinder the charges because of their family’s reputation and so forth. But we charged them here and that got the ball rolling with the feds.”
According to a U.S. Attorney’s press release, “Gowder obtained oxycodone by fraud, subterfuge and deception by filling the illegal prescriptions that Dr. Heaton issued for oxycodone at different pharmacies in Georgia, Tennessee and North Carolina in an effort to conceal the large numbers of pills that Heaton was prescribing to him.”
At the trial, Jason Allen, a U.S. Drug Enforcement Administration investigator, testified that he began investigating Gowder in 2015 after his brother David Gowder was arrested for allegedly filling a fraudulent prescription in Fannin County, according to a report in the Towns County Herald. Allen testified that he saw prescriptions for more than 15,000 pills written to Mike over and a half years.
David Gowder pleaded guilty earlier this year to one count of prescribing oxycodone improperly. He was not a defendant in this trial.
One of the big stories leading up to the trial was Heaton’s involvement with female patients and whether he may have traded pills for sexual favors. Three different women testified in the trial about various pill arrangements with Heaton, the Herald reported, including one woman who said she often got pills without being charged when leaving his house late at night after a sexual encounter.
On Monday morning, Gowder’s attorneys filed a motion for a new trial, citing that the court’s previous ruling to not separate himself and Heaton to allow the latter to testify on his behalf was an error.
A sentencing date had not been set as of press time.