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Federal Clinical Trial Fraud Charges – What You Need to Know
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Federal investigators are prosecuting clinical trial fraud at rates never seen before. If you conduct clinical research – as a principal investigator, study coordinator, or site owner – you need to understand what federal prosecutors are looking for. Here is the first thing you should know: clinical trial fraud prosecutions result in serious federal prison sentences. Miguel Montalvo Villa received 71 months in federal prison for fabricating clinical trial data at AMB Research Center in Miami. Dr. Martin Valdes received 60 months for his role as principal investigator at Tellus Clinical Research. These are not theoretical outcomes.
Welcome to Spodek Law Group. We handle federal healthcare fraud defense cases regularly, including cases where clinical researchers first realize they are facing serious criminal exposure through exactly this kind of investigation. The second thing you need to understand is this: the Department of Justice has declared clinical trial fraud a “major priority.” Deputy Assistant Attorney General Arun Rao characterized DOJ enforcement as “aggressive.” At least 16 individuals have been charged with clinical trial fraud to date. Federal prosecutors view research fraud as a public health threat – and the sentences are devastating.
Heres something most clinical researchers dont realize about federal prosecution. The paradox is brutal. Pharmaceutical companies pay clinical trial sites to conduct drug safety research. Sites respond by fabricating the participation of patients who never took the drugs. Children are enrolled in pediatric trials who never made scheduled visits, never received physical exams, and never took study drugs – but there “participation” is billed to sponsors. The data that is supposed to determine wheather a drug is safe for FDA approval comes from ghost patients who never existed.
Ghost Patients
Heres the uncomfortable truth about clinical trial fraud. Some research sites enroll patients who dont exist. They fabricate entire patient records. They bill pharmaceutical sponsors for participation that never happened. And the FDA may be reviewing drug applications based on data from ghost patients.
Unlimited Medical Research fabricated pediatric asthma trial data. Jessica Palacio was charged in 2025 for her role as study coordinator at Unlimited Medical Research in Miami. The indictment alleges she participated in a scheme to falsify medical records to make it appear as though pediatric subjects made scheduled visits, received physical exams from a clinical investigator, and took study drugs as required. None of it actualy happened. Children who were supposedly enrolled in an asthma medication trial never participated.
Lisett Raventos received 30 months for the same scheme. She admitted participating in a conspiracy to defraud a pharmaceutical company by fabricating the data and participation of subjects in a clinical trial designed to investigate the safety and efficacy of an asthma medication in children between ages four and eleven. The pharmaceutical sponsor paid for research that never occurred. The data submitted was fabricated.
AMB Research Center used peoples names without there knowledge. Miguel Montalvo Villa and Ivette Portela Martinez used the names and personal information of individuals without there knowledge or consent and listed them as enrolled subjects in a clinical trial for a drug being developed to treat Clostridium difficile-associated diarrhea. No subject fully participated in that clinical trial as required by the protocol. The research site billed the sponsor. The data went to FDA. None of it was real.
Dr. Fiddes operated fraud for over a decade. He was known as an investigator who could recruit patients rapidly with low dropout rates. Unfortunately, his reputation was built on fraud. Ineligible patients were enrolled. Fictitious patients were also enrolled. Laboratory data was altered. Blood pressure readings, EKGs, and other results were fabricated. He maintained his fraud despite audits until a whistleblower contacted the FDA.
Think about what this means for your research site. If your enrollment records show patients who didnt actualy participate, thats not a documentation error. Thats wire fraud. The patient records that seemed like standard paperwork become the evidence that proves criminal intent.
The Fabrication Factory
Heres something about clinical trial fraud that reveals how research sites become billing operations rather then scientific enterprises. When sites cant recruit real patients, some just invent fake ones – and get paid the same amount.
Tellus Clinical Research fabricated data for profit. From February 2014 through July 2016, defendants fabricated clinical trial data while working at Tellus Clinical Research in Miami. They knowingly enrolled subjects who failed to meet eligibility criteria. They falsified subject laboratory results. They falsified medical records. They falsely represented that subjects were taking the drugs being studied when they were not. The clinical trials evaluated treatments for opioid dependency, irritable bowel syndrome, and diabetic nephropathy.
Eduardo Navarro received 46 months and $2 million restitution. He participated in the Tellus scheme along with Dr. Martin Valdes, who received 60 months. Nayade Varona received 30 months. Duniel Tejeda received 30 months. The study coordinators and principal investigator all went to federal prison. The pharmaceutical sponsors lost millions. The research data was worthless.
Sami Anwar ran fraudulent research sites for five years. Between 2013 and 2018, Anwar headed a conspiracy in Washington State. His companies fraudulently posed as legitimate human clinical research trial sites and provided mountains of false clinical research trial data to dozens of drug companies and the FDA. Over a dozen former employees testified that he directly instructed them to commit fraud – including falsifying medical records, falsifying electrocardiograms and vital signs, and fabricating required subject diary entries.
The billing continues whether patients exist or not. Research sites receive payments from pharmaceutical sponsors based on enrollment milestones. When you enroll a patient, you get paid. When the patient completes visits, you get paid more. When you cant find real patients, the financial incentive is to fabricate enrollment and bill for participation that never happened. The payment structure creates the fraud.
Ineligible Patient Enrollment
Heres something about clinical trial fraud that reveals how investigators compromise patient safety for profit. When patients dont meet eligibility criteria, some sites falsify records to make them appear eligible – putting patients at risk and corrupting research data.
AMB Research Center enrolled patients who failed eligibility criteria. The indictment alleges that defendants knowingly enrolled subjects in a clinical trial even though those subjects failed to meet eligibility criteria. They falsified subject laboratory results. They falsified subject medical records. They falsely represented that subjects were taking the drug being studied when they were not. The eligibility criteria exist to protect patient safety. Falsifying them endangers patients.
A&R Research Group enrolled ineligible patients in asthma drug trials. Angela Baquero and Ricardo Acuna owned A&R Research Group in Pembroke Pines, Florida. They pleaded guilty to conspiracy to commit wire fraud in connection with there work on two clinical trials testing asthma drugs. As a result of the conspiracy, A&R provided fraudulent clinical research data to the drug trial sponsor and to an FDA investigator.
The irony destroys public health protection. Clinical trial eligibility criteria exist to protect patient safety and ensure valid research results. Investigators who were supposed to protect patient safety instead enrolled patients who failed eligibility criteria – making the drugs appear safer then they actualy were. The safety testing was compromised. The efficacy data was corrupted. The FDA received falsified information.
Laboratory results are fabricated to make patients appear eligible. When a patient fails screening bloodwork, some sites simply change the results. The lab values that should have disqualified the patient are replaced with values that show eligibility. The patient receives study drug they shouldnt receive. The research data becomes meaningless. And the site gets paid.
FDA Data Compromise
Heres something about clinical trial fraud that should terrify everyone who relies on FDA drug approvals. Compromised clinical trial data impacts agency decisions about drug safety and effectiveness. Some approved drugs may have been evaluated based on fabricated data from patients who never existed.
FDA stated the risk directly. “The cornerstone of FDA’s evaluation of a new drug is reliable and accurate data from clinical trials,” stated FDA Assistant Commissioner Justin D. Green. “Compromised clinical trial data could impact the agency’s decisions about the safety and effectiveness of the drug under review.” The FDA depends on data integrity. Fabrication compromises that integrity.
Multiple drug trials were corrupted by fraud. The Tellus scheme affected trials for opioid dependency drugs, irritable bowel syndrome treatments, and diabetic nephropathy medications. The AMB scheme affected a trial for Clostridium difficile treatment. The Unlimited Medical Research scheme affected a pediatric asthma medication trial. Each of these drugs was being evaluated for safety and efficacy. Each trial received fabricated data.
The question becomes: which drug approvals were affected? When the DOJ announces clinical trial fraud prosecutions, they dont always identify the drugs being studied. The pharmaceutical sponsors are sometimes unnamed. The drugs may have proceeded to FDA approval. Or they may have been rejected based on fabricated data. Either way, the integrity of the evaluation process was completly compromised. The public basicly has no way to know wheather approved drugs were actualy tested properly.
DOJ now treats this as a public health priority. The Department of Justice has identified clinical trial fraud as a “major priority” specificaly becuase of the FDA data integrity implications. Enforcement is “aggressive.” The DOJ recognizes that fabricated trial data threatens public health beyond the immediate financial fraud.
The Cases That Show What Happens
If you think federal clinical trial fraud prosecutions are theoretical, look at what actualy happens to researchers when these schemes collapse.
Miguel Montalvo Villa received 71 months in federal prison. The Miami clinic owner was convicted by jury of conspiracy to commit wire fraud, wire fraud, and making a false statement to an FDA regulatory investigator. He submitted falsified and fraudulent invoices totaling $277,920 for conducting a clinical trial. He lied to the FDA when they investigated. 71 months in federal prison.
Dr. Martin Valdes received 60 months in federal prison. The principal investigator at Tellus Clinical Research pleaded guilty to conspiracy to commit wire fraud. He was the medical doctor responsible for overseeing the clinical trials. He knew the data was fabricated. He allowed it to continue. Five years in federal prison for a licensed physician.
Eduardo Navarro received 46 months and $2 million restitution. He participated in the Tellus scheme. Ivette Portela Martinez received 46 months for her role in the AMB scheme. Multiple study coordinators received 30-month sentences. The sentences stack up across the organization – principal investigator, clinic owner, study coordinators all face prison.
Eight defendants charged in Cleveland for fictitious patients. A federal grand jury returned a 19-count indictment charging Amie Demming, John Panuto, and six others with conspiracy to commit mail and wire fraud, mail fraud, wire fraud, aggravated identity theft, conspiracy to defraud the United States, and failure to maintain adequate records. They enrolled subjects under fictitious names. They enrolled past subjects without there knowledge. They fabricated medical records, informed consent forms, and other documentation.
Heres the uncomfortable truth about clinical trial fraud prosecutions. When federal investigators examine your research site, they compare your enrollment records to what actualy happened. They interview subjects. They review source documents. They analyze wheather your data makes scientific sense. The gap between what you billed and what you actualy did becomes the evidence that convicts you.
These arnt unusual cases. They represent the DOJs new enforcement priority. The sentences reach 71 months. The restitution reaches millions. The research sites that seemed profitable collapse when investigation begins.
How Clinical Trial Investigations Begin
Heres something about how these cases develop that should concern every clinical researcher. Investigations often begin long before anyone contacts you.
Whistleblowers contact the FDA. Dr. Fiddes operated his fraud for over a decade despite audits. He was only caught when a concerned whistleblower contacted the FDA about the misconduct. Your employees know what your doing. Study coordinators who are pressured to fabricate data can become informants. They can file qui tam lawsuits and receive 15-30% of any recovery.
Pharmaceutical sponsors detect anomalies. Sponsors conduct audits. They review source documents. They analyze enrollment patterns. When your site recruits patients faster then comparable sites, thats flagged. When your dropout rate is impossibly low, thats flagged. When your data shows patterns that dont match clinical reality, sponsors investigate.
FDA inspections reveal fabrication. The FDA conducts inspections of clinical trial sites. They compare your records to source documents. They verify patient participation. When the inspection reveals that enrolled patients never actualy participated, investigation begins. Montalvo was also convicted of making a false statement to an FDA regulatory investigator – the inspection uncovered the scheme.
Statistical analysis identifies impossible data. Research data follows patterns. Lab values have expected distributions. Vital signs fluctuate in predictable ways. When your data is too perfect – when every patient meets every endpoint – statisticians recognize fabrication. The data that seemed thorough becomes proof of fraud. Auditors look specificaly for statistical impossibilities that reveal falsification.
What You Cannot Do When Investigated
Heres what people do when they learn about clinical trial fraud investigations. They panic. They try to fix things. They make decisions that create additional criminal exposure.
Do NOT destroy or alter research records. Case report forms, source documents, laboratory records, informed consent forms. Destroying any of this is obstruction of justice. The FDA and sponsors probly already have copies. Destruction proves consciousness of guilt.
Do NOT backdate or modify patient records. If your records show fabricated participation, your natural instinct is to create documentation that appears more legitimate. Dont. Backdating records is additional fraud. Electronic document metadata reveals modification dates. The cover-up becomes additional charges.
Do NOT contact other site staff to coordinate stories. If study coordinators participated in fabrication, your natural instinct is to align your accounts. Dont. They may already be cooperating with the government. Over a dozen employees testified against Sami Anwar. Your conversation could be recorded. Coordination is witness tampering.
Do NOT lie to FDA investigators. Montalvo was convicted not just of wire fraud but of making a false statement to an FDA regulatory investigator. That separate charge added to his exposure. When the FDA asks questions, anything you say can be used against you. You need an attorney before the inspection.
The Wire Fraud Math
Heres something about clinical trial fraud that exponentialy increases legal exposure. Wire fraud penalties apply per count – and every false invoice, every fabricated record transmitted electronically, is a seperate count.
How the multiplier works. Wire fraud carries up to 20 years imprisonment per count. Every email containing falsified data is a potential count. Every electronic invoice submitted for fabricated enrollment is a potential count. A clinical trial with 50 ghost patients might generate hundreds of wire fraud counts.
Aggravated identity theft adds mandatory consecutive time. When you use real peoples identities to enroll them as ghost patients without there knowledge, thats aggravated identity theft. The Cleveland indictment included this charge. Its a mandatory 2-year consecutive sentence – meaning it runs after any other sentence, not concurrent with it.
False statement to FDA adds exposure. Making false statements to federal investigators is a seperate crime carrying up to 5 years per count. Montalvo was convicted of this charge on top of wire fraud. When you lie during an FDA inspection, you compound your exposure.
Restitution can reach millions. Eduardo Navarro was ordered to pay just over $2 million in restitution. Duke University paid $112.5 million to settle allegations of falsified research grant data. The money you received fraudulently must be repaid – plus penalties.
Professional consequences compound criminal penalties. Federal debarment from conducting federaly funded research. Loss of medical license for physician investigators. Exclusion from FDA-regulated research permanantly. The criminal conviction triggers professional destruction that continues after prison. You basicly cannot work in clinical research again.
What You Should Do Right Now
If federal investigators have contacted you about clinical trial conduct, or if your research practices might trigger scrutiny, heres exactly what you should do:
Contact a federal healthcare fraud defense attorney immediatly. Not a general business lawyer. Not your institutional review board. Someone who specificaly handles federal healthcare fraud cases and understands clinical trial prosecution.
Do NOT speak to investigators without counsel. FDA investigators may arrive for an inspection. Federal agents may request interviews. There is nothing voluntary about it. Anything said can be used to build the case against you. Politely decline substantive questions and contact an attorney immediatly.
Preserve all documentation exactly as it is. Case report forms, source documents, laboratory records, informed consent forms, enrollment logs. Do not alter, destroy, or organize anything. Document preservation is critical.
Identify all potentially problematic enrollment. Patients who may not have fully participated. Patients who may have failed eligibility criteria. Documentation that may not match source records. Your attorney needs to understand the full scope.
Do NOT discuss the investigation with other site staff. Anyone you talk to can be compelled to testify. They may already be cooperating with the government. Only attorney-client communications are protected.
Todd Spodek tells every clinical researcher in this situation the same thing: federal clinical trial fraud investigations are serious criminal matters. Miguel Montalvo Villa got 71 months for fabricating data. Dr. Martin Valdes got 60 months as principal investigator. Your response in the next few days could determine wheather this becomes a matter that resolves favorably – or federal charges that destroy your career and your freedom.
Call Spodek Law Group at 212-300-5196. Before you speak to federal investigators. Before you make decisions that create additional criminal exposure. Before a documentation problem becomes a federal fraud prosecution.
Federal clinical trial fraud is now a DOJ enforcement priority. The sentences reach 71 months in federal prison. The restitution reaches millions. What you do right now matters enormosly.