Witnesses recount thousands of pills, sex-for-drugs in Week 1 of trial

By Linda Erbele

GAINESVILLE – Flanked by their lawyers, Dr. James Heaton and former Union General Hospital CEO Mike Gowder faced off against Assistant U.S. Attorneys William McKinnon Jr. and Laurel Boatright in U.S. District Judge Richard Story’s courtroom starting Tuesday, Oct. 15.

Both men are accused of crimes involving prescription drugs, including conspiracy to dispense and distribute controlled substances “outside the usual course of professional medical practice and for no legitimate medical purpose.”

The 103 charges against them include allegations by the government of “misrepresentation, fraud, forgery, deception and subterfuge” involving oxycodone and hydrocodone, with Heaton facing dozens of additional charges related to issuing prescriptions to several other patients.

Jury selection occurred on Tuesday, Oct. 15, and resulted in a jury of seven men and seven women to include 12 jurors and two alternates. They were chosen from a pool of 52 people from Gilmer, Hall, Jackson, White, Barrow, Dawson, Forsyth, Union, Habersham, Towns and Rabun counties, though no one from Union or Towns counties was selected for this case.

Opening statements began Wednesday, Oct. 16, with government attorney McKinnon insisting that evidence would show that Heaton issued prescriptions “for no legitimate medical purpose and outside the usual course of professional medical practice.”

As for Gowder, McKinnon said “he filled these prescriptions in three different pharmacies in three states,” pointing out that filling prescriptions with no medical purpose was also a crime.

The prosecutor went on to say that Heaton had a financial relationship that benefited from his association with Gowder as hospital CEO, seemingly attempting to show a relationship between the prescription writing and potential compensation.

According to McKinnon, Heaton was paid $3,000 per month for working at the hospital, but when Gowder became CEO, he got a raise to $4,000 per month. In 2014, the hospital purchased Heaton’s sleep study clinic and hired him to run it for $1,000 per month, McKinnon continued, adding that Heaton was also paid to manage the hospital’s nursing home.

In her opening comments, Kristen Novay, one of Heaton’s attorneys, argued that Heaton had been a local doctor for 26 years, and that the hospital was simply compensating him for his work.

“Like most doctors in the area, he had several jobs at the hospital,” she said, listing the sleep clinic the hospital purchased from Heaton.

She acknowledged that he was paid by the hospital to manage the sleep clinic and nursing home, but she attempted to rebut the kickback allegations by noting that Heaton’s replacement at the hospital received the same pay after Heaton and Gowder parted ways with Union General.

Referring to testimony that would be delivered after press time in the second week of trial, the prosecution said jurors would soon be hearing from Dr. Gary Kaufman, an expert witness who examined medical records from Dr. Heaton’s office.

“(Kaufman’s) conclusion is that Dr. Heaton’s prescriptions were outside the usual course of professional practice and without a legitimate medical reason,” McKinnon said, affirming that doctors have a legal duty to prescribe drugs “in a way that doesn’t make their patients addicted.”

Novay said that some of Heaton’s patients “were dependent on pain medication,” but that dependency was different from addiction.

She contended that fewer than 7% of Heaton’s patients were ever prescribed pain medication, adding that, of his almost 2,000 patient files, the government had “hand-picked” files to be examined by Kaufman.

In his opening remarks, Mike Gowder’s attorney Steve Sadow accused the government of seeing his client and Heaton’s past relationship “through glasses of suspicion.”

According to Sadow, Gowder underwent back surgery in 2006, though the pain never went away. He was referred for more surgery in 2011 and 2012, but he’d become CEO of the hospital, and it just wasn’t the right time to take off six months to recover from surgery, Sadow said.

“You’ll see the first prescription for hydrocodone was in January 2012,” Sadow said. “He used hydrocodone for five months, then changed to oxycodone.”

As for the government’s claim that his client filled illegal prescriptions elsewhere seemingly to hide his actions, Sadow said that Gowder’s family was well-known in Blairsville, which is why he chose to fill his prescriptions outside of the community to prevent small-town gossip.

Gowder was often in Nashville, Tennessee, because his daughter lived there and his son moved there, Sadow said, so he filled some prescriptions in Nashville.

Furthermore, Sadow said the idea that Gowder was not taking all the pain pills himself – many thousands of pills over the course of three-and-a-half years – was “absurd.”

“When you have taken a lot of medication, you build up a tolerance,” Sadow said. “Most of the time, defendants don’t testify on their behalf. Mike Gowder will testify.”

Following opening statements Wednesday, the jury heard from pharmacists in Murphy, North Carolina, and Hiawassee, each of whom had refused to fill oxycodone prescriptions for Gowder because they saw too many “red flags.”

One of the pharmacists testified that she discovered Gowder was filling the prescriptions in another state, prompting her to call Dr. Heaton. She described his response as “aggressive and confrontational,” and she reported the incident to the Georgia Composite Medical Board.

Jason Allen, a federal diversion investigator with the Drug Enforcement Administration, testified that he had been called in on the case by the Union County Sheriff’s Office in July 2015, after David Gowder was arrested in April 2015 for filling a fraudulent prescription in Fannin County.

David Gowder is Mike’s brother, and he was the emergency room director for Union General Hospital at the time of his 2015 arrest.

Allen said he started seeing prescriptions for Mike Gowder after he began collecting records of prescriptions related to David Gowder, at which time he “initiated a parallel investigation.”

Every prescription for Mike was written by Heaton, so Allen expanded the investigation to Heaton, he said. The prosecution introduced a spreadsheet compiled by Allen showing prescriptions written to and filled by Mike Gowder from January 2012 to June 2015.

Beginning with January 2012, the spreadsheet indicated Heaton had written a prescription for Mike Gowder for 40 hydrocodone.

The next month, in February 2012, it went to two prescriptions of 60 hydrocodone each. By March, it was two prescriptions for 90 each, and in April 2012, there was one for 90 and one for 150.

In July 2012, the prescriptions had changed from hydrocodone to two for oxycodone at quantities of 120 pills each. In November 2012, the quantities changed to two prescriptions for oxycodone at 150 each. Allen testified that the pattern continued through 2013.

In September 2015, Allen and investigators from the Georgia Medical Board served a subpoena and conducted a search of Heaton’s office, and Allen testified that the patient file for Mike Gowder was only a few pages.

Prosecutor Boatright asked Allen how many pills Gowder had obtained in the three-and-a-half-year period covered by the spreadsheet.

“Just over 15,000 (pills),” Allen said.

She asked how many of those prescriptions were accounted for in Heaton’s file on Mike Gowder.

“Five prescriptions,” he said.

During cross examination, Heaton’s other attorney, Don Samuel, attempted to explain the lack of files by pointing out that Mike Gowder often came to Heaton’s office after hours when he got off work at the hospital.

Samuel also tried to distance Gowder from the actions of his brother, David, who had filled prescriptions under a fake name, according to Allen.

“There’s no relation to Mike Gowder to what his brother did, right?” Samuel said, and Allen agreed.

David Gowder is a former co-defendant in the federal prescription drug case. In March 2019, he pleaded guilty to one count of prescribing oxycodone without a legitimate medical purpose before being removed as a co-defendant.

According to David’s attorney, he admitted that he was addicted to opioids and entered a treatment program. He faces up to 20 years in prison and a potential $1 million fine. He has not yet been sentenced.

Allen’s testimony crossed over into Thursday, Oct. 17, which is when Sadow questioned the investigator.

Sadow started off by entering into evidence 10 of Mike Gowder’s medical records from various other health providers in Atlanta and Nashville before asking Allen whether he’d sought or obtained the records in question.

“I wouldn’t know about them unless they were in Dr. Heaton’s records,” Allen said. “I was focused on Dr. Heaton. You could have pain, but that doesn’t mean that what you’re getting is for a legitimate medical purpose in the normal course of practice.”

A former Georgia Medical Composite Board investigator testified that she had investigated a complaint against Heaton in 2010 involving his prescriptions. In resolving that complaint, Heaton had provided the board with medical forms and a contract that his pain management patients must fill out.

Among the other witnesses to testify last week was a female patient who said she’d gone to Heaton for high blood pressure and other issues.

He prescribed Xanax, she said, and then she began to buy stronger doses “off the street.” She testified that she and Heaton began a sexual relationship that lasted for six months.

Another female patient testified that she went to Heaton because she was having abdominal pain. She said he did an exam and gave her a prescription for hydrocodone, and that she, too, began buying it off the street.

After admitting this to him, she said he told her that would have to stop because he couldn’t regulate her medication. The witness testified Heaton made her sign a contract that she would only get pills from him or she would be terminated as a patient.

He then referred her for a colonoscopy that led to her being diagnosed with Crohn’s Disease, and she testified that when Heaton’s clinic closed, she had to go to an addiction treatment center.

“I couldn’t find a physician who would take me,” she said from the stand.

A former employee of Heaton’s family practice led off testimony for Friday, Oct. 18, saying that Mike Gowder would “randomly” come by to discuss business with Heaton in his office, usually about 5 p.m. The employee said they did not collect a co-pay from Gowder because he wasn’t a patient.

“He typically came by to pick up a prescription,” the employee said.

Further, the employee testified that Gowder brought checks from the hospital about once a month that went to Dr. Heaton and were not part of the office deposits.

The prosecution also called on the testimony of Curtis Mason, a Union County man who is currently serving a 10-year sentence at Coastal State Prison in Savannah for a previous drug conviction.

His testimony centered on allegations that he used to buy pills from Mike’s son Brad, and that he sold them to Brad if Brad was out.

Mason was questioned about a specific incident in which he was allegedly outside the Gowder home with Brad in 2015. According to Mason, at the time, Brad said he didn’t have any “roxys,” but when Mike arrived home, Brad went in to talk with him and came out with pills.

“He told me he got them from his dad,” Mason said in court.

On cross examination, Sadow suggested that Mason’s reason for testifying was that the prosecution had offered to write a letter to the parole board about his cooperation, to which Mason replied that prosecutors said they really couldn’t help but that they’d write the letter.

The final witness Friday was a woman who, at the request of the prosecution, showed the jury scars left from her heroin addiction.

She testified that she became a patient of Heaton’s because of back pain from a car wreck, and that she’d followed the usual course of paperwork and diagnosis prior to treatment.

After she became his patient, however, she said the two entered into a sexual relationship, and she would ask him for pain medication refills and sometimes go over to his house at night to pick up prescriptions.

“When I didn’t have money, he didn’t charge me,” she said, adding that she usually left a sexual encounter with a prescription, but that he never forced her to have sex.

The witness said Heaton was aware that she was a former heroin addict and that he gave her methadone when she was pregnant.

She further testified that, after serving time in jail for several months in 2015, she’d texted him hoping for an immediate prescription, only to be told she would have to come to the office to fill out paperwork.

During the course of her testimony, it was brought out that she had served as a confidential informant for law enforcement in recent years.

The defense pointed out that confidential informants were paid, implying that she had offered information about Heaton giving her pills for sex in an effort to keep from going to jail.

Assistant U.S. Attorney Boatright asked the witness if she was being paid for her testimony, and she answered that she was not.

This week, the jury will hear from other witnesses, including the medical expert Dr. Kaufman, after which the defense will have an opportunity to present its witnesses.

At the end of testimony, the attorneys will each sum up their cases in closing statements, after which the jury will go into deliberation, potentially this week.

For extended trial coverage, visit the newspapers’ websites at nganews.com and townscountyherald.net.