Indicted Missouri lawmaker faces new fraud charges, this time with CARES Act funds

Missouri State Rep. Patricia Derges, accused by federal prosecutors of selling patients fake stem cell treatments at her southwest Missouri clinics, has also been charged with defrauding Greene County of pandemic relief funds.

Derges is accused of taking $300,000 in federal aid intended for her nonprofit clinic and using it instead to pay for tests that patients at her for-profit clinic had already paid for.

A new indictment unsealed Friday shows she now faces three more charges in addition to the 20 counts she was charged with in January. In the past two months, the freshman lawmaker has been removed from her committee assignments, booted out of the Republican caucus and faced multiple calls from House leaders to resign.

Her lawyer, St. Louis attorney Al Watkins, denies she acted illegally with federal funds.

The Nixa Republican, an assistant physician, runs a chain of clinics in and around Springfield as well as an organization called Lift Up Someone Today, which provides medical care to the poor and homeless.

She applied for a total of nearly $900,000 in Greene County CARES Act funds last September, according to the new indictment, to pay for COVID-19 tests for Lift Up Springfield.

Her application was accompanied by invoices totaling close to $300,000 that a testing company sent to her private clinic, the Ozark Valley Medical Clinic. She requested an additional $500,000 for future tests. Prosecutors allege patients and their employers had already paid Ozark Valley a total of $517,000 for the tests, which she did not tell Greene County.

When asked by the county for more documentation in December, Derges sent eight invoices between April and November showing the private clinics paid nearly $600,000 for tests. The clinics’ patients had already paid nearly $1 million for those tests, prosecutors allege.

Greene County in December awarded the nonprofit Lift Up $296,574.04 as reimbursement for the tests, money that Derges then transferred into Ozark Valley’s account, authorities allege.

According to a Greene County press release issued December, Lift Up was awarded the money “for health care and COVID testing for the uninsured and those without housing.”

Lift Up never performed Covid-19 tests, prosecutors say. Its clinic was closed for three months at the beginning of the pandemic last year.

House Minority Leader Crystal Quade, a Springfield Democrat, called for Derges to recuse herself from voting on the state budget in light of the new charges.

“It further calls into question her fitness to serve in the legislature,” Quade said in a statement. “But more immediately, it raises deep concerns about whether she should be casting votes that will determine how Missouri allocates its share of those relief funds. Given the situation, it would be appropriate for her to recuse herself from voting when the House debates the state budget next week.”

Watkins said his client “did everything she was supposed to do” and complied with “not only the letter of the CARES Act but the spirit of the CARES Act.”

He said the private clinic took on Lift Up’s indigent patients when the nonprofit had to close for lack of staff during the pandemic.

“She acted with complete transparency and acted with the knowledge with those on the board of the collaborative undertaking,” he said.

In February, prosecutors revealed charges against the lawmaker of medical fraud, writing illegal prescriptions and lying to investigators. She is accused of pocketing nearly $200,000 for marketing stem cell treatments to patients who actually received amniotic fluid without the cells.

Federal prosecutors began investigating her last April, after she went on a local TV station claiming a certain kind of stem cells could potentially be used to treat the coronavirus.

She ran unopposed in November after winning the GOP primary, and took office weeks before being indicted. Alongside her predecessor, Rep. Lynn Morris, she advocated for the creation of Missouri’s assistant physician license, allowing medical school graduates like herself who did not get placed into residencies to treat patients.

On social media, she has referred to her legal battle as akin to David and Goliath.

This story was originally published March 26, 2021 at 1:05 PM.