Maria Carmen Palazzo, psychiatrist already in prison on Medicaid fraud conviction, pleads guilty to charges of falsified pediatric clinical drug trial records

August 19, 2010

NEW ORLEANS, LA—Dr. Maria Carmen Palazzo, age 58, pled guilty in federal court today before U.S. District Judge Mary Ann Vial Lemmon to 15 counts of failing to prepare and maintain records, with intent to defraud and mislead, in connection with clinical trials to evaluate the efficacy and safety of Paxil in children and adolescents with Obsessive-Compulsive Disorder (OCD), announced U.S. Attorney Jim Letten.

According to court documents, Palazzo, who specialized in psychiatry, was a clinical investigator for SmithKline Beecham d/b/a GlaxoSmithKline, was involved in two clinical trials evaluating Paxil’s safety and effectiveness in children and adolescents. Some of the study records indicated that Palazzo included psychiatric diagnoses inconsistent with patients’ psychiatric histories; prepared multiple psychiatric evaluations on study patients which contained different diagnoses and treatment plans; reported symptoms of OCD when Palazzo knew that the study subject did not demonstrate such symptoms; and reported that Palazzo examined study subjects when she had not.

Palazzo is currently serving an 87-month prison sentence after being convicted of 39 counts of health care fraud following a 12-day trial in April 2008. In the instant case, Palazzo was sentenced to 13 months in prison to run concurrent to the previous sentence as well as serve one year of supervised release during which time she will be under federal supervision and risk additional imprisonment should she violate any rules of the release. Additionally, Palazzo was ordered to pay restitution to GlaxoSmithKline in the amount of $91,824 and $1,500 in special assessments.

The case was investigated by the Food and Drug Administration’s Office of Criminal Investigations, U. S. Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation and the Louisiana Medicaid Fraud Control Unit.

The case was prosecuted by Assistant U.S. Attorney Patrice Harris Sullivan, the Health Care Fraud Coordinator in this District.

Source: "Jailed Psychiatrist Pleads Guilty and is Sentenced on Charges of Falsified Records of Clinical Trials Involving Children," press release of the U.S. Department of Justice, August 19, 2010.