SAN ANTONIO – Three people tied to a network of opioid addiction treatment clinics in Kentucky have been sentenced to federal prison for a scheme that prosecutors said fraudulently billed Medicare and Kentucky Medicaid more than $4.8 million.
The U.S. Department of Justice said Michael Bregenzer, 53, of Houston, Texas, was sentenced today to 48 months in prison, followed by three years of supervised release. José Alzadon, M.D., 62, of Paintsville, Kentucky, was sentenced in February 2026 to 60 months in prison. Barbie Vanhoose, 63, of West Van Lear, Kentucky, was sentenced in January 2026 to 24 months in prison.
All three defendants were ordered to pay restitution of $812,881.09.
According to evidence presented at trial, the three orchestrated the scheme through Kentucky Addiction Centers, which operated in Winchester, Paducah, Paintsville and London. The Justice Department said Alzadon served as the clinics’ medical director and prescribed Suboxone, a controlled substance used to treat opioid addiction. Bregenzer was the CEO, and Vanhoose was the billing manager.
Prosecutors said the defendants billed taxpayer-funded programs for services that were not provided or were billed as more complex and expensive than what patients actually received. The Justice Department also said they conspired to bill for services in the name of Alzadon’s elderly father when services were not provided or were provided by Alzadon, who was not credentialed with certain health plans. The defendants also conspired to use Alzadon’s father’s prescribing credentials, including his DEA registration number and electronic prescribing token, to prescribe Suboxone even though Alzadon’s father had not seen the patients for whom he was supposedly issuing prescriptions, according to the release.
In March 2025, the Justice Department said Bregenzer, Alzadon and Vanhoose were each convicted at trial of conspiracy to commit health care fraud, eight counts of health care fraud, and conspiracy to distribute controlled substances using the registration number of another person. Alzadon and Vanhoose were also convicted of two counts of aggravated identity theft.
Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division; Special Agent in Charge Robert J. Scott of the DEA Louisville Division; Special Agent in Charge Olivia Olson of the FBI Louisville Field Office; Special Agent in Charge Kelly Blackmon of the Department of Health and Human Service Office of the Inspector General; Regional Director Joe Rivers of the Department of Labor Employee Benefits Security Administration; and Kentucky Attorney General Russell Coleman announced the sentencings.
The DEA, FBI, HHS-OIG, DOL-EBSA and the Kentucky Medicaid Fraud Control Unit investigated the case, according to the Justice Department. The Winchester Police Department provided substantial assistance during the investigation and trial. Trial Attorneys Dermot Lynch, Sarah Edwards and Samad Pardesi of the Criminal Division’s Fraud Section prosecuted the case.
The Justice Department also noted that on April 7 it announced the creation of the National Fraud Enforcement Division. The department said its Health Care Fraud Strike Force Program, which includes nine strike forces operating in federal districts across the country, has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion since 2007.