Everything you need to know about the Federal trial of Dr. Tricia Derges

Federal authorities charged Patricia “Tricia” Derges, 63, of Nixa with 20-count indictment.
Federal authorities charged Patricia “Tricia” Derges, 63, of Nixa with 20-count indictment.(KY3)
Published: Jun. 16, 2022 at 8:12 AM CDT
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SPRINGFIELD, Mo. (KY3) -The federal trial of Dr. Patricia “Tricia” Derges has started this week inside the U.S. Federal Courthouse and is expected to go on for two weeks.

THE CASE

Dr. Derges of Nixa faces a 23-count superseding indictment, which was returned under seal by a federal grand jury in Springfield on March 23, 2021. The U.S. Attorney’s office says Derges lied about stem cell treatments at her healthcare clinic and illegally provided prescription drugs.

The federal indictment charges Derges with:

  • Three counts of COVID-19 fraud dealing with the Cares Act
  • Eight counts of wire fraud related to five specific victims
  • Ten counts of distributing Oxycodone and Adderall over the internet without in-person consultations
  • Two counts of making false statements to federal agents investigating the case in May 2020

WHO IS DR. DERGES?

Dr. Patricia “Tricia” Derges is a Republican representing Christian County. She was elected into this position in November of 2020. However, her indictment is unrelated to her current political standing and seems to focus more on her business.

Dr. Derges is an assistant physician and owner of Ozark Valley Medical Clinic, which has locations in Springfield, Branson, and Ozark. She also created the non-profit “Life Up Someone Today” (Lift Up Springfield) to help provide medical and dental care to the poor and homeless of Springfield and southwest. Missouri.

Dr. Derges’ husband has faithfully sat behind her in court every day so far of the trial.

KEY PLAYERS

Albert Watkins, a Clayton, Missouri attorney, represents Dr. Derges. You may have heard the name before because this indictment isn’t the first high-profile case on his roster. More recently, he represented Jacob Chansley. Chansley became one of the faces of the Jan. 6, 2021 insurrection with his horned-helmeted.

This week in court, he has brought along a team to Springfield. These include Attorney Michael Schwade and Will Saunders. Throughout the trial, Schwade and Saunders appeared to work for hand and hand with Watkins. Three other team members have been taking detailed notes of evidence, working on technology, and ensuring the attorneys are well equipped with pens and notepads.

U.S. Attorney Shannon Kempf represents the government. He’s the exact prosecuting attorney who went to trial with Michael David Dismer, the Nixa business owner who engaged in a $4 million scheme to defraud his customers. Sitting with the prosecutor so far during the trial is Michael Effland, the federal agent who investigated Dr. Dergas along with Health and Human Services agent Theresa Daly.

JURY SELECTION

Jury selection started at 9 a.m. Monday ed by Judge Brian Wimes. By 5 p.m., when the court closed, attornies from both sides were still arguing over who would take the 14 seats. Thirty minutes later, nine men and five women were chosen to be part of this federal trial.

OPENING STATEMENTS

On Tuesday at 9 a.m., opening statements began with the prosecution talking about the charges against Dr. Derges and summarizing what evidence they said they had and witnesses they would bring to the stand.

Watkins, Dr. Derges’ attorney, waved an opening statement at this time.

WITNESSES

Jodi Schmitt: an accountant who did payroll for Lift Up Springfield.

Schmitt testified she had also volunteered to help Dr. Derges compile a financial history summary of the Ozark Valley Medical Center. Dr. Derges told her she had the intention of selling the clinics. Schmitt said she used numbers in this that were provided by Dr. Derges.

Schmitt testified that the numbers did not match up with what was on the tax forms she was filling and that she found several discrepancies.

The production also focused on an email that stated that Dr. Derges didn’t take a paycheck. All profits from Ozark Valley Medical Center would go to her non-profit, Life Up Someone Today.

Watkins, the attorney for Dr. Derges, cross-examined Schmitt and focused on mistakes she had made in the fillings and not clarifying emails. Like if money was going to “Lift Up Springfield” or “Lift Up Someone Today.”

Schmitt said she didn’t know the difference.

He also emphasized Schmitt met with government officials about this account on several occasions, never once mentioning it to Dr. Derges, although she wasn’t instructed to.

He questioned if she had a duty to her clients to let them know if something was happening with their accounts.

He also emphasized that she picked and chose what correspondence with Dr. Derges she turned over to the FBI. He asked her about not turning in an email where Schmitt informed Dr. Derges that she didn’t pay her taxes on time.

Susan Reynolds: Long-time CPA of Dr. Derges

Reynolds worked with Derges as her CPA for 25 years.

She said from the beginning that she worked with the numbers provided by Dr. Derges. Evidence showed these numbers were usually presented on an email spreadsheet listed.

A key moment from prosecutors is when Reynolds said expenses from lab work that was once on Ozark Valley clinic’s draft tax return disappeared in a later version of Derges and her husband’s tax form.

That difference was near $600,000, Reynolds testified.

Like with Schmitt, Watkins questioned Reynolds about her responsibility to her client. Reynolds also didn’t alert her client that the government was asking about Dr. Derges’ accounts. She also wasn’t asked to keep it a secret.

Terri Brown: Manager at Great Southern Bank

Terri Brown was brought in to speak on the PPP loans and verify some account numbers.

Karen Fackler: Dynamic DNA Laboratories employee

Dynamic DNA Laboratories provided the supplies for Dr. Derges COVID 19 testing.

The clinic went into contract with the laboratory in 2020. The contract’s terms sold COVID tests to Ozark Valley Medical center for $99.99 per test.

The prosecution explained that the center provided the test for an upcharge, and this is where they say things get murky. The prosecution says that she was awarded Cares Act money for these COVID-19 tests that her clinic had already made a profit from.

Michael Effland: Federal investigator

Michael Effland is a key witness, and his testimony took up the better part of Wednesday in the courtroom, though he made his first appearance at the end of the day Tuesday.

Tuesday, his testimony started with an interview aired by KOLR-10 interviewing Dr. Derges about the stem cell services she offered. This, along with several Facebook posts, were the leads to his investigation into Dr. Derges.

During the interview, Dr. Derges goes into great detail about the power of amniotic Fluid– specifically fluid with Mesenchymal Stem Cells (MSC) inside. Dr. Derges said these could possibly help fight COVID 19.

Effland said COVID scams were on the FBI’s radar. These claims piqued his interest. He put in a “case open request” to investigate, which was approved.

The prosecution plays several recorded interviews with Dr. Derges, including some from a recorded phone conversation.

In the phone call clips presented, Dr. Derges explains how the MSC work and how she has had success with them. She specifically talks about its success with a Vietnam vet who felt healthy for the first time in a long time after treatments.

Dr. Derges tells the agent that she’s glad there’s an investigation going on because “all around the U.S. there are clinics,” and she warns that some are scamming people out of money.

On May 5, 2020, Effland and Health Human Services agent Theresa Daly met with Dr. Derges for the first in-person interview.

There they asked about her Stem cells, and she talked about the MSC that were in the amniotic fluid she was injecting into patients. She spoke about how they can help aid lots of different ailments. They also questioned her on prescribing drugs, specifically schedule two drugs. She said, “we don’t ever prescribe twos.”

In a later interview, Dr. Derges seemed to agree with the agent that there was no MSCs in her fluids.

The prosecution also walks Effland through a video posted on Facebook from one of Dr. Derges’ “stem cell seminars,” where she would offer a free dinner to learn more about her stem cell services.

In the video, she claims she’s been working with stem cells since 2014, yet the prosecution points out she wasn’t licensed until 2018. She also mentions several times her close relationship with The University of Utah.

“I can’t promise you this will work, but I have a hell of a rate on it… 95%,” she says in the video.

They go on to show medical records where patients describe the treatment they expect, which includes “stem cells,” despite the prosecution insisting that no stem cells are in the amniotic fluids she has.

Watkins began his cross-examination, pointing out that Effland has no medical degree or science training. He also says that this is the only health care case he has had to go to trial.

He asked a series of questions about why he took a special interest in this case in particular and why he asked to cover the case in particular.

Watkins kept referring back to the interview recorded by Effland and Daly, bringing up something the prosecution left out, it was a cold day, and the interview was around four hours.

This outdoor interview is part of the “making false statements to federal agents’ charges. Dr. Derges had no idea she was being recorded. She was also never told she was under investigation and had no lawyer present.

“We rarely tell subjects we are investigating them,” Effland tells the court.

The defense also pointed out something we didn’t know about the investigation. That there was a secret agent that went to one of her seminars and recorded it.

During Watkins’ cross-examination, he also pointed out that Bob Dixion, Greene County commissioner, contacted Dr. Derges about applying for the Cares Act the day before the applications were due. He also points out that the applications include invoices from Ozark valley Medical and “Lift Up Someone Today.”

Dixon is a witness for the prosecution we plan to hear from during the trial.

Watkins also points out that the FBI seized almost all of the Cares Act money, except $8000 that was no longer in the bank. He also questioned Effland’s interview tactics. If he possibly asked people he contacted, “did you know Derges is not a doctor.”

He denied leading in any of the interviews.

Jan Pierce: Senior Director at University of Utah Cell Therapy and Regenerative Medicine

Jan Pierce sold amniotic fluid to Dr. Derges’ Ozark Valley Medical Center clinic. He says he has known the doctor for some time.

The prosecution focused on email exchanges between Dr. Derges and Pierce regarding another person selling “Stem Cell Shots” in the Ozarks.

Dr. Derges tells him in an email that Tom Brett, a performer in Branson who kept his chiropractor, toured her facility and then decided to open his own clinic there. She went on to say that he was giving out “Stem Cell Shots.” She asked in the email, “Can he call it a stem cell shot?”

Pierce said no. Part of the University of Utah’s processes was filtering out all of the stem cells, including MSCs. They did have proteins and are advertised to provide some healing properties without the MSCs.

Towards the end of day two, a cross-examination began led by Watkins. He shared an email that Pierce had sent saying that amniotic fluid could provide some help for a spinal cord injury.

Watkins asked about the debate in the scientific community about what would still be inside of amniotic fluid despite its filtering process.

Thursday, that cross-examination will continue.

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