Harrison Co. prosecutor files suit against Corydon OB-GYN


by Maggie Ruper


Posted on February 28, 2013 at 12:31 AM

Updated Thursday, Feb 28 at 10:05 AM

HARRISON CO., Ind. (WHAS11) -- The Harrison County Prosecutor’s office has filed a lawsuit for damages, forfeiture of property, seizure of assets and injunctive relief against Dr. Paul Kelty who practiced as an OB-GYN in  Corydon.

After state investigators removed boxes from his office last week, they uncovered patient files and financial documents.

An affidavit states:
“Those documents indicate Kelty has more than $3 million in investments with Hilliard Lyons and a substantial amount of money is his office checking account.”

They believe that money was obtained from illegal activity, including Medicaid fraud.

A state consultant for the Medicaid Fraud Control Unit reviewed the patient documents and found:

“The care given did not conform to reasonable and acceptable standards and that controlled substances were not prescribed for legitimate purposes,” Dr. Timothy King said. 

On Tuesday, a Harrison County judge found probable cause that Kelty profited from those alleged illegal acts and invested part of the financial gain. The judge ordered Kelty’s financial accounts to be frozen, including locations at Republic Bank in Floyds Knobs and Hilliard Lyons in Louisville.

Kelty has 20 days to respond to the lawsuit. Formal charges from the investigation at his office have not yet been filed.