GREENEVILLE, Tenn. (WJHL) — A Kingsport doctor faces federal health care benefit fraud, making false statements and distribution of controlled substances charges after a multi-year investigation.

Dr. Scott McLain allegedly billed insurers for services he didn’t provide and engaged in unauthorized distribution of Schedule II and Schedule IV drugs, including Oxycodone, according to an affidavit unsealed last week. McLain is listed as one of the physicians at Kingsport Primary Care.

McLain was arrested July 1. He was denied release in a detention hearing Thursday and remains in the custody of federal marshals.

An affidavit from FBI agent Reanna O’Hare states that O’Hare participated in a joint investigation with the Tennessee Bureau of Investigation (TBI), its Medicaid Fraud Control Division and the U.S. Drug Enforcement Administration. The affidavit refers back to an Aug. 23, 2023 surveillance of Kingsport Primary Care by TBI agents.

It describes agents interviewing pharmacists as well as people to whom McLain allegedly prescribed drugs improperly between mid-2023 and early 2025. Controlled substances allegedly prescribed in violation of law, in addition to Oxycodone (a painkiller), included Xanax, Gabapentin and Phentermine.

The affidavit alleges McLain prescribed such drugs for a mechanic who sometimes lived at the clinic property and for romantic partners. “The facts … pertain to McLain issuing controlled substance prescriptions to close friends or romantic interests outside the ordinary course of professional practice,” it says.

The mechanic, who faced federal drug and firearm possession charges, cooperated with the FBI in the McLain case. O’Hare’s affidavit says, “The United States agreed to dismiss a felony offense of possessing a firearm by an addict…”

In addition to the drug-related charges, McLain is charged with billing two different insurance companies “for excessive services that were not provided.”

He is charged with a total of four separate crimes:

• False statements relating to health care matters;
• Health Care benefit fraud;
• Unauthorized distribution of Schedule II controlled substance;
• Unauthorized distribution of Schedule IV controlled substance.

Corey Shipley, who was appointed to represent McLain, argued for his release from custody to await trial at a hearing Thursday. That request was denied. The next hearing in McLain’s case has not yet been set.