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Alaskan Drug Kingpin and Aide Jailed for HIPAA Violations

The land of the midnight sun may not be a hot spot of HIPAA violations, although one incident has recently made the news. The story involves an Anchorage drug kingpin, two hospitalized victims, a financial counselor and the first felony convictions for HIPAA violations in Alaska.

HIPAA Rules Regarding Accessing PHI

The Health Insurance Portability and Accountability Act introduced a number of changes to protect the privacy of patients, and the legislation has gone a long way towards ensuring that Protected Health Information (PHI) remains private and confidential.

Access to patient health information is restricted to a need to know basis. Information can only be accessed for the treatment and care of the patient, or for billing and other essential administrative purposes. Medical professionals cannot simply look at the medical records of any patient. There must be a justifiable reason for doing so.

Friend of Anchorage Drug Kingpin Violates HIPAA Rules

Anchorage resident, Stacy Laulu, 33, was arrested, charged and convicted of two violations of the Health Insurance Portability and Accountability Act on January 16, 2015.

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Prosecutors alleged that Laulu had, on two separate occasions, accessed the medical records of two individuals who had been admitted to the Providence Alaska Medical Center following an assault committed by local drug kingpin, Stuart T. Seugasala.

Seugasala is alleged to have sexually assaulted one of the men with a curling iron, while the other victim was shot in a local Denny’s restaurant after apparently “upsetting” Seugasala. In an attempt to learn information about what the victims had told the police, he contacted Laulu, who accessed the records of the patients to find out what was recorded in their medical records as the cause of their injuries.

Laulu worked as a financial counselor at the hospital and was provided with access to the medical center’s database for work purposes. According to prosecutors, Laulu and her husband were close friends of Seugasala.

Laulu abused her privileges and illegally accessed the PHI of both victims and disclose it via text message. Law enforcement officers recovered a mobile phone when Seugasala was arrested in 2013. When Laulu was questioned about the text messages by the Drug Enforcement Agency, she admitted that she had sent them.

Seugasala and Laulu Convicted on HIPPA Felony Charges

Both individuals were convicted of offences in January of this year, with Seugasala’s sentencing scheduled for May and Laulu’s for May 29. The former will be spending the remainder of his natural life behind bars for a string of violent assaults, trafficking, kidnapping, and firearms offences.

The 40 year old, along with his accomplice, convicted murderer Phosavan Khamnivong, smuggled “nearly pure methamphetamine, as well as other drugs” from California into Alaska, according to the District Attorney.

The judge ordered the state’s first prison term for a HIPAA violation, sentencing Seugasala to ten years for each of the two HIPAA privacy violations he committed, in addition to a 7 year term for firearms offences and three life sentences for kidnapping and drug trafficking.

Laulu was recently brought before the judge for sentencing for the part she played in the privacy violations. She has been sentenced to serve 24 months for each of the two HIPAA violations, with the terms to run concurrently, according to a recent KTVA news report.

These may be the first two felony convictions for HIPAA violations in Alaska, but the harsh sentencing should serve as a warning to other healthcare professionals that patient privacy is a serious matter, and violations will result in lengthy prison terms in Alaska.

Author: Steve Alder is the editor-in-chief of HIPAA Journal. Steve is responsible for editorial policy regarding the topics covered on HIPAA Journal. He is a specialist on healthcare industry legal and regulatory affairs, and has several years of experience writing about HIPAA and other related legal topics. Steve has developed a deep understanding of regulatory issues surrounding the use of information technology in the healthcare industry and has written hundreds of articles on HIPAA-related topics.