Doctor released into wife's custody; bail continues at $100,000

Posted: Tuesday, November 07, 2000

FAIRBANKS (AP) -- Former Tanana Valley Clinic doctor Steve Grandstaff has been released from jail into the custody of his wife after being accused of trading drugs for sexual favors from patients and defrauding Medicaid of more than $6,000 in bogus treatments and prescriptions.

Superior Court Judge Ralph Beistline said in his bail order last week that Grandstaff had been aware of the investigation for at least 18 months and hadn't fled.

Grandstaff even flew to Anchorage, Beistline said, to meet with prosecutor Stephen Branchflower, director of the Medicaid Fraud Control Unit. The judge also noted that Grandstaff, who was a physician at the clinic until May 26, 1998, voluntarily surrendered his license on June 10, 1999.

But Beistline rejected defense attorney Bill Murphree's request to lower bail from $100,000 to $10,000 because of the seriousness of the allegations. They ''raise significant issues regarding his judgment, his emotional stability and his overall attitude toward women,'' Beistline's bail order said.

Grandstaff was charged with first- and second-degree assault, second-degree theft and a combined 98 charges of second- and fourth-degree misconduct involving a controlled substance.

He pleaded no contest to the charges on Oct. 30.

Conditions of his release stipulate that Grandstaff cannot leave the Fairbanks North Star Borough and that his wife must drive him to and from his job as a car salesman. Grandstaff will be under the custodial care of his employer while working, the order said.

Grandstaff also is under a curfew from 8 p.m. to 7 a.m., where he must remain at his Fairbanks home with his wife, Kathleen, and his two teen-age stepdaughters.

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