In the last few years federal authorities have initiated many investigations on a variety of healthcare related frauds.  These investigations have involved a wide range of  healthcare related matters including doctors and others in the medical field accepting or paying “kickbacks” or  bribes,  fraudulently billing insurance companies for services not rendered, or for non-medically necessary procedures, money laundering, and failure to pay taxes.  Sometimes the charges are brought in addition to mail and wire fraud charges. Below are some recent examples of healthcare related convictions that occurred in 2015 in New Jersey and New York Federal Courts (obtained from the IRS website (cited below)).

Newark Doctor Sentenced for Accepting $1.8 Million in Bribes for Test Referrals 
On July 8, 2015, in Newark, New Jersey, Frank Santangelo, of Boonton, was sentenced to 63 months in prison, three years of supervised release and ordered to forfeit more than $1.8 million for accepting bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, as part of a long-running scheme operated by the lab, its president, and numerous associates. Santangelo previously pleaded guilty to violating the Travel Act, money laundering and failing to file tax returns. Santangelo, a doctor, who has offices in Montville and Wayne, received more than $1.8 million in bribe payments from BLS for referrals for which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party – often tens of thousands of dollars a month – totaling more than $1 million between 2010 and his arrest in April 2013. Additionally, Santangelo failed to file tax returns from 2009-2011 and he failed to pay taxes owed during that time period.

New Jersey Doctor Sentenced for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical Lab
On June 23, 2015, in Newark, New Jersey, Douglas Bienstock, of Wayne, was sentenced to 37 months in prison, one year of supervised release and ordered to pay a $75,000 fine and forfeit $79,695. Bienstock previously pleaded guilty to accepting bribes. Bienstock, a doctor with a practice in Hawthorne, accepted bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, its president and numerous associates. From February 2008 through October 2009, Bienstock was paid more than $2,500 per month under a sham service contract in return for patient blood specimen referrals to BLS. BLS also paid Bienstock $100 in cash for each of a certain type of blood test that he ordered. As a result of Bienstock’s referrals, BLS received approximately $640,000 in lab business.

Salesman Sentenced for Role in Bribes-For-Test-Referrals Scheme Involving New Jersey Clinical Lab
On June 17, 2015, in Newark, New Jersey, Len Rubinstein, of Holmdel, was sentenced to 37 months in prison, one year of supervised release, ordered to forfeit $250,000 and pay a $10,000 fine. Rubinstein previously pleaded guilty to one count of conspiracy to commit bribery and one count of money laundering for his role in a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates. From May 2012 through April 2013, Rubinstein agreed with BLS president David Nicoll, of Mountain Lakes, his brother, Scott Nicoll, of Wayne, and others to pay doctors to refer patients to BLS for testing of blood specimens. Rubinstein paid cash bribes to doctors as part of the conspiracy. Rubinstein admitted he used Delta Consulting Group LLC – an entity he controlled – to hide the money he received from BLS and used to make bribe payments to doctors.

Two Doctors Sentenced for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical Lab
On June 2, 2015, in Newark, New Jersey, Richard Goldberg, of Weston, Connecticut, was sentenced to 20 months in prison, three years of supervised release and ordered to pay a $5,000 fine. Gary Leeds, of Greenwich, Connecticut, was sentenced to 20 months in prison, one year of supervised release and ordered to pay a $15,000 fine. Goldberg and Leeds must each forfeit $108,000. Both previously pleaded guilty to accepting bribes. Both Goldberg and Leeds were doctors with practices in New York and each accepted bribes in exchange for test referrals. The bribes were associated with the long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates. Thirty-eight people – 26 of them doctors, including Goldberg and Leeds – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. Goldberg and Leeds accepted thousands of dollars per month in cash between September 2010 and April 2013 in return for referring patient blood specimens to BLS. The pair acknowledged they each accepted more than $100,000 in cash from BLS in exchange for referring at least a combined $1.8 million in lab business from their joint practice, Family Medical Group of Manhattan.

Two Doctors Sentenced for Taking Bribes in Test-Referrals Scheme  
On May 5, 2015, in Newark, New Jersey, Eugene DeSimone, of Eatontown, and Franz Goyzueta, of New York, were each sentenced to 37 months in prison and one year of supervised release. Additionally, DeSimone was ordered to forfeit $260,500 and Goyzueta was ordered to forfeit $72,000. Both DeSimone and Goyzueta previously pleaded guilty to accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates. DeSimone accepted $1,500 in cash per month between August 2010 and March 2013 in return for referring patient blood specimens to BLS, for which BLS received $980,000. Goyzueta accepted as much as $3,000 per month from BLS between December 2013 and March 2013 in return for patient blood specimen referrals, for which BLS received approximately $713,249. Thirty-eight people – 26 of them doctors, including DeSimone and Goyzueta   – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has so far recovered more than $10.5 million to date through forfeiture.

Two New Jersey Doctors Sentenced for Taking Bribes in Test-Referral Scheme
On March 31, 2015, in Newark, New Jersey, Wayne Lajewski, of Madison, and Glenn Leslie, of Ramsey, were sentenced to 14 months and 24 months in prison, respectively. In addition to the prison term, both were sentenced to one year of supervised release and fined $10,000. Lajewski and Leslie previously pleaded guilty to separate informations charging them each with accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates. As part of their guilty pleas, Lajewski must forfeit $48,000 and Leslie must forfeit $350,000. Including Lajewski and Leslie, 37 people – 24 of them physicians –pleaded guilty in connection with the bribery scheme, which its organizers admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. To date, the investigation has recovered more than $10.5 million through forfeiture. Lajewski accepted cash bribes of $2,000 per month for over two years in return for referring patient blood specimens to BLS, for which BLS received more than $850,000. Leslie accepted $5,000 per month in return for referring patient blood specimens to BLS, for which BLS received $380,000.

Former University Employee Sentenced On Fraud Charges
On March 19, 2015, in Rochester, New York, Debra Bulter, of Penfield, was sentenced to 36 months in prison, three years of supervised release and ordered to pay restitution totaling $4,285,637. Bulter was previously convicted of conspiracy to commit mail fraud and money laundering. Bulter worked as the program administrator for the Department of Anesthesiology at the University of Rochester in Rochester (the Department). From 2001 through 2012, CGF Anesthesia Associates, P.C. (CGF), contracted with the Department to provide anesthesiologists at medical facilities served by the Department. From 2007 to 2009, Bulter deceived the Department into making fraudulent payments of $930,000 to two doctors from CGF and $530,000 to CGF. The two doctors each executed fraudulent contracts with the Department worth more than $3,000,000 with the assistance of Bulter. The scheme caused the Department to divert compensation of $2,410,015 actually earned by CGF to the two doctors. For the years 2010 through 2012, CGF was deceived into paying $1,169,606 to Bulter’s business, DJA Solutions, LLC. Bulter also caused the Department to make a fraudulent and unauthorized loan to a doctor working for the Department. Bulter disguised various payments to the doctor as extra compensation resulting in total fraudulent payments to the doctor of $510,726. From October 2012 to May 2012, Bulter also caused the Department to pay a former employee $7,168. Doron Feldman, of Williamsville, New York, one of the two doctors with CGF, was sentenced to 24 months in prison and ordered to pay $1,617,000 in restitution.

New York Pharmacist Sentenced for Multimillion-Dollar Medicare/Medicaid Fraud Scheme
On March 26, 2015, in Manhattan, New York, Purna Chandra Aramalla, of Port Washington, was sentenced to 36 months in prison, ordered to forfeit $7,503,605, pay restitution to his victims in the same amount, file amended tax returns for the years 2010 through 2012 and pay back taxes and applicable penalties. Aramalla was sentenced for conducting a scheme to defraud Medicaid, Medicare, and the New York State-funded AIDS Drug Assistance Program (“ADAP”) through the purchase and sale of illegally diverted prescription drugs, including HIV medication. Aramalla was also sentenced for tax evasion. Aramalla, a pharmacist, owned and operated A Fair Deal Pharmacy Inc. in Queens, New York, and Quality Drug Inc. in the Bronx, New York. Using these pharmacies, Aramalla carried out a multimillion-dollar scheme to defraud the New York State Medicaid, Medicare, and ADAP programs through the sale of diverted prescription drugs, that is, drugs not obtained from legitimate sources. Further, Aramalla signed and filed a false individual income tax return for the 2011 calendar year. Aramalla falsely underreported business income by $2,164,545, which resulted in tax due and owing of $757,591.

Former Owner and Operator of New York Health Clinics Sentenced for $30 Million Medicare Fraud Scheme
On Aug. 25, 2015, in Manhattan, New York, Oscar Huachillo was sentenced to 87 months in prison, three years of supervised release and ordered to pay $3,454,244 in restitution and $31,177,987 in forfeiture, including forfeiture of approximately $14 million of assets that were seized at or around the time of Huachillo’s arrest in August 2013. Huachillo previously pleaded guilty to orchestrating a scheme to defraud Medicare out of more than $31 million and evading more than $3.4 million in federal income taxes by falsely underreporting his income. Huachillo set up and operated multiple health care clinics in New York City that purported to provide injection and infusion treatments to Medicare-eligible HIV/AIDS patients, but that were, in reality, health care fraud mills that routinely billed Medicare for medications that were never provided or were provided at highly diluted doses, and often unnecessary because the person being “treated” did not medically need the treatments. In addition, Huachillo willfully evaded over $3.4 million in taxes owed to the IRS during the tax years 2009 through 2011 by falsely underreporting his taxable income, including income he had obtained through fraudulent Medicare claims.

If you are being investigated by federal authorities or have been charged with a federal healthcare fraud crime, contact Lorraine Gauli-Rufo, a Montclair, New Jersey and New York Federal Criminal Defense attorney, whose office specializes in federal white collar fraud cases and investigations.