Feds Call in the SWAT Teams on Rogue Docs

The U.S. Department of Justice arrested a record 301 individuals on health-care fraud allegations in late June. The number was striking, but so was the word—“takedown”—Attorney General Loretta Lynch used to describe what was essentially a white-collar enforcement operation. “Health-care fraud is not an abstract violation or a benign offense,” Lynch said at a June 22 press conference. “It is a serious crime.”

The arrests, from Florida to Alaska, involved about $900 million in suspect billings. They’re the most visible result yet of a policy shift set in motion last fall, when Deputy Attorney General Sally Yates issued a memo barring prosecutors, without special permission, from releasing individuals from criminal or civil liability when settling fraud cases against companies. Prosecutors typically used such immunity deals as leverage in pursuing civil settlements with companies accused of fraud. “Those days are gone,” says Mark Hardiman, an attorney in Los Angeles who represents health-care companies. read more »

NJ lab at the center of major kickback scheme forfeits assets

The New Jersey laboratory accused of orchestrating one of the nation’s largest kickback schemes, which involved dozens of physicians, has pleaded guilty and was ordered to forfeit all of its assets, according to the U.S. Attorney’s Office for the District of New Jersey.

The total assets from Bio diagnostic Laboratory Services (BLS) paled in comparison to the estimated $100 million in false claims paid as a result of the scheme. BLS had just $56,000 in laboratory equipment, computers, printers, furniture and office equipment, according to the plea agreement. The company also agreed to pay $64,000 that had been deposited in three separate accounts linked to a money laundering charge. So far the government has recovered more than $12 million from the scheme through forfeiture.

The company’s plea deal is separate from that of David Nicoll, president of BLS, and his brother Scott, both of whom admitted to orchestrating the scheme and are awaiting sentencing.

Prosecutors have received guilty pleas from 41 individuals, including 27 doctors. The latest physician to plead guilty, Juan Espindola, admitted to taking $1,500 a month in sham consulting fees in exchange for providing blood samples to the lab. read more »