The defendants accused of being involved in a $300 million healthcare fraud case have pleaded guilty. According to a news release by the U.S. Department of Justice, all eleven defendants pleaded guilty.
Court documents state that the founders of lab companies, including Reliable Labs LLC, Spectrum Diagnostic Laboratory, and Unified Laboratory Services, bribed medical professionals to order lab tests that were not necessary. The tests were then billed to Medicare and other federal healthcare programs.
According to court records, the medical professionals who accepted the bribes, disguised as legitimate business transactions, ordered tests worth millions of dollars. In return for lab test referrals, the labs had paid doctors hundreds of thousands of dollars in disguised payments, including “advisory services,” which the doctors never performed. The transaction was done through marketers.
To increase referrals, Reliable Labs offered advance disbursement payments and ownership opportunities to physicians to encourage them to refer an adequate number of lab tests.
According to the Department of Justice, the scheme yielded more than $300 million in billing to federal government healthcare programs.
Ten of the defendants were indicted on February 9. Six of them filed plea papers on February 11. They include Abraham Phillips, co-founder of Reliable Labs; Jose Roel Maldonado, a family medicine doctor; Eduardo Carlos Canova, a Laredo-based internal medicine doctor; Keith Allen Wichinski, a nurse practitioner; Juan David Rojas, a marketing firm owner; and Laura Ortiz, a marketing employee.
The other four defendants are Jeffrey Paul Madison, founder of Unified Lab and Spectrum Diagnostic Lab; David Michael Lizcano, owner of DCLH, a marketing firm involved in the scheme; Mark Christopher Boggess, chief operating officer for Spectrum and Unified; and Sherman Kennerson, an investor at Unified.
In addition to the initial ten defendants, Reliable Labs co-founder Biby Ancy Kurian was charged on March 16. She entered her guilty plea on April 13.
Dr. Maldanado admittedly received a payment of over $400,000 for ordering lab tests worth more than $4 million. Dr. Canova admitted to ordering more than $12 million worth of lab tests and receiving more than $300,000 in return. They both pleaded guilty to conspiracy to solicit and receive illegal kickbacks, leaving them to face up to five years in federal prison.
Kennerson, Ortiz, Kurian, Phillips, Rojas, and Wichinski face up to five years in prison. Boggess faces up to three years in prison, while Madison and Lizcano might get up to 15 years each.