When Love and Fraud Collide

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When in love, people have been known to do some pretty interesting things. Extravagant gifts, flowers, and romantic getaways aside, today’s fraudster from Cape Girardeau, Missouri demonstrated his love for his fiancée by involving her spinal implant distributorship in a healthcare fraud scheme that cost Medicare and Medicaid $1.65 million.

Here’s how the love story played out. The Cape Girardeau neurosurgeon’s fiancée founded a spinal implant distributorship in 2008. The doctor used the company’s spinal implants for most of the surgeries he performed over the next three years. It’s important to note that the neurosurgeon got a 50 percent commission for each implant he used. (The more implants used from his fiancée’s distributorship, the more commission he and his fiancée made. Get where I’m going here?)

Trial evidence showed that the fiancée used some of the income generated by more than 228 spinal surgeries performed on Medicaid and Medicare patients to buy a home, boat, airplane, and make home improvements. (The neurosurgeon got to enjoy them as well.)  They collected $1.65 million by submitting false and fraudulent Medicare and Medicaid claims.

In 2012, several physicians, a surgical assistant and another citizen filed a civil suit in federal court regarding kickback allegations against the neurosurgeon and his fiancée’s medical company. (Apparently, they were tired of the neurosurgeon bragging about his annual earnings exceeding $8 million per year.) Federal prosecutors purported that the defendants and their companies violated the anti-kickback statue, which is a federal law that prevents healthcare providers from making patient referrals in exchange for any direct or indirect benefits. (The doctor was advising patients to have the spinal implant surgeries using the devices his fiancée’s company provided.)

After an 11-day trial, a federal jury found the Cape Girardeau neurosurgeon and his fiancée guilty of healthcare fraud for violating the federal False Claims Act. They are required to pay back the $1.65 million to the Medicare and Medicaid programs. The court imposed a penalty of between $5,500 to $11,000 on each of the 228 false claims for a total of $1.25 to $2.5 million.

Wooing a love interest can be costly depending on the level of extravagancy involved. Today’s fraudsters went beyond the standard bouquet of flowers and weekend getaways to new homes, planes and boats to get the message across. But, when love and fraud collide, the heartbreak is a little different. These two love birds will have to depart with a significant number of assets to pay back what is owed. The real test will be whether the two will be able to keep the relationship together since they have gone from richer to poorer. (After all, financial issues are one of the top reasons couples break up.)

 Today’s “Fraud of the Day” is based on an article entitled, Federal jury finds surgeon Fonn guilty of kickback scheme,” published by Southeast Missourian on November 10, 2017.

A federal jury in St. Louis has found Cape Girardeau neurosurgeon Dr. Sonjay Fonn and his fiancee, Deborah Seeger, guilty of submitting false and fraudulent Medicare and Medicaid claims.

The jury handed down the guilty verdicts Thursday in the 11-day civil trial, finding Fonn and Seeger of Cape Girardeau conspired to violate the federal False Claims Act, the federal prosecutor’s Office said in a news release.

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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.