Violation of Trust


When a patient pays a visit to the doctor, they trust they will receive a correct diagnosis and a solution that will make them feel better. (Patients do not expect to be used by their physicians as pawns to steal money from their medical insurance providers.) A Department of Justice press release details how one doctor’s illegal acts contributed to a bribery scheme involving a total of 38 co-conspirators and $100 million in undeserved payments from Medicare and other private insurance companies.

The press release detailed that the doctor, who had two offices in New Jersey, received more than $1.8 million in bribery payments from a laboratory in exchange for referrals. (As a result of his referrals for unnecessary medical tests, the lab was paid more than $6 million by Medicare and various insurance companies.) The physician received more than $800,000 through sham lease agreements and service agreements over a four year period of time. He also received bribes from a third-party connected to the lab, amounting to tens of thousands of dollars a month and totaling more than $1 million before his arrest.

Text messages between the physician and the lab’s president and part owner provided evidence of wrongdoing. (Multiple messages from the doctor proved that he admitted ordering unnecessary medical tests to increase the number of referrals to the lab. Apparently, his goal was to send $1 million in referrals per month.) The press release also states that he used another individual to hide the bribes from the lab; neglected to file tax returns for three years; and, failed to pay taxes during that timeframe.

The physician, who was one of 26 doctors involved in the complex health care fraud scheme, pleaded guilty to violating the Travel Act, money laundering and failing to file tax returns. The 45-year old physician was sentenced to 63 months in prison, three years of supervised release and a fine of $6,250. He will also forfeit more than $1.8 million as part of a plea agreement. (That’s quite a chunk of change.)

The investigation into this massive bribery scheme has recovered more than $11.5 million through forfeiture thus far. Despite this good news, the Medicare system and the private insurance companies victimized by this crime may have a difficult time recovering the rest of the $100 million. (It’s also a pretty good guess that this physician’s patients may have an equally difficult time recovering from the violation of trust.)

Source: Today’s ”Fraud of the Day” is based on a Department of Justice press release entitled ”Doctor Sentenced to 63 Months in Prison for Accepting $1.8 Million in Bribes for Test Referrals” released on July 8, 2015.

A Morris County, New Jersey, doctor was sentenced today to 63 months in prison for accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, as part of a long-running scheme operated by the lab, its president and numerous associates, U.S. Attorney Paul J. Fishman for the District of New Jersey announced.

Frank Santangelo, 45, of Boonton, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to information charging him with violating the Travel Act, money laundering and failing to file tax returns. Judge Chesler imposed the sentence today in Newark federal court.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.