When Ignorance is Not a Defense

A 79-year-old New Jersey physician who was charged in connection with a healthcare kickback scheme now faces sentencing in June after being convicted of accepting bribes in exchange for blood test referrals.

As we previously wrote about, Dr. Bernard Greenspan, 79, was among more than 40 people, many of them physicians, who allegedly accepted payments from Biodiagnostic Laboratory Services (BLS) in exchange for referrals.

The investigation has resulted in 43 convictions – 29 of them of doctors. However, Greenspan has been the only one to opt to go to trial. His attorneys argued he had practiced medicine for more than 50 years and that he had become an unwitting pawn in what was described as a long-running and elaborate laboratory test referral scheme.

However, according to published reports, during the month-long trial, David Nicoll, the former owner of the laboratory admitted to taking over a “failing lab” and “immediately set about bribing doctors to build the business.”

Nicolle, who has pleaded guilty, but who has not yet been sentenced, testified that he spent some $4 million in bribes over seven years which brought in more than $150 million in revenue. On June 28, 2016, BLS pleaded guilty and was required to forfeit all of its assets.

Greenspan was convicted of all ten counts including: one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud.

The conspiracy, Anti-Kickback, and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud charges are punishable by a maximum potential penalty of 20 years in prison per count. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.

“Bernard Greenspan decided to accept bribes in exchange for referrals and deprived patients of their right to honest services. These types of kickback arrangements cripple the healthcare industry and severely impact patient care. The FBI remains committed to investing its resources to combat these types of schemes,” Special Agent in Charge Timothy Gallagher of the Newark FBI Field Office said in a news release.

According to the indictment and testimony at trial, between March 2006 and April 2013, Greenspan received bribes totaling approximately $200,000 from BLS employees and associates. Greenspan periodically solicited and received monthly bribe payments in the form of sham rental, service agreement, and consultant payments. Greenspan’s referrals generated approximately $3 million in lab business for BLS.

“This verdict should serve as a warning to any health care provider that dares to put personal profit ahead of proper patient care,” Scott J. Lampert, Special Agent in Charge, Office of Inspector General, U.S. Department of Health and Human Services, said in a news release. “HHS-OIG, along with our law enforcement partners, will continue to aggressively pursue those who seek to undermine the federally funded health care programs intended for our most vulnerable Americans.”

This case clearly illustrates how important it is for healthcare professionals to obtain legal counsel when considering entering into any agreement that involves payment, particularly from another entity that benefits from the deal. If it sounds too good to be true, it probably is.

The Health Law Offices of Anthony C. Vitale can assist clients in making sure that any contractual arrangements do not violate existing laws. Feel free to contact us for additional information at 305-358-4500 or send an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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