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Ten Indicted for Healthcare Kickbacks

Ten people, including two medical doctors, have been indicted in a $300 million healthcare fraud, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

The defendants – who stand accused of accused of conspiracy to commit healthcare fraud, conspiracy to pay and receive healthcare kickbacks, offering or paying illegal kickbacks, and soliciting or receiving illegal kickbacks – were charged in a 26-count indictment filed Wednesday afternoon.

“Anti-kickback laws are designed to ensure that financial considerations do not cloud physicians’ judgement,” said U.S. Attorney Chad Meacham. “The Justice Department is determined to prosecute those flouting our nation’s healthcare fraud laws. Patients – and taxpayers – deserve rigorous enforcement.”

“Illegal kickback schemes corrupt the healthcare system. They cause billions of dollars in losses each year, generate business for dishonest service providers and erode trust in our health care system,” said Dallas FBI Special Agent in Charge Matthew DeSarno. “The FBI will continue to work with our law enforcement partners to expose fraud and protect the public from illegal schemes.”

According to the indictment, the founders of several lab companies, including Unified Laboratory Services, Spectrum Diagnostic Laboratory, and Reliable Labs LLC, allegedly paid kickbacks to induce medical professionals to order medically unnecessary lab tests, which they then billed to Medicare and other federal healthcare programs.

The medical professionals — including internal medicine specialist Eduardo Canova, family medicine practitioner Jose Maldonado, and nurse practitioner Keith Wichinski – allegedly accepted the bribes and ordered millions of dollars’ worth of tests.

Meanwhile, Unified, Spectrum, and Reliable disguised the kickbacks as legitimate business transactions, including as medical advisor agreement payments, salary offsets, lease payments, and marketing commissions.

The labs, through marketers, allegedly paid doctors hundreds of thousands of dollars for “advisory services” which were never performed in return for lab test referrals. They also allegedly paid portions of the doctors’ staff’s salaries and a portion of their office leases, contingent on the number of lab tests they referred each month. In some instances, lab marketers even made direct payments to the provider’s spouse.  (When the labs threatened one provider that payments would cease if he didn’t refer more tests, he immediately increased his lab referrals, averaging approximately 20 to 30 referrals per day.)

Knowing they could disguise additional kickbacks using a provider-ownership model, the founder of Spectrum and Unified, Jeffrey Madison, convinced the co-founders of Reliable, Biby Kurian and Abraham Phillips, to convert Reliable into a physician-owned lab. Reliable offered physicians ownership opportunities only if those physicians referred an adequate number of lab tests. In some cases, they made advance disbursement payment to physicians in an effort to appease the physician and ensure he would not send samples to other labs.

As a result of these kickbacks, laboratories controlled by the defendants were able to submit more than $300 million in billing to federal government healthcare programs.  Between 2015 and 2018, Dr. Maldonado alone received more than $400,000 in kickbacks for ordering more than $4 million worth of lab tests and Dr. Canova received more than $300,000 in kickbacks for ordering more than $12 million worth of lab tests.

Defendants indicted are:

• Jeffrey Paul Madison, 56, founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory

• Mark Christopher Boggess, 49, chief operating officer for Spectrum and Unified

• Biby Ancy Kurian, 49, co-founder of Reliable Labs, LLC

• Abraham Phillips, 50, co-founder of Reliable Labs, LLC

• Dr. Jose Roel Maldonado, 48, family medicine doctor based in Laredo

• Dr. Eduardo Carlos Canova, 44, internal medicine specialist based in Laredo

• Keith Allen Wichinski, 50, board-certified nurse practitioner based in San Antonio

• David Michael Lizcano, 56, ]owner of DCLH, a marketing firm engaged by Unified, Spectrum, and Reliable

• Laura Ortiz, 58, sister of David Lizcano and employee at his marketing firm

• Juan David Rojas, 34, owner of Rojas & Associates, another marketing firm engaged by Unified, Spectrum, and Reliable

An indictment is merely an allegation of criminal conduct, not evidence. Defendants are presumed innocent until proven guilty in a court of law.

If convicted, the defendants face up to 55 years or more in federal prison.

The Federal Bureau of Investigation’s Dallas Field Office, the U.S. Department of Health and Human Services’ Office of Investigations, the Defense Criminal Investigative Service, and the Veterans Affairs’ Office of Inspector General conducted the investigation. Assistant U.S. Attorney P.J. Meitl is prosecuting the case.

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