TEXAS, USA — Federal authorities have indicted ten doctors, two pharmaceutical executives and two business entities in a kickback scheme to bribe doctors for prescriptions.
The alleged scheme in this indictment included doctors who used their positions of trust to profit personally at the expense of their patients.
“Our community trusts doctors to write prescriptions that serve their patients’ best interest. Kickbacks and bribes cloud physicians’ judgment,” said U.S. Attorney Leigha Simonton in a statement. “The U.S. Attorney’s Office is proud to hold accountable those who abandon the Hippocratic oath in the name of personal enrichment. We will not permit greed to taint the practice of medicine.”
According to the indictment, several pharmacies allegedly identified profitable prescriptions and recruited doctors to write those prescriptions. The doctors allegedly referred the prescriptions, including highly lucrative pain creams, to those pharmacies in return for a share of the profits on the prescriptions.
The pharmacies allegedly tracked each prescription by the doctor. They illegally funneled a share of the profits back to the doctors through various marketing firms and management service organizations (MSOs), including Trinity Champion and Hexamed.
The doctors indicted in this case involved:
- Robert Leisten
- Amy Haase
- Arnold Farbstein
- Barry Weinstein
- Eric Berkman
- Jorge Cuz
- Katherine McCarty
- James Ellis
- David Wolf
Also, executives Amir Mortazavi and Arvin Zeinali, Dallas-based Trinity Champion Healthcare Partners, LLC, and Houston-based Hexamed Business Solutions, LLC have been indicted.
The charges in the indictment include: Conspiracy to violate the Travel Act by violating the Texas Commercial Bribery Statute and conspiracy to deny patients their right to honest services; and with conspiracy to commit money laundering.
Doctor Walter Strash was charged with conspiracy to violate the Travel Act by violating the Texas Commercial Bribery Statute and conspiracy to deny patients their right to honest services.
"Health care fraud affects all sectors of the economy and costs U.S. taxpayers billions of dollars each year,” said FBI Dallas Special Agent in Charge Chad Yarbrough.
The indictment alleges roughly 45 to 55% of net profits were retained by the pharmacy, which would pay roughly 50 to 55% of profits to a marketer called Med Left. Med Left would take a significant percentage of the payment, sometimes as much as half, and pay the rest to MSOs including Trinity Champion, Hexamed and Eagle Ridge.
Trinity Champion would funnel a small percentage to its managing partner and then pay the remaining proceeds to an entity controlled by Dr. Leisten, who would then pay Drs. Haase, Farbstein, Weinstein, Berkman and Cuza. Meanwhile Hexamed and Eagle Ridge would pay a small percentage to its managing partner and then pay the remaining proceeds to Drs. McCarty, Wolf and Ellis.
According to the indictment, in May 2018, a confidential source met with executives Mortazavi and Zeinali, saying he represented a group of doctors who wanted to get paid for their prescriptions. Mortazavi and Zeinali allegedly said they would only agree to pay doctors through an MSO model. The following week, the confidential source met with an MSO operator who allegedly explained how the doctors would get paid for prescriptions they sent to pharmacies.
The indictment also alleges, later that same month, Mortazavi and three of the doctors met for dinner to discuss changing their MSO model. They agreed that the MSO would receive a weekly report of scripts submitted the previous week. A report subsequently sent to an MSO tracked each doctor by the patient, the number of prescriptions filled, the sum of monies due from insurance companies, the total cost to fill each prescription, and the sum of net. Three weeks later, a person affiliated with one of the MSOs asked Zeinali about which new drugs doctors “can get a good reimbursement on?”
If convicted, each defendant faces up to five years on the Travel Act conspiracy, 20 years on the Deprivation of Honest Services Wire Fraud conspiracy, and 20 years on the money laundering conspiracy charge.
Two businessmen, Andrew Hillman and Semyon Narosov, owners of Next Health, pleaded guilty to charges stemming from this scheme in October 2018. They were sentenced to 66 months (Hillman) and 76 months (Narosov) in prison. The owner of marketing firm Med Left, Vinson Woodlee, pleaded guilty in a separate case to conspiracy to solicit and receive kickbacks for referrals to federal health care programs.
