March 19, 2018

NJ Doctor Charged with Stealing More than $500k from Insurance Companies in Medical Kickback Fraud Scheme

Trenton, NJ – Attorney General Gurbir S. Grewal and the Office of the Insurance Fraud Prosecutor recently announced that a Passaic County pain management doctor has been charged with first-degree conspiracy and money laundering for allegedly submitting more than $4.4 million in fraudulent bills for service to insurance companies that netted him more than $500,000 in a medical kickback fraud scheme he operated.

Dr. Todd Koppel, 51, a New York City resident who ran the Garden State Pain Management (“GSPM”) in Clifton, NJ, allegedly paid more than $190,000 in kickbacks to five chiropractors in exchange for more than 790 patient referrals to his pain management facility between 2006 and 2016.

Three of those chiropractors have admitted to participating in the scheme and accepting kickbacks from Koppel. The investigation is ongoing.

Koppel is the latest doctor charged in connection with an ongoing investigation by the Attorney General’s Commercial Bribery Task Force, which was formed in January 2016 to target commercial bribery in the healthcare industry.

The task force, which includes deputy attorneys general and detectives from the Division of Criminal Justice Financial & Computer Crimes Bureau and the Office of the Insurance Fraud Prosecutor, has uncovered a statewide criminal enterprise in which doctors receive hundreds of thousands of dollars in illegal kickbacks in return for providing patient referrals worth millions of dollars to other doctors and medical service providers.

“Through its continued hard work, the Commercial Bribery Task Force has identified and dismantled yet another unsavory alliance of medical fraudsters who treated patients as pawns to be bought and sold for profit,” said Attorney General Grewal. “As the alleged operator of this criminal enterprise, Dr. Koppel not only stole hundreds of thousands of dollars from insurance companies, he deprived patients of their right to be treated by doctors whose medical decisions were not clouded by unadulterated greed.”

According to the indictment, over a 10-year span Koppel billed various insurance companies more than $4.4 million for medical treatments for patients referred to him by the five chiropractors. In submitting the fraudulent claims, Koppel allegedly omitted the material fact that the treatments were the result of an illegal kickback scheme. Koppel received more than $500,000 in insurance payments from his criminal activities, which were deposited into GSPM’s business accounts and later moved to his personal bank accounts, according to the indictment. Koppel allegedly used some of the ill-gotten proceeds to generate cash to pay additional kickbacks.

“Medical kickback schemes like this are a form of insurance fraud that spreads like a cancer throughout the healthcare industry, putting more and more unsuspecting patients into the hands of doctors who use them as cash cows to drive up billable services,” said Acting Insurance Fraud Prosecutor Christopher Iu. “Our Commercial Bribery Task Force will continue to follow the trail of dirty money from one corrupt physician to the next until every one of them is held accountable for this shameful abuse of the trust their patients place in them. Anyone who suspects this type of corrupt activity in the healthcare industry is urged to contact our task force confidentially at 866-TIPS-4CJ.”

Three chiropractors involved in the scheme have admitted receiving kickbacks from Koppel. All three previously pleaded guilty to charges related to the prosecution of other medical kickback rings. They are:

  • Phillip Potacco, former operator of the South Orange Trauma and Rehab Center (SOTC) in South Orange, who pleaded guilty in a kickback scheme involving SOTC.
  • Dr. Ronald Hayek, former operator of Union Wellness Center in Totowa, who pleaded guilty in a kickback scheme involving medical imaging centers in North Jersey.
  • Dr. Brian Beagin, a Woodland Park chiropractor who pleaded guilty to conspiracy and health care claims fraud (2nd degree) for his role in the kickback scheme involving medical imaging centers in North Jersey.

In an indictment handed up by a state Grand Jury in Trenton last week, Koppel was charged with:

  • Conspiracy (1st degree),
  • Money Laundering (1st degree)
  • Misconduct by a Corporate Official (2nd degree)
  • Theft by Deception (2nd degree)
  • Health Care Claims Fraud (4 counts 2nd degree)
  • Attempted Theft by Deception (2nd degree)
  • Commercial Bribery (5 counts 3rd degree)
  • Criminal Running (6 counts 3rd degree)

The charges are merely accusations and the defendant is presumed innocent until proven guilty. First degree crimes carry a sentence of 10 to 20 years in state prison and a fine of up to $500,000. Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000 Third-degree crimes carry a sentence of three to five years in state prison and a criminal fine of up to $15,000.

Deputy Attorneys General Colin Keiffer and Charles Wright, of the Office of Insurance Fraud Prosecutor, and Deputy Attorney General Brian Faulk, of the Division of Criminal Justice Financial & Computer Crimes Bureau, presented the case to the grand jury.

Commercial Bribery Task force members Lt. Anthony Butler, Lt. Lisa Shea, Detective Wendy Berg, Detective John Campanella, Detective Grace Proetta, Detective Kimberly Allen, Detective John Neggia, Analyst Bethany Schussler, Analyst Rita Gillis, Analyst Theresa Worthington, and Assistant Bureau Chief Christina Runkle are conducting and coordinating the investigation for the Office of the Insurance Fraud Prosecutor, under the supervision of Bureau Chief Cheryl Maccaroni and Deputy Bureau Chief Jillian Carpenter, and the Division of Criminal Justice Financial & Computer Crimes Bureau, under the supervision of Deputy Bureau Chief Mark Kurzawa. Additional assistance was provided by Supervising Criminal Forensic Auditor Debra Lewaine and Criminal Forensic Auditor Michael Birnie both of the Department of the Treasury’s Office of Criminal Investigation, and the National Insurance Crime Bureau.

Source: NJ AG’s Office

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