Spc Published Case Patterns On Sentencing For Health-Care Corruption And Kickbacks
1. Michael Drobot – Hospital Owner, Spinal Surgery Kickback Scheme
Facts:
Michael Drobot owned a hospital in California.
He paid kickbacks to physicians and marketers to induce patient referrals for high-revenue spinal surgeries.
Payments were disguised through sham contracts for consulting, leasing, or management services.
The scheme involved manipulating implant costs billed to insurance programs, especially workers’ compensation.
Legal Issues:
Violations of the Anti-Kickback Statute (AKS).
Health-care fraud (billing insurers for unnecessary procedures).
Conspiracy to commit fraud.
Outcome:
Pleaded guilty.
Sentenced to 5 years and 3 months in prison.
Required to forfeit assets obtained from the scheme (luxury cars, real estate).
Lessons:
Long-term, large-scale schemes with sham contracts significantly increase sentences.
High-level executives are held personally accountable.
2. Dr. Faustino Bernadett – Physician and Hospital Executive
Facts:
Dr. Bernadett took over operations of a hospital previously owned by Drobot.
He allowed continued kickback payments to induce patient referrals.
He facilitated concealment of these payments via sham arrangements.
Legal Issues:
Misprision of a felony (concealing knowledge of a felony).
Violations of the Anti-Kickback Statute.
Outcome:
Sentenced to 15 months in federal prison.
Paid fines and forfeited money obtained through the scheme.
Lessons:
Even insiders who only help maintain a kickback scheme, without originating it, face prison.
Lesser charges still carry meaningful prison terms.
3. Simon Orobor – Durable Medical Equipment (DME) Fraud
Facts:
Orobor operated multiple DME companies.
Paid marketers to obtain prescriptions for orthotic braces from doctors, sometimes without real patient evaluation.
Orders were submitted to Medicare, generating millions in fraudulent claims.
Concealed payments via false invoices and contracts.
Legal Issues:
Health-care fraud.
Conspiracy to commit fraud.
Anti-Kickback Statute violations.
Outcome:
Sentenced to 30 months in prison.
Ordered to serve 3 years of supervised release.
Lessons:
DME schemes using telemarketing are treated seriously.
Concealment through fake contracts is an aggravating factor in sentencing.
4. Brenda Montgomery – Health-Care Executive Kickback Scheme
Facts:
Montgomery paid kickbacks to a physician in exchange for arranging Medicare patient referrals.
Used nominee accounts and false tax documents to conceal payments.
The scheme involved millions of dollars in kickbacks relative to Medicare claims.
Legal Issues:
Conspiracy to violate Anti-Kickback Statute.
Multiple AKS violations.
Outcome:
Sentenced to 42 months in prison.
Ordered to forfeit significant sums and pay restitution.
Lessons:
Middle-level executives can receive multi-year sentences.
Large percentages of claims paid as kickbacks result in higher culpability.
5. Dr. Farid Fata – Oncologist Fraud and Kickback Scheme
Facts:
Dr. Fata administered medically unnecessary chemotherapy and treatments.
Billed Medicare and private insurers for treatments patients did not need.
Received kickbacks and benefits from schemes involving referrals.
Legal Issues:
Health-care fraud.
Conspiracy to commit fraud.
Anti-Kickback Statute violations.
Patient harm as a major aggravating factor.
Outcome:
Sentenced to 45 years in federal prison.
Massive restitution orders.
Lessons:
When health-care corruption causes patient harm, sentencing is extremely severe.
High moral culpability and patient exploitation increase punishment dramatically.
6. John Oxendine – Health-Care Fraud Involving Laboratory Referrals
Facts:
Former public official participated in a lab referral scheme.
Helped conceal kickbacks disguised as “loans” to generate referrals for lab tests.
Assisted in mischaracterizing payments to avoid detection.
Legal Issues:
Conspiracy to commit health-care fraud.
Anti-Kickback Statute violations.
Outcome:
Sentenced to 42 months in prison.
Ordered to pay substantial restitution and fines.
Lessons:
Regulators and public officials are not immune from prosecution.
Concealment tactics such as mischaracterizing kickbacks are treated as aggravating factors.
Key Patterns Across These Cases
Referral-Based Kickbacks: Physicians, marketers, or intermediaries are commonly paid to generate referrals.
Sham Contracts / Concealment: Kickbacks are often disguised as consulting, lease, or management agreements.
Scale Matters: Larger dollar amounts and longer schemes → higher sentences.
Patient Harm: Schemes directly harming patients result in extremely long sentences.
Executives and Officials Held Accountable: Both medical and non-medical high-level personnel face serious penalties.
Restitution / Forfeiture: Courts often order repayment of fraudulent gains.
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