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Adult Daycare Facility Agrees to $2.72 Million Settlement to Resolve Allegations of Violating False Claims Act

Edison Adult Medical Daycare (Edison), its former owner, Dinesh Patel, and current owners, Daxa Patel and Satish Mehtani, have agreed to pay the United States and the State of New Jersey $2.72 million to resolve allegations that Edison improperly billed and received payments from Medicaid despite Dinesh Patel having been excluded from participating in Medicaid following his 2012 conviction for accepting kickbacks, Acting U.S. Attorney William E. Fitzpatrick announced today.

On Sept. 19, 2012, Dinesh Patel pleaded guilty to accepting cash kickback payments from Orange Community MRI LLC in exchange for patient referrals. He was later sentenced to three months in jail and two years of supervised release.

On March 17, 2012, Dinesh Patel was excluded by the State of New Jersey from participating in any capacity in the Medicaid program. Later, on Feb. 20, 2014, Dinesh Patel was excluded by the U.S. Department of Health and Human Services from participating in Medicare, Medicaid, and all federal health care programs for a period of five years. Five days after Dinesh Patel’s Medicaid exclusion in 2012, he transferred his 50 percent ownership interest in Edison to his wife, Daxa Patel.

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Today’s settlement resolves federal and state government allegations that from March 17, 2012, through Aug. 4, 2015, Dinesh Patel violated his exclusion by not ceasing his involvement in the adult daycare facility, and that Edison violated the False Claims Act by submitting claims to and receiving payments from Medicaid while Dinesh Patel directed, managed and supervised activities at Edison. The settlement also resolves allegations that owners Daxa Patel and Satish Mehtani had full knowledge that Dinesh Patel was managing Edison while he was an excluded Medicaid provider.

Dinesh Patel, Daxa Patel, Satish Mehtani, and Edison have agreed to pay $2.72 million plus interest to be split equally between United States and State of New Jersey. Dinesh Patel has also agreed to another five-year exclusion precluding him from participating in all federal health care programs, including Medicaid and Medicare, until 2022.

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Department of Health and Human Services - Office of the Inspector General (HHS-OIG), under the direction of Special Agent in Charge Scott J. Lampert, New York Region, and the N.J. Office of the State Comptroller, Medicaid Fraud Division, under the direction of State Comptroller Philip James Degnan, with the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney Nicole F. Mastropieri of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark. David Fuchs of the HHS-OIG negotiated the additional period of exclusion.

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.37 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

The claims settled by this agreement are allegations only; there have been no admissions of liability.

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Defense counsel:

Edison Adult Medical Daycare: Robert Fogg Esq., Princeton 
Dinesh Patel: Steven D. Feldman Esq., New York, and Melissa L. Jampol Esq., New York
Daxa Patel: Nicholas C. Harbist Esq., Princeton
Satish Mehtani: Denis F. Driscoll Esq., Parsippany

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