NEWARK, N.J. – A Morris County doctor was sentenced today to 63 months in prison for accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, NJ, as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Frank Santangelo, 45, of Boonton, NJ, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. Judge Chesler imposed the sentence today in Newark federal court.
"Santangelo admitted he violated the trust of his patients, who should be able to count on their doctors' prescribing only tests that are necessary and recommending providers based solely on their qualifications," U.S. Attorney Fishman said. "This type of fraud compromises patient care and drives up the cost of health care."
"Today's sentencing of Frank Santangelo is the result of a long-term, multi-agency investigation into a complex health care fraud scheme which involved millions of dollars," Richard Frankel, FBI Special Agent in Charge, Newark Division, said. "Santangelo's arrest and sentencing send the message the FBI and its law enforcement partners will continue to zealously investigate these fraud and abuse schemes, which divert critical resources from our already overburdened health care system and contribute exponentially to the rising cost of health care."
Including Santangelo, 38 people - 26 of them doctors - have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
According to documents filed in this and other cases and statements made in court, Santangelo, who has offices in Montville and Wayne, received more than $1.8 million in bribe payments from BLS for referrals which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements and sham service agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party - often tens of thousands of dollars a month - totaling more than $1 million between 2010 and his arrest in April 2013.
Santangelo also pleaded guilty to money laundering and failing to file tax returns from 2009 - 2011 and pay taxes owed during that time period.
On April 9, 2013, federal agents arrested BLS employees David Nicoll, 41, of Mountain Lakes, NJ; Scott Nicoll, 34, of Wayne, NJ; and Craig Nordman, 36, of Whippany, NJ. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Santangelo.
"Physicians who accept kickbacks in exchange for patient referrals and ordering medically unnecessary blood tests undermine the public's faith in the medical profession and the financial stability of Medicare," said Special Agent in Charge Scott Lampert, U.S. Department of Health and Human Services Office of Inspector General. "OIG will continue to protect both taxpayers and patients by holding physicians accountable for such wrongdoing."