NEWARK, NJ – Five individuals including a Hillsborough resident were sentenced Friday for bribing doctors in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, its president and numerous associates, U.S. Attorney Craig Carpenito announced.
Doug Hurley, 38, of Hillsborough and Kevin Kerekes, 52, of Florham Park were both sentenced to 24 months in prison. Luke Chicco, 45, of Garden City, NY, was sentenced to 21 months in prison. Kristina Hamdan, 40, of Paterson was sentenced to 41 months in prison. David McCann, 45, of Lyndhurst, was sentenced to three years of probation.
U.S. District Judge Stanley R. Chesler imposed all five sentences in Newark federal court.
Hurley, Kerekes, and Chicco previously pleaded guilty in June 2013 to separate informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering.
In addition to the prison term, Judge Chesler sentenced Hurley, Chicco, Kerekes, and Hamdan a year of supervised release. Hurley, Chicco, and Kerekes must also pay forfeiture of $800,000, $850,000, and $1.2 million, respectively. Hamdan must pay forfeiture of $1,209,890.36.
The investigation has thus far resulted in 53 convictions – 38 of them doctors – 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. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
The investigation has to date recovered more than $13 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
Hamdan pleaded guilty to Counts One and Thirteen of an indictment charging her with conspiracy to violate the Anti-Kickback Statute, the Federal Travel Act and the honest services wire fraud statute, and conspiracy to commit money laundering. McCann pleaded guilty to an information charging him with conspiring to violate the Anti-Kickback Statute and the Travel Act.
According to documents filed in this and related cases and statements made in court:
Hurley, Kerekes, and Chicco each admitted that from the fall of 2010 through April 2013, they conspired with BLS president and part owner, David Nicoll and his brother, Scott Nicoll, to pay bribes to doctors in the forms of cash, checks and other means in order to induce them to refer patient blood specimens to BLS. Hurley, Kerekes, and Chicco also admitted that in some instances, they paid bribes to doctors through sham consulting companies, which they created and controlled, in order to hide the fact that BLS was the true source of the bribes.
Hamdan admitted that from November 2009 through April 2013, she paid doctors illegal bribes in exchange for blood specimen referrals to BLS. For example, Hamdan bribed Yousef Zibdie, an internal medicine doctor with a practice in Woodland Park, in exchange for generating more than $900,000 in lab business for BLS. The bribes were funded by BLS and, in an effort to obscure that BLS was the true source of the payments paid to the doctors by Hamdan, she made the payments through a sham consulting company that she created and controlled.
McCann paid thousands of dollars in cash on a monthly basis between December 2011 and April 2013 to numerous physicians on behalf of BLS in exchange for the doctors’ referral of blood specimens to BLS.
Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.
The government is represented by Senior Litigation Counsel Joseph N. Minish, Assistant U.S. Attorneys Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office Public Protection Unit and Jacob T. Elberg, Chief of the Health Care and Government Fraud Unit, as well as Assistant U.S. Attorney Barbara Ward of the Asset Forfeiture and Money Laundering Unit.