Law & Justice

Two West Orange Physicians Indicted in Bribery Scam

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The involvement of Dr. Davarajan Iyengar, 61, of Livingston, an oncology doctor with a medical practice in Bayonne, stems from an indictment alleging that from 2007 to 2012, Iyengar participated in a scheme by which he referred patients to Zuberi-controlled medical imaging centers for MRI and CT scans in exchange for approximately $75,000 in kickbacks disguised as payroll payments. The state grand jury charged Iyengar with second-degree health care claims fraud, second-degree commercial bribery and third-degree running.   Credits: Office of the Attorney General
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Dr. William M. Steck, Sr., 70, a gynecologist/obstetrician in West Orange, allegedly referred hundreds of scans to DIA imaging centers and received an estimated amount of $55,000 as compensation from Zuberi shell companies. Steck, who was also arrested in connection with the investigation in October 2014, was charged by the state grand jury with second-degree health care claims fraud, third-degree commercial bribery and third-degree running. Credits: Office of the Attorney General
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Dr. Alexander G. Salerno, 47, of West Orange, an internist who practices in East Orange, allegedly referred thousands of scans to Zuberi imaging centers from 2009 to 2013 for which he received approximately $130,000 in kickbacks. Salerno allegedly received payment from Zuberi’s organization in several different ways including checks and “sham rental agreements,” the terms of which provided that Zuberi’s organization paid to rent space at Salerno’s medical offices, though the arrangement was contrived to conceal the kickbacks. Salerno, who was arrested in connection with this investigation in October 2014, was charged by the state grand jury with second-degree health care claims fraud, second-degree commercial bribery and third-degree running. Credits: Office of the Attorney General
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TRENTON – On Wednesday, Acting Attorney General John J. Hoffman and the Office of the Insurance Fraud Prosecutor (OIFP), led by Acting Prosecutor Ronald Chillemi, have announced that five medical practitioners—four doctors and one chiropractor, were indicted for referring patients to medical imaging company Diagnostic Imaging Affiliates in exchange for cash bribes and other kickbacks. Two of the doctors indicted—Dr. William M. Steck, Sr., 70, a gynecologist; and internistDr. Alexander G. Salerno, 47, are from West Orange; and oncologist Dr. Davarajan Iyengar, 47, is from Livingston. The others indicted are: family physician, Dr. John Fritz, 47, of Jersey City; and chiropractor, Dr. Alan P. Epstein, 46, of Manalapan.

All five were accused of taking kickbacks from Rehan Zuberi. Zuberi, 46, of Boonton, who pleaded guilty last month to charges that he led a criminal enterprise that paid several million dollars of bribes and kickbacks to dozens of doctors from 2008 to 2014. The plea agreement calls for Zuberi to receive a 10-year state prison sentence with a four-year non-parole eligibility stipulation.

Second-degree crimes carry a sentence of five to 10 years in state prison and a criminal fine of up to $150,000, while third-degree crimes carry a sentence of three to five years in state prison and a criminal fine of up to $15,000.

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Dr. Alexander G. Salerno, 47, of West Orange, an internist who practices in East Orange, allegedly referred thousands of scans to Zuberi imaging centers from 2009 to 2013 for which he received approximately $130,000 in kickbacks. Salerno allegedly received payment from Zuberi’s organization in several different ways including checks and “sham rental agreements,” the terms of which provided that Zuberi’s organization paid to rent space at Salerno’s medical offices, though the arrangement was contrived to conceal the kickbacks. Salerno, who was arrested in connection with this investigation in October 2014, was charged by the state grand jury with second-degree health care claims fraud, second-degree commercial bribery and third-degree running.

Dr. William M. Steck, Sr., 70, a gynecologist/obstetrician in West Orange, allegedly referred hundreds of scans to DIA imaging centers and received an estimated amount of $55,000 as compensation from Zuberi shell companies. Steck, who was also arrested in connection with the investigation in October 2014, was charged by the state grand jury with second-degree health care claims fraud, third-degree commercial bribery and third-degree running.

The involvement of Dr. Davarajan Iyengar, 61, of Livingston, an oncology doctor with a medical practice in Bayonne, stems from an indictment alleging that from 2007 to 2012, Iyengar participated in a scheme by which he referred patients to Zuberi-controlled medical imaging centers for MRI and CT scans in exchange for approximately $75,000 in kickbacks disguised as payroll payments. The state grand jury charged Iyengar with second-degree health care claims fraud, second-degree commercial bribery and third-degree running.

The indictment of Dr. John Fritz, 47, of Jersey City, a family physician with a practice in Jersey City, alleges that from 2006 to 2013, Fritz referred approximately 4,500 scans to Zuberi-controlled imaging facilities in exchange for approximately $500,000 in kickbacks. It is alleged that during months of high referrals Fritz was receiving approximately $6,000 to $7,000 per month from DIA. Fritz was charged with second-degree health care claims fraud, second-degree commercial bribery and third-degree running.

Dr. Alan P. Epstein, 46, of Manalapan, allegedly referred more than 200 scans to Zuberi-owned medical imaging centers. In exchange, Zuberi allegedly paid for architectural services and permits that were meant to expand Epstein’s practice, Epstein Chiropractic in Elizabeth. During certain points of Epstein’s work with the Zuberi organization from September 2012 to December 2013, it is also alleged that the organization paid for Epstein’s patient transportation expenses. Epstein, who was also arrested in October as part of this investigation, was charged by the state grand jury with second-degree health care claims fraud, second-degree commercial bribery and third-degree running.

“A doctor’s duty is to his patients’ care and well-being, not to his personal wealth,” said Hoffman. “By allegedly selling their medical opinion for kickbacks, the five medical practitioners indicted today have abandoned that duty, thus breaking the law and the trust of those who sought their advice.”

“Since we arrested Rehan Zuberi and his associates last year, our investigation has shined a light into the dark world of kickbacks that has unfortunately been a source of illegal income for some doctors,” said Chillemi. “Our prosecution seeks to reduce the role of greed in medicine and its impact on insurance consumers.”

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