WEST ORANGE, NJ - Dr. Alexander G. Salerno, 46, a West Orange resident and physician practicing Internal Medicine in East Orange, and Dr. William M. Steck, 70, a West Orange OB/GYN, have been arrested as part of the New Jersey Attorney General's investigation into Operation RayScam.

On June 19, 2014, American Imaging Center at 61 Main Street in West Orange was closed as the first round of arrests in operation RayScam were made. At the time, Rehan “Ray” Zuberi, 45, of Boonton Township, the owner of Diagnostic Imaging Affiliates and the alleged ringleader of a patient referral kickback scheme, was targeted, along with Faisal Paracha, 30, of Fords, Rehan Zuberi’s brother-in-law, and part owner/manager of American Imaging of West Orange. 

On Oct. 15, six doctors and a chiropractor, including Salerno and Steck, were arrested for allegedly taking illegal kickbacks worth approximately $200,000 from Diagnostic Imaging Affiliates (DIA) in exchange for patient referrals to the company’s testing facilities during 2008-2013. As a result, insurance companies, along with Medicare and Medicaid, were defrauded as the doctors allegedly made more than 20,000 referrals to DIA centers resulting in payments of millions of dollars.

Sign Up for E-News

Agents from the Office of the Insurance Fraud Prosecutor and the Division of Criminal Justice executed the arrests warrants. 

The physicians and chiropractor were charged with second-degree health care claims fraud and third-degree commercial bribery. They were processed at the Division of Criminal Justice Office in Whippany and subsequently released on bail.

"The medical practitioners arrested yesterday betrayed the trust of their patients and allegedly scammed insurers both public and private to enrich themselves,” said Acting Attorney General Hoffman.

“Medical practitioners should only be concerned with the quality of care they provide and recommend. They should not be selling their medical opinion to the highest bidder.”

According to the press release issued by the Office of the Attorney General, Dr. Alexander Salerno "allegedly referred thousands of scans to Zuberi imaging centers from 2009-2013. Zuberi’s organization billed insurance carriers more than a million dollars for those scans and allegedly paid Salerno approximately $105,000 for cooperating in the scheme. Salerno’s first kickbacks were in the form of four checks totaling $8,000 that were made out to his medical practice: Salerno Medical Associates in East Orange. After that, Salerno allegedly received payment from Zuberi’s organization in several different ways including through: a shell company registered in his name; Salerno’s charity, the Urban Healthcare Initiative Program; and through “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."

Dr. William Steck, also of West Orange, "received his first alleged kickback from the Zuberi organization, a check for $1,000, in January 2010. Prior to that time, Steck had referred fewer than 100 tests to Zuberi’s imaging centers. Following that initial payment, and continuing through November 2011, Steck allegedly referred hundreds of scans to DIA imaging centers and received an estimated amount of $55,000 as compensation from Zuberi shell companies."

Other arrest included:

Dr. Simon B. Santos-Arias, 71, of Guttenberg; Dr. Michael L. Gross, 47, of New York, N.Y.; Dr. James W. Cahill, 51, of Franklin Lakes; Dr. Alan P. Epstein, 45, of Manalapan; Dr. Guillermo A. Munoz, 49, of Union.

To read the Office of Attorney General Press Release in its entirety and review the charges against the doctors, go to: http://nj.gov/oag/newsreleases14/pr20141016b.html.