11 plead guilty in $300 million Texas health care scam

All 11 people charged in a $300 million health care fraud conspiracy in Texas have pleaded guilty to charges including conspiracy, concealing a felony and paying and receiving health care kickbacks, according to the Department of Justice.

The 11 defendants included two medical doctors, the CEO of Spectrum and Unified, owners and employees of marketing firms, an investor and the co-founders of Reliable Labs, LLC, according to the release. The two doctors and eight others were indicted Feb. 9. The final defendant was charged March 16.

The first 10 defendants filed plea papers on Feb. 11, two days after being indicted, and the final defendant filed plea papers on April 6 and entered her plea on April 13, according to the news release.

Court documents showed the crimes took place between 2015 and 2018.

The Justice Department said the defendants pleaded guilty to:

• Jeffrey Paul Madison, founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory, and David Michael Lizcano, owner of marketing firm DCLH which was engaged by Unified, Spectrum and Reliable Labs, both pleaded guilty to conspiracy to pay and receive health care kickbacks and two counts of paying and receiving health care kickbacks;
• Jose Roel Maldonado, a family doctor, and Eduardo Carlos Canova, an internal medicine specialist, both based in Laredo, pleaded guilty to conspiracy to solicit and receive illegal kickbacks;
• Reliable Labs co-founders Biby Ancy Kurian and Abraham Phillips pleaded guilty to conspiracy to pay kickbacks;
• Spectrum and Unified CEO Marck Christopher Boggess pleaded guilty to misprison (or concealment) of a felony;
• The owner of Rojas and Associates, another marketing firm engaged by Unified, Spectrum and Reliable, Juan David Rojas, and Sherman Kennerson, an investor in Unified, pleaded guilty to conspiracy to pay kickbacks;
• and board-certified nurse practitioner Keith Allen Wichinski, based in San Antonio, and Laura Ortiz, the sister of Lizcano and an employee at his DCLH marketing firm, both pleaded guilty to conspiracy to pay and receive health care kickbacks.

The Justice Department said the fraud involved the founders of Unified Laboratory Services, Spectrum Diagnostic Laboratory, Reliable Labs LLC and others paying kickbacks to medical professionals to order lab tests that weren’t medically necessary. Those tests were then billed to Medicare and other federal health care programs.

The labs owned by the defendants were able to submit more than $300 million in billing to federal programs because of the kickbacks, according to the Justice Department.

Maldonado admitted in plea papers that he received more than $400,000 in kickbacks because he ordered more than $4 million in lab tests, the Justice Department said. Canova admitted in his plea papers that he was paid more than $300,000 by the labs because he ordered more than $12 million worth of lab tests.

Canova, Maldonado and Wichinski all accepted the bribes and offered millions of dollars in tests, according to the Justice Department, and the labs disguised those kickbacks as legitimate transactions including medical adviser agreement payments, salary offsets, lease payments and marketing commissions.

The marketers were used to pay the medical professionals hundreds of thousands of dollars for “advisory services” that were never performed, according to the Justice Department. Those payments were paid in return for lab test referrals. The marketers also paid portions of the medical professionals’ staff salaries and office leases depending on the number of lab tests they referred each month.

In one instance, the Justice Department says in the news release, when the labs threatened that payments to one of the medical professionals would stop if he didn’t refer more tests, the number of referrals increased to about 20 to 30 a day.

At one point, Spectrum and Unified founder Madison convinced Kurian and Phillips, the co-founders of Reliable, to convert their business into a physician-owned lab, saying they could disguise additional bribes using a provider-ownership model, the Justice Department said. Kurian and Phillips offered physicians opportunities to become owners if they referred an adequate number of tests.

Reliable made advance disbursement payments in some cases as an effort to appease the physician and ensure he would not send samples to other labs, according to the release.

Madison and Lizcano, the two who pleaded guilty to conspiracy to pay and receive health care kickbacks and two counts of paying and receiving health care kickbacks, could each face up to 15 years in prison.

The Justice Department said Boggess, the CEO of Unified and Spectrum, faces up to three years in federal prison. The rest of the defendants each face up to five years in prison.

The FBI field office in Dallas conducted the investigation with assistance from the U.S. Department of Health and Human Services’ Office of Investigations, the Defense Criminal Investigative Services and the Veterans Affairs’ Office of Inspector General.

This story was originally published April 21, 2022 5:12 PM.