The plan seemed simple enough: Open up a couple of shell companies to funnel millions in bribe and kickback payments in exchange for patient referrals.
The U.S. Attorney’s Office of the Northern District of Texas claims Forest Park Medical Center paid approximately $40 million in bribes and kickbacks in exchange for patient referrals. Surgeons, primary care physicians, chiropractors, lawyers, worker’s compensation pre-authorization specialists and others routed patients to the physician-owned Forest Park Medical Center in Dallas, an out-of-network hospital.
Setting up an out-of-network hospital allowed the owners — Alan Beauchamp, 64; Richard Toussaint Jr., 58; Wade Barker, 51; and Wilton Burt, 61 — to set their own prices for services and receive a substantially higher reimbursement rate by insurance companies, the FBI Dallas field office said in a release.
The referrals were primarily of patients eligible for high reimbursements for out-of-network private insurance benefits, some of whom received benefits from federally funded programs. “Medical providers who enrich themselves through bribes and kickbacks are not only perverting our critical health care system, but they are committing a serious crime,” U.S. Attorney John Parker says. “Massive, multi-faceted schemes such as this one, built on illegal financial relationships, drive up the cost of health care for everyone and must be stopped.”
Twenty-one defendants were charged in the indictment. Along with Dallas residents Beauchamp, Toussaint, Barker and Burt, other defendants include:
Andrea Kay Smith, 37, of Rockwall
Carli Adele Hempel, 40, of Plano
Kelly Wade Loter, 48, of Dallas
Jackson Jacob, 53, of Murphy
Douglas Sung Won, 45, of Dallas
Michael Bassem Rimlawi, 45, of Dallas
David Daesung Kim, 54, of Southlake
William Daniel Nicholson IV, 46, of Dallas
Shawn Mark Henry, 46, of Fort Worth
Mrugeshkumar Kumar Shah, 42, of Garland
Gerald Peter Foox, 69, of Tyler
Frank Gonzales Jr., 41, of Midland
Israel Ortiz, 49, of Dallas
Iris Kathleen Forrest, 56, of Dallas
Andrew Jonathan Hillman, 40, of Dallas
Semyon Narosov, 51, of Dallas
Royce Vaughn Bicklein, 44, of San Antonio
They were charged with multiple counts of offering or paying and soliciting or receiving illegal remuneration in violation of the federal Anti-Kickback Statute, violating the federal Travel Act and conspiracy to commit money laundering. They were also charged with aiding and abetting.
Federal investigators claim Forest Park founders Beauchamp, Toussaint, Barker and Burt refused to join the networks of insurance plans for a certain period of time to enrich themselves and their managers by using the out-of-network billing and reimbursement system. They also claim Forest Park’s referral coordinator, Andrea Smith, owned a shell company called Unique Healthcare. It was created to funnel bribe and kickback payments to surgeons in exchange for patient referrals, according to law enforcement officials.
But she wasn’t the only one, authorities claim.
Jackson Jacob owned a shell company named Adelaide Business Solutions that he allegedly used to funnel bribe and kickback payments to surgeons, primary care physicians, chiropractors, lawyers, worker’s compensation and pre-authorization specialists and others for patient referrals. He also gave kickbacks to surgeons who used Forest Park’s facilities to perform medical procedures such as surgeries.
They say Forest Park’s Director of Bariatric Services Carli Hempel led efforts to sell Medicare and Medicaid referrals to a non-Forest Park facility.
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“The allegations against the defendants in this indictment indicate that patient trust was broken by the payments of kickbacks and bribes used to induce surgeons to use their hospital to perform services,” says Special Agent in Charge Tamera Cantu.
The U.S. Department of Justice’s press release lays out the rest of the government’s allegations against the 21 defendants, including investors receiving millions in bribe and kickback payments and a clinic owned by Israel Ortiz that received more than $1 million in bribe and kickback payments for patient referrals.
Federal investigators say the bribes and kickbacks resulted in patients’ insurance plans being billed more than a half billion dollars. Ten million was also billed to the Department of Defense healthcare program TRICARE. Twenty-five million was billed to the Department of Labor FECA healthcare program and more than $60 million was billed to FEHBP health care program for federal employees and retirees.
“The charges announced today show that the government will not tolerate corrupt practices by medical providers motivated by greed,” says Dallas FBI Special Agent in Charge Thomas M. Class Sr. “The FBI will continue to work with our law enforcement partners to identify those who manipulate and defraud our health care system and to seek their prosecution.”