The chief executive officer and chief operating officer of a Palm Beach urinalysis lab were sentenced to prison Friday and ordered to pay more than $9.6 million for healthcare fraud.
The decision Friday by the U.S. District Court for the Southern District of Florida follows guilty pleas in August by Smart Lab’s CEO H. Hamilton Wayne of Palm Beach Gardens and COO Justin Morgan Wayne of Boca Raton. The two are brothers.
H. Hamilton Wayne, 40, was sentenced to 63 months in prison, to be followed by three years of supervised release, along with a $50,000 fine.
Justin Wayne, 39, got 46 months in prison, three years supervised release and a $20,000 fine. He was a pitcher for the Florida Marlins from 2002 to 2004, the Palm Beach Post reported.
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The court also ordered H. Hamilton Wayne to pay $3.9 million in restitution and Justin Wayne to pay $2.9 million in restitution. The court ordered Smart Lab LLC to pay $2.9 million in restitution.
The brothers and co-conspirators were subjects of a federal investigation into healthcare fraud dating from 2005 to 2017.
Lanny Fried, 41, of Miami, a Smart Lab sales representative, pleaded guilty in August, too, for his role in a scheme that sought insurance payments for testing that was medically unnecessary.
And Boca Raton lawyer Lawrence Weisberg also pleaded guilty in August to a charge of money laundering in relation to this case.
Weisberg was sentenced to six months in prison, to be followed by six months home confinement, one year of supervised release and a $7,500 fine.
“While Mr. Weisberg was potentially looking at a greater amount of time in prison, Judge [Robin] Rosenberg was persuaded that he had no knowledge of Smart Labs’ practices of illegal conduct and the government declined to file any healthcare fraud charges against Mr. Weisberg based upon [his] limited, but unfortunate, role in this case,” said Weisberg’s Miami-based attorney Brian H. Bieber.
“He’s extremely remorseful and will pay a heavy penalty of losing his license to practice law in the future,” Bieber added.
According to court records, the Waynes established Smart Lab to perform confirmatory urinalysis testing — tests given after a positive or negative result.
“Both established bank accounts to receive proceeds of insurance claims for medically unnecessary testing and to pay kickbacks and bribes to individuals and entities that referred urine samples to their lab for testing,” according to a U.S. Department of Labor release following the court’s decision Friday.
The brothers established agreements with co-conspirators to solicit body fluid samples from substance abuse treatment centers, according to the investigation.
“In exchange, Smart Lab would kick back a portion of the insurance reimbursements — disguised as payments for sales commissions — that would eventually funnel back to owners, operators, or clinicians at the treatment centers that referred the insured patients’ urine samples for testing,” the investigation found.
Smart Lab paid the other co-conspirators more than $600,000, which came from proceeds of the healthcare fraud, the investigation found.
“Healthcare fraud victimizes the individuals involved and the community at-large,” Isabel Colon, a regional director with the U.S. Department of Labor, said in a release.