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Patients got needless blood work. Their doctors got sex, cars and strippers, N.J. prosecutors say

A New Jersey man was sentenced to six years in prison Wednesday after pleading guilty to conspiracy and money laundering for his role in giving doctors cash, strippers, cars and prostitutes for sending patients’ blood work to Biodiagnostic Laboratory Services.
A New Jersey man was sentenced to six years in prison Wednesday after pleading guilty to conspiracy and money laundering for his role in giving doctors cash, strippers, cars and prostitutes for sending patients’ blood work to Biodiagnostic Laboratory Services. AP

The blood-work referrals doctors sent to Biodiagnostic Laboratory Services helped the New Jersey company rake in more than $100 million, according to federal prosecutors.

But there was a big, illegal problem: The tests and procedures doctors were making their patients undergo were often unnecessary — and the doctors ordering the tests had been bribed into ordering them, prosecutors said.

Dozens of doctors implicated in the scheme enjoyed lavish lifestyles in exchange for sending patients to the lab work company based in Parsippany, New Jersey. That included cash, sham leases, luxury cars, trips on private jets, strip club visits and prostitutes, the U.S. Attorney for New Jersey said. And the conspiracy lasted for years, from 2006 until April 2013 when federal investigators caught on and arrested the men who orchestrated it.

On Wednesday, a U.S. district judge sentenced the defunct lab’s president and the mastermind of the multimillion-dollar scam — David Nicoll, 44 — to 72 months in prison after he pleaded guilty to conspiracy and money laundering, prosecutors said. His brother and co-conspirator, Scott Nicoll, 37, was sentenced to 43 months behind bars.

“There can be little doubt that your conduct was the most egregious,” U.S. District Judge Stanley Chesler told David Nicoll, according to NJ.com. “You were at the center of a spiderweb, which you wove. It was for one reason: greed. You wanted the money.”

The $100 million the company made was milked from Medicare and private insurers, prosecutors said. And the Nicolls admitted to making “substantially more” than that through their blood work-related billing.

U.S. Attorney Craig Carpenito called the scam “one of the largest ever prosecutions of medical professionals in a bribery case.”

The Nicolls brothers were far from the only conspirators prosecutors went after: Prosecutors have convicted 53 people, including 38 doctors, for their respective roles in the scam, the U.S. attorney's office said.

“Medical referrals from a doctor should be based on what’s in the patient’s best interest, not on how much money the doctor is offered in kickbacks,” Carpentino said in a statement. “The number of doctors and medical professionals sent to prison in this case should make that message abundantly clear.”

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Prosecutors said that, through forfeiture, their investigation has helped recover some $15 million.

Some doctors were paid each time they ordered particular tests, prosecutors said, which was the lab company’s way of drumming up business. Texts between David Nicoll and Frank Santangelo, a Boonton, New Jersey doctor involved in the scheme, revealed how far doctors were willing to go to pile on the tests, prosecutors said.

Santangelo and another physician “put our heads together and added a significant amount of testing,” Santangelo wrote to Nicoll in a text. “The testing is 90% legit.”

Court records accused Santangelo alone of plotting to send the company $1 million in testing referrals each month — even if the tests weren’t actually needed.

Another doctor, Aiman Haman, took a lab-funded private jet with the Nicolls and others to Key West, Florida, in 2010 “for the purpose of fishing and visiting strip clubs,” court records said. The trip was entirely paid for by the company, as was a separate New York City strip club visit, prosecutors said.

Nicoll admitted to prosecutors that he also paid for five or more doctors to get prostitutes for sending him blood tests, and gave one doctor an Audi S5, the NJ.com reports.

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