President Of New Jersey Clinical Laboratory, Six Salesmen Admit Bribing Doctors For More Than $100 Million In Test Referrals

The president of Parsippany, New Jersey-based Biodiagnostic Laboratory Services LLC (BLS), three BLS employees, and three associates admitted this week to a conspiracy in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals worth more than $100 million to the company.

All seven defendants pleaded guilty to an information charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The defendants entered their guilty pleas before U.S. District Judge Stanley R. Chesler in Newark federal court.

According to the United States Attorney’s Office for the District of New Jersey, the conspiracy made millions in illegal profits between 2006 and April 2013. During their guilty pleas, certain defendants admitted that BLS made substantially more than $100 million from Medicare and private insurance companies—just from bills related to blood specimens sent to BLS by bribed doctors.

Statements made during the pleas also detailed the means through which BLS paid doctors millions of dollars—in cash or under the guise of sham lease, service, and consulting agreements through an elaborate network of shell entities used for that purpose. The defendants also admitted that one component of the bribery scheme was to pay some doctors a fee per test to induce them to increase their ordering of certain tests. Documents filed the case allege that one doctor planned to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.

Those who pleaded guilty each face a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge and 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense. In addition, two defendants have agreed to forfeit $50 million and $25 million to the United States, respectively. The other five defendants will forfeit amounts ranging between $800,000 and $1.3 million. Sentencing for all seven defendants is scheduled for September 11, 2013.