Two co-owners of several New York area diagnostic testing facilities were sentenced on December 1 to three years in prison each for their roles in an $18.5 million healthcare fraud scheme. The two owners, who are married, paid kickbacks for referrals if the beneficiaries came in for diagnostic testing or other alleged services provided by Sophisticated Imaging, East Coast Diagnostics and East West Management.
The Brooklyn-based couple also falsely reported the illegal kickback payments as valid business expenses to the IRS. In doing so, the co-owners claimed deductions they weren’t entitled to and underreported their business income.
The sentencing in 2022 wraps up a case that goes back to 2017, where the couple first pleaded not guilty in Manhattan Criminal Court to charges of Grand Larceny and money laundering $44 million and submitting more than $1 million in false Medicaid claims. The couple eventually pleaded guilty in May 2019 and admitted to paying $18.5 million.
A collaborative effort
The Medicare Fraud Strike Force led the investigation, a joint effort between the Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG ) Office of Investigations. IRS Criminal Investigations was also part of the federal case tried in the Eastern District of New York.