ATLANTA DOCTOR INDICTED FOR HEALTH CARE FRAUD AND TAX EVASION
March 28, 2011
Physician Allegedly Used Purported Charitable Entity He Controlled to Offer
Kickbacks to Medicare Patients and Evade Income Taxes
ATLANTA, GA - LAWRENCE EPPELBAUM, 52, of Roswell, Georgia has been indicted by a federal grand jury and was arraigned today before United States Magistrate Judge Janet F. King on charges of health care fraud and tax fraud.
United States Attorney Sally Quillian Yates said, “The Medicare system is designed to provide patients with the ability to choose physicians and other medical providers based on their own medical needs. This defendant allegedly used a purported charitable organization he controlled to manipulate the system, paying kickbacks to Medicare patients to induce them to use his medical practice for care. The indictment alleges that these payments, hidden as charitable efforts, violated criminal anti-kickback laws.”
“Providing free interstate trips at taxpayer expense and billing the government for needless services, as Dr. Eppelbaum stands accused of here today, is the sort of corruption all too common in our health care system,” said Derrick L. Jackson, Special Agent in Charge of the Atlanta Region for the Office of Inspector General of the Department of Health & Human Services. “My agency will work with our law enforcement partners to investigate and prosecute health care fraud in all its forms.”
Reginael D. McDaniel, Special Agent in Charge of the Atlanta Region for the Internal Revenue Service Criminal Investigations said, “Our system of health care is founded on the trust of the public in its health care professionals and the outstanding services they provide. The system was not designed for the few individuals who may choose to place personal profit ahead of that trust. The illegal activity alleged in this indictment, including tax evasion and abuse of charitable organizations, harms all Americans, as we all have to pay our fair share for the government services and protections that we enjoy.”
According to United States Attorney Yates, the charges and other information presented in court: EPPELBAUM is a physician who is licensed to practice medicine in Georgia and owns and operates the “Atlanta Institute of Medicine and Rehabilitation” (“AIMR”) and the “Pain Clinic of AIMR” in Atlanta. In 2004, EPPELBAUM allegedly created the “Back Pain Fund,” a purported charitable organization that was never incorporated as a charitable tax-exempt entity and that EPPELBAUM, in fact, controlled both directly and indirectly. EPPELBAUM, through the Back Pain Fund, paid for Medicare patients to travel to Atlanta to receive medical treatment from his practice, then travel to Florida or North Carolina to visit a local hot spring for approximately four days, before returning to Atlanta to receive additional treatment.
The indictment alleges that EPPELBAUM was the primary donor to the Back Pain Fund and paid the vast majority of its operating expenses. EPPELBAUM allegedly tried to disguise his financial control over the Back Pain Fund by entering into an arrangement with a Jewish Day School in Atlanta, whereby the parents of students attending the Jewish Day School were instructed to make their tuition checks payable to the Back Pain Fund instead of to the school, and in turn, EPPELBAUM repaid the Jewish Day School for the amount of the tuition, plus an additional 25 percent. EPPELBAUM allegedly entered into similar arrangements with other organizations, and even allowed patients visiting his medical practice to make their co-payment checks payable to the Back Pain Fund in exchange for receiving a charitable contribution receipt. Between 2004 and 2009, EPPELBAUM treated hundreds of Back Pain Fund patients and billed Medicare approximately $15 million for their treatment.
EPPELBAUM is also charged with utilizing the Back Pain Fund as a vehicle for committing tax fraud. The indictment charges that during 2006 through 2008, EPPELBAUM deducted as charitable donations all the payments he made to the Back Pain Fund, the Jewish Day School, and the other organizations with which he had a financial arrangement, even though EPPELBAUM allegedly derived substantial personal income from treating Back Pain Fund patients. The indictment alleges that EPPELBAUM evaded approximately $1 million in federal income taxes through his scheme.
The indictment charges 21 counts of medicare fraud and tax fraud. The health care charges each carry a maximum sentence of 10 years in prison and a fine of up to $250,000. The tax charges each carry a maximum sentence of 3 or 5 years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding, but provide appropriate sentencing ranges for most offenders.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.
This case is being investigated by Special Agents of the Office of Inspector General for the Department of Health & Human Services, Internal Revenue Service and Federal Bureau of Investigation.
Assistant United States Attorneys Kurt R. Erskine and Steven D. Grimberg are prosecuting the case.
For further information please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.