Laboratory Owner Sentenced to 82 Months in Prison for COVID-19 Kickback Scheme
A Florida owner of multiple diagnostic testing laboratories was sentenced today in the Southern District of Florida to 82 months in prison for a scheme to defraud the United States and to pay and receive kickbacks through exploiting regulatory waivers put in place to ensure access to health care during the COVID-19 pandemic.
According to court documents, Leonel Palatnik, 42, of Aventura, as a co-owner of Panda Conservation Group LLC (Panda), conspired with other co-owners of the company and with Michael Stein, the owner of 1523 Holdings LLC, to pay illegal kickbacks to Stein in exchange for his work arranging for telemedicine providers to authorize genetic testing orders for Panda’s laboratories. 1523 Holdings and Panda then exploited temporary amendments to telehealth restrictions enacted during the pandemic, which were intended to expand access to care for Medicare recipients by making it easier for beneficiaries to receive needed medical care from home. Palatnik and his co-conspirators took advantage of these waivers by using telehealth providers to authorize thousands of medically unnecessary cancer and cardiovascular genetic testing orders. In exchange, Panda gave these providers access to beneficiary information and the opportunity to bill for purported telehealth consultations with Medicare recipients, which often did not take place. On Aug. 31, Palatnik pleaded guilty to one count of conspiracy to defraud the United States and offer kickbacks and one count of paying a kickback.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division; and Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG) made the announcement.
The FBI’s Miami and Dallas Field Offices and HHS-OIG are investigating the case, with assistance from the FBI’s Healthcare Rapid Response Team.
Trial Attorney Ligia Markman of the National Rapid Response Strike Force is prosecuting the case.
The case against Palatnik was brought as part of the COVID-19 Health Care Fraud coordinated law enforcement action on May 26 against 14 defendants in seven judicial districts. Palatnik was charged along with Stein, who is currently awaiting trial. The law enforcement action was brought in coordination with the Health Care Fraud Unit’s COVID-19 Interagency Working Group, which is chaired by the National Rapid Response Strike Force and organizes efforts to address illegal activity involving health care programs during the pandemic.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
An indictment is merely an allegation, and Stein is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.