Chief Financial Officer of Pain Management Clinics Admits to Receiving $459,245 in Kickbacks
Negotiated a Deal to Submit Patients’ Urine Samples to a Testing Lab That Paid Over $1.3 Million in Kickbacks to His Employer
Baltimore, Maryland – Vic Wadhwa, age 38, of Frederick, Maryland, pleaded guilty today to soliciting and receiving kickbacks in return for referrals at lab tests from a medical practice.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to his plea agreement, Wadhwa was the chief financial officer of a group of pain management clinics located in central Maryland. The group’s clinics required its patients who have been prescribed pain relief medications to submit urine samples for testing in order to monitor the levels of pain medication or other narcotics in their bodies. The group’s clinics generated hundreds of urine samples each month, which were sent to an outside lab for testing.
In March 2011, Wadhwa and others at the group’s clinics decided to shift the group’s testing business to a laboratory testing company in New Jersey, after learning that the lab testing company was willing to pay a kickback for every urine sample that the group of clinics submitted for testing. Wadhwa negotiated the arrangement, whereby the lab company promised to pay kickbacks equal to half of its profit, after accounting for expenses, for every urine sample that the group of clinics submitted for testing.
The group of clinics submitted urine samples for testing to the lab company from approximately March 2011 to August 2012. During this time, the lab company received total reimbursement payments of $4,033.846.70 from private insurers, Medicare and the Federal Employees Health Benefit Program for lab tests ordered by the group of clinics.
Between the time the kickback payments commenced in July 2011 and the end of the scheme in July 2012, the lab company paid the group of clinics a total of $1,376,540.85 in kickbacks. Out of this amount, Wadhwa received approximately $459,245.
The investigation is ongoing.
Wadhwa faces a maximum sentence of five years in prison and a $250,000 fine. U.S. District Judge Marvin J. Garbis has scheduled sentencing for April 2, 2015 at 2:30 p.m.
United States Attorney Rod J. Rosenstein commended the FBI and HHS-OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Jefferson M. Gray and Sean R. Delaney, who are prosecuting the case.