Doctor Admits Taking Cash Kickbacks For Patient Referrals And Failing To Report Nearly $1 Million In Income

NEWARK, N.J. — An Essex County, N.J., doctor practicing family medicine in East Orange, N.J., today admitted receiving cash kickbacks for diagnostic testing referrals of his patients and failing to file tax returns on $1 million of income over a three-year period, U.S. Attorney Paul J. Fishman announced.

Yash Khanna, M.D., 72, of Livingston, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a six-count superseding indictment charging him with conspiracy to violate the federal health care anti-kickback statute; soliciting and receiving more than $10,000 in illegal cash kickbacks for patient referrals in violation of the anti-kickback statute; and failing to file tax returns for tax years 2008, 2009, and 2010.

According to documents filed in this case and statements made in court:

From 2009 through 2011 Khanna owned and operated his own medical practice, Family Medicine and Pediatrics LLC. He agreed with representatives of a diagnostic testing facility called Orange Community MRI LLC (Orange MRI) that he would be paid cash in exchange for patients he referred for testing. He received cash kickbacks from Orange MRI for diagnostic tests performed on Medicare and Medicaid patients and met with an Orange MRI representative at his office on Oct. 4, 2011, and Nov. 10, 2011, taking envelopes with cash. Khanna acknowledged taking kickback cash from Orange MRI on other occasions as well. 

Khanna admitted to earning income of more than $381,000 in 2008, $400,000 in 2009, and $214,000 in 2010. He intentionally failed to file tax returns or ask for extensions during those years.    

The anti-kickback charges each carry a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. The tax charges each carry a maximum penalty of one year in prison and a maximum $100,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for June 27, 2014.

Khanna is the 15th doctor convicted in the government’s investigation of Orange MRI and its corrupt referring doctors. Healthcare practioners convicted in the case have so far forfeited a total of $460,140.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and criminal investigators with the U.S. Attorney’s Office for the investigation leading to the guilty plea. 

The case is being prosecuted by Deputy Chief Scott B. McBride of the U.S. Attorney’s Office’s Economic Crimes Unit and Deputy Chief Joseph G. Mack of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense counsel: Christopher L. Patella Esq., Bayonne, N.J.                                                                                   

Khanna Superseding Indictment