Health Care Practitioner Sentenced To Six Months In Prison, Six Months Home Detention, For Accepting Cash Kickbacks For Patient Referrals
For Immediate Release
U.S. Attorney's Office, District of New Jersey
NEWARK, N.J. – Daisy Deguzman, a New Jersey doctor who practiced in Newark, today was sentenced to six months in prison and six months of home detention for her role in a cash-for-patients scheme with a diagnostic facility in Orange, N.J., U.S. Attorney Paul J. Fishman announced.
Deguzman, 70, of Livingston, N.J., pleaded guilty June 4, 2012, before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging her with one count of violating the federal healthcare program anti-kickback statute.
“Patients have every right to expect their doctors will recommend medical service providers because they do the best job, not because they provide the best bribes,” said U.S. Attorney Fishman. “The sentence handed down today shows the federal healthcare system cannot be abused by those practitioners who see a person in need of care as an opportunity to illegally make an extra buck.”
“Buying patient referrals has absolutely no place in a modern health care system,” said Tom O’Donnell, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s region including New Jersey. “The country's taxpayers are fed up with footing the bill for health care fraud, so these criminals can expect to pay the price.”
According to documents filed in this case and statements made in court:
On Dec. 13, 2011, Deguzman was arrested and charged with accepting cash kickback payments from Orange Community MRI (“Orange MRI”), a diagnostic facility, in exchange for her referral of Medicare and Medicaid patients. Twelve other New Jersey doctors and one nurse practitioner were arrested that day and charged in separate Complaints with accepting similar cash kickback payments from Orange MRI. Each defendant was recorded taking envelopes of cash in exchange for their patient referrals. On Dec. 8, 2011, an Orange MRI executive was arrested and charged in a separate Complaint in connection with his participation in the scheme. Deguzman is the first of the defendants to be sentenced.
Starting in at least 2010, Orange MRI began making monthly cash kickback payments to Deguzman in exchange for her referral of patients for diagnostic tests. At the end of each calendar month, individuals at Orange MRI printed Orange MRI patient reports that detailed how many magnetic resonance imagings (“MRIs”) and computed axial tomographies (“CAT Scans”) were referred by Deguzman. These patient reports were used to calculate the kickback payment owed to Deguzman. Pursuant to Deguzman’s agreement with Orange MRI, she was paid kickbacks for each Medicare or Medicaid beneficiary MRI or CAT Scan referred.
Deguzman received three separate payments from a cooperating government witness during the course of the investigation. On Oct. 11, 2011, Deguzman accepted $1,700 in cash for her September 2011 referrals to Orange MRI; she accepted another $1,130 on Nov. 17, 2011 for her October 2011 referrals to Orange MRI, and another $1,000 on Dec. 6, 2011 for her November 2011 referrals to Orange MRI.
In addition to the prison term, Judge Cecchi sentenced Deguzman to two years of supervised release, fined her $20,000 and ordered her to forfeit $23,595.
With respect to the other defendants charged in the investigation:
• Jose Castaneda, a nurse practitioner formerly practicing in Newark, pleaded guilty before Judge Cecchi on April 3, 2012, and is scheduled to be sentenced on June 18, 2013.
• Yash Khanna, M.D., a doctor practicing in East Orange, was indicted on May 4, 2012, by a federal grand jury on one count of accepting kickbacks; Judge Cecchi has not yet set a trial date.
• Dov Rand, M.D., a doctor practicing in West Orange, pleaded guilty before Judge Cecchi on May 18, 2012, and is scheduled to be sentenced on Feb. 13, 2013.
• William Lagrada, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on July 11, 2012, and is scheduled to be sentenced on June 4, 2013.
• Maryam Jafari, M.D., another Newark doctor, was indicted on July 13, 2012, by a federal grand jury on one count of accepting kickbacks. On Sept. 14, 2012, the same grand jury handed up a superseding indictment against Dr. Jafari, charging her with one count of conspiracy and two counts of accepting kickbacks. The trial of Dr. Jafari ended with a hung jury and mistrial on Dec. 6, 2012. Judge Cecchi has set the retrial date for March 1, 2013.
• Chikezie Onyenso, M.D., an Irvington doctor, was indicted on Sept. 7, 2012, by a federal grand jury on one count of accepting kickbacks; Judge Cecchi has not yet set a trial date. • Dinesh Patel, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on Sept. 19, 2012, and is scheduled to be sentenced on Feb. 26, 2013.
• Ashokkumar Babaria, M.D., a Moorestown radiologist and Orange MRI’s former medical director and owner-in-fact, pleaded guilty before Judge Cecchi on Sept. 27, 2012, and is scheduled to be sentenced on March 21, 2013.
• Lucio Cardoso, M.D., a North Arlington physician, pleaded guilty before Judge Cecchi on Oct. 10, 2012, and is scheduled to be sentenced on March 27, 2013.
• Rameshcha Kania, M.D., an East Orange doctor, pleaded guilty before Judge Cecchi on Oct. 12, 2012, and is scheduled to be sentenced Feb. 14, 2013.
• Chirag Patel, Orange MRI’s former executive director, pleaded guilty before Judge Cecchi on Oct. 16, 2012, and is scheduled to be sentenced on July 15, 2013.
U.S. Attorney Fishman credited special agents with the Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge O’Donnell, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Joseph Mack and Scott B. McBride of the Office’s Healthcare and Government Fraud Unit.
Defense counsel: Daniel A. Giaquinto Esq., Bridgewater, N.J.
Updated April 17, 2023