New Jersey Doctor Faces New Charges He Took Kickbacks, Failed To File Taxes

NEWARK, N.J. – A federal grand jury returned an indictment today against a Livingston, N.J., physician with medical practices in Verona and East Orange, N.J., for allegedly conspiring to receive thousands of dollars in cash kickbacks in exchange for referrals and for failing to file tax returns on nearly $1 million in income, U.S. Attorney Paul J. Fishman announced.

Yash Khanna, 71, a family physician and the owner and operator of Family Medicine & Pediatrics, LLC, in East Orange, and West Essex Medical Group, PA, in Verona, is charged in the six-count superseding indictment with one count of conspiracy to violate the federal health care Anti-Kickback Statute, two separate counts alleging substantive violations of the Anti-Kickback Statute and three counts of willfully failing to file a federal tax return.

Khanna was originally arrested on a complaint in December 2011 and indicted in May 2012 on one count of violating the Anti-Kickback Statute in relation to a two-year scheme to receive cash kickbacks in exchange for his diagnostic testing referrals to Orange, N.J.-based Orange Community MRI. The new charges allege a conspiracy lasting at least three years and that he failed to file tax returns for approximately $1 million in income – including the kickback income – from 2008 through 2010.

According to the superseding indictment:

From at least as early as 2009 through December 2011, Khanna conspired with Orange MRI to solicit and receive cash kickbacks from the facility in return for referring patients for diagnostic tests such as MRIs and CAT scans. Khanna and Orange MRI representatives negotiated the value of kickbacks that Orange MRI would pay him per test he referred, and they were paid for a period of at least three years.

Specifically, Khanna and Orange MRI’s executive director agreed Khanna would be paid $50 for every MRI referral of a Medicare or Medicaid patient and $75 for every MRI referral of a patient with private health insurance.

Khanna also failed to file federal tax returns for 2008, 2009, and 2010, even though he earned considerable income – including illegal income – during that time period: approximately $381,000 in 2008, $400,000 in 2009 and $214,000 in 2010.

The conspiracy and kickback charges each carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the loss caused by the offense. The tax charges each carry a maximum potential penalty of a year in prison and a $100,000 fine, or twice the loss caused by the offense.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell, and IRS-Criminal investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Scott B. McBride and Deputy Chief Joseph G. Mack of the U.S. Attorney’s Office Health Care and Government Fraud Unit.

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

Khanna Superseding Indictment