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Justice News

Department of Justice
U.S. Attorney’s Office
District of New Jersey

Thursday, June 30, 2016

New Jersey Doctor Pleads Guilty In Connection With Test Referral Scheme With New Jersey Clinical Lab

NEWARK, N.J. – A doctor with a practice in Clifton, New Jersey, today admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Juan Espindola, 58, of Montclair, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with violating the Federal Travel Act by accepting bribes to refer patient blood specimens to BLS.

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

Espindola admitted that between April 2011 and June 2012, he received bribes of approximately $1,500, largely on a monthly basis, from an individual working on behalf of BLS, referred to in the information as “Individual 1.”

Individual 1 falsely characterized the payments as “consulting fees” and made the payments via check. In reality, Espindola did not provide consultant services to Individual 1 or BLS – the consultant fees were merely a sham intended to conceal the bribe payments. In exchange, Espindola referred patient blood samples to BLS. Espindola’s referrals generated approximately $65,000 in lab business for BLS.

The Travel Act charge to which Espindola pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. His sentencing is scheduled for Oct. 12, 2016.

The investigation has thus far resulted in 41 guilty pleas – 27 of them from doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has to date recovered more than $12 million through forfeiture.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation. 

The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney 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 $1.29 billion 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.

Defense counsel: Robert Stahl, Esq., Westfield, New Jersey

Healthcare Fraud
Updated June 30, 2016