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Press Release

New York Doctor Sentenced To 37 Months In Prison For Taking Bribes In Test-Referral Scheme With New Jersey Clinical Lab

For Immediate Release
U.S. Attorney's Office, District of New Jersey

NEWARK, N.J. – A doctor who 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 was sentenced today to 37 months in prison, U.S. Attorney Paul J. Fishman announced.

Bret Ostrager, 51, of Woodbury, New York, a doctor with practices in Nassau County, New York, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Counts One, Two and Five of an indictment charging him with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act by accepting bribes, one substantive violation of the Anti-Kickback Statute, and one substantive violation of the Federal Travel Act. Judge Chesler imposed the sentence today in Newark federal court.

Ostrager is one of 39 people – 26 of them doctors – who have pleaded guilty 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.

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

Ostrager admitted that, between February 2011 and April 2013, he received monthly cash bribes of approximately $3,300 from BLS employees and associates. He periodically solicited and received from the BLS employees and associates tickets and meals that cost thousands of dollars. These additional bribes in response to specific requests from Ostrager included tickets to a New York Mets baseball game, a New York Knicks basketball game, a Katy Perry concert, a Justin Bieber concert, and the Broadway show “Newsies.” In exchange, Ostrager referred patient blood samples to BLS. Ostrager’s referrals generated approximately $909,000 in lab business for BLS.

In addition to the prison term, Judge Chesler sentenced Ostrager to one year of supervised release, fined him $30,000 and ordered forfeiture of $101,271.

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 leading to today’s sentencing.

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 Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering 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 $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: Marc Agnifilo Esq., New York

Updated June 8, 2016

Health Care Fraud
Press Release Number: 16-166