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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Michigan

FOR IMMEDIATE RELEASE
Tuesday, January 12, 2016

Physician Assistant, Kyle D. Gandy, Sentenced To Fourteen Months In Prison For Accepting Illegal Kickbacks

          GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Kyle D. Gandy, age 37, a physician assistant who formerly resided in Mt. Pleasant, Michigan, was sentenced to 14 months in prison and two years of supervised release for accepting $1,000.00 in illegal kickbacks for referring patients to medical clinics, physical therapy clinics, and a home health care agency. Gandy is the tenth person, and the fourth physician assistant, convicted of felony charges in connection with a joint federal-state investigation into a kickback scheme initiated by Babubhai Rathod. As part of this felony conviction, Gandy was ordered to pay $18,030.17 in restitution, representing the amount of the referred services paid by Medicare and Medicaid. Gandy will be excluded from participating with the Medicare and Medicaid programs for at least five years.

          In sentencing Gandy, U.S. District Judge Janet T. Neff stated that accepting kickbacks is "a very serious crime" that "take[s] advantage of government programs that help so many people." Judge Neff emphasized that receiving illegal kickbacks in any amount is a "strike at the whole [health care] system." Judge Neff further noted the need to punish and deter those who have "the education and opportunity to work in a dignified profession," but use such opportunities "to commit fraud and theft."

          In its sentencing memorandum, the Government cited Gandy’s acknowledgements that the subject kickback payments influenced his referral patterns and resulted in services that were not medically necessary. U.S. Attorney Miles reiterated that, "Paying kickbacks for patient referrals distorts the motives of health care professionals. The U.S. Attorney’s Office will continue to aggressively investigate and prosecute all kickback schemes using the available criminal and civil remedies, including felony prosecutions, treble civil damages, monetary penalties, and program exclusions."

          "Paying kickbacks for the referral of Medicare or Medicaid patients is a serious crime," said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. "Kickbacks inappropriately influence health care practitioners’ medical decision making process, lead to overutilization and/or up-coding of services, and further increase program costs. The OIG will continue to aggressively pursue kickback allegations to ensure the integrity of the Medicare and Medicaid programs and protect vital taxpayer dollars."2

          This case was the result of a coordinated effort by the U.S. Attorney’s Office for the Western District of Michigan, the Michigan Attorney General’s Office, the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and Blue Cross Blue Shield of Michigan. Assistant U.S. Attorneys Raymond E. Beckering III and Adam B. Townshend prosecuted this matter.

END

Updated February 4, 2016