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Just over two years ago, in June 1994, National Medical Enterprises, headquartered in Santa Monica, California, pleaded guilty to seven felony charges and was ordered to pay a $362.7 million fine – the largest in history.
Soon thereafter, in January 1995, Peter Alexis, the former Vice President of NME, entered guilty pleas to charges of conspiring to defraud insurers, inflating Medicare expenses and illegally paying referral fees to psychiatrists, psychologists and therapists in exchange for patient referrals. Alexis was sentenced to just five years probation and a $100 fine.
The easy sentence was in exchange for the cooperation and the assistance Alexis lent to federal prosecutors during the investigation – assistance like admitting that he’d paid over $40 million in bribes over several years on behalf of NME. The government civil suit was settled at a slightly higher cost; Alexis forfeited $221,800 worth of fine arts, jewelry, furs and automobiles.
Further investigative digging was aided by the mid-1995 guilty plea by Bert Wayne Bolan, a psychotherapist-turned-ostrich-dealer who admitted to the same crimes as Alexis. Bolan, however, admitted taking kickbacks and drew a stiffer sentence – eight years in federal prison – and a stiffer fine – $375,000. The civil settlement called for the forfeiture of two Mercedes-Benz automobiles and two houses, one worth a cool half million bucks.
And still the matter has not been put to rest. A practicing psychiatrist is the latest fraud fatality in the never-say-die NME case. A federal grand jury has indicted the former medical director of the now defunct Psychiatric Institute of Fort Worth, Dr. Hernan Enrique Burgos, on eight counts of mail fraud.
The indictment accuses Burgos of the following actions between 1985 and 1992:
Filing insurance claims for nonprovided services and treatments.
Signing false claims to assist others in obtaining illegal reimbursements and/or increased payments.
The creation of false documents to cover up the schemes.
Oral and written lies.
Defrauding patients of “the benefit of honest performance of services billed to health insurance companies.”
Authorities active in the ongoing prosecutions have made it very clear that the matter is far from over. Additional doctors are still being investigated and more arrests may be forthcoming.
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