N.J. Doctor Charged with Stealing More Than $500K from Insurance Companies in Fraud Scheme

A Passaic County, N.J., pain management doctor has been charged with first-degree conspiracy and money laundering for allegedly submitting more than $4.4 million in fraudulent bills for service to insurance companies that netted him more than $500,000 in a medical kickback fraud scheme he operated.

Dr. Todd Koppel, a New York City resident who ran the Garden State Pain Management (GSPM) in Clifton, N.J., allegedly paid more than $190,000 in kickbacks to five chiropractors in exchange for more than 790 patient referrals to his pain management facility between 2006 and 2016.

Three of those chiropractors have admitted to participating in the scheme and accepting kickbacks from Koppel. The investigation is ongoing.

Koppel is the latest doctor charged in connection with an ongoing investigation by the New Jersey Attorney General’s Commercial Bribery Task Force, which was formed in January 2016 to target commercial bribery in the healthcare industry.

The task force, which includes deputy attorneys general and detectives from the Division of Criminal Justice, Financial & Computer Crimes Bureau and the Office of the Insurance Fraud Prosecutor, has uncovered a statewide criminal enterprise in which doctors receive hundreds of thousands of dollars in illegal kickbacks in return for providing patient referrals worth millions of dollars to other doctors and medical service providers.

“Through its continued hard work, the Commercial Bribery Task Force has identified and dismantled yet another unsavory alliance of medical fraudsters who treated patients as pawns to be bought and sold for profit,” said New Jersey Attorney General Gurbir S. Grewal in a press release issued by the New Jersey Office of the Insurance Fraud Prosecutor. “As the alleged operator of this criminal enterprise, Dr. Koppel not only stole hundreds of thousands of dollars from insurance companies, he deprived patients of their right to be treated by doctors whose medical decisions were not clouded by unadulterated greed.”

Over 10 years, Koppel billed insurance companies more than $4.4 million for medical treatments for patients referred to him by the five chiropractors, according to the indictment. In submitting the fraudulent claims, Koppel allegedly omitted that the treatments were the result of an illegal kickback scheme.

Koppel received more than $500,000 in insurance payments from his criminal activities, which were deposited into GSPM’s business accounts and later moved to his personal bank accounts, according to the indictment. Koppel allegedly used some of the ill-gotten proceeds to generate cash to pay additional kickbacks.

“Medical kickback schemes like this are a form of insurance fraud that spreads like a cancer throughout the healthcare industry, putting more and more unsuspecting patients into the hands of doctors who use them as cash cows to drive up billable services,” said Acting New Jersey Insurance Fraud Prosecutor Christopher Iu in the release. “Our Commercial Bribery Task Force will continue to follow the trail of dirty money from one corrupt physician to the next until every one of them is held accountable for this shameful abuse of the trust their patients place in them. Anyone who suspects this type of corrupt activity in the healthcare industry is urged to contact our task force confidentially.”

Three chiropractors involved in the scheme have admitted to receiving kickbacks from Koppel. All three previously pleaded guilty to charges related to the prosecution of other medical kickback rings.

Phillip Potacco, former operator of the South Orange Trauma and Rehab Center (SOTC) in South Orange, N.J., pleaded guilty in a kickback scheme involving SOTC. Dr. Ronald Hayek, former operator of Union Wellness Center in Totowa, N.J., pleaded guilty in a kickback scheme involving medical imaging centers in North Jersey, and Dr. Brian Beagin, a Woodland Park chiropractor, pleaded guilty to conspiracy and health care claims fraud (second degree) for his role in the kickback scheme involving medical imaging centers in North Jersey.

In an indictment handed up by a state grand jury in Trenton, Koppel was charged with first degree conspiracy, first degree money laundering, second degree misconduct by a corporate official, second degree theft by deception, four counts of second degree health care claims fraud, second degree attempted theft by decesption, five counts of third degree commercial bribery and six counts of third degree criminal running.

The charges are merely accusations, and the defendant is presumed innocent until proven guilty. First degree crimes carry a sentence of 10-to-20 years in state prison and a fine of up to $500,000. Second degree charges carry a sentence of five-to-10 years in state prison and a fine of up to $150,000. Third degree crimes carry a sentence of three-to-five years in state prison and a criminal fine of up to $15,000.

Deputy Attorneys General Colin Keiffer and Charles Wright of the Office of Insurance Fraud Prosecutor and Deputy Attorney General Brian Faulk of the Division of Criminal Justice Financial & Computer Crimes Bureau presented the case to the grand jury.

Commercial Bribery Task force members are conducting and coordinating the investigation for the Office of the Insurance Fraud Prosecutor under the supervision of Bureau Chief Cheryl Maccaroni and Deputy Bureau Chief Jillian Carpenter, and the Division of Criminal Justice Financial & Computer Crimes Bureau under the supervision of Deputy Bureau Chief Mark Kurzawa.

Topics Carriers Fraud New Jersey