Lab Fraud Update

31st Physician Pleads Guilty In Federal Lab Fraud Case

Latest conviction in Biodiagnostic Lab Services case, U.S. Attorney continues to pursue docs who took bribes

AN INTERNAL MEDICINE PHYSICIAN who practiced in Yonkers, N.Y., is the latest physician to admit to taking bribes in connection with a laboratory test referral scheme that Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., operated for years.

The physician, Ricky J. Sayegh, MD, 44, of Scarsdale, N.Y., pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court, according to Acting U.S. Attorney William E. Fitzpatrick.

To date, the investigation into BLS has resulted in 45 convictions, including 31 physicians. The DOJ said that number of physicians convicted in the BLS case is believed to be the largest number of medical professionals ever prosecuted in a bribery scheme.

Sayegh was charged with accepting cash bribes in return for referring blood specimens to BLS. For more than three years beginning in February 2010, Sayegh collected approximately $400,000 in bribes from BLS, the DOJ reported. In exchange, BLS used Sayegh’s referrals to generate more than $1.4 million in lab business, the DOJ said.

BLS executives have admitted that the scheme involved millions of dollars in bribes and resulted in Medicare and private health insurers paying more than $100 million to BLS.

In the investigation, the DOJ has recovered more than $12 million through forfeiture from physicians, BLS executives, and others involved in the scheme. Last year, executives from BLS pleaded guilty and the company was required to forfeit all assets. The lab company no longer operates.

Facing 5 Years in Prison

Sayegh is scheduled to be sentenced on Sept. 6. He could serve a maximum potential penalty of five years in prison and be required to pay a fine of $250,000.

In April, the DOJ reported, that a physician who practiced in the New York City borough of Staten Island pleaded guilty to accepting bribes in exchange for sending patient’s blood samples to BLS. That physician, Ahmed El Soury, MD, 44, of Monmouth Junction, N.J., practiced internal medicine, Fitzpatrick announced.

El Soury faces a maximum penalty of five years in prison and a $250,000 fine when he is sentenced on July 19.

Among the 31 physicians convicted in the case, only one, Brett Ostrager, MD, has been sentenced. He was sentenced to 37 months in prison. He had a practice in Nassau County, N.Y.

In 2015, a federal grand jury indicted Ostrager. He was charged with one count of conspiring to violate the Anti-Kickback Statute and the Federal Travel Act, three substantive violations of the Anti-Kickback Statute, and four substantive violations of the Federal Travel Act.

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