The U.S. attorney for the Northern District of Texas announced Thursday the indictments of 10 doctors, two pharmaceutical executives and two business entities in a kickback scheme involving prescriptions that spanned six years from 2013 to 2019.
The indictments, filed Wednesday in Dallas, charge the following individuals and businesses with conspiracy to violate the Travel Act, specifically the Texas Commercial Bribery Statute, and conspiracy to deny patients their right to honest services, as well as with conspiracy to commit money laundering:
- Medical doctors Robert Leisten, Amy Haase, Arnold Farbstein, Barry Weinstein, Eric Berkman, Jorge Cuza, Katherine McCarty, James Ellis and David Wolf;
- Executives Amir Mortazavi, who held various titles including chief business development officer, chief commercialization officer and chief executive officer of Next Health Pharmacy, and Arvin Zeinali, whose titles included senior vice president of pharmacy and president of pharmacy;
- And management service organizations (MSOs) Trinity Champion Healthcare Partners, LLC, and Hexamed Business Solutions, LLC.
Medical doctor Walter Strash was also charged with conspiracy to violate the Travel Act and conspiracy to deny patients their right to honest services, but not with conspiracy to commit money laundering, according to the U.S. attorney’s announcement.
Each faces up to 20 years in prison if convicted.
According to court documents, Zeinali is represented by Jay Dewald of Norton Rose Fulbright, Ellis is represented by James T. Jacks of the Law Office of James T. Jacks, and Cuza is represented by Michael John Uhl of Fitzpatrick Jacks Smith & Uhl. Uhl declined to comment. Dewald and Jacks did not respond to requests for comment. Lawyers were not listed Friday for the other defendants.
“Our community trusts doctors to write prescriptions that serve their patients’ best interest. Kickbacks and bribes cloud physicians’ judgment,” said Leigha Simonton, the U.S. attorney for the Northern District of Texas. “We will not permit greed to taint the practice of medicine.”
The Conspiracy
The scheme began in 2013 with Next Health, a holding company that was principally controlled by Andrew Hillman and Semyon Narosov. They pled guilty in 2018 to charges of conspiracy to launder monetary instruments and received five and a half years and six years four months in prison, respectively, for their roles in the scheme.
A marketer, Vinson Woodlee of Med Left, also participated, according to the indictment. He pled guilty in a separate case to conspiracy to solicit and receive kickbacks for referrals to federal health care programs but has not been indicted in this case.
Hillman and Narosov were also convicted in the massive $200 million kickback scheme involving the now-defunct Forest Park Medical Center that carried more than 20 indictments.
Next Health owned and controlled dozens of associated business entities and pharmacies. The company agreed to split profits with physicians from prescriptions filled at its pharmacies, according to the indictment.
In 2017 and 2018, Hillman, Narosov and Woodlee were involved in moving a large share of Next Health’s pharmacy business to an entity called Altus or Pharma Select, the indictment alleges.
Prosecutors allege Woodlee operated fake management service organizations, Trinity and Hexamed, that did not provide real services but instead were used to conceal payments Altus made to referring physicians.
Between 2017 and 2019, Altus received reimbursements from pharmacy benefit managers, such as CVS Caremark, totaling more than $3 million from illegally purchased prescriptions, according to the indictment. Med Left got about half the profits from Altus and distributed the payments to physicians through the management service organizations, the indictment describes.
Part of the scheme included veiling illegal payments as legitimate returns on investment from physician ownership, the indictment states.
Sometimes kickbacks were made to a member of a referring physician’s household, the indictment claims.
A September 2014 letter signed by executive Mortazavi claimed the partnership “realized a return on investment of 1878% in the prior month.”
Other written communications between doctors and business partners described in the indictment showed discussion about generated revenue.
In 2018, a confidential informant for the FBI met with executives Mortazavi and Zeinali in Dallas and purported to be a representative of a group of doctors who wanted to get paid for their prescriptions. The executives referred the informant to Woodlee, whom he later met with in San Antonio. Woodlee “explained in detail” how participants got paid for prescriptions sent to Altus, the indictment says, noting the conversation was recorded.