A top administrator of Forest Park Medical Center was sentenced Wednesday to 12 ½ years in federal prison, and a spinal surgeon to 7 ½, for their roles in a massive kickback and bribery scheme in which doctors were paid to direct their patients to the now-defunct physician-owned surgical hospital.
The administrator, Mac Burt, one of the founders of the North Dallas hospital and one of its two managers, was also ordered to forfeit almost $4.6 million in property acquired, according to federal prosecutors, with ill-gotten gains from Forest Park’s conspiracy to “buy surgeries.”
The surgeon, Shawn Henry of Fort Worth, had been ordered to pay more than $6 million in restitution, of which, his lawyer said, he has already made a down payment of $941,000.
A third Forest Park defendant, Iris Forrest, a nurse and occupational-injury consultant, was sentenced to 3 years in prison for taking bribes to steer patient covered by workers’ compensation insurance to Forest Park for treatment.
The sentences were handed down at the federal courthouse in downtown Dallas, nearly vacant still because of the Covid pandemic, by U.S. District Judge Jack Zouhary, a visiting judge from Ohio who presided at the 2019 trial in Dallas of nine Forest Park defendants.
The sentences portend a lousy week for Douglas Won and Michael Rimlawi, two spinal surgeons and onetime business partners who were convicted at trial along with Burt, Henry, Thomas, and two other defendants. Won and Rimlawi, co-founders of the once thriving Minimally Invasive Spine Institute, are to appear before Zouhary for sentencing Thursday.
According to trial testimony, Won received almost $6 million in bribes, and Rimlawi almost $5 million, for referring their patients to and operating on them at Forest Park.
Assistant U.S. Attorney Andrew Wirmani said the defendants deserved prison time.
In sentencing Burt and Henry, Zouhary deviated downward from federal sentencing guidelines, but not enough that either man left the courtroom skipping gaily.
“Mr. Burt, you are an educated man with a master’s” the judge told the longtime healthcare executive.
“You were, let’s be frank, laundering money.”
Forest Park, the government argued at trial, disguised its payoffs to doctors as “marketing money” funneled through a shell company or, in the case of Henry, in monthly payments of $30,000 for real estate consulting services.
Burt’s lawyer, Richard Westling, pleaded for leniency for his client, noting that Burt has mental health problems, including depression and anxiety disorder, and is a recovering alcoholic who has maintained his sobriety for four years. Zouhary said he would recommend that Burt serve his sentence in a federal correctional institute equipped to treat inmates in need of treatment for alcoholism and psychological sicknesses.
Henry, according to trial testimony, was paid $840,000 to serve as a consultant to a real estate venture owned by two of Forest Park’s founding doctors but did no consulting of any kind for that money. He did, however, refer surgery patients by the dozens to Forest Park.
Zouhary called Henry’s arrangement with the real estate company “a sham consulting agreement.”
Noting that Henry was, legitimately, a surgeon of substantial means, the judge added: “We have a crime of greed here.”
Henry’s lawyer, Clint Broden, said his client’s career was a rags-to-scalpel tale. Henry, he said, put himself through medical school while living in his car. Once he achieved success in his field, Henry did significant pro bono work, including traveling to Houston in 2017 to provide medical care to victims of Hurricane Harvey.
Zouhary said he took into account Henry’s community service, as well as a stack of glowing letters from the doctor’s patients, friends and colleagues.
“You are a good man who did a bad thing,” the judge said.
Both Henry and Burt declined to make a statement of allocution to the court, citing the appeals of their convictions that they’re pursuing.
Forrest, the nurse, said she was “deeply sorry” for the shame and embarrassment that she’d caused her family. “I’ve learned a lot about myself in this process, and I know I’ll come out a better person,” she told Zouhary.
The sentencing of a fourth defendant, Jackson Jacob, was scheduled for Wednesday but continued to give his lawyer, Sara Johnson, time to review and respond to a sentencing-related document filed by the government in January that she never received. Jacob, according to trial testimony, was the person who funneled Forest Park’s bribes and kickbacks to doctors through a third-party company he controlled.
In just over three years, from its opening in the spring of 2009 through the end of 2012, Forest Park raked in $200 million in insurance payouts, while paying $40 million in kickbacks, mostly to doctors who sent patients there, performed surgeries there and, in some cases, became investors.
Of the nine defendants who went on trial, one was acquitted, seven were convicted and, in the case of one midlevel manager, the jury was unable to reach a verdict. That manager, Carli Hempel, pleaded guilty to one misdemeanor count and was sentenced to three years’ probation.
The guilty defendants, along with several individuals who cut deals with the government and cooperated in the fraud investigation, face sentencing this week before Zouhary.
The remaining scheduled sentencings, delayed in the past year because of Covid, will determine the fate of the following individuals:
Thursday:
Douglas Won, who according to testimony at trial received almost $6 million in “marketing money” from Forest Park, more than $158,000 of which was used to pay construction-related costs on his custom-built, multimillion-dollar mansion on Inwood Road north of Walnut Hill Lane.
Mike Shah, a pain-management physician convicted of conspiracy and receiving kickbacks for steering patients to Forest Park.
Michael Rimlawi, Won’s partner in the Minimally Invasive Spine Institute. Accused, with Won, of taking millions of dollars in bribes from Forest Park, Rimlawi was the only doctor to testify in his own defense at trial. His rambling, whiny, self-pitying, condescending performance on the stand was universally regarded by observers of the trial as an unmitigated disaster.
Wade Barker, a weight-loss surgeon and one of the founders of Forest Park, who struck a plea bargain with the government and cooperated in the investigation of corruption at the hospital.
Friday:
Frank Gonzales, a Midland chiropractor who agreed to cooperate with prosecutors and testified that he was paid $385,000 in kickbacks for steering more than 500 patients to Forest Park.
David Kim, a weight-loss surgeon who, in a deal with the government, pleaded guilty to one felony count of soliciting or receiving illegal remuneration, and to a separate charge – not part of the Forest Park case – of filing false income tax returns. Kim testified against other doctors he claimed were on Forest Park’s pad. “I accepted money in exchange for patients, sending patients to Forest Park,” he said, adding, “And I cheated on my taxes.”
Israel Ortiz, who agreed to cooperate with federal authorities investigating Forest Park and who pleaded guilty to conspiracy to pay and receive health care bribes and kickback. Ortiz, who owned a Dallas company that handled paperwork to preauthorize workers’ compensation patients for surgery, admitted to receiving more than $1 million in kickbacks for referring about 2,300 patients to Forest Park.
Alan Beauchamp, the self-professed mastermind of Forest Park’s money-for-surgeries scheme. With Mac Burt, Beauchamp ran the surgical hospital. Testifying under a plea agreement, Beauchamp admitted to recruiting doctors willing to direct their patients to Forest Park and to signing off on payments to those doctors that eventually exceeded $1 million a month. On the stand, he matter-of-factly acknowledged “buying surgeries,” which the hospital then billed patients’ insurers for at exorbitant rates.