The kingpin was the last pin to fall.
Alan Beauchamp, the architect, builder, marketer and chief salesman for an infamous bribery and kickback scheme concocted by Forest Park Medical Center, was sentenced Friday to 5 years, 3 months in federal prison, in keeping with a recommendation from the U.S. Attorney’s Office in Dallas.
Beauchamp’s sentencing concluded a marathon three days of sentencings in U.S. District Court in Dallas that all but brought to a close the Forest Park medical fraud trial, one of the biggest and most prominent in the country, involving $40 million in bribes to doctors and others and $200 million in ill-gotten insurance proceeds to the physician-owned Dallas surgical hospital.
Appeals to the Fifth U.S. Circuit Court of Appeals are likely in several convictions, and one sentencing was stayed because the defendant in question, onetime weight-loss surgeon David Kim, is continuing to cooperate with federal authorities in a criminal investigation unrelated to Forest Park.
But for all intents, this week’s sentencings, by U.S. District Judge Jack Zouhary, closed the book on the Forest Park case. Zouhary, a visiting judge from Ohio, presided at a two-month jury trial of Forest Park defendants in 2019.
Beauchamp, Forest Park’s chief operating officer, was one of 21 people, including eight doctors, indicted by a federal grand jury in late 2016. The indictment described an elaborate system of bribes and kickback paid by Forest Park to a statewide network of surgeons, workers’ compensation consultants, nurses, chiropractors and others in exchange for their referring well-insured patients to the hospital.
As Beauchamp, who cut a deal with prosecutors, succinctly put it from the witness stand during the 2019 trial, the hospital became immensely profitable from the moment it opened in 2009 by “buying surgeries” – paying doctors to refer patients to and perform surgeries at Forest Park.
Beauchamp, in his trial testimony, said he was the person chiefly responsible for setting up the bribery program, recruiting crooked doctors willing to take part, closely monitoring monthly payoffs to those doctors to make sure they were sending as much business as promised to Forest Park, and creating phony contracts to disguise the bribes as “marketing money.”
“We papered it up to make it look good,” he testified.
Andrew Wirmani, the assistant U.S. attorney who led the prosecution of the complex, multifaceted Forest Park case, acknowledged Friday that Beauchamp was “the government’s most important witness,” the one person in a position to implicate all nine defendants, including five doctors, who went to trial in the case.
In pleading for a sentence of home confinement rather than incarceration, Beauchamp’s lawyers, Jim Jacks of Fitzpatrick Jacks Smith & Uhl and Bill McMurrey, told Zouhary their 68-year-old client is the sole caretaker of his 74-year-old wife, Jackie, who’s endured an array of debilitating health problems: Crohn’s disease, heart failure, glaucoma in both eyes, seizures, psoriasis, insomnia, septic shock, C. diff,, a bacterial infection that depresses one’s immune system, multiple melanomas that required surgery, and “occasional bouts of dementia.”
Zouhary said of Beauchamp’s wife’s condition, “You have my sympathy.” But the judge didn’t buy the defense argument that Beauchamp’s care of his wife should spare him from imprisonment. The couple’s four adult children could care for Jackie, as could her friends, in Beauchamp’s absence, the judge said.
“Families make sacrifices for loved ones. That’s what we do,” Zouhary said.
Beauchamp may never know how close he came to getting the book thrown at him. Under federal statutes, he could have been sent away for 20 years.
When, at sentencing, a federal judge asks a defendant with 40-plus years’ experience in the healthcare field, a onetime multi-millionaire who masterminded a $200 million insurance fraud, why he did it, one very wrong answer is the one Beauchamp gave:
“We did a risk assessment, and we thought it would be a low risk that we would be caught.”
A good answer might be: “Greed, your honor. My moral compass somehow lost its connection with magnetic north, and I followed it down a sordid path of corruption, selfishness, and rapacity, and I am truly sorry.”
A bad answer is: We figured we’d get away with it.
Zouhary, clearly peeved, said he accepted the prosecution’s recommended sentence of 63 months in prison with some reluctance.
The sentencing that was postponed, that of Kim, a bariatric surgeon, depends on his continuing to cooperate with authorities investigating a bogus tax shelter of which he took advantage. According to court documents, Kim used the tax dodge to evade more than $5 million in income taxes.
In the Forest Park case, he was accused of accepting nearly $4.6 million in bribes to steer patients to the hospital.
Under a plea agreement, he testified for the government in the trial of his former colleagues and associates from Forest Park.
In acknowledging his crimes Friday, Kim made an emotional statement of allocution to Zouhary.
‘I have no one to blame but myself,” he said, adding, “I became a doctor to help society, not to hurt society. I have failed miserably. I am very, very sorry.”
Kim’s lawyer, Ron Breaux, noted that Kim surrendered his medical license immediately upon his indictment, even though he could have kept practicing, and making money, until a conviction forced an automatic license revocation. Kim, Breaux said, felt that he had “dishonored his profession and did not deserve to be a doctor.”
Prerak Shah, acting U.S. attorney for the Northern District of Texas, summed up what he hopes the Forest Park sentencings collectively convey:
“Patient needs, not physician finances, should dictate where, when, and how patients are treated,” he said. “Money should never be allowed to influence medical decisions.
“We believe the stiff sentences handed down this week send a strong deterrent message: Violate anti-kickback laws, and you will face consequences.”
The other sentencings that took place on Friday were those of:
– 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. Gonzales was sentenced to 21 months in prison.
– Israel Ortiz, who owned a Dallas company that handled paperwork to preauthorize workers’ compensation patients for surgery. Under a plea deal with the government, Ortiz admitted to receiving more than $1 million in kickbacks for referring about 2,300 patients to Forest Park. He was sentenced to 1 year and 1 day in prison.
– Jackson Jacob, who controlled a company – a shell company, according to the government—that funneled Forest Park’s monthly bribes and kickbacks to business entities affiliated with the doctors on the take. For his money-laundering efforts he was paid $526,000 in all, according to trial testimony. “He didn’t do anything for it,” Wirmani said. “He cut checks.” He was sentenced to 96 months (eight years) in federal prison.
For earlier coverage of the sentencings see:
Forest Park Surgeons, Executives Face Prison Time Today
Federal Judge to Forest Park Medical Defendants: Change Scrubs to Stripes
Four More Doctors Get Prison Time as FPMC Sentencing Continues