“Crime does not pay, even when millions are involved.”
With those words, U.S. District Judge Jack Zouhary sentenced Douglas Won, once a wealthy, preeminent spinal surgeon, to five years in federal prison for his role in a massive bribery and kickback scheme involving Forest Park Medical Center, a now-defunct physician-owned hospital in North Dallas.
Won’s onetime business partner, surgeon Michael Rimlawi, was sentenced to 7 ½ years in prison. Both doctors, whose licenses have been yanked by the Texas Board of Medical Examiners, were convicted in 2019 of counts stemming from their taking millions of dollars in bribes to refer patients to and perform surgeries at Forest Park.
A third physician, Mike Shah, a pain-management specialist, was sentenced to 3 ½ years in prison.
A fourth, bariatric surgeon Wade Barker, one of the founders of Forest Park, was sentenced to five years’ imprisonment, the sentence recommended to Zouhary by prosecutors from the U.S. attorney’s office in light of Barker’s agreement to plead guilty and testify against his co-conspirators.
The Forest Park case drew national attention for the scope of the fraud involved and the prominence of many of the doctors and hospital executives indicted by a federal grand jury in Dallas in December 2016. In just over three years, from its opening in the spring of 2009 through the end of 2012, Forest Park paid $40 million in bribes and kickbacks, mostly to doctors who agreed to steer their well-insured patients to the surgical hospital. Forest Park received $200 million in insurance payouts for treating the hundreds of patients illegally gotten through the bribery scheme.
Nine people, including Won, Rimlawi, Shah and two other physicians as well as one of Forest Park’s two top executives, went on trial in early 2019. Seven of the nine defendants were convicted in the eight-week jury trial, over which Zouhary, a visiting judge from Ohio, presided.
Sentencings for most of the principals in the case are taking place this week. Those sentencings were delayed through 2020, as were countless proceedings in countless courts across the country, by the Covid pandemic. They continue Friday.
Won’s five-year sentence was the maximum allowable under federal law. The jury found him guilty of just one count of conspiracy while acquitting him of commercial bribery, the felony counts underlying his indictment on the conspiracy charge.
Assistant U.S. Attorney Andrew Wirmani, the lead prosecutor in the 2019 trial, said at Thursday’s sentencing that Won topped the leader board among doctors on Forest Park’s pad. His indictment said he accepted $5.9 million in bribes; Zouhary, in sentencing Won, pegged the actual figure at $9 million.
Won’s lawyer, Jay Nanavati, in arguing for probation or home confinement for his client instead of imprisonment, portrayed the doctor as a crushed man. Won, he noted, will never practice medicine again. The onetime multimillionaire filed for personal bankruptcy after his indictment and, since the trial, saw his marriage dissolve. A court order that he pay $27.4 million in restitution will, when enforced, leave him destitute.
Won, a child immigrant from South Korea, “has lived a life grinding at work without complaint,” Nanavati said. Before enrolling in medical school, the lawyer said, Won was a shoeshine boy and a janitor.
Zouhary, in imposing the maximum sentence available to him, said, “This kind of conduct, not only for this defendant but for the community and the healthcare industry, requires some consequences.”
Rimlawi, alone among the doctors sentenced thus far this week, chose to make an allocution to the court. (Others have kept mum, citing pending appeals of their convictions.)
He began by apologizing to the court for his testimony at trial, where he was the only physician to take the stand. Under a piercing cross-examination by Assistant U.S. Attorney Katherine Pfeifle, Rimlawi as combative, argumentative and wholly unrepentant.
He sang a different tune Thursday, vowing that, if granted mercy by the court, he would “work tirelessly to repay every cent” he received under the table and to “use every second of a second chance to improve society and the lives of others.”
Zouhary caustically noted Rimlawi’s trial testimony in an order related to the sentencing. That document is under court seal. One source familiar with its contents said the judge’s comments were “virtually identical” to a characterization of Rimlawi’s performance on the stand that appeared in The Texas Lawbook this week: “rambling, whiny, self-pitying, condescending.”
Rimlawi’s lawyer, noted Houston trial attorney David Gerger, told the judge “there is more to Mike Rimlawi than what you saw on the witness stand.” He said his client, a 1983 emigrant from what was then war-torn Lebanon, has donated generously to various charities, developed innovative surgical techniques and helped hundreds of patients hobbled by spinal disorders.
Gerger reprised a theme voiced by other defense counsel during this week’s sentencings: that prison time wasn’t needed to send a message to other doctors not to break the law as Rimlawi did.
“I daresay no one looks at Mike Rimlawi today and says, ‘I want to be like him,’” Gerger said.
Philanthropy is all well and good, Zouhary said, but “let’s also consider where some of that money came from.”
According to court documents, Rimlawi, who, with Won, founded the once-successful Minimally Invasive Spine Institute, took more than $8 million in bribes and kickbacks from Forest Park – “all in all, a nice payday,” the judge observed.
Shah’s lawyer, Christopher Man of Winston & Strawn, said his client deserved probation instead of prison because, among other reasons, the illegal payments he received from Forest Park totaled $67,850, a fraction of the millions that other crooked doctors pocketed.
But Wirmani, the prosecutor, said that was because Shah’s pain-management treatments were billable at a fraction of what a surgery costs – not because Shah was less deeply involved in the plot to steer patients to Forest Park.
Barker, represented by Mark Werbner, a premiere litigator based in Dallas, was given a relatively light sentence even though, as one of Forest Park’s founders, he was at the heart of, and profited mightily from, the bribes-for-surgeries scheme. Wirmani said Barker’s testimony at trial and his cooperation through the years of the Forest Park investigation were of great value to the government. Barker, he said, was “truly contrite” from the moment he was confronted by federal agents with evidence of his crimes.
Won, Rimlawi and Barker all have or had drinking problems, exacerbated by their indictment and conviction, according to comments and documents presented at their sentencings. All three requested through their lawyers that they be incarcerated at a federal correctional institute that offers specialized treatment for substance abuse.
The remaining Forest Park sentencings, scheduled for Friday, are for:
— Jackson Jacob, a businessman who, according to authorities, was paid for writing monthly checks to doctors on Forest Park’s payroll, concealing the bribes as marketing payments from a shell company to business entities controlled by the doctors.
— 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 kickbacks. 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. Beauchamp, one of two executives who ran the hospital, testified under a plea agreement and described his extensive recruitment of doctors willing to direct their patients to Forest Park and his carefully monitored schedule of monthly bribes to these doctors, depending on how much business they brought in.