Physicians, CEO, Owner and Marketer Also Charged in Tax and Health Care Fraud Schemes
Baltimore, Maryland – A federal grand jury indicted five defendants on charges arising from a scheme whereby physicians and administrative personnel associated with a Maryland pain management practice agreed to refer urine specimens to a testing lab for evaluation in return for $1.37 million in kickbacks:
Sandeep Sherlekar, age 51, of Germantown, Maryland,
Atif Babar Malik, age 46, of Germantown,
Muhammad Ahmad Khan, age 43, of Pakistan,
Mubtagha Shah Syed, age 49, of Jersey City, New Jersey, and
Konstantin Bas, age 40, of Brooklyn, New York.
The indictment also charges Sherlekar, Malik and Khan with conspiring to defraud the IRS, and Sherlekar and Malik are further charged with health care fraud and making false statements on patient medical records. The indictment was returned on June 28, 2016 and unsealed today.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service – Mid-Atlantic Field Office; and Special Agent in Charge Scott Rezendes of the Office of Personnel Management – Office of Inspector General.
Sherlekar and Malik were physicians trained in pain management and Sherlekar was also trained in anesthesiology. The two merged their Maryland pain management practices in February 2009 to create Advanced Pain Management Services, LLC (APMS), first in Frederick, Maryland, and expanding to multiple offices in Maryland. Starting in August 2010, APMS began doing business under the name of American Spine Center, LLC (APMS/ASC) and the APMS entity was thereafter used in submitting bills for medical services. Khan was the CEO of APMS/ASC and co-conspirator Vic Wadwha was its CFO.
Bas was the owner and CEO of a medical testing laboratory principally located in Linden, New Jersey. Syed was a marketing agent who solicited medical practices to submit blood and urine specimens to the medical laboratory for testing. Bas also owned a company which provided pharmaceuticals and medications; and a third company which provided medical and surgical supplies, including orthotic devices.
APMS/ASC required patients who were prescribed pain relief medications to submit urine samples for testing in order to monitor the levels of pain medication or other narcotics in their bodies. From spring 2011 to August 2012, APMS/ASC typically generated approximately 700 to 1,000 urine samples each month which were sent to an outside lab for testing.
According to the 36 count indictment, starting in February 2011, Bas agreed to pay kickbacks to the principals of APMS/ASC in return for the referral of APMS/ASC patients to his companies for the testing of urine samples, for back braces, and for pain creams. Syed is charged with facilitating the referrals-for-kickbacks arrangement, and receiving 5% of the proceeds of the agreement.
From the time the kickback payments commenced in June 2011 until the end of the scheme in August 2012, Bas caused his companies to pay kickbacks totaling approximately $1.37 million to Sherlekar, Malik, Khan and Wadhwa. Out of the total amount of the kickback payments, the indictment charges that Sherlekar and Malik received approximately $244,000 each, Khan received approximately $400,000, and the balance of the kickback payments were retained by Wadhwa.
All five defendants face a maximum sentence of five years in prison for conspiring to violate the Anti-Kickback Act. Sherlekar and Malik also face five years in prison on each of 12 counts of soliciting and receipt of unlawful remuneration in violation of the Anti-Kickback Act.