TYLER, Texas – Five defendants, including laboratory executives and hospital executives, were found guilty of conspiring to violate the Anti-Kickback Statute, announced U.S. Attorney Damien M. Diggs today.
Susan L. Hertzberg, 65, of New York, New York; Matthew John Theiler, 57, of Mars, Pennsylvania; David Weldon Kraus, 65, of Loudon, Tennessee; Thomas Gray Hardaway, 51 of San Antonio, Texas; and Jeffrey Paul Madison, 48, Georgetown, Texas, were found guilty by a jury on November 30, 2023, following a seven-week-long trial before U.S. District Judge Jeremy D. Kernodle.
“Patients should be able to trust that their physicians are ordering tests and making laboratory referrals based on what is best for the patient, and not because the physicians are looking to pad their pockets with profits from kickbacks,” said U.S. Attorney Damien M. Diggs.
For several years, these defendants utilized an elaborate marketing scheme to facilitate payments to physicians in return for the physicians’ laboratory referrals. Improper financial relationships such as these undermine the integrity of federally-funded healthcare programs by influencing physician decision-making.
This case emphasizes our District’s commitment to justice by pursuing both the hospital and lab executives who sought to influence the physicians and the physicians who accepted the illegal kickbacks.
The indictment charges the defendants with conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute. The statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federal health care programs.
The defendants were charged for their roles in a conspiracy through which physicians were incentivized to make referrals to rural hospitals and an affiliated lab in exchange for kickbacks which were disguised as investment returns; and in which marketers were incentivized to arrange for or recommend the ordering of services from rural hospitals and an affiliated lab.
Two rural Texas hospitals, Little River Healthcare (LRH) based in Rockdale, and Stamford Memorial Hospital based in Stamford, partnered with Boston Heart Diagnostics (BHD), a clinical laboratory based in Framingham, Massachusetts, that specialized in advanced cardiovascular lipid testing.
For a fee, BHD processed the blood tests while the hospitals billed the patients for the tests, resulting in millions of dollars in payments from Medicare, Medicaid, and other federal health care programs.
Defendant/Respondent: Susan L. Hertzberg, Matthew John Theiler, David Weldon Kraus, Thomas Gray Hardaway, Jeffrey Paul Madison
Criminal Charges: Conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute
City and State: Tyler, Texas
Exact Date: November 30, 2023
Sentence or Outcome: Found guilty by a jury
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Key Facts
- State: Texas
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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