A federal investigation has uncovered a shocking scheme involving a Michigan neurosurgeon, a spinal implant company, and a physician-owned distributorship. The United States has filed two complaints under the False Claims Act against Dr. Aria Sabit and Reliance Medical Systems, a spinal implant company based in Michigan. The complaints also name two of the company’s distributorships—Apex Medical Technologies and Kronos Spinal Technologies—and their non-physician owners, Brett Berry and Adam Pike, along with a third owner, John Hoffman.
The government alleges that Apex Medical and Kronos Spinal paid physicians, including Dr. Sabit, to induce them to use Reliance spinal implants in the surgeries they performed. The complaints claim that Dr. Sabit began using Reliance implants on his patients only after he acquired an ownership interest in Apex and started receiving payments from the sale of Reliance’s spinal implants. According to the complaints, Dr. Sabit used Reliance implants in approximately 90 percent of his spinal fusion surgeries between May 2010 and July 2012, during which time he received payments totaling $438,570.
The government further alleges that Reliance operated a second distributor, Kronos, in southern California, which made improper payments to two other physicians, Drs. Ali Mesiwala and Gowriharan Thaiyananthan. Allegedly, Reliance’s owners were recorded telling a potential Kronos investor that Reliance was formed as part of a plan to “get around” the federal Anti-Kickback Statute, which prohibits such improper payments, and that Reliance pays its physician-investors enough in the first month or two to “put their kids through college.”
The allegations that Dr. Sabit performed medically unnecessary or excessive surgeries were raised in a separate lawsuit filed by Dr. Cary Savitch and Dr. Gary Proffett under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.
The lawsuits illustrate the government’s emphasis on combating health care fraud and mark another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. Since January 2009, the Justice Department has recovered a total of more than $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
Reliance Medical Systems, the spinal implant company at the center of the scheme, has been accused of making improper payments to physicians in exchange for using their implants in surgeries. The company’s owners, Brett Berry and Adam Pike, along with John Hoffman, have been named as defendants in the lawsuits. The government alleges that Reliance used its distributorships to funnel improper payments to physicians, including Dr. Sabit, who used the company’s implants in approximately 90 percent of his spinal fusion surgeries between May 2010 and July 2012.
The exact date of the crime is not specified in the source. The outcome of the case is currently pending, and the defendants have not been sentenced. The alleged kickback scheme has exposed the dark underbelly of the medical industry, highlighting the need for greater transparency and accountability in the handling of healthcare costs.
Related Federal Cases
- Rita Shaba, Wire and Bank Fraud, Michigan 2023 · Illinois
- Edward Nick Robinson, Embezzlement, Michigan 2019 · Washington
- MoReno Rondell Taylor Sr., Making False Statements, Michigan 2011 · Kentucky
- Anthony Sharpe, Lead Testing Report Falsification, Michigan 2011 · Michigan
- James Robert Liang, Emissions Fraud, Michigan 2017 · Ohio
Key Facts
- State: Michigan
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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