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Bergen doctor, salesman admit roles in massive bio lab bribe scheme

Photo Credit: Cliffview Pilot File Photo

A North Arlington doctor and a Lyndhurst salesman today admitted in federal court to their roles in a long-running scheme that culled bribes in exchange for test referrals, bringing to 17 the number of people who’ve taken guilty pleas in the massive fraud.  A second doctor, from Pompton Plains, admitted to his participation, as well.

The scheme was orchestrated by the president and numerous associates of Biodiagnostic Laboratory Services in Parsippany, bringing more than $100 million in payments to BLS from Medicare and various private insurance companies. the government said.

Pleading guilty today were Angelo Calabrese, 56, of Pine Brook, who has an office in North Arlington,  David McCann, 45, of Lyndhurst, and 72-year-old Paul Ostergaard.

Calabrese admitted accepting more than $130,000 in bribes to refer at least $600,000 in lab business to BLS.

Ostergaard, a doctor with an office in Pompton Plains, admitted accepting more than $50,000 in bribes to refer at least $150,000 in lab business to BLS.

McCann, meanwhile, admitted paying thousands of dollars in cash to doctors on behalf of BLS.

Sentencing for all three is scheduled for March 13, 2014. Calabrese and Ostergaard have also agreed to forfeit $334,000 and $53,900, respectively (The investigation has so far recovered more than $3 million through forfeiture, federal authorities said).

“We are continuing to pursue those defendants, including doctors, who put personal profits ahead of patient care,” U.S. Attorney Paul J. Fishman said. “Patients need to be confident that their doctors are recommending providers who are best qualified to perform medically necessary tests. Those doctors who recommended providers in return for payoffs should know we are coming after them.”

Fishman credited special agents of the FBI, the U.S. Department of Health and Human Services Office of Inspector General,  IRS–Criminal Investigation, and the U.S. Postal Inspection Service with the ongoing investigation that led to today’s guilty pleas. Handling the case for the government are Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.

According to a news release from Fishman’s Office:

Calabrese received more than $130,000 from BLS between 2010 and 2013 through a sham consulting agreement and a sham rental agreement, which combined to pay Calabrese more than $4,500 per month in bribes from BLS. Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments – who pleaded guilty in June to his role in the scheme, made many of the payments to Calabrese on behalf of BLS.

Ostergaard received more than $50,000 from BLS between 2006 and 2009 through a sham lease agreement and a sham service agreement.  William Dailey, 42, of Wall, N.J., a BLS salesman who pleaded guilty to his role in the scheme in May, negotiated the sham agreements on behalf of BLS, with the knowledge and approval of BLS’s president, David Nicoll, 39, of Mountain Lakes, N.J.  Ostergaard admitted today that while he was being bribed to make referrals to BLS, he noticed that BLS was adding tests that Ostergaard had not ordered for his patients, but stayed silent about the added tests.

McCann paid thousands of dollars in cash on a monthly basis between December 2011 and April 2013 to numerous physicians on behalf of BLS in exchange for the doctors’ referral of blood specimens to BLS.

On April 9, 2013, federal agents arrested David Nicoll, Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother, and Nordman. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 43, of Boonton, N.J.  In June, David and Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty last month to charges relating to his role in the scheme. So far, 11 employees or associates of BLS, and six physicians have pleaded guilty to their roles in the bribery scheme.

“Offering slush fund payments for medical referrals, ultimately paid for by taxpayers, can have absolutely no place in our health care system,” Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General at the U.S. Department of Health and Human Services region including New Jersey, said. “Such schemes will continue to be vigorously investigated and prosecuted, and these criminals will be brought to justice.”

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