In late 2016, prosecutors indicted 21 people in a Dallas area healthcare fraud scheme involving illegal bribes and kickbacks. Authorities say that several physicians and hospital administrators cooked up an elaborate scheme to bilk tens of millions from insurance companies. Since the indictments were announced, several have pleaded guilty.
This week, the kingpin of the scheme, Alan Beauchamp, pleaded guilty to Conspiracy to Pay and Receive Health Care Bribes and Kickbacks and Aiding and Abetting Commercial Bribery. He faces 10 years in prison when sentenced later this year.
The others indicted are:
- Richard Toussaint, Jr., 58, of Dallas.
- Wade Barker, 51, of Dallas.
- Wilton Burt, 61, of Costa Rica.
- Andrea Kay Smith, 37, of Rockwall.
- Carli Hempel, 40, of Plano.
- Kelly Loter, 48, of Dallas.
- Jackson Jacob, 53, of Murphy.
- Douglas Sung Won, 45, of Dallas.
- Michael Rimlawi, 45, of Dallas.
- David Daesung Kim, 54, of Southlake.
- William Nicholson IV, 46, of Dallas.
- Shawn Henry, 46, of Fort Worth.
- Mrugeshkumar Kumar Shah, 42, of Garland.
- Gerald Foox, 69, of Tyler.
- Frank Gonzales Jr., 41, of Midland.
- Israel Ortiz, 49, of Dallas.
- Iris Forrest, 56, of Dallas.
- Andrew Hillman, 40, of Dallas.
- Semyon Narosov, 51, of Dallas.
- Royce Bicklein, 44, of San Antonio.
Beauchamp resides in Dallas. He is 66.
According to court records, Forest Park Medical Center Dallas was the center of the scheme. Most of the people indicted were either physicians affiliated with the hospital or hospital administrators. One of the defendants, Royce Bicklein, was a worker’s compensation attorney accused of taking bribes and kickbacks in exchange for referring patients to the hospital.
Prosecutors say that hospital opened its doors in 2009. Owned by physicians, the original founders of the hospital were Alan Beauchamp, Dr. Richard Toussaint, Jr., Dr. Wade Barker and Wilton Burt. All were named in the indictment. Beauchamp was Forest Park’s Chief Operating Officer.
Forest Park acted as an out-of-network hospital. It accepted no Medicare or Medicaid patients and set its own rates. The concept was to cater to high end patients with private insurance.
Because the patient co-pays are usually much higher at private out-of-network hospitals, these facilities often struggle to keep their beds full. Forest Park Medical Center Dallas was no exception. According to the indictment, the defendants “engaged in a massive, multi-faceted bribe and kickback scheme.” The kickback payments were paid to incentivize doctors, clinics and even lawyers to steer patients to the hospital.
According to prosecutors, doctors and others who referred patients could expect a kickback of approximately 10% of what the hospital collected for the procedure. The more expensive the procedure, the higher the kickback.
One spinal surgeon, Dr. Douglas Sung Won, allegedly received $7 million in kickbacks. A bariatric surgeon, David Daesung Kim, received almost $5 million.
Several dozen physicians and medical practices were on the receiving end of Forest Park’s gravy train. Some received as little as $500 per month while others received millions in kickbacks.
If a physician didn’t deliver enough patients, they were often contacted by Beauchamp. The indictment documents an email to a chiropractor in which Beauchamp says, “It appears your projections of cases have fallen whole-fully [sic] short… I want to sit down as soon after the beginning of the year and before the 15th to find out why my $150k investment has not produced Jack.”
The kickbacks became so widespread that prosecutors claim that some of the defendants were even bribing patients to seek treatment at Forest Park. As an inducement to get patients to travel to Dallas, some defendants paid travel and hotel expenses of out-of-town patients or gave them gift cards.
A clinic owner that referred patients to the Forest Park, Israel Ortiz, has already pleaded guilty to federal conspiracy to pay health care kickbacks. According to the Dallas Morning News, Ortiz claims that if he did not make enough referrals Beauchamp would yell and want “more bodies on the table.”
Forest Park Indictments Unsealed December 2016
In late 2016, the court unsealed the indictments against all 21 defendants.
In announcing the charges, Dallas’ U.S. Attorney John Parker said, “Medical providers who enrich themselves through bribes and kickbacks are not only perverting our critical health care system, but they are committing a serious crime. Massive, multi-faceted schemes such as this one, built on illegal financial relationships, drive up the cost of health care for everyone and must be stopped.”
Several of the defendants have now pleaded guilty. The trial for the remaining ones is set for October 22nd. Now that Beauchamp has pleaded guilty we expect additional defendants will seek last minute deals to avoid trial.
According to a plea agreement filed with the court on July 23rd, Beauchamp admitted many the allegations of the indictment. He also agreed to cooperate and testify against the holdouts.
One Forest Park Doc Flees to Panama
All of the doctors and other defendants were released on bail. The only one detained was Dr. Gerald Foox, an orthopedist.
The FBI claims Dr. Foox was vacationing in Canada at the time the indictment was unsealed. He promised to surrender at a U.S. border crossing on December 2nd. Instead, agents say he bordered a flight bound for Panama. Fortunately, an international travel alert was enough to catch Foox as entered Panama. He was immediately deported and arrested by U.S. authorities when he re-entered the United States.
A federal magistrate judge determined Foox was a flight risk. He was detained without bail. Later, however, the court reconsidered and released him on a $13 million bail and a requirement of house arrest.
Immediately after the reconsideration, the United States moved to revoke his bail. They say that prior to fleeing to Panama, Foox withdrew $7.9 million from his bank. When entering Panama, he also attempted to use a South African passport.
Whistleblower Awards and Kickbacks
The Forest Park Medical Center Dallas case is a bit unique because it involves a hospital that doesn’t accept Medicare or Medicaid. Even that facility, however, accepted Federal Employee Compensation Act (FECA) and Tricare funds. FECA is the defacto workers compensation carrier for many government workers including postal service workers. Tricare pays for the healthcare of Department of Defense employees.
Cash whistleblower rewards are available whenever a contractor or healthcare provider violates federal anti-kickback laws and federal or state healthcare dollars are in play. That means Medicaid, Medicare, workers comp or Tricare. Under the False Claims Act, whistleblowers can receive a reward of between 15% and 30% of whatever the court collects from wrongdoers. With wrongdoers responsible for triple damages and high fines, the rewards are often huge.
It doesn’t matter if the kickbacks are paid to patients, doctors or even hospitals. In this case, the hospital was paying the kickbacks in the hopes of bringing in expensive surgeries into the facility.
In many cases we see, corrupt clinics and hospitals use paid patient recruiters. These folks are paid to round patients and bring them in for treatment they often don’t need. Patient recruiters look for potential patients at homeless shelters, in senior centers, Methadone clinics and even on the street. The patients are paid bribes in the form of cash, cigarettes or alcohol. Once again, paying for patients is illegal.
To see if you qualify for a Medicare fraud whistleblower reward, visit our healthcare whistleblower page or contact us directly online, by email at *protected email* or by phone at 414-704-6731 (direct). All inquiries are kept strictly confidential.
Note: Not all defendants have been convicted. Some are awaiting trial. Statements in this blog were made in court records or by prosecutors. We remind everyone that defendants are presumed innocent until found guilty.
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