A Morris County doctor was sentenced today to 63 months in prison for accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Frank Santangelo, 45, of Boonton, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. Judge Chesler imposed the sentence today in Newark federal court.
Including Santangelo, 38 people – 26 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
According to documents filed in this and other cases and statements made in court:
Santangelo, who has offices in Montville and Wayne received more than $1.8 million in bribe payments from BLS for referrals for which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements and sham service agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party – often tens of thousands of dollars a month – totaling more than $1 million between 2010 and his arrest in April 2013.
Santangelo acknowledged the authenticity of text messages between himself and BLS president and part owner David Nicoll in which Santangelo referred to ordering unnecessary tests to increase referrals to BLS in exchange for bribes. In one text message conversation, Santangelo said he and another doctor had “put our heads together and added a significant amount of testing…. The testing is 90 percent legit.” Santangelo detailed his plan to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
In another text message conversation, David Nicoll wrote to Santangelo about the status of their referral agreement, stating that BLS “really can’t afford the 40-50,000 [dollars] a month if the girls aren’t going to be drawing any blood,” to which Santangelo responded by stating, “U no u can count on me!” and “I never let u down!”
He also pleaded guilty to money laundering, admitting that he used another individual in an attempt to hide the bribes from BLS, and to failing to file tax returns from 2009-2011 and pay taxes owed during that time period.
In addition to the prison term, Judge Chesler sentenced Santangelo to three years of supervised release and fined him $6,250. Santangelo must also forfeit more than $1.8 million as part of his plea agreement. The investigation has so far recovered more than $11.5 million through forfeiture.