TYLER, Texas (KETK) – An East Texan was among 21 people who were charged in connection to alleged medical fraud schemes worth $1.2 billion.

The Department of Justice said 36 defendants are facing criminal charges in 13 federal districts in the United States for alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment schemes, according to prosecutors for the U.S. Attorney’s Office for the Eastern District of Texas.

As part of this case, the U.S. Attorney’s Office for the Eastern District of Texas has charged 21 people for healthcare kickback and they are accused of money laundering crimes.

Those charged include doctors, hospital executives, laboratory executives and marketers.

Former True Health Diagnostics LLC CEO Christopher Grottenthaler, Susan L. Hertzberg who was formerly with Boston Heart Diagnostics Corporation, former Rockdale Hospital d/b/a Little River Healthcare CEO Jeffrey Paul Madison, and others are defendants in a False Claims Act civil lawsuit titled United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.). 

Officials said they have reached civil settlements in this case, but criminal charges still remain.

33 doctors and healthcare leaders have agreed to pay more than $32 million to settle False Claims Act allegations that they were a part of the fraud. According to the criminal and civil cases, the defendants are accused of breaking the law and making money by paying and receiving illegal kickbacks for referring people to laboratories. The United States filed an amended complaint in May 2022.

“The civil settlements resolve allegations that doctors and healthcare executives violated the Anti-Kickback Statute by receiving thousands of dollars in remuneration from nine MSOs (management services organizations) in exchange for ordering laboratory tests from Little River, True Health, and/or Boston Heart,” according to prosecutors. 

Criminal Case

U.S. v. Hertzberg, et al

The following people were indicted for conspiracy to commit illegal payments in violation of the Anti-Kickback Statute:

  • Jeffrey Paul Parnell, 54, of Tyler
  • Susan L. Hertzberg, 64, of New York
  • Matthew John Theiler, 56, of Mars, Pennsylvania
  • David Weldon Kraus, 64, Loudon, Tennessee
  • Thomas Gray Hardaway, 49 of San Antonio
  • Laura Spain Howard, 48, of Allen
  • Jeffrey Paul Madison, 47, Georgetown, Texas
  • Todd Dean Cook, 57, Wimauma, Florida
  • William Todd Hickman, 59, of Lumberton, Texas
  • Christopher Roland Gonzales, 45, of McKinney, Texas
  • Ruben Daniel Marioni, 37, of Spring, Texas
  • Jordan Joseph Perkins, 38, of Conroe, Texas
  • Elizabeth Ruth Seymour, 39, of Corinth, Texas
  • Linh Ba Nguyen, 58, of Dallas,
  • Thuy Ngoc Nguyen, 54, of Dallas
  • Joseph Gil Bolin, 50, of Dallas
  • Heriberto Salinas, 62, of Cleburne, Texas
  • Hong Davis, 54, of Lewisville

The Anti-Kickback Statute does not allow offering, paying, soliciting, or receiving remuneration for 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 critical access hospitals and an affiliated lab in exchange for kickbacks which were disguised as investment returns; and in which marketers were incentivized to order, arrange for, or recommend the ordering of services from critical access hospitals and an affiliated lab in violation of the Anti-Kickback Statute,” said prosecutors.

Two Texas critical access hospitals, Little River Healthcare (LRH) in Rockdale, Texas, and Stamford Memorial Hospital based in Stamford, Texas, worked with Boston Heart Diagnostics (BHD), a clinical laboratory based in Framingham, Massachusetts, that focused on blood testing.

BHD allegedly helped the hospitals bill their blood tests to insurers to appear as hospital outpatient services. Officials said the hospitals charged insurers more money than BHD could obtain as a laboratory.

Authorities also said the hospitals worked with marketers who partnered with management services organizations (MSOs) that provided investment chances to doctors in Texas. The MSO’s would also help process payments to doctors for the doctor’s laboratory referrals, said officials.

“Pursuant to the alleged kickback scheme, the hospitals paid a portion of their laboratory revenues to marketers, who in turn kicked back a portion of those funds to the referring physicians who ordered BHD tests from the hospitals or from BHD directly. BHD executives and sales force personnel leveraged the MSO kickbacks to gain and increase referrals and, in turn, to increase their revenues, bonuses, and commissions,” said prosecutors.

From July 1, 2015, to January 9, 2018, at least $11,256,241.68 in illegal kickback payments were exchanged by the defendants during the alleged scheme. On May 24, Laura Howard pleaded guilty to her involvement in the kickback conspiracy and Marioni pleaded guilty on July 20.