U.S. v. Nachamie, S2 98 CR. 1238(SAS).

• Decision Date: 06 January 2000
• Docket Number: No. S2 98 CR. 1238(SAS).,S2 98 CR. 1238(SAS).
• Citation: 91 F.Supp.2d 552
• Parties: UNITED STATES of America, v. Alan Barton NACHAMIE, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

91 F.Supp.2d 552

UNITED STATES of America, v. Alan Barton NACHAMIE, et al., Defendants.

No. S2 98 CR. 1238(SAS).

United States District Court, S.D. New York.

January 6, 2000.

Lynn A. Neils, Robert R. Strang, United States Attorney's Office, Southern District of New York, New York City, for the United States of America.

Michael S. Sommer, McDermott, Will & Emery, New York City, for Jose Hernandez.

Gerald J. McMahon, New York City, for Alan Barton Nachamie.

Diarmuid White, New York City, for Edwin Tunick.

Jeremy F. Orden, New York City, for Lydia Martinez.

Steven N. Gordon, New York City, for Ghanshyam Kalani.

Richard A. Tanner, Dickson, Ashenfelter, Slous, Tanner & Trevenen LLP, Upper Montclair, NJ, for Donna Vining.

Robert S. Fink, Caroline Rule, Kostelanetz & Fink, LLP, New York City, for Kenneth Schrager.

Michael C. Miller, Fritz & Miller, P.C., New York City, for Alan Siegel.

OPINION AND ORDER

SCHEINDLIN, District Judge.

Pursuant to Fed. R. Cr. P. 17(c), defendant Jose Hernandez has served twenty-four subpoenas duces tecum on non-parties in this prosecution of eight defendants for Medicare fraud.¹ The Government has moved to quash all of the subpoenas, and Hernandez opposes the Government's motion.²

I. BACKGROUND

A. The Indictment

The Indictment contains a total of twenty-six counts which are briefly summarized below. Count One alleges that all eight defendants conspired, between 1995 and June 10, 1998, to violate certain laws of the United States, to wit: Sections 1035, 1341 and 1347 of Title 18 and Sections 1320a-7b(a)(2) and 1320a-7b(a)(5) of Title 42 of the United States Code. The objects of the conspiracy are set forth in the indictment and include: (1) executing a scheme to defraud the Medicare program; (2) mailing various documents in furtherance of the scheme; (3) making false statements in connection with the delivery of and payment for health care benefits; (4) making false statements in order to obtain payments from private insurance carriers that administered the Medicare Program; and (5) presenting false claims to the Medicare program.

The Indictment charges that the claims were false in one or more of the following five ways: (1) the claimed services were never rendered; (2) different services were rendered than those that were billed; (3) services were rendered at home but were claimed to have been rendered in an office; (4) services were rendered by unsupervised non-doctors, but were claimed to have been rendered by licensed doctors or by non-doctors under the supervision of a licensed doctor; and (5) services were rendered on a single date, rather than on the various dates claimed.

In a section entitled "Means and Methods of the Conspiracy," the Indictment explains how the scheme worked. Defendants Alan Barton Nachamie and Lydia Martinez³ recruited telemarketers, who telephoned elderly people on Medicare, whose names were obtained from lists received from defendant Edwin Tunick. The telemarketers convinced these Medicare beneficiaries to agree to home visits in which diagnostic tests would be performed, for the purpose of identifying those at risk for heart attacks, strokes and Alzheimer's Disease. The beneficiaries were told the screening and testing were part of a health awareness program under the auspices of Medicare. Nachamie and Martinez then recruited foreign medical school graduates who were not licensed doctors in the United States to visit these beneficiaries at home. During these visits, the non-doctors would conduct a cursory examination and administer two basic tests—a cardiac rhythm test and a Doppler blood circulation test.

Nachamie, Tunick and Martinez also recruited licensed doctors, including defendants Ghanshyam Kalani, Donna Vining, Kenneth Schrager and Alan Siegel, to "supervise" the non-doctors and review patient charts. These doctors rarely, if ever, met with the Medicare beneficiaries. Instead, Nachamie and Martinez provided the doctors with charts that included "Encounter Forms" indicating what tests or services had been ordered by the non-doctors and others. These doctors then signed the forms as the ordering physicians, even though they had not ordered or performed the tests or services checked off on the Encounter Forms. These Encounter Forms were sent to defendant Jose Hernandez, who submitted claims electronically to Medicare. Hernandez often received the Encounter Forms before they were signed by the doctors.

The Indictment provides three examples of services that were not performed or services that were billed in place of those that were performed. These examples are: (1) billing for an "event recorder," which permits the monitoring and recording of the heart rhythm 24 hours a day for up to 30 days, when, in reality, the patient received a one-to-two minute cardiac rhythm test; (2) billing for extensive Duplex blood circulation scans, when, in reality, the patient received a less expensive Doppler blood circulation test; and (3) billing for echocardiograms and stress tests, when, in reality, no such tests were given or were improperly given.

The Indictment specifies that the billing was done under provider numbers of different doctors and professional corporations, including three enumerated professional corporations. The indictment also alleges that defendants Nachamie, Martinez and Tunick⁴ used other corporate names, of which five are enumerated. All defendants are alleged to have submitted claims to Medicare providers, who, in turn, processed the claims and sent checks to the four doctor defendants. At the direction of Nachamie, Tunick and Martinez, the doctor defendants deposited the checks, keeping between 15 and 25% of the funds and writing checks for the remaining portion to the corporations used by Nachamie, Tunick⁵ and Martinez. Over 10 million dollars was billed to Medicare as a result of this conspiracy.

Thirty-one overt acts are then pled in the Indictment. (1-2) In 1997, an unnamed coconspirator ("CC 1") created phony vascular reports and forged the signature of an unnamed doctor ("Doctor 1"), while that doctor was in prison. Defendant Nachamie admitted to Doctor 1 that he had ordered the preparation of the phony report and the forging of Doctor 1's signature; (3) In the Spring of 1997, CC 1 instructed another unnamed person to vary randomly the diagnostic codes in order to avoid detection by Medicare; (4) In July 1997, Nachamie and CC 1 met with an unnamed doctor in Queens, New York; (5) In 1997, Martinez fired a medical assistant who told others she suspected fraud; (6) In October 1997, Hernandez attended a meeting with Nachamie and Martinez in an office located in Newark, New Jersey; (7) In 1997, Hernandez had a meeting with Nachamie and others at an office located on Jamaica Avenue in Queens, New York; (8) In May 1997, Hernandez sent a memorandum to an unnamed coconspirator attaching sample medical reports; (9) In December 1997, Martinez interviewed a foreign medical school graduate for a job examining Medicare beneficiaries in their home; (10) In February 1998, Nachamie and Tunick met with a potential investor in Florida and Nachamie informed that person that doctors had to be changed frequently to avoid detection by Medicare; (11) On December 18, 1997, the "defendants" caused individuals to visit a beneficiary at her home in New York New York and perform various medical tests; (12) On March 25, 1998, Doctor 1 spoke with an undercover agent of the FBI; (13-17) On March 5, 1997, the "defendants" caused individuals to visit a beneficiary at his home in Bronx, New York. In March or April 1997, Dr. Kalani signed an Encounter Form for tests performed during that visit. Dr. Kalani received a check from Medicare which included the services rendered on March 25, 1997. He deposited that check and then wrote a check payable to the Flatbush Medical Practice, one of three professional corporations discussed earlier; (18-22) On May 28, 1997, the "defendants" caused individuals to visit a beneficiary at her home in Brooklyn, New York. In May or June 1997, Dr. Vining signed an Encounter Form for tests performed during that visit. Dr. Vining received a check from Medicare which included the services rendered on May 28, 1997. She deposited that check and then wrote a check payable to the Flatbush Medical Practice, one of three professional corporations discussed earlier; (23-27) On June 4, 1997, the "defendants" caused individuals to visit a beneficiary at her home in New York, New York. In June 1997, Dr. Schrager signed an Encounter Form for tests performed during that visit. Dr. Schrager received a check from Medicare which included the services rendered on June 4, 1997. He deposited that check and then wrote a check payable to the American Medical Ventures of Maryland, one of the corporations discussed earlier; (28-31) On February 16, 1998, the "defendants" caused individuals to visit a beneficiary at her home in Brooklyn, New York. In March 1998, Dr. Siegel signed an Encounter Form for tests performed during that visit. Dr. Siegel received a check from Medicare which included the services rendered on February 16, 1998. He deposited that check and then wrote a check payable to the Delta Management Corporation, one of the corporations discussed earlier.

Count Two charges all defendants with participating in a scheme to defraud Medicare in the same ways and means as described in Count One, in violation of Sections 1347 and 2 of Title 18 of the United States Code. Counts Three through Six charge Nachamie, Tunick, Martinez, Hernandez and one doctor per count of making false statements in matters involving the Medicare program, in violation of Sections 1035 and 2 of Title 18 of the United States Code. These false statements are not specified except by the five categories described above.

Counts Seven through Eleven charge Nachamie, Tunick, Martinez and Kalani with submitting false claims to Medicare, in violation of Section...