News | January 12, 2012

Government Files $150 Million Complaint Against Imaging Company for Medicare Referral Kickbacks

Phillip J. Young

Phillip J. Young

January 12, 2012 — The government has filed suit seeking $150 million in damages and penalties under the False Claims Act against Universal Imaging Inc. and its current and former owners, Phillip J. Young and Mark Lauhoff, United States attorney Barbara L. McQuade announced today.

The complaint alleges that Universal and the owners, who are not medical professionals, conducted a medical radiology business in violation of numerous Medicare rules relating to adequate supervision of diagnostic tests and generated 90 percent or more of their business by paying kickbacks to physicians. Also named in the complaint is Gwendolyn Washington, a primary care physician who received kickbacks for referrals from Universal and as a result ordered dangerously high levels of tests involving injections of radioactive material into patients.

The complaint alleges that although Universal was required under Michigan law to be organized as a non-profit corporation to ensure the health and safety of patients, it surreptitiously continued to operate as a for-profit corporation by transferring its equipment to a for-profit entity, MRI Leasing LLC, with the same owners. Universal then made “lease” payments to that for-profit entity for Universal’s equipment, profiting the owners in circumvention of the laws relating to Michigan non-profits.

U.S. Attorney McQuade also announced settlements totaling $1.56 million with fourteen physicians or physician groups who were paid for their referrals by Universal. The settling physicians include Dr. David Schaefer; Drs. Vladimir and Albert Klemptner; Dr. Corey Haber; Drs. John and Andrew Zazaian; Partners in Internal Medicine, PLLC; Drs. Eric Straka, Sara Hashemian and Peter Paul; Drs. Gregory Stevens and Teresa Wargovich-Stevens; Dr. Steven Hartz; Dr. David Leszkowitz; Dr. Alexander Vertkin; Dr. Keith Pierce; Dr. Corrine Adler; Dr. Namir Stephan; Dr. Carmen Bogdan; and Dr. James B. Hayner.

McQuade praised radiologist Dr. Richard Chesbrough and his wife Kim Chesbrough, who formerly worked at Universal and filed a qui tam whistleblower suit under the False Claims Act bringing many of the facts in the case to the government’s attention. “We urge other physicians with knowledge of these inappropriate relationships to come forward, either by calling our office and asking to speak to the criminal or civil health care fraud coordinators, or through the qui tam whistleblower mechanism,” she said.

The case is being handled by Assistant United States Attorney Joan Hartman of the U.S. Attorney's Office for the Eastern District of Michigan and was investigated by Special Agent Steve Rinaldi of the Office of Inspector General of the Department of Health and Human Services.

Related Content

New U.S. Tariffs on Chinese Goods Include Imaging Equipment
News | Radiology Business | June 15, 2018 | Jeff Zagoudis, Associate Editor
The Office of the U.S. Trade Representative (USTR) released the much-anticipated list of Chinese-manufactured goods...
Geraldine McGinty Elected First Female Chair of American College of Radiology

Image courtesy of the American College of Radiology

News | Radiology Business | May 22, 2018
The American College of Radiology (ACR) Board of Chancellors has elected Geraldine McGinty, M.D., MBA, FACR, as chair....
Joint ACR-SIIM Summit to Examine Economics of AI in Healthcare
News | Artificial Intelligence | May 15, 2018
On May 30, 2018, the American College of Radiology (ACR) Data Science Institute (DSI) and the Society for Imaging...
Charles E. Kahn Jr., M.D., M.S., will become editor of the new online journal, Radiology: Artificial Intelligence

Charles E. Kahn Jr., M.D., M.S.

News | Artificial Intelligence | May 02, 2018
The Board of Directors of the Radiological Society of North America (RSNA) announced that Charles E. Kahn Jr., M.D., M....
What is the cost of interrupting a radiologist?
News | Clinical Study | March 20, 2018
March 20, 2018 – A first of its kind study...
Imaging agent helps predict success of lung cancer therapy
News | Oncology Diagnostics | March 08, 2018
March 8, 2018 – Doctors contemplating the best therapy for...
Sponsored Content | Case Study | Radiology Imaging | March 06, 2018
As one of the largest Catholic, not-for-profit healthcare systems in the United States, St. Louis-based SSM Health has...
ECR 2018 Spotlights Artificial Intelligence and Current Radiology Trends
News | Interventional Radiology | February 21, 2018
The European Congress of Radiology (ECR) announced the theme of its 2018 annual meeting, Feb. 28-March 4 in Vienna...
Radiography Education Enrollment Shows Marginal Rise in 2017
News | Radiology Business | February 15, 2018
Directors of radiography educational programs report the number of enrolled students increased slightly in 2017, while...
Sponsored Content | Videos | Radiology Imaging | February 15, 2018
Kiyotaka Fujii, global healthcare senior executive officer and president of Konica Minolta, discusses the company's...
Overlay Init