Atlanta Doctor Convicted on Health Care Fraud, Tax Evasion, and Money Laundering Charges
Physician Used Purported Charitable Entity He Controlled to Offer Illegal Inducements to Medicare Patients and Evade Income Taxes
|U.S. Attorney’s Office June 24, 2013|
ATLANTA—After a two-week trial, a federal jury has convicted Lawrence Eppelbaum, 54, of Roswell, Georgia, on health care fraud, tax fraud, and money laundering in relation to a scheme in which he illegally induced patients from all over the country to be treated at his medical clinic in Atlanta by providing free travel accommodations through a purported charitable entity that he controlled.
United States Attorney Sally Quillian Yates said, “In addition to the Hippocratic oath, Medicare doctors take a special oath that they will not interfere with a patient’s ability to choose a doctor based on medical needs alone. This defendant violated that oath in favor of personal greed. As a result, he has done harm to his future rights and liberties.”
“Eppelbaum thought his clever scheme was undetectable but was outwitted by my investigators and other law enforcement officers,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services Atlanta Region. “Criminals defrauding government health programs can expect to be brought to justice regardless of how intricate their plots.”
“Abusing the federally funded Medicare system in such a manner is something that cannot and will not be tolerated,” stated Mark F. Giuliano, Special Agent in Charge, FBI Atlanta. “With today’s verdict, a jury has clearly indicated that they will not tolerate these abuses and have held the defendant, an Atlanta doctor, accountable for his greed fueled criminal acts. The FBI urges anyone with information regarding Health Care Fraud contact the FBI Atlanta Field Office at (404) 679-9000.”
“Today’s verdict clearly illustrates that individuals who engage in these types of illegal activities will be held accountable for their actions,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS-Criminal Investigation. “Dr. Eppelbaum clearly took advantage of his professional standing in the community as well as the individuals who respected and revered him. Eppelbaum manipulated the Medicare system and received undeserved tax benefits which resulted in substantial unreported personal income.”
According to United States Attorney Yates, the charges, and other information presented in court: Eppelbaum is a physician who is licensed to practice medicine in Georgia and owns and operates the Atlanta Institute of Medicine and Rehabilitation (AIMR) and the Pain Clinic of AIMR in Atlanta. In 2004, Eppelbaum created the Back Pain Fund, a purported charitable organization that he controlled both directly and indirectly. Eppelbaum, through the Back Pain Fund, paid for Medicare patients to travel to Atlanta to receive medical treatment from his practice and then travel to Florida to visit a local hot spring for approximately four days before returning to Atlanta to receive additional treatment.
Eppelbaum was the primary donor to the Back Pain Fund and paid the vast majority of its operating expenses. Eppelbaum tried to disguise his financial control over the Back Pain Fund by entering into an arrangement with the Torah Day School, a Jewish Day School in Atlanta, whereby the parents of students attending the Torah Day School were instructed to make their tuition checks payable to the Back Pain Fund instead of to the school, and, in turn, Eppelbaum repaid the Torah Day School for the amount of the tuition, plus an additional 25 percent. Eppelbaum entered into similar arrangements with other organizations and even caused patients who were treated at his medical practice to make their checks payable to the Back Pain Fund. Between 2004 and 2009, Eppelbaum treated hundreds of Back Pain Fund patients and received approximately $16 million for their treatment from Medicare.
Eppelbaum also utilized the Back Pain Fund as a vehicle for committing tax fraud. Between 2006 through 2008, Eppelbaum deducted as charitable donations all the payments he made to the Back Pain Fund, the Torah Day School, and other organizations with which he had a financial arrangement, even though Eppelbaum derived substantial personal income from treating Back Pain Fund patients. Eppelbaum evaded approximately $1 million in federal income taxes through his scheme.
Eppelbaum was charged with 27 counts of health care fraud, tax fraud, and money laundering. The jury found him guilty of all 27 counts. The health care charges each carry a maximum sentence of 10 years or five years in prison and a fine of up to $250,000. The tax charges each carry a maximum sentence of five years or three years in prison and a fine of up to $250,000. The money laundering charges each carry a maximum sentence of 20 years in prison and a fine of up to $500,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
The sentencing will be scheduled at a later date before United States District Judge Amy Totenberg.
This case is being investigated by Special Agents of the U.S. Department of Health and Human Services-Office of Inspector; Federal Bureau of Investigation; and Internal Revenue Service-Criminal Investigation.
Assistant United States Attorneys Steven D. Grimberg and Stephen H. McClain are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.Pressefirstname.lastname@example.org or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.