NEWARK, NJ—Two doctors with practices in Secaucus and Hawthorne, New Jersey, today admitted accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Eugene DeSimone, 60, of Eatontown, New Jersey, who practiced in Secaucus, and Douglas Bienstock, 48, of Wayne, New Jersey, who practiced in Hawthorne, each pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to one count of accepting bribes.

According to documents filed in this and related cases and statements made in court:

DeSimone admitted accepting $1,500 in cash per month between August 2010 and March 2013 in return for referring patient blood specimens to BLS. Bienstock admitted that in return for patient blood specimens referrals to BLS he was paid more than $2,500 per month under a sham service contract. BLS also paid Bienstock $100 in cash for each of a certain type of blood test that he ordered. The two doctors acknowledged generating a total of at least $1.6 million in lab business for BLS from their respective practices.

As part of their guilty pleas, DeSimone and Bienstock agreed to forfeit a combined total of $339,000.

On April 9, 2013, federal agents arrested David Nicoll, 40, of Mountain Lakes, New Jersey, Scott Nicoll, 33, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother, and Craig Nordman, 35, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC—one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 44, of Boonton, New Jersey. In June 2013, David and Scott Nicoll, Nordman and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme.

The bribery counts to which DeSimone and Bienstock pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for Dec. 16, 2014.

Including DeSimone and Bienstock, 31 people have now 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. So far, 11 employees or associates of BLS, and 20 doctors have pleaded guilty to their roles in the bribery scheme. The investigation has recovered more than $10.2 million to date through forfeiture.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $540 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.