Passaic County, New Jersey, Doctor Pleads Guilty In Connection With Test-Referral Scheme With New Jersey Clinical Lab

NEWARK, N.J. – A doctor practicing in Passaic County, New Jersey, today admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced today.

Salvatore Conte, 52, of Totowa, New Jersey, pleaded guilty to Count One, Count Two, Count Five, and Count Eight of an indictment charging him with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act by accepting bribes, one substantive violation of the Anti-Kickback Statute, one substantive violation of the Federal Travel Act, and one substantive violation of wire fraud. Conte pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court.

According to documents filed in this case and statements made in court:

Conte admitted accepting bribes from BLS employees and associates in the form of sham rental, service, and consulting agreements. From February 2009 through April 2013, Conte received bribes totaling approximately $130,000 from BLS employees and associates. Conte’s referrals generated approximately $525,000 in lab business for BLS.

Conte was the fifth physician indicted in connection with the BLS bribery scheme. Ahmed El Soury and Thomas Savino were indicted on Dec. 13, 2016 and Dec. 20, 2016, respectively. Brett Ostrager – who was indicted Aug. 11, 2015 and pleaded guilty on Dec. 22, 2015 – was sentenced on June 8, 2016 to 37 months in prison. Bernard Greenspan was indicted on March 14, 2016 and his trial is ongoing before U.S. District Judge William H. Walls.

The investigation has thus far resulted in 42 guilty pleas – 28 of them from doctors – 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. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.

The conspiracy, Anti-Kickback, and Federal Travel Act counts to which Conte pleaded guilty are each punishable by a maximum potential penalty of five years in prison. The wire fraud charge is punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense. Conte’s sentencing is scheduled for June 6, 2017.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation.

The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, 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, Acting Chief 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 $1.32 billion 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.

Defense counsel: Howard Brownstein Esq., Jersey City, New Jersey