U.S. Attorney's Office
District of New Jersey
(973) 645-2888
June 23, 2015

Passaic County, New Jersey Doctor Sentenced to 37 Months in Prison for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical Lab

NEWARK, NJ—A doctor with a practice in Hawthorne, New Jersey, was sentenced today to 37 months in prison for 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.

Douglas Bienstock, 48, of Wayne, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.

Including Bienstock, 38 people—26 of them doctors—have 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. The investigation has so far recovered more than $11 million to date through forfeiture.

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

Bienstock admitted that from February 2008 through October 2009, he was paid more than $2,500 per month under a sham service contract in return for patient blood specimen referrals to BLS. BLS also paid Bienstock $100 in cash for each of a certain type of blood test that he ordered. As a result of Bienstock’s referrals, BLS received approximately $640,000 in lab business.

In addition to the prison term, Judge Chesler ordered Bienstock to serve one year of supervised release, pay a $75,000 fine and forfeit $79, 695.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS– Criminal Investigation, under the direction of 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.

The government is represented by Senior Litigation Counsel Andrew Leven; Assistant

U.S. Attorney Joseph N. Minish; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and Assistant U.S. Attorney Barbara Ward, Chief of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney Paul J. 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 $635 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.

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