Unlicensed Doctor Sentenced to Prison for Role in Fraud Scheme, Distributing Prescription Drugs
|U.S. Attorney’s Office July 18, 2014|
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that FRANCISCO R. CARBONE, 56, of Fairfield, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 24 months of imprisonment, followed by three years of supervised release, for his role in an insurance fraud scheme and a conspiracy to illegally distribute prescription narcotics.
This matter stems from “Operation Running Man,” a 14-month undercover fraud investigation headed by the Federal Bureau of Investigation.
According to court documents and statements made in court, CARBONE previously had been licensed to practice medicine, working as a sole practitioner in Bridgeport. In March 2005, CARBONE’s license to practice medicine was revoked by the State of Connecticut.
Between December 2006 and February 2010, CARBONE conspired with attorney Joseph Haddad and Dr. Marc Kirshner, who owned and operated two chiropractor offices in Bridgeport and one in Stamford, to defraud several insurance companies by exaggerating the auto accident injuries of Haddad’s clients to justify a larger monetary settlement with the insurance companies. As part of this scheme, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents.
During the scheme, Haddad instructed his clients to see CARBONE, who both Haddad and Kirshner knew was an unlicensed doctor. Because CARBONE had lost his license to practice medicine and was not permitted to prescribe pain medication, CARBONE enlisted James W. Marshall, Jr., a licensed doctor of osteopathic medicine in Monroe, to write prescriptions for oxycodone, hydrocodone and other narcotics, for CARBONE’s patients, even if the medication was not needed.
CARBONE also fabricated medical records, including the clients’ injuries and medical condition, even though CARBONE had not done any medical examination on the vast majority of the patients. The fabricated reports were given to Haddad who provided them to the insurance carriers in support of settlements.
CARBONE, at the request of Haddad and Kirshner, also referred clients to a diagnostic testing company owned by Kirshner to receive “Nerve Conduction Velocity” (NCV) testing, even though CARBONE had no prior knowledge of NCVs and did not rely on the test results for any medical purpose. Kirshner’s office would submit a bill to Haddad in the amount of approximately $2000 for each NCV test that was performed, which would eventually be paid out of settlement proceeds.
In addition, CARBONE, Haddad and Kirshner engaged in a scheme to defraud the State of Connecticut. By law, the state is entitled to 50 percent of the proceeds of a personal injury case if the individual who receives a settlement has been on public assistance, or has outstanding child support obligations. Haddad provided fraudulent settlement statements to the state that inflated the payments to him, Kirshner and CARBONE, and reduced the net payout to the client.
CARBONE and Kirshner, at Haddad’s request, regularly kicked back a portion of their medical fees to Haddad’s clients.
More than 10 insurance carriers lost a total of more than $1.7 million as a result of this fraud scheme.
CARBONE was paid approximately $434,529 for participating in this scheme. Today, he was ordered to pay restitution in that amount to the victim insurance carriers.
CARBONE was sentenced below the recommended sentencing guidelines range for cooperating during the investigation.
On July 19, 2011, CARBONE pleaded guilty to one count of conspiring to commit mail fraud to defraud insurance carriers, one count of conspiring to commit mail fraud to defraud the State of Connecticut, one count of making a false statement relating to health care matters, and one count of conspiring to distribute controlled substances outside the scope of the usual course of professional practice.
CARBONE’s criminal history includes federal convictions in 1999 for violating the Medicare/Medicaid anti-kickback statute and for filing a false federal tax return, for which he was sentenced to four months of imprisonment. In 2002, CARBONE was sentenced to an additional 13 months of imprisonment for violating the conditions of his supervised release.
Haddad, Kirshner, Marshall and three other chiropractors pleaded guilty to charges stemming from this scheme. On July 10, 2014, Haddad was sentenced to 51 months of imprisonment. Kirshner and Marshall await sentencing.
This matter was investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau, the Metropolitan Property and Casualty Insurance’s Special Investigation Unit and the Travelers Insurance Company.
The case is being prosecuted by Assistant U.S. Attorneys Christopher W. Schmeisser and David J. Sheldon.