NEWARK, NJ—A well-known cardiologist and the founder,
CEO, and sole owner of a pair of large medical services companies in New
Jersey and New York admitted today to conspiring in a
multi-million-dollar health care fraud scheme that subjected thousands
of patients to unnecessary tests and potentially life-threatening,
unneeded treatment, as well as treatment by unlicensed or untrained
personnel. The guilty plea was announced today by U.S. Attorney for the
District of New Jersey Paul J. Fishman.
Jose Katz, 68, of Closter, New Jersey, pleaded guilty before U.S.
District Judge Jose L. Linares in New Jersey federal court to an
information charging him with one count of conspiracy to commit health
care fraud and one count of Social Security fraud arising from a
separate scheme to give his wife a “no show” job and make her eligible
for Social Security benefits.
As part of his plea agreement with the government, Katz agreed that
the loss amount sustained by Medicare, Medicaid, and other insurers
victimized by the fraudulent billings was $19 million. U.S. Department
of Health and Human Services, Office of Inspector General and FBI
records indicate the loss amount suffered by the victims is the largest
recorded in New Jersey, New York, and Connecticut for an individual
practitioner convicted of health care fraud.
“After years of prominence in his field, Jose Katz will now be
remembered for his record-setting fraud,” said U.S. Attorney Fishman.
“Katz was so focused on illegal profits that he directed unlicensed and
unqualified providers to treat his patients, ordered unnecessary tests,
and cavalierly ordered treatments that could have caused patient harm.
Ripping off the government and insurance companies is bad enough;
risking patient health in the bargain is inexcusable.”
“Health care fraud is not a victimless crime. It is a plague on
American society and could put the health of people who need medical
care at risk,” said FBI Special Agent in Charge Aaron T. Ford. “The FBI,
together with its law enforcement and regulatory agency partners, will
vigorously investigate these crimes and hold those responsible
accountable.”
“I am proud to be part of the federal team that brought Dr. Katz to
justice after a complicated investigation,” said Tom O’Donnell, Special
Agent in Charge of the U.S. Department of Health and Human Services,
Office of Inspector General’s New York Regional Office. Dr. Katz had
very little regard for his patients and the Medicare program, as
evidenced by his blatant behavior. Criminals can be assured that if they
attempt to defraud Medicare and their patients, they will be brought to
justice.”
According to documents filed in this case and statements made in court:
Katz was the founder, CEO, and sole equity-holder of Cardio-Med
Services LLC (Cardio-Med) and Comprehensive Healthcare & Medical
Services LLC (Comprehensive Healthcare). From 2004 through 2012,
Cardio-Med had offices in Union City, Paterson, and West New York, New
York, and Comprehensive Healthcare had offices in Manhattan and Queens,
New York. Both Cardio-Med and Comprehensive Healthcare provided
cardiology, internal medicine, and other medical services to individual
patients. During that time period, Katz conspired to bill Medicare Part
B, Medicaid, Empire BCBS, Aetna, and others for unnecessary tests and
unnecessary procedures based on false diagnoses and for medical services
rendered by unlicensed practitioners.
Between July 2006 and February 2009, Katz spent more than $6 million
for advertising on Spanish-language television and radio stations. The
ads attracted hundreds of patients to Cardio-Med and Comprehensive
Healthcare every day. Overall, Katz was able to bill Medicare and
Medicaid more than $70 million for his services from 2005 through 2012.
Over the course of the conspiracy, Katz ordered and performed
essentially the same battery of diagnostic tests for nearly all the
patients he treated, regardless of their symptoms. Katz also instructed
his non-physician employees to order and perform diagnostic tests for
patients of other doctors working at his offices, even though he had not
examined those patients and the other physicians had not ordered the
unnecessary tests.
Most significantly, Katz admitted that he falsified patient charts
with fictitious and boilerplate symptoms and falsely diagnosed a
majority of his Medicare and Medicaid patients with coronary artery
disease and debilitating and inoperable angina. He also admitted to
making the diagnoses to justify prescribing and administering an
unnecessary treatment for those patients called enhanced external
counter pulsation, or EECP. Katz even prescribed EECP treatments for
some patients with contraindications for the treatment, therefore
subjecting those patients to a substantial risk of serious injury or
death.
From 2005 through 2012, Medicare and Medicaid paid Katz more than
$15.6 million just for his EECP treatments, most of which were
fraudulent.
In addition, Katz ordered conspirator Mario Roncal, 62, of Woodland
Park, New Jersey—who had a medical degree from San Juan Bautista School
of Medicine in San Juan, Puerto Rico but did not have a license to
practice medicine in any of the 50 states—to treat patients, knowing he
was not licensed. At Katz’s direction, Roncal held himself out to fellow
employees and to patients as “Dr. Roncal,” examined new patients as
well as Katz’s follow-up patients, ordered diagnostic tests, diagnosed
patients with medical conditions and diseases, and recommended and
prescribed courses of treatment and surgery—including falsely diagnosing
patients with angina and prescribing EECP treatments for those
patients.
To conceal this illegal and unlicensed practice of medicine, Roncal
forged Katz’s signature on paperwork associated with Roncal’s unlawful
medical services, including on patient charts. During the conspiracy,
Katz used his own billing numbers to bill Medicare Part B and Medicaid
for the illegal services Roncal provided as though they were provided by
Katz.
Roncal was indicted on March 2, 2012, for conspiracy to commit health
care fraud. He entered a guilty plea on January 4, 2013, and awaits
sentencing.
Katz also admitted to a Social Security fraud scheme in which, from
2005 through 2012, he kept his wife on Cardio-Med’s payroll though she
performed little or no work. During the course of the scheme, Katz sent
false W-2 forms for calendar years 2005 through 2011 to the U.S. Social
Security Administration purportedly reflecting $1,251,604 in earnings
for his wife, making her eligible for an estimated $263,000 in Social
Security benefits to which she was not entitled.
The health care fraud conspiracy and fraud counts with which Katz is
charged carry a maximum potential penalty of 10 and five years in
prison, respectively. Each count also carries a maximum $250,000 fine or
twice the gross gain or loss from the offense. At sentencing, currently
scheduled before Judge Linares on July 23, 2013, Katz will also be
ordered to pay restitution to victims of his offenses. Katz was granted
$200,000 bail pending sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the
direction of Special Agent in Charge Aaron T. Ford; the U.S. Department
of Health and Human Services, Office of Inspector General, under the
direction of Special Agent in Charge O’Donnell; the U.S. Postal
Inspection Service, under the direction of Acting Inspector in Charge
Maria Kelokates; the Social Security Administration, Office of the
Inspector General, under the direction of Special Agent in Charge Edward
J. Ryan; IRS-Criminal Investigation, under the direction of Acting
Special Agent in Charge Shantelle P. Kitchen; and criminal and civil
investigators with the U.S. Attorney’s Office for the investigation
leading to the guilty plea.
The case is being prosecuted by Assistant U.S. Attorney Scott B.
McBride of the U.S. Attorney’s Office Health Care and Government Fraud
Unit in Newark.
Read more about criminal doctor Jose Katz.
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Health and Human Services, Office of Inspector General, and Steven G.
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July 11, 2013
Former
Chief Executive Officer Of Hospital For Special Surgery Pleads Guilty
In Manhattan Federal Court To Fraudulent Kickback SchemePreet
Bharara, the United States Attorney for the Southern District of New
York, announced that JOHN R. REYNOLDS, the former Chief Executive
Officer ("CEO") of the Hospital for Special Surgery (the "Hospital"),
pled guilty today in Manhattan federal court to participating in a
fraudulent scheme in which he was paid nearly $300,000 in undisclosed
kickbacks from a subordinate Hospital employee. REYNOLDS, who was
arrested in September 2012, also pled guilty to making false statements
to a law enforcement agent. U.S. Magistrate Judge Debra Freeman presided
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June 13, 2013
Eighth Person Charged in Illegal Drug SchemeA
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streets.
June 12, 2013
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Prominent Tri-State Cardiologist Admits Record $19 Million Billing Fraud SchemeJose
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February 7, 2013 
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