NEWARK, N.J. — Details of a long-running health care kickback scheme that allegedly featured prostitutes, cash-stuffed envelopes and private jet junkets began to unfold in federal court Tuesday as a 79-year-old doctor went on trial for his alleged role in the scheme.
Though Bernard Greenspan isn’t alleged to have engaged in any of the seamier activities surrounding now-defunct Biodiagnostic Laboratory Services, prosecutors painted him as eager to accept about $200,000 in bribes from the lab over several years in exchange for sending his patients’ blood samples there.
The bribes came in the form of inflated rental payments for BLS to use space in Greenspan’s office, bogus consulting fees and even a job at the lab for Greenspan’s alleged mistress, Assistant U.S. Attorney Danielle Alfonzo Walsman told jurors.
“Blood is not a commodity doctors can sell,” Walsman said.
BLS allegedly made $3 million from its arrangement with Greenspan, who is charged with conspiracy, violating federal anti-kickback laws and honest services fraud. The counts carry a combined maximum penalty of decades in prison.
More than 40 people, including more than two dozen doctors in New York and New Jersey, have pleaded guilty over the last four years; Greenspan is the first defendant to go to trial.
The charges stemmed from an investigation into Parsippany-based BLS, a previously nondescript New Jersey company that had experienced a large spike in revenues between 2006 and 2013.
BLS made $200 million between 2006 and 2013, with more than $100 million as a result of the bribery scheme, authorities said when charges were announced in 2013. U.S. Attorney Paul Fishman estimated Medicare was defrauded out of tens of millions of dollars during that time.
David Nicoll, the company president and a former pharmaceutical salesman; his brother, Scott, who previously sold concert tickets for a living, and Scott Nordman, David Nicoll’s cousin, are among those who have pleaded guilty.
David Nicoll, who is expected to testify against Greenspan, faces up to 25 years in prison. Authorities said he used BLS’s profits on a $300,000 Ferrari, $392,000 on tickets to sporting events and $154,000 at a gentlemen’s club and restaurant.
Attorney Damian Conforti, representing Greenspan, painted a sharp contrast Tuesday between Nicoll and his client, who has practiced medicine for more than 50 years and continues to see patients at his northern New Jersey practice.
While some doctors frolicked with prostitutes or received $50,000 monthly cash payments stuffed in envelopes, Conforti told jurors, Greenspan’s dealings were legitimate.
“It’s not illegal for a doctor to be paid rent,” Conforti said, adding that Greenspan wanted patients to have the convenience of being able to give blood samples in his office to a BLS phlebotomist. He said Greenspan even kept the phlebotomist on after BLS stopped paying him rent.
David Nicoll, meanwhile, saw Greenspan as an easy target and “sold him on the legality” of the arrangement, Conforti said.
The investigation into BLS reflected federal officials’ increased focus on health care fraud over the last 10 years. According to an annual report by the Department of Health and Human Services and the Department of Justice, in fiscal year 2016 the federal government won or negotiated more than $2.5 billion in health care fraud judgments and settlements.
Since the inception of Medicare fraud strike force teams in key areas around the country beginning in 2007, charges have been brought against more than 3,000 defendants who billed Medicare nearly $11 billion, according to the report.