Former Co-Owner and Sales Manager of defunct medical testing lab sentenced to prison | USAO-WDWA

Former Co-Owner and Sales Manager of defunct medical testing lab sentenced to prison | USAO-WDWA

Seattle – A resident of Astoria, Oregon was sentenced these days in U.S. District Court in Seattle to two a long time in prison for 5 federal felonies connected to his scheme to earnings from unlawful kickbacks in the medical screening field, introduced U.S. Attorney Nick Brown.  Richard Reid, 53, was convicted in March 2022, following a 6-day jury demo.  At today’s sentencing listening to, U.S. District Choose John C. Coughenour denied a defense motion to postpone the prison sentence although Reid appeals his conviction.

“Mr. Reid was the architect of a plan to illegally profit on toxicology exams that were paid out for by governing administration insurance,” claimed U.S. Attorney Brown. “The world-wide-web of referrals and kick-backs led to major earnings for NWPL and its homeowners.  This sort of unlawful kick-backs simply just inflate clinical costs for the rest of us.”

The pursuits of Bellevue-based Northwest Medical professionals Laboratory (NWPL) have been the issue of extensive civil and criminal litigation.  Richard Reid was one particular of the proprietors and the Vice President of Gross sales for NWPL.  Reid assisted NWPL receive additional than $3.7 million in kickback payments by steering urine drug examination specimens to two labs that could monthly bill the govt for tests. This resulted in federal government payments to individuals two labs of far more than $6.5 million.

In accordance to records filed in the situation in between January 2013 and July 2015, two labs, that were being not health practitioner owned, built payments to NWPL in trade for referrals of Medicare and TRICARE program business enterprise, in violation of the Anti-Kickback Statute.  Spending remuneration to health care suppliers or provider-owned laboratories in exchange for referrals encourages suppliers to order medically needless products and services.  The Anti-Kickback Statute functions, in component, to discourage this kind of habits. NWPL was physician-owned, and for that cause could not exam urine samples for individuals covered by government health and fitness courses this sort of as Medicare, Medicaid, and TRICARE.  In purchase to conceal the payment of the kickbacks, Reid and other co-conspirators involved described the service fees as getting for internet marketing solutions nevertheless, no marketing solutions have been carried out. 

In the sentencing memo inquiring that Reid acquire the very same two-12 months sentence as CEO Jae Lee, prosecutors explained his position producing, “Reid hid the truth and retained the cover tale in spot by lying to his profits force, lying to suppliers, and sharing fraudulent feeling letters from lawyers.  NWPL grew and the income – like unlawful kickbacks – rolled in.  The kickbacks enhanced as time went on, and totaled just about $5 million.  As the proceeds of the criminal offense rose, so did Reid’s month to month distributions — from $10,000 in 2013 to $50,000 in 2015.” 

Reid was convicted of one particular depend of conspiracy to solicit and receive kickbacks involving wellness care plans and 4 counts of receipt of kickbacks.

The business, NWPL, pleaded guilty in February 2021 and was sentenced to fork out $8,114,417 in restitution joint and many with the other criminal defendants.  NWPL has dissolved. To day, the labs and people associated in this investigation have compensated additional than $14 million to settle linked civil allegations. 

In addition to Reid, three other defendants have pleaded guilty and await sentencing.  Former NWPL CEO Jae Lee was sentenced to two several years in prison in Could 2022.  Kevin Puls, the former Govt Director of NWPL was sentenced to 90 times in jail and a yr of supervised release.

“Mr. Reid’s sentencing culminates his component in a yrs-very long investigation wherein he was convicted very last yr for actively orchestrating and personally benefiting from a scheme to corrupt and defraud the healthcare procedure, which includes the Department of Defense’s TRICARE program,” mentioned Bryan D. Denny, the Unique Agent in Charge of the DoD Business office of Inspector Common, Protection Felony Investigative Services (DCIS), Western Discipline Office environment.  “DCIS will keep on to perform with its companions to root out fraudulent pursuits, like those in this unique investigation, that weaken TRICARE and inevitably improve expenditures unnecessarily.”

“Mr. Reid allow his greed get in the way of executing what was ideal by taxpayers” said Richard A. Collodi, Exclusive Agent in Charge of the FBI’s Seattle discipline workplace. “He solicited and been given hundreds of 1000’s of bucks in kickbacks. Eventually, frauds like these inflate wellness treatment expenses for the rest of us. I applaud the perform of our investigators and associates to maintain Mr. Reid accountable, present justice to the victims, and carry his crimes to an finish.”

The circumstance was investigated by the FBI, Health and fitness and Human Solutions Business office of Inspector Normal (HHS-OIG), and the Defense Prison Investigative Services (DCIS).

The situation was prosecuted by Assistant United States Attorney Michael Dion and previous Assistant United States Legal professional Brian Werner.