United States Attorney’s Office, Northern District of Alabama, April 26, 2023
BIRMINGHAM, Ala. – Another individual has been convicted in the latest in a series of cases involving multi-million-dollar health care fraud and kickback conspiracies, announced U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Special Agent in Charge Carlton L. Peeples, and U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Tamala E. Miles.
David Lyle Shehi, 42, of Rainbow City, pleaded guilty yesterday before Chief U.S. District Judge L. Scott Coogler to conspiracy to pay kickbacks and commit health care fraud.
According to the information and plea agreement, Shehi owned a pain management clinic in Rainbow City called Etowah Pain. Between 2016 and 2018, Shehi conspired with others to commit health care fraud, and to receive kickbacks in exchange for his medical practice’s ordering items or services that would be billed to Medicare and other health insurance programs. One of those services was electro-diagnostic testing provided by a Huntsville-based company called QBR, or Diagnostic Referral Community. According to the plea agreement, QBR paid Shehi, through the medical practice, a per-patient fee for tests ordered from QBR and reimbursed by insurance. The payments were disguised as hourly payments for the ordering physician’s time and staff’s time, but in reality, Shehi’s practice was paid on a per-patient basis.
Also, this week, a defendant in a related case was sentenced. Today, Judge Coogler sentenced Dr. Eric Beck, 64, of Huntsville, to 15 months in prison. Beck pleaded guilty last year to health care fraud conspiracy for his role in the QBR scheme.
In February, John Alan Robson, 40, of Trussville, was indicted in a related case for health care fraud conspiracy, kickback conspiracy, and kickbacks.
The cases against Shehi, Beck, and Robson are related to several other cases that have resulted in convictions. John Hornbuckle, 53, of Huntsville, pleaded guilty to health care fraud and kickback conspiracy offenses for his role, as QBR’s CEO, in orchestrating the fraud. James Ewing Ray, 52, of Gadsden, pleaded guilty to health care fraud and kickback conspiracy for his role as a sales rep who marketed QBR’s scheme to Shehi and other medical practices and received kickbacks per test ordered.
In March 2022, a jury convicted Dr. Mark Murphy, 66, and his wife Jennifer Murphy, 66, both of Lewisburg, Tennessee, of drug distribution, fraud, and kickback crimes. The Murphys operated North Alabama Pain Services, which closed its Decatur and Madison offices in early 2017. According to court documents and evidence presented at trial, the Murphys took kickbacks from QBR of more than a million dollars. In return, Dr. Murphy ordered electro-diagnostic tests from QBR for his patients, regardless of whether there was a medical need for those tests. Dr. Murphy also pre-signed prescriptions for expensive specialty topical creams, sprays, and patches, which patients then received whether they wanted the products or not. Before the Murphys went to trial, a co-defendant, Brian Bowman, 42, of Gadsden, pleaded guilty to health care fraud conspiracy. According to Bowman’s plea agreement, Bowman marketed QBR’s electro-diagnostic testing to medical providers, and was paid a fee for each test they ordered. Bowman received nearly a million dollars in fees from QBR. Bowman also marketed high-reimbursing specialty prescription drugs to the Murphys and other providers, and received payments for the prescriptions he generated.
Mark Murphy and Jennifer Murphy each were sentenced to twenty years in prison. Hornbuckle was sentenced to eighty months in prison. Ray and Bowman are awaiting sentencing. Other co-conspirators have already been sentenced.
The maximum penalty for conspiracy to commit health care fraud and receive kickbacks is five years in prison.
The FBI and HHS-OIG investigated the case. Assistant U.S. Attorneys J.B. Ward and Don Long are prosecuting the case.
New article: https://www.justice.gov/usao-ndal/pr/etowah-pain-clinic-owner-pleads-guilty-multi-million-dollar-kickback-and-health-care