NJ lab at the center of major kickback scheme forfeits assets

multicolored test tubes

The New Jersey laboratory accused of orchestrating one of the nation’s largest kickback schemes, which involved dozens of physicians, has pleaded guilty and was ordered to forfeit all of its assets, according to the U.S. Attorney’s Office for the District of New Jersey.

The total assets from Biodiagnostic Laboratory Services (BLS) paled in comparison to the estimated $100 million in false claims paid as a result of the scheme. BLS had just $56,000 in laboratory equipment, computers, printers, furniture and office equipment, according to the plea agreement. The company also agreed to pay $64,000 that had been deposited in three separate accounts linked to a money laundering charge. So far the government has recovered more than $12 million from the scheme through forfeiture.

The company’s plea deal is separate from that of David Nicoll, president of BLS, and his brother Scott, both of whom admitted to orchestrating the scheme and are awaiting sentencing.

Prosecutors have received guilty pleas from 41 individuals, including 27 doctors. The latest physician to plead guilty, Juan Espindola, admitted to taking $1,500 a month in sham consulting fees in exchange for providing blood samples to the lab. 

More complex kickback schemes have pulled physicians into the legal fray for accepting payments from labs, drug companies and device manufacturers. Two years ago, the Office of Inspector General released a special fraud alert highlighting regarding lab payments made to physicians in excess of fair market value. Last year, the agency reiterated that stance in another fraud alert warning of excessive payments for medical directorships or compensation arrangments that account for volume or referrals

- read the U.S. Attorney’s announcement
- here’s the BLS plea deal
- check out the list of assets
- here’s the physician’s guilty plea announcement