Hospital purchasing officials who are tempted to bend the rules can learn a hard lesson from the case of one former purchasing executive who has been caught in the net of a multi-hospital federal antitrust investigation. A New York City federal grand jury has returned a three-count indictment against Mario Perciavalle, a former Mount Sinai Medical Center and School of Medicine purchasing official, for participating in bid-rigging and fraud conspiracies related to contracts for work performed at Mount Sinai, according to the U.S. Department of Justice (DOJ).
Perciavalle has been charged with engaging in a conspiracy to rig bids on Mount Sinai contracts for maintenance and insulation services between June 2004 and September 2005. "Perciavalle and his co-conspirators took steps to create the appearance that Mount Sinai was awarding contracts based on competition, when, in fact, they submitted, or caused to be submitted, intentionally high, noncompetitive bids to Mount Sinai on these contracts," says the DOJ.
The indictment also charges that Perciavalle engaged in a mail fraud conspiracy between March 2003 and September 2005. Perciavalle allegedly awarded work at Mount Sinai to his co-conspirator's company when he was receiving cash kickbacks from the co-conspirator. The mail fraud change derives from payments that Mount Sinai mailed to the co-conspirator for work done on the rigged contracts.
Perciavalle faces a maximum penalty of 10 years in prison and a $1 million fine for the bid-rigging charge, as well as a maximum penalty of 20 years in prison and a $1 million fine for the fraud charge. However, the fines can be increased if the crime victim (i.e., Mount Sinai) lost more than the statutory maximum.
Perciavalle's indictment is part of an ongoing federal antitrust investigation involving contracts at Mount Sinai and New York Presbyterian Hospital (NYPH). On March 31, the DOJ also announced that a former NYPH contractor had been indicted for bid-rigging and tax fraud related to contracts for re-insulation services. So far, eight people and three companies have pleaded guilty to charges deriving from the investigation.
To learn more about the bid-rigging case at Mount Sinai:
- read the DOJ press release
To learn more about bid-rigging at New York Presbyterian:
- read the DOJ press release