Laboratory Marketer and North Carolina Physicians Agree to Pay Over $1.3M to Settle Kickback Allegations

Laboratory marketer Thomas Anthony Carnaggio, of Irmo, South Carolina, and his marketing company, as well as three physicians in Charlotte, North Carolina, Steven Bauer, M.D., Larry Berman, M.D. and Alireza Nami, M.D., and their medical practices, have agreed to pay a total of $1,373,400 to resolve alleged False Claims Act violations arising from their involvement in laboratory kickback schemes. The parties have agreed to cooperate with the Justice Department's investigations of other participants in the alleged schemes.

"Using financial inducements to steer patients to a particular laboratory for taxpayer-funded testing can distort medical decision making and result in unnecessary services," said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division. "We will diligently pursue those who undermine the integrity of federal health care programs by violating rules designed to protect the programs and their beneficiaries from fraud and abuse."

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, TRICARE, and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers' judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlement announced today resolves allegations that a marketer and his marketing company offered kickbacks to doctors on behalf of a laboratory in Anderson, South Carolina, and that doctors and their medical practices received kickbacks from the laboratory in return for laboratory referrals. The alleged kickbacks resulted in the submission of false or fraudulent laboratory testing claims to Medicare and TRICARE in violation of the False Claims Act.

• Thomas Anthony Carnaggio and South Ventures LLC. Carnaggio and his marketing company agreed to pay $400,000 to resolve allegations that from January 2017 to January 2020, Carnaggio and his company, on behalf of the laboratory, offered to doctors in North Carolina and South Carolina thousands of dollars in kickbacks disguised as purported office space rental and phlebotomy payments to induce the doctors to order laboratory testing. In addition, Carnaggio and his marketing company allegedly received commissions from the laboratory as independent contractors based on the volume and/or value of the Medicare and TRICARE referrals that they arranged for and/or recommended, in violation of the Anti-Kickback Statute.
• Steven Bauer and Ballantyne Medical Associates PLLC. Dr. Bauer and his medical practice agreed to pay $205,000 to resolve allegations that from May 2016 to December 2021, they received thousands of dollars in kickbacks in the form of purported office space rental and phlebotomy payments from the laboratory, in return for ordering testing. Dr. Bauer and his practice provided information that assisted the government's investigation and received credit under the Department of Justice's guidelines for taking cooperation into account in False Claims Act matters.
• Larry Berman and Larry F. Berman, M.D., P.C. Berman and his medical practice agreed to pay $385,000 to resolve allegations that from July 2017 to November 2021, they received thousands of dollars in remuneration disguised as purported office space rental and phlebotomy payments from the laboratory in return for ordering testing.
• Alireza Nami and Joint and Muscle Medical Care, P.C. Nami and his medical practice agreed to pay $383,400 to resolve allegations that from November 2016 to November 2021, they received thousands of dollars in kickbacks from the laboratory disguised as the purchase price for used laboratory equipment, office space rental, and phlebotomy payments, in return for ordering testing.

"Schemes like this compromise the integrity of our healthcare programs," said U.S. Attorney Adair F. Boroughs for the District of South Carolina. "We will continue to pursue those engaged in illegal kickbacks and hold them accountable."

"This resolution underscores our commitment to ensuring fair and ethical practices in the healthcare industry," said Special Agent in Charge Steve Jensen of the FBI Columbia Field Office. "The FBI, along with our law enforcement and regulatory partners, will continue to hold those accountable who defraud our healthcare systems for their personal gain."

"Providers who participate in kickback schemes do so at the risk of undermining the integrity of federal healthcare programs," said Special Agent in Charge Tamala Miles of the Department of Health and Human Services Office of Inspector General (HHS-OIG). "HHS-OIG remains steadfast in its collaboration with law enforcement partners to diligently investigate individuals engaged in kickback schemes for personal gain."

"It is unethical and wholly inappropriate for physicians to accept financial incentives to drive business," said Special Agent in Charge Chris Dillard of the Defense Criminal Investigative Service (DCIS) Mid Atlantic Field Office. "Government healthcare systems are degraded and the reputation of the medical profession is tarnished when vendors pay medical providers kickbacks for use of their services. Working closely with our law enforcement partners, DCIS will continue to hold accountable those who choose to enrich themselves at the expense of patient health and trust."

The settlement was the result of a coordinated effort between the Civil Division's Commercial Litigation Branch, Fraud Section and the U.S. Attorney's Office for the District of South Carolina, with assistance from HHS-OIG, DCIS and the FBI.

Senior Trial Counsel Christopher Terranova in the Civil Division's Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorney Beth C. Warren for the District of South Carolina handled the case. The United States previously resolved allegations that physicians in South Carolina and Texas received kickbacks from the same laboratory.

The government's pursuit of this matter illustrates the government's emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to HHS at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are only allegations. There has been no determination of liability.

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