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

Seattle – A resident of Astoria, Oregon was sentenced today in U.S. District Court docket in Seattle to two a long time in prison for 5 federal felonies related to his plan to revenue from unlawful kickbacks in the health-related testing marketplace, declared U.S. Legal professional Nick Brown.  Richard Reid, 53, was convicted in March 2022, adhering to a six-working day jury trial.  At today’s sentencing hearing, U.S. District Judge John C. Coughenour denied a protection movement to postpone the jail sentence even though Reid appeals his conviction.

“Mr. Reid was the architect of a plan to illegally income on toxicology tests that have been compensated for by governing administration insurance coverage,” claimed U.S. Lawyer Brown. “The internet of referrals and kick-backs led to considerable revenue for NWPL and its owners.  This kind of illegal kick-backs simply just inflate health-related costs for the relaxation of us.”

The pursuits of Bellevue-centered Northwest Medical professionals Laboratory (NWPL) have been the issue of extensive civil and criminal litigation.  Richard Reid was just one of the entrepreneurs and the Vice President of Sales for NWPL.  Reid helped NWPL acquire far more than $3.7 million in kickback payments by steering urine drug test specimens to two labs that could monthly bill the government for tests. This resulted in governing administration payments to these two labs of extra than $6.5 million.

In accordance to records submitted in the circumstance concerning January 2013 and July 2015, two labs, that were not physician owned, manufactured payments to NWPL in exchange for referrals of Medicare and TRICARE system company, in violation of the Anti-Kickback Statute.  Paying remuneration to healthcare vendors or service provider-owned laboratories in exchange for referrals encourages companies to purchase medically pointless solutions.  The Anti-Kickback Statute functions, in section, to discourage these habits. NWPL was medical doctor-owned, and for that purpose could not check urine samples for sufferers lined by govt wellness courses these kinds of as Medicare, Medicaid, and TRICARE.  In buy to conceal the payment of the kickbacks, Reid and other co-conspirators associated described the service fees as getting for internet marketing expert services even so, no marketing and advertising providers ended up done. 

In the sentencing memo inquiring that Reid receive the exact same two-12 months sentence as CEO Jae Lee, prosecutors described his position crafting, “Reid hid the fact and saved the deal with tale in spot by lying to his revenue pressure, lying to providers, and sharing fraudulent feeling letters from attorneys.  NWPL grew and the dollars – such as unlawful kickbacks – rolled in.  The kickbacks elevated as time went on, and totaled nearly $5 million.  As the proceeds of the criminal offense rose, so did Reid’s every month distributions — from $10,000 in 2013 to $50,000 in 2015.” 

Reid was convicted of one particular rely of conspiracy to solicit and acquire kickbacks involving wellbeing treatment programs and four counts of receipt of kickbacks.

The firm, NWPL, pleaded guilty in February 2021 and was sentenced to shell out $8,114,417 in restitution joint and quite a few with the other criminal defendants.  NWPL has dissolved. To date, the labs and folks involved in this investigation have compensated extra than $14 million to settle associated civil allegations. 

In addition to Reid, 3 other defendants have pleaded guilty and await sentencing.  Former NWPL CEO Jae Lee was sentenced to two many years in prison in May possibly 2022.  Kevin Puls, the former Executive Director of NWPL was sentenced to 90 days in jail and a 12 months of supervised launch.

“Mr. Reid’s sentencing culminates his portion in a years-extended investigation whereby he was convicted last 12 months for actively orchestrating and personally benefiting from a plan to corrupt and defraud the health care procedure, which includes the Section of Defense’s TRICARE application,” explained Bryan D. Denny, the Particular Agent in Demand of the DoD Office of Inspector Basic, Protection Felony Investigative Assistance (DCIS), Western Discipline Office.  “DCIS will proceed to operate with its companions to root out fraudulent actions, like those people in this specific investigation, that weaken TRICARE and inevitably increase expenditures unnecessarily.”

“Mr. Reid let his greed get in the way of carrying out what was suitable by taxpayers” mentioned Richard A. Collodi, Unique Agent in Demand of the FBI’s Seattle discipline place of work. “He solicited and acquired hundreds of hundreds of bucks in kickbacks. In the long run, frauds like these inflate well being treatment charges for the relaxation of us. I applaud the operate of our investigators and associates to hold Mr. Reid accountable, offer justice to the victims, and convey his crimes to an close.”

The scenario was investigated by the FBI, Wellness and Human Services Office environment of Inspector Basic (HHS-OIG), and the Protection Felony Investigative Service (DCIS).

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