TRENTON - Attorney General Jeffrey S. Chiesa announced that two chiropractors pleaded guilty today to accepting cash payments in exchange for referring approximately 100 chiropractic patients for other services, including legal representation. The defendants also admitted to failing to report a combined total of more than a million dollars of income on their tax returns.
Christopher J. Montana, 40, of Chester, Morris County, and Fernando Barrese, 40, of Washington Township, Bergen County, pleaded guilty to criminal accusations charging them with two counts of third-degree use of runners and third-degree filing false and fraudulent tax returns before Superior Court Judge Thomas V. Manahan in Morris County.
Montana and Barrese are the owners of Chiropractic Centre of Elizabeth, Chiropractic Centre of Newark and Chiropractic Centre of Jersey City. In addition, Barrese owned Wallington Chiropractic Center, located in Wallington.
Judge Manahan scheduled sentencing for Dec. 19. Under the plea agreement(s), the state will recommend that the defendants each be sentenced to seven years in state prison and pay a total of $200,000 in restitution to a total of 15 insurance carriers. Barrese will be ordered to pay $240,451 in back taxes, penalties and interest to the New Jersey Division of Taxation; Montana will be ordered to pay $71,032 in back taxes penalties and interest to the New Jersey Division of Taxation. In addition, each defendant’s chiropractic license will be suspended for 18 months. The matter will also be referred to the New Jersey Board of Chiropractic Examiners, which may impose additional sanctions.
"Dr. Montana and Dr. Barrese lined their own pockets by taking advantage of motor vehicle accident victims who came to them seeking treatment for their injuries," Attorney General Chiesa said. The sentences these defendants face should serve as a powerful deterrent to anyone thinking of using such schemes to defraud insurance companies. Ultimately the cost of such fraud is passed on to consumers through increased premiums."
In pleading guilty, Montana and Barrese admitted that between February and July 2011, they referred approximately 100 patients from their chiropractic facilities, for additional services. The referrals were made in exchange for cash kickbacks of $500 per patient. All of the patients had been in automobile accidents.
Kickbacks have long been illegal in New Jersey, because they influence a doctor’s decision about whether to send a patient for additional services, and to whom. Such decisions should be based on the best interest of each patient. The state does not allege that the services were unnecessary, but alleges that the referrals were made in exchange for illegal payments.
“Kickbacks are a bane of the auto insurance market,” Acting Insurance Fraud Prosecutor Ronald Chillemi said. “Money is a strong incentive that influences doctors to refer their patients for testing, treatment or other services. All of these services are paid for with other people’s insurance premiums. Doctors should base their medical decisions on their patients’ needs, not their own pocketbooks.”
By making their patient referrals in exchange for cash payments, Montana and Barrese violated New Jersey’s “anti-running statute,” which imposes criminal penalties for acting as a runner or using a runner. The statute defines a runner as a person who attempts to procure a patient or client at the direction of a health care professional or attorney in exchange for a pecuniary benefit, when the health care professional or attorney intends to assert a claim against an insurance carrier for providing services to the patient or client. The anti-running statute carries a presumptive sentence of three to five years in state prison, as well as other penalties.
Barrese and Montana were arrested July 27, 2011. Two other defendants – Oleg Gorodesky, 42, of Staten Island and Alcindor Robin, 57, of Elizabeth - were also charged that day for their roles in the scheme. Gorodesky was the office manager of Chiropractic Centre of Jersey City. Robin allegedly acted as a runner by soliciting patients to receive medical treatment from doctors who intended to file claims with insurance companies. The charges against Gorodesky and Robin are still pending and they are presumed innocent until proven guilty.
In pleading guilty today, Barrese also admitted that he filed a false tax return for the year 2009 in which he failed to report $918,826 in income. Montana similarly admitted that he filed a fraudulent tax return for the year 2008 in which he failed to report $291,000 in income.
Assistant Attorney General John Kennedy and Deputy Attorney General Cheryl Maccaroni were assigned to the case. Detectives Darrell Washington, Kelly Howard, Janessa Jones and Kristi Procaccino coordinated the investigation along with Civil Investigator Megan Flanagan and Analyst Bethany Schussler. Acting Insurance Fraud Prosecutor Chillemi thanked Auditor Charlene Singleton from the New Jersey Division of Taxation for her assistance in the investigation.
Prosecutor Chillemi noted that several important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at www.NJInsurance fraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.