“If you are paying doctors to refer their patients, you are committing a federal crime.” (U.S. Attorney Zachary Fardon)
On the city of Chicago’s West Side, Sacred Heart Hospital now sits with its doors locked tight with police tape in place – a lonely ghost of a building where unspeakable crimes used to happen everyday of the year by an array of medical professionals. The owner and two of his senior executives were found guilty in March of making illegal payments to doctors, for referring Medicare patients to a hospital that was poorly run and could not pay its bills. One brilliant plan conjured up by the hospital’s big-wigs was to inflict unnecessary surgeries on unsuspecting elderly.
Edward J. Novak, age 60, was the hospital owner. This man was convicted on 27 of 28 Felony charges against him in Dirksen U.S Courthouse, including Conspiracy in a kickbacks-to-physicians scam. The jury also found Clarence Nagelvoort, age 59, the Sacred Heart Hospital CEO, guilty on 11 of 12 charges; Roy Payawal, age 66, the Chief Financial Officer, was convicted on 17 counts. The men could get five years in prison for each charge, although they assuredly won’t.
Federal prosecutors were able to prove that the hospital administrators were so desperate for cash that they decided to illegally entice doctors to send their patients across town to them, bypassing other facilities. They used secret cash payments disguised as teaching contracts, lease agreements and employee perks as incentives.
U.S. Attorney Zachary Fardon told the court that elderly patients were brought from nursing homes as far as 25 miles across town, often in the middle of the night, to receive unnecessary care in the emergency room.
Prosecutors said the massive Medicare fraud scheme operated over a 10-year span that began in 2003 and went on until federal agents raided the hospital in 2013. They pegged Novak’s personal wealth at $30,000,000 – an appalling “salary” for a failing hospital.
During the 6-week trial, the jury listened to many undercover recordings and testimony from two dozen witnesses. Among them was William Noorlag, who managed the podiatric training program for 10 years. He testified that Novak had set up teaching contracts to disguise the illegal payments to physicians after the hospital saw that the volume of foot diseased patients were dropping.
Noorlag said Novak stressed the need to make the contracts appear legitimate, quoting him as saying in 2001, “Bill, you better make sure the evaluations and paperwork are done because if I go down for this, you’re going down with me.”
The court also heard a recording of Doctor Shanin Moshiri during a meeting with hospital executive Anthony Puorro. At that meeting, Puorro assured Moshiri that he would get a monthly illegal $2,000 payment if he referred his Medicare patients to Sacred Heart.
The case hit the headlines in 2013 when Federal agents raided the hospital after learning that doctors were inflicting unnecessary tracheotomies (cutting holes in the throats) of patients. At least 5 patients died. But not one of these monstrous crimes involving patient injuries and deaths were charged against any defendants.
Four defendants admitted their guilt, including Doctor Subir Maitra, age 75, and Doctor Jagdish Shah, age 70. Former executives Puorro, age 57, and Noemi Velgara, age 65, also confessed. Four other physicians are awaiting trial.
Here’s another look:
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