Corrupt Lab Boss: Hundreds of Doctors Took Bribes to Help Steal Millions from Medicare

A New Jersey medical lab boss said hundreds of doctors demanded illegal cash payoffs from the lab in exchange for business

By Jonathan Dienst and Joseph Valiquette
|  Tuesday, Jun 11, 2013  |  Updated 1:26 PM EDT
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Leaders of a New Jersey medical laboratory admit to paying bribes to hundreds of doctors in New York and New Jersey in order to bilk millions from Medicare. Jonathan Dienst reports.

NBC 4 New York

Leaders of a New Jersey medical laboratory admit to paying bribes to hundreds of doctors in New York and New Jersey in order to bilk millions from Medicare. Jonathan Dienst reports.

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The corrupt former president of a New Jersey lab testing firm said hundreds of doctors demanded bribes and kickbacks as part of a $100 million dollar Medicare and insurance billing scheme.

Scott Nicoll pleaded guilty and admitted Monday that his Parsippany firm, Biodiagnostic Laboratory Services, paid millions in bribes to doctors in order to bill tens of millions in additional and often unnecessary blood tests sent to his lab.

After the court hearing, Nicoll said through his lawyer that hundreds of doctors demanded illegal cash payoffs from the lab in exchange for business.

“This case clearly involves a two-way street between doctors and unfortunately, my client,” said defense attorney John Whipple, who said the doctors number “in the hundreds.”

“In many occasions, it was the doctors themselves that insisted upon the payment of funds to have their bloodwork and other tests sent to the lab,” Whipple said.

Nicoll was one of seven lab workers and consultants who pleaded guilty Monday at Newark federal court to conspiracy to bribe physicians and money laundering. Whipple said his client accepts responsibility for the fraud and intends to repay the money he stole.

All seven men are scheduled to be sentenced in September.

Federal prosecutor Paul Fishman said, “Individual greed has no place in a treatment plan, and people seeking medical help deserve to know a doctor’s recommendations are based on professional expertise, not illicit profits.”

While just one doctor has been charged to date, New Jersey FBI Director Aaron Ford has said the investigation is ongoing and “we are looking to pursue every avenue that is available to complete the case.”

FBI agents raided Biodiagnostic Laboratory Services' offices in April, seizing records and documents. Investigators said that in addition to Medicare, private insurance companies and patients were also duped. Patients often were never told that extra and extraneous tests had been ordered, officials said.

Officials have not said how many doctors may soon get arrested. Whipple said the FBI is now armed with names and documents that show which doctors were doing business with Biodiagnostic Laboratory Services.

“The doctors know who they are, there is no question about it,” Whipple said.

Whipple said tests were always performed properly but admitted that doctors ordered extra blood or allergy tests in order to pump up billing. In all, Biodiagnostic Laboratory Services officials paid millions in bribes to medical professionals, and more than $100 million was earned by overbilling on blood samples and other tests.

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