Feds Charge 4 in Massive Medical Billing Scam in NJ

The Parsippany-based medical testing lab allegedly billed tens of millions in fraudulent claims, according to federal authorities

Federal authorities in New Jersey charged a doctor and three employees of a medical testing lab, including its president, with scheming to bribe doctors to refer blood samples to the lab and to order unnecessary tests that resulted in tens of millions of dollars in profits to the lab from private health insurance companies and Medicare.

David Nicoll, president of Biodiagnostic Laboratory Services (BLS) of Parsippany and two lab employees -- Scott Nicoll (brother of David) and Craig Nordman -- are charged with conspiring to bribe physicians over a period of several years.

Frank Santangelo, a New Jersey physician with offices in Montville and Wayne, is also charged with allegedly accepting more than $700,000 in bribes from BLS and sending the lab more than $4.2 million in blood referrals, prosecutors said.

In announcing the charges at a press conference, U.S. Attorney Paul Fishman said he expects dozens more doctors to be charged in the scheme. “It would be a good idea to call us before we come for you,” he said.

In addition to making the arrests, teams of agents from the FBI, U.S. Department of Health and Human Services and U.S. Postal Inspectors executed federal search warrants and seized records from BLS, law enforcement officials said.

From 2006 to 2013, BLS made more than $200 million from the testing of blood specimens and related services. During that period David Nicoll received more than $33 million which he spent on luxury collectible cars, a $300,000 Ferrari, a $291,000 Corvette, a $700,000 Manhattan apartment, and $600,000 on private jet charters, among other personal items, according to court papers.

“The FBI views health care fraud as a severe crime problem that affects every American, “ said FBI Special Agent in Charge Aaron T. Ford. “Fraud and abuse take critical resources out of our health care system, and contribute to the rising cost of health care for everyone.”

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