SOUTH AMBOY, NJ—A medical doctor from South Amboy pleaded guilty on November 22 to "engaging in sophisticated fraud and money laundering schemes," according to a press release from the NJ Attorney General's Office.
Manoj Patharkar, the 45-year-old doctor who led the Edison-based Pain Management Associates of Central Jersey (PMACJ), admitted to hiding approximately $3.6 million in income from his medical practices to evade taxes, .
Partharkar also ran Prospect Pain Management Associates in Passaic, according to the AG's Office.
"He admitted that he evaded roughly $327,000 in state taxes by fabricating employee payroll and wage expenses totaling over $2.1 million and by diverting over $1.4 million in checks written for medical services provided by his businesses into personal bank accounts," reads the official press release on the guilty plea.
Sayreville resident Mohammed Shamshair "secured the personal identifying information of about 28 people, including Social Security numbers, names, dates of birth, and addresses," according to the AG's Office.
"These 28 people became 'phantom employees' of his corporations, PMACJ and Prospect Pain Management Associates," reads the press release. "To give the scheme a semblance of legitimacy, Patharkar issued at least 1,574 checks totaling more than $2.1 million, made payable or otherwise attributable to the 28 phantom employees."
Partharkar pled guilty to first-degree conspiracy, first-degree money laundering, seven counts of third-degree filing fraudulent tax returns, and three counts of third-degree failure to pay taxes, according to the AG's Office. He also pled guilty to the same counts on behalf of PMACJ.
The schemes also involved illegal kickbacks paid to more than a dozen other doctors, which led to additional charges of second-degree conspiracy and second-degree commercial bribery against Partharkar.
"He further admitted that he used laundered funds to pay commercial bribes to doctors who unlawfully referred patients to his pain clinics," reads the AG's Office press release.
Authorities noted that the kickback scheme involved Patharkar depositing approximately 4,310 checks totaling more than $1.4 million into his personal bank account, and failing to claim those funds on tax filings.
The checks came from "various companies and persons, including several national and regional insurance carriers, for medical services he provided," according to the release.
In February, Shamshair pled guilty to first-degree conspiracy and first-degree money laundering for "acting as a middle man... and delivering the kickbacks to the doctors."
Nine months prior, Patharkar's accountant, 45-year-old Irfan Raza, of Valley Stream, NY, had pleaded guilty to second-degree conspiracy for assisting in the the phantom employees scheme.
Raza admitted to "helping Patharkar and Shamshair launder the doctor’s income in exchange for a cut of the illicit funds," according to the release.
Two chiropractors also pleaded guilty to accepting the kickbacks earlier this year, 62-year-old Alexander Dimeo, of Budd Lake, and Ronald Hayek, of Totowa. Both doctors pled guilty to second-degree conspiracy, money laundering and commercial bribery, as well as "various third-degree offenses," according to the release.
Dimeo admitted he took more than $250,000 in illegal kickbacks from multiple doctors for referring patients to their practices, clinics and medical imaging centers, including approximately $56,300 in kickbacks from Patharkar.
Hayek admitted he took "tens of thousands of dollars" in illegal kickbacks, including some from Patharkar, according to the release.
Middlesex County Superior Court Judge Michael Toto is set to sentence Partharkar on January 23, 2017.
Prosecutors are recommending a state prison sentence of up to 10 years, including five years of parole ineligibility. Partharkar will also be required to pay an "anti-money laundering penalty" of $500,000, and must dissolve the PMACJ.
The investigation was spearheaded by the Attorney General’s Commercial Bribery Task Force, which was formed to target commercial bribery in the healthcare industry.
“We’re coming down hard on this type of corruption in the industry, which causes patients to receive unnecessary services and raises costs for all healthcare consumers. We urge anyone with information about this type of bribery to contact us confidentially,” said Director Elie Honig of the Division of Criminal Justice.
“Criminal behavior like this corrupts New Jersey’s insurance system and compromises the integrity of its healthcare industry,” said Christopher Iu, Acting Insurance Fraud Prosecutor.
The Division of Criminal Justice took the opportunity to promote their "toll-free tip line... for the public to report corruption, financial crime and other illegal activities confidentially."
Anyone can call the tip line at 1-866-TIPS-4CJ, or use the Division's webpage at www.njdcj.org to report "suspected wrongdoing."
Funds from those money laundering schemes were used to pay the 13 doctors who unlawfully accepted commercial bribes for referring patients to one of Patharkar’s pain management clinics.