Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor announced that Rehan “Ray” Zuberi, the mastermind behind a multi-million dollar medical kickback ring, was sentenced to prison today for his role in bribing dozens of doctors in exchange for patient referrals to the network of medical imaging centers he owned.
Zuberi, 48, of Boonton, was sentenced to eight years in state prison, including two years and eight months of parole ineligibility, and ordered to pay $1 million in restitution by Superior Court Judge Salem Vincent Ahto in Morris County.
The former owner of Diagnostic Imaging Affiliates (DIA), an umbrella corporation that managed 10 diagnostic imaging facilities in the state, was also banned for life from being a provider under the Medicaid program, or working in a Medicaid facility, and all other government health programs.
“Rehan Zuberi was the mastermind behind a criminal enterprise that treated patients like commodities to be bought and sold for profit,” said Attorney General Porrino. “This man made millions by conspiring with doctors to deprive patients of their right to honest services based on sound medical judgment. He will now serve a lengthy prison sentence befitting his leadership role in this appalling corruption of the medical profession.”
Zuberi pleaded guilty in 2015 to charges of first-degree money laundering and second-degree conspiracy to commit commercial bribery. Zuberi admitted to spearheading the commercial bribery ring in which he, his wife, and numerous other DIA associates paid hundreds of thousands of dollars in kickbacks to dozens of medical practitioners, including doctors and chiropractors, in return for patient referrals worth several million dollars to DIA facilities throughout northern and central New Jersey.
Zuberi and his DIA associates were arrested in “Operation RayScam” in 2014. The investigation revealed that from 2008 to 2014, Zuberi and various owners/operators, officers, managers and accountants of the DIA organization paid kickbacks to medical practitioners in return for patient referrals to DIA testing centers for expensive diagnostic tests such as MRIs and PET scans.
These kickbacks were paid from “shell” corporations created by the Zuberi enterprise and were delivered in the form of cash, checks, gift cards, lavish dinners and expensive vacations. The Zuberi enterprise also disguised the payment of kickbacks by providing doctors services (e.g., patient transportation and office renovations). By obtaining referrals through the alleged kickback scheme, the Zuberi enterprise made millions of dollars in illegal profits. Under state law, medical practitioners are not permitted to accept a benefit in exchange for a referral.
The investigation further determined that Zuberi financially facilitated the criminal enterprise by making numerous structured cash withdrawals to circumvent the statutory reporting requirements that are triggered by large cash withdrawals.
Five of Zuberi’s DIA associates have pleaded guilty in the scheme and were sentenced:
· Humara Paracha, 41, of Boonton Township, Rehan Zuberi’s wife and president of DIA. Pleaded guilty to third-degree conspiracy to commit commercial bribery and was sentenced to two years of probation and ordered to pay $1 million in restitution jointly and severally with Zuberi.
· Faisal L. Paracha, 34, of Fords, Zuberi’s brother-in-law and president of DIA’s American Imaging Center of West Orange. Pleaded guilty to second-degree commercial bribery and was sentenced to three years in state prison and ordered to pay $1 million jointly and severally with Zuberi.
· Baber “Bob” Eskar, 52, of Pompton Lakes, Zuberi’s close associate and chief operating officer of DIA. Pleaded guilty to third-degree tampering with public records and was sentenced to two years of probation.
· Jose Lopez, 55, of Passaic, Zuberi’s driver. Pleaded guilty to third-degree commercial bribery and third-degree money laundering and was sentenced to three years of probation.
· Abid Syed, 40, of East Hanover, administrator and financial controller of DIA. Pleaded guilty to third-degree falsifying records and was sentenced to two years of probation.
Three other DIA administrators were admitted into the Pre-Trial Intervention program.
“Operation RayScam” included the execution of more than a dozen search warrants at locations that included 10 DIA-owned facilities, the offices of DIA’s billing company, and the homes of Zuberi, Eskar, and Faisal Paracha. In the course of executing the search warrants, the Office of the Insurance Fraud Prosecutor seized many of the Zuberi enterprise’s assets, including more than $100,000 cash, high-end sports cars such as Lamborghinis and Ferraris, as well as other luxury items, and placed liens on the imaging equipment and Zuberi’s 9,000 square foot mansion.
Zuberi is awaiting sentencing in connection with charges stemming from a separate investigation by the Office of Insurance Fraud Prosecutor. In 2015 he pleaded guilty to second-degree conspiracy to commit theft by deception receiving reimbursements from insurers for repairs well in excess of what he had actually paid, thus receiving more than $100,000 in overpayments.
Of the medical practitioners charged in connection with Zuberi’s criminal enterprise, six of those defendants were sentenced to probation or entered the Pre-Trial Intervention program. Two defendants, Budd Lake chiropractor Dr. Alexander Dimeo, and Totowa chiropractor Dr. Ronald Hayek, pleaded guilty to third-degree conspiracy to commit commercial bribery in connection with Zuberi’s enterprise.
Dimeo and Hayek also pleaded guilty to charges of conspiracy, commercial bribery, money laundering, and failure to pay taxes in connection with an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau.
That investigation centered on a kickback scheme involving Mohammed Shamshair, a Sayreville man who pleaded guilty to acting as a middleman for Zuberi’s kickback scheme. Shamshair also pleaded guilty to charges stemming from the Division of Criminal Justice Financial & Computer Crimes Bureau investigation, as did South Amboy pain management specialist Dr. Manoj Patharkar, and Irfan Raza, a certified public accountant in Valley Stream, N.Y.
The cases of Dimeo and Hayek led to the formation of the Attorney General’s Commercial Bribery Task Force in January 2016. The task force includes deputy attorneys general and detectives from the Division of Criminal Justice Financial & Computer Crimes Bureau and the Office of the Insurance Fraud Prosecutor.
Lieutenant Anthony Butler and Detective Anthony Correll coordinated the investigation with assistance from Detectives Jason Volpe, Yevgeny Gershman and Kevin Gannon. They worked closely with Special Agent William Makar from the Division of Taxation. Analyst Terri Drumm of the Office of the Insurance Fraud Prosecutor assisted in the investigation.
Alan Zegas, Esq., of The Law Offices of Alan L. Zegas and Associates, represented the defendant at sentencing.
Acting Insurance Fraud Prosecutor Iu noted that some 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.NJInsurancefraud.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.