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New Jersey Salesman Proves Healthcare Fraud Comes In All Forms

Perhaps, one of the reasons that healthcare fraud in the United States is so prevalent is because it comes in a variety of shapes and sizes. The Allegiant Experts Blog has covered many a story about doctors and other healthcare professionals who have bilked our health insurance programs such as Medicare, Medicaid and TRICARE for millions of dollars. However, we’ve also highlighted the fact that healthcare fraud isn’t committed only by those who work directly in the healthcare industry.

According to the United States Department of Justice, a New Jersey salesman was recently convicted of bribery that involved the victimization of several doctors. Michael J. Zarrelli previously pleaded guilty to both a similar charge and money laundering. However, on January 18th, the 50 year-old pleaded guilty to the new charge and was sentenced to 20 months in prison. His bribes were part of a long-running and elaborate scheme that involved the request for test referrals.

The scheme involved Biodiagnostic Laboratory Services LLC (BLS) president, David Nicoll and his brother, Scott Nicoll. Together with a number of other co-conspirators, Zarrelli paid cash bribes to doctors in return for referring patient blood specimens to BLS. All in all, the referrals sent the way of BLS by the doctors generated over $400,000 in lab business for the company. As part of his sentence, Zarrelli must forfeit $247,264 – an amount that represents his payment from BLS.

The investigation that uncovered Zarrelli’s plot was far reaching. In total, 41 guilty pleas were made and 27 were from doctors. Each of them was connected to the bribery scheme which involved millions of dollars in bribes. As reported by the United States Department of Justice, over $100 million in payments were made to BLS from Medicare among other insurance companies.

As of June 28, 2016, Biodiagnostic Laboratory Services LLC is no longer operational. The company was required to forfeit all of its assets after being found guilty of receiving the unsubstantiated payments. Thus far, the investigation was been able to recover over $12 million through forfeiture.

This case speaks to an unfortunate, yet important facet of healthcare fraud. Labs have been found to be at high-risk for violations when they pay doctors in an effort to encourage referrals. The “money-grab” mentality is one that places a need for boosting business over the health of patients who require the labs for legitimate health reasons.

At Allegiant Experts, we are well aware that healthcare fraud comes in all forms. It’s one of the main reasons that our experienced team of clinical experts is so committed to offering its expertise to attorneys who are trying cases against fraudsters of all kinds.

For more information about our experience, expertise and how we may be able help your case, please don’t hesitate to call us at 407-217-5831 or email us at

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