Brothers who ran $100M health fraud scam sentenced to prison
NEWARK, N.J. (AP) — Two brothers who admitting bribing doctors in a $100 million health care scheme were sentenced to prison Wednesday, closing a case that featured accounts of cash bribes, prostitutes and $300,000 luxury cars.
David Nicoll, 44, considered the orchestrator of the seven-year scheme, received a six-year sentence for his role in a fraud authorities said at the time of his arrest in 2013 was one of the largest of its kind ever uncovered. His younger brother, Scott, received a 43-month sentence.
Both sentences were far below the 25-year combined maximum sentences the brothers faced after they pleaded guilty to conspiracy to bribe doctors and money laundering through their New Jersey company, Biodiagnostic Laboratory Services. Both men cooperated with the government and were instrumental in helping prosecutors earn more than 50 guilty pleas or convictions.
In a wavering voice, David Nicoll told the court Wednesday he was "embarrassed and ashamed" by his crimes. In a similarly emotional statement, Scott Nicoll told U.S. District Judge Stanley Chesler he was "honestly sorry" for his actions.
Chesler praised the brothers' cooperation, which he termed "timely, significant and useful," but didn't minimize their crimes.
"There can be little doubt that your conduct was the most egregious conduct that occurred in this case," he told David Nicoll. "You were the center of this operation and you were at the core of this spider web that you wove. You took a company that was making nothing and you made yourself a big fortune. And let's not kid ourselves, it was for one reason: greed. You wanted the money."
According to prosecutors, David Nicoll spent $5 million of the proceeds on luxury cars, including a $300,000 Ferrari and a $291,000 Corvette. He has been ordered to forfeit $50 million made from the scheme.
While Scott Nicoll's attorney painted him as an employee of BLS who played a lesser role than his brother, Assistant U.S. Attorney Jacob Elberg noted that Nicoll was recorded on a phone call negotiating with a doctor to send more blood samples in exchange for more money.
"Scott Nicoll is encouraging that doctor to order tests on patients whether they need it or not," Elberg said. "He is right at the heart of this scheme."
David Nicoll was a trained nurse and former pharmaceutical sales rep, and his brother had worked selling concert tickets, when David Nicoll borrowed money from his father-in-law to buy a struggling lab in northern New Jersey in 2005. Within a year, they had hit upon a way to drastically increase their income, according to authorities: Bribe doctors to steer blood samples to BLS for testing.
They accomplished this first by signing bogus agreements to rent office space in doctors' offices; then, when New Jersey law discontinued that practice, they switched to bribing doctors with bogus consultant agreements paid for by shell corporations formed specifically for that purpose.
Nicoll testified last year that he dealt with "probably hundreds" of doctors during his years at BLS. When asked how many had been bribed, he replied: "The large majority."
The company also wined and dined doctors at fancy restaurants, took some on private jet trips and even provided some with prostitutes, Nicoll testified.
The U.S. attorney's office estimated at least $100 million of the revenue the company made between 2006 and 2013 derived from the bribery scheme.