Eastern District of Texas | California Man Convicted in Healthcare Kickback Conspiracy

Texarkana, Texas – A Temecula, California man has been found guilty of federal violations related to the Eastern District of Texas’ medical kickback program, U.S. Attorney Damian M. Diggs announced today.

Stephen D’Onofrio, 49, was convicted by a jury on May 5, 2023 and was put on trial for two weeks before U.S. District Judge Robert W. Schroeder III.

“This is the last of the many defendants in this case who abused the health care system to steal taxpayers’ money and caused unnecessary medical procedures in the process,” said U.S. Attorney Damian M. Diggs. Stated. “Protecting the public from physical and economic harm will always be a top priority for law enforcement, and parasites like Donofrio who prey on vulnerable citizens will be brought to justice.”

“The reach of HHS/OIG is very wide. Our agents and law enforcement partners are not hindered by the scope of a medical fraud investigation or the location of a defendant,” said the U.S. Department of Health and Human Services Inspector General. Special Agent Jason E. Meadows said. , Dallas area. “Donofrio and others stole millions of dollars from American taxpayers in exchange for medically unnecessary services, all for the benefit of greedy people across the country. HHS/OIG and ours.” Our partners continue to focus on tracking people who use Medicare trust funds as their own piggy bank.”

“Illegal kickback schemes cause billions of dollars in losses each year and corrupt the healthcare system. It has a direct impact on patients who are living with it,” said FBI Dallas Special Agent Chad Yarbrough. “We will continue to work tirelessly with our law enforcement partners to hold those responsible for medical fraud accountable and to pursue justice for patients harmed as a result of these schemes. ”

According to information presented in court, D’Onofrio conspired with others to pay and receive kickbacks in exchange for referrals and arrangements for health care businesses, particularly pharmacogenetic (PGx) testing. Pharmacogenetic testing, also known as pharmacogenomic testing, is a type of genetic testing that identifies genetic variants that affect how individual patients metabolize certain drugs. The illegal arrangement involved referral of her PGx test to a clinical laboratory located in Fountain Valley, California. Irvine, California. and San Diego, California. Those involved in the conspiracy exchanged over $28 million in illegal kickback payments.

In December 2019, 12 individuals from three states were indicted for their involvement in a kickback conspiracy. A federal grand jury for the Eastern District of Texas returned an indictment against 48-year-old Phillip Lamb of Eagle, Colorado. Nicholas Arroyo, 41, from Tempe, Arizona. Vincent Marchetti, Jr., 58, from Coronado, CA. William Flowers, 58, from Houston, Texas. Stephen D’Onofrio; James J. Walker, Jr. a/k/a Jimmy Walker, 49, from Frisco, Texas. Timothy Armstrong, deceased, originally from Frisco, Texas. Virginia Blake Herrin, 57, from Frisco, Texas. Patrick Ridgeway, 53, from Jackson, Mississippi. Chismere Mallard, 42, from McAllen, Texas. Dr. Ray W. Ng, 65, from Dallas, Texas. His Ashley Kretzschmar, 37, of Aledo, Texas. Because he conspired to pay illegal compensation in violation of anti-kickback laws.

Philip Lamb, Nicholas Arroyo, Jimmy Walker, Timothy Armstrong, Virginia Blake Herrin, Patrick Ridgeway, Chismea Mallard, and Ashley Kretzsummer pleaded guilty before trial. Kimberly Willett, 61, of Friendswood, Texas, and Edwin Chad Isbell, 50, of Atascocita, Texas also pleaded guilty to related charges.

Vincent Marchetti, Jr. was found guilty by a jury on December 16, 2021 after a month-long trial. He was sentenced to his 48-month sentence in federal prison on August 30, 2022.

On April 25, 2022, Nicolas Arroyo was sentenced to 21 months in federal prison. On August 23, 2022, Kimberly Willett was sentenced to one year and one day in federal prison, while Patrick Ridgeway was ordered to serve three years of probation and pay a $100,000 fine.

Anti-kickback laws prohibit offering, paying, soliciting, or receiving compensation in exchange for referrals, arrangements, or recommendations to order goods or services paid for under federal health care programs. Under federal law, violating anti-kickback laws carries a maximum sentence of five years in federal prison.

The case was investigated by the U.S. Department of Health and Human Services, the Office of the Inspector General, and the FBI Dallas and Frisco Station. The case was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld, Lucas Machichek, and Adrian Garcia, along with Stephen E. Oestreicher Jr., Brent Andrus, and L. Frank Cohn. • Assisted by Junior Assistant Federal Attorney and Special Assistant. Laurel EP Simmons.


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