Forest Park Fraud Trial Results in Guilty Verdicts for Seven

After four days of deliberations, the jury returned guilty verdicts for seven defendants in the federal bribery case involving Forest Park Medical Center. Though a sentencing date has not been set, defendants face between five to 65 years in prison.

Announced by U.S. District Judge Sidney Fitzwater, the jury decided that Wilton Burt, Jackson Jacob, Douglas Sung Won, Michael Rimlawi, Shawn Henry, Mrugeshkumar Shah, and Iris Forrest took part in the conspiracy to pay or receive healthcare bribes.

After the verdict announcement, the Dallas Morning News described how Assistant U.S. Attorney Katherine Pfeifle requested that all defendants be detained on the grounds that they were flight risks. Fitzwater said they can remain free until a detention hearing has been scheduled.

Ten other defendants had already pleaded guilty in the $200 million scheme where physicians steered patients to the hospital for expensive out-of-network surgeries in exchange for bribes. The kickbacks, which were described as marketing payments by defendants, totaled $40 million.

In testimony that lasted weeks, federal prosecutors made the case that physicians were receiving payments based on the number of patients they funneled to Forest Park, rather than the standard flat fee for co-marketing agreements.

Insurers discourage patients from using hospitals like Forest Park by making out-of network surgeries more expensive, but Forest Park was able to skirt the problem for a time by assuring patients they would pay in-network prices. Knowing that insurers would not agree, they wrote off the lost income from patient discounts as “bed debt.” The network would eventually go bankrupt as surgeries dried up.

“The verdict in the Forest Park case is a reminder to healthcare practitioners across the District that patients – not payments –  should guide decisions about how and where doctors administer treatment,” said U.S. Attorney Nealy Cox via release. “We are grateful to the Forest Park jury, 12 men and women who listened attentively through seven long weeks of trial. It’s obvious from the verdict that they deliberated each charge carefully, and we appreciate their service.”

Burt, Forest Park’s managing partner, was found guilty on 10 of 12 counts that included conspiracy, paying kickbacks, commercial bribery, and money laundering. He faces up to 65 years in federal prison. Jacob owned shell companies used to distribute the bribes, and was found guilty on all 14 counts he faced, including conspiracy and paying kickbacks. He faces up to 20 years. Won, a spinal surgeon, faces up to five years for one count of conspiracy. Rimlawi, another spinal surgeon, was found guilty on three of four counts including conspiracy and receiving kickbacks, and faces up to 15 years in prison. Henry, a spinal surgeon who invested in Forest Park, faces 30 years in prison for three counts of conspiracy, commercial bribery, and money laundering. Pain management doctor Shah was found guilty of four counts including conspiracy, paying kickbacks, and commercial bribery and faces up to 20 years in prison. Forrest, a nurse who recruited and preauthorized worker’s comp requests, faces 10 years in prison for two counts of conspiracy and paying kickbacks.

Dr. Nick Nicholson, an investor in Forest Park and bariatric surgeon, was found not guilty. The jury could not come to a conclusion against Carli Hempel, and the judge declared a mistrial.

Assistant U.S. Attorneys Andrew Wirmani, Kate Pfeifle, Marcus Busch, Mark Tindall and Gail Hayworth are prosecuting the case.