2002-06-05 -- Nahas, Frederick -- Guilty Plea -- News Release

Atlantic County Doctor Pleads Guilty to Obstructing Investigation of His Medicare Billing

TRENTON - A vascular surgeon from Somers Point in Atlantic County admitted in federal court today that he obstructed justice in an investigation into his Medicare billing practices by the U.S. Department of Health and Human Services, U.S. Attorney Christopher J. Christie announced.

The one-count Information charges Dr. Frederick J. Nahas, 55, of Longport, with obstructing an investigation into his Medicare billing practices being conducted by the investigative arm of HHS.

Nahas entered his plea before U.S. District Judge Garrett E. Brown Jr., who set sentencing for Sept. 9 at 1 p.m.

HHS was considering whether Nahas ordered and billed for a high volume of diagnostic tests without regard to whether they were reasonable and necessary for the treatment of any illness or injury of a Medicare patient.

In particular, HHS was investigating whether Nahas, during 1994 and 1995:

• ordered diagnostic tests for Medicare patients on a rotating schedule for screening purposes, knowing that Medicare did not generally pay for such tests;

• whether Nahas instructed technicians at his office to apply to the diagnostic studies identical, pre-printed interpretations with descriptions of disease states when in fact the diagnostic test results were normal;

• and whether Nahas directed his office personnel to bill Medicare for his professional interpretations of certain diagnostic tests when in fact he did not provide that service.

During the course of the investigation, HHS served a subpoena which required the production of many patient files. Nahas admitted today before Brown that he obstructed the investigation by moving and thus concealing from investigators hundreds of patient files sought under the subpoena.

The Information to which Nahas pleaded guilty describes a series of actions initiated by the doctor after the subpoena was served. First, he began to review approximately 2000 patient files to determine if there was sufficient data to support the Medicare billings in connection with certain diagnostic tests given to many patients. According to the Information, Nahas withheld the majority of the patient records that were required to be produced by the subpoena.

The obstruction occurred between November 1996 and November 1999, according to the Information.

Nahas admitted that he relocated original subpoenaed patient records to three separate locations to conceal them from the Government, including a room at the Harbor Inn in Somers Point, less than one mile from his office; to a property in Ventnor to which he had access; and to an airplane hangar which he owned.

Nahas faces a maximum prison sentence of five years and a $250,000 fine on the obstruction count.

Under U.S. Sentencing Guidelines, Judge Brown would, upon conviction, determine the actual sentence based on a formula that takes into account the severity and characteristics of the offense and the defendant's criminal history, if any. Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

Christie credited special agents of the Department of Health and Human Services Office of Inspector General, under the direction of the Regional Inspector General for Investigations Brian J. Smith in New York, with developing the case against Nahas.

This case is being handled by Assistant U.S. Attorney Joan Thomas of the U.S. Attorney's Office in Trenton.

-end-

Defense Counsel:

Arnold Dranoff, Esq. Philadelphia

Stephen P. Patrizio, Esq. Philadelphia