Maryland Man Sentenced to Year and a Day in Prison for Multistate Patient Brokering and Bribery Scheme

TRENTON, N.J. – A Maryland man was sentenced to 12 months and one day in prison for participating in a conspiracy to defraud health insurance companies through a multistate patient brokering scheme in which he directed recruiters to bribe drug-addicted individuals to enroll in drug rehabilitation in exchange for referral fees from the rehabilitation centers, U.S. Attorney Philip R. Sellinger announced today.

John Devlin, 37, of Baltimore, Maryland, pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiracy to commit health care fraud. Judge Sheridan imposed the sentence on May 14, 2024.

Six other individuals have previously pleaded guilty for their roles in the scheme: Peter Costas; Seth Logan Welsh; John C. Devlin; Akikur Mohammad; Lauren Philhower; and Anastasia Passas.

According to documents filed in the case and statements made in court:

Devlin, Dickau, and Welsh, and their conspirators owned and operated a marketing company in California. Devlin, Dickau, and Welsh used the marketing company to help orchestrate a scheme in New Jersey, Maryland, California, and other states that involved bribing individuals addicted to heroin and other drugs to enter into drug rehabilitation centers so Devlin, Dickau, and Welsh, and their conspirators could generate referral fees from those facilities. Two facilities in California that paid such referral fees were owned or operated by Mohammad, Philhower, and Passas.

The marketing company run by Devlin, Dickau, and Welsh maintained contractual relationships with drug treatment facilities around the country, including the ones run by Mohammad, Philhower, and Passas. The marketing company also engaged a nationwide network of recruiters – including Costas in New Jersey – to identify and recruit potential patients, from New Jersey and other states, who were addicted to heroin or other drugs and who had robust private health insurance.

To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas and other recruiters offered to bribe them – often as much as several thousand dollars – with the approval of Devlin, Dickau, and Welsh. Once the patients agreed to enroll in drug rehabilitation in exchange for the offered bribe, Devlin, Dickau, Welsh, and Costas would arrange and pay for cross-country travel to the drug treatment centers in California and other states, in concert with the owners of the facilities themselves, including Mohammad, Philhower, and Passas. Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments, and he would pass along information to Devlin, Dickau, and Welsh about the patients’ status at the facilities. Devlin, Dickau, and Welsh would monitor the other patients they brokered by speaking to other recruiters or to the owners and employees of the drug treatment facilities themselves.

The drug treatment facilities run by Mohammad, Philhower, and Passas had contracts with the marketing company. Those facilities typically paid the marketing company a fee of $5,000 to $10,000 per patient referral. Devlin, Dickau, and Welsh, and their conspirators shared that money among themselves. Costas and other recruiters received approximately half that amount for each patient they brokered. Devlin, Dickau, and Welsh, and their conspirators brokered scores of patients to drug treatment facilities around the country, including the ones run by Mohammad, Philhower, and Passas, and the conspiracy caused millions of dollars of losses for health insurers.

In addition to the prison term, Judge Sheridan sentenced Devlin to three years of supervised release.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading the sentencing. He also thanked the FBI, under the direction of Acting Assistant Director in Charge Amir Ehsaei in Los Angeles and the District Attorney’s Office in Orange County, California.

The government is represented by Assistant U.S. Attorneys Jason S. Gould, Chief of the Health Care Fraud Unit in Newark, Angelica Sinopole of the Health Care Fraud Unit in Newark, and Aaron Webman of the Opioid Abuse Prevention and Enforcement Unit in Newark.