Ex-Nurse Pleads Guilty in Kickback Scheme

A former Newark nurse practitioner pleaded guilty Tuesday to accepting envelopes of cash in exchange for patient referrals, U.S. Attorney Paul J. Fishman announced.

Jose Castaneda, 37, of Clifton, admitted his role in the cash-for-patients scheme before U.S. District Judge Claire C. Cecchi in Newark federal court and was charged on one count of violating the federal healthcare program anti-kickback statute. He faces a maximum five years in prison and a fine of $25,000.

Castaneda was arrested Dec. 13 last year and charged with accepting cash kickback payments starting as early as 2010 from Orange Community MRI (OCM), located in Orange, in exchange for referring Medicare and Medicaid patients to the facility.

Patient reports that detailed how many diagnostic tests, including MRIs, ultrasounds, echocardiograms (echo scan), CAT scans and dual-emission X-ray absorptiometries (DEXA), were referred by Castaneda were used to calculate his monthly kickback payment. He was paid for each Medicare or Medicaid beneficiary MRI, CAT scan, ultrasound, DEXA scan and echo scan.

On Oct. 6, 2011, Castaneda received $3,500 in cash for his September 2011 referrals to OCM and, on Nov. 8, 2011, he received $4,620 in cash for his October 2011 referrals.

He admitted that his offense involved losses of more than $200,000 but not more than $400,000.

Thirteen other doctors were arrested Dec. 13, 2011 and charged in separate complaints for accepting similar cash kickback payments from OCM. Each of the defendants was recorded taking envelopes of cash in exchange for patient referrals.

Castaneda agreed to forfeit $57,695 as property derived from his criminal conduct. Sentencing is schedule for July 11 before Checchi.

"Today's guilty plea is one more step toward ensuring that the patients are not viewed as a currency to be cashing in by those to whom they turn for help," said Fishman in a statement.

– Staff reports