Arrests Made and Investigation Underway at a Chicago Hospital


On April 16, 2013, the United States Department of Justice (DOJ) and U.S. Attorney’s Office in the Northern District of Illinois announced the arrest in Chicago of the owner and senior executive of Sacred Heart Hospital (Sacred Heart), along with four physicians affiliated with the facility, for allegedly conspiring to pay and receive illegal kickbacks in exchange for referrals of Medicare and Medicaid patients. 

The alleged kickback schemes involved payments to the indicted physicians in return for their patient referrals.  Kickbacks were characterized as fictitious rental payments, payments for the salaries of the physicians’ employees, payments pursuant to ghost contracts for duties without real responsibilities, alternative billing arrangements, and payments to supervise and teach non-existent medical students.

Agents from the Federal Bureau of Investigation and the U.S. Department of Health & Human Services Office of Inspector General also executed a search warrant in connection with an ongoing investigation of other alleged fraudulent schemes involving billing for medically unnecessary emergency department evaluations, testing, and observation services, and intubation and tracheotomy procedures.  The government seized approximately $2 million in Medicare payments from hospital bank accounts. 

The Affidavit in support of the criminal complaint and search warrant reflects that a physician formerly affiliated with Sacred Heart began cooperating with law enforcement in October 2011, and two administrators began assisting in the investigation in February 2012 and in January 2013.  It further reflects that these individuals made consensual recordings of meetings and telephone conversations with hospital executives, administrators, physicians and employees. 

On April 18, 2013, the DOJ announced the arrest of a fifth physician affiliated with Sacred Heart for allegedly prescribing controlled substances without a valid license or DEA registration.  According to the press release, the physician wrote prescriptions using another physician’s DEA registration.

A copy of the April 16 and April 18 press release, and the Affidavit in support of the criminal complaint and search warrant can be found here, here and here, respectively. 

Reporter, Tracy Weir, Washington, D.C., + 1 2023626.2923,

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.