Brothers who ran 7-year health fraud scam face sentencing
Two brothers who ran a bribes-for-referrals health fraud scam that brought in more than $100 million over several years were due in court Wednesday to face sentencing, in a case that already has produced more than 50 guilty pleas or convictions.
David and Scott Nicoll were arrested in 2013 and pleaded guilty to conspiracy and money laundering through their New Jersey company, Biodiagnostic Laboratory Services. Of more than 50 people who have pleaded guilty since then, more than three dozen were doctors who admitted taking bribes.
At the time of the Nicolls’ arrest, the U.S. attorney’s office in New Jersey estimated it was one of the largest health care frauds of its kind ever uncovered.
David Nicoll was a trained nurse and former pharmaceutical sales rep and his brother had worked selling concert tickets when they bought a struggling lab in northern New Jersey in 2005. Within a year, they had hit upon a way to drastically increase their income: Bribe doctors to steer blood samples to BLS for testing, whether the tests were necessary or not.
They accomplished this first by signing bogus agreements to rent office space in doctors’ offices; then, when New Jersey discontinued that practice, they switched to bribing doctors with bogus consultant agreements paid for by shell corporations formed specifically for that purpose.
The limited liability corporations “were just a vehicle for us to pay the doctors,” David Nicoll testified last year during one of two trials to arise from the scandal. “They really didn’t do anything.”
Nicoll testified he dealt with “probably hundreds” of doctors during his years at BLS. When asked how many had been bribed, he replied: “The large majority.”
The company also wined and dined doctors at fancy restaurants, took some on private jet trips and even provided some with prostitutes.
The Nicolls face a maximum of 25 years in prison, but are expected to receive much lighter sentences because of their cooperation with the government.