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Catch of the Week: Florida Lab Owner Pleads Guilty to $73 Million Telemedicine Fraud Scheme

Posted  September 3, 2021
Editor’s Note: For this week’s biggest story, the record $90 million settlement secured by a Constantine Cannon client against Sutter Health, read more here.

Healthcare fraudsters have a track record of exploiting health crises for personal gain. The COVID-19 pandemic created new telemedicine opportunities for patients to receive care without having to see doctors in person. As expected, fraudsters seized on these telemedicine opportunities to line their own pockets.

This week we focus on the guilty plea of Leonel Palatnik, the co-owner of Panda Conservation Group LLC (“Panda”) to resolve allegations regarding a $73 million fraud scheme involving paying kickbacks to a telemedicine organization to incentivize doctors to authorize medically unnecessary genetic testing.

The Alleged Kickback Scheme

The primary scheme alleged was that Mr. Palatnik, through his company Panda, paid kickbacks to Michael Stein and his company 1523 Holdings. The kickbacks were designed to encourage Stein and 1523 Holdings to exploit new telemedicine amendments enacted during the pandemic to offer physicians access to Medicare beneficiaries. The physicians would then refer the beneficiaries back to Panda for expensive and unnecessary genetic testing services. These tests would be billed to Medicare, lining the pockets of Mr. Palatnik and Panda. The kickbacks were disguised by Panda and 1523 Holdings through a false contract purporting to provide IT and consulting services.

The Enforcement Action and Guilty Plea

This matter was brought to the attention of the government through its COVID-19 Health Care Fraud coordinated law enforcement action in May 2021. The enforcement action targeted health care frauds in seven jurisdictions that spawned out of changes to the healthcare system in response to the COVID-19 pandemic.

Mr. Palatnik was charged on May 26, 2021, along with fourteen other defendants across six states. Mr. Palatnik’s guilty plea was for one count of conspiracy to offer kickbacks and one count of paying a kickback. Mr. Palatnik will be sentenced in November 2021 and faces a maximum sentence of fifteen years in prison.

This guilty plea demonstrates the continued importance of enforcement against fraudsters who seek to exploit the COVID-19 pandemic for personal gain. The telemedicine changes during a global pandemic are intended to help patients, not to line the pockets of greedy fraudsters. While these charges stemmed from an internal government investigation and enforcement effort, whistleblowers continue to play an important role in exposing healthcare frauds. Especially amid the myriad of changing rules and regulations in response to COVID-19, whistleblowers are a key part of keeping healthcare providers accountable to patients and to the taxpayers.

If you have information about healthcare or COVID-19-related fraud, or would like to speak to a member of the Constantine Cannon whistleblower lawyer team, please contact us for a confidential consultation.

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Tagged in: Anti-Kickback and Stark, Catch of the Week, Contract Non-Compliance, FCA Federal, Government Programs Fraud, Healthcare Fraud, Improper Medical Facility, Lack of Medical Necessity, Provider Fraud,


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