United States v. Kolodesh

Kolodesh owned a home-health services company. He approached his employee, Pugman, about starting a home-based hospice care company. Pugman's agreed. Kolodesh funded the new company, Home Care Hospice. Pugman managed the operations. Kolodesh’s wife and Pugman were listed as owning equal shares; Kolodesh was intimately involved in forming and overseeing its management. In 2000 or 2001, Kolodesh, Pugman, and Pugman's wife began giving gifts and cash “kickbacks” to doctors in exchange for patient referrals. At Kolodesh’s suggestion, Pugman placed doctors or their employees on the Hospice payroll with sham job titles and issued paychecks in exchange for patient referrals. About 90% of the revenue generated by Hospice came from Medicare reimbursements. Kolodesh and Pugman had contractors submit fake invoices Hospice would pay; the contractor would give most of the money to Kolodesh and Pugman, keeping a portion. The participants were charged with conspiracy to defraud a health care benefit program, 18 U.S.C. 1349, 21 counts of health-care fraud, 18 U.S.C. 1347, two counts of mail fraud, 18 U.S.C. 1341, and 11 counts of money laundering, 18 U.S.C. 1957. Pugman testified for the government after having pled guilty. The Third Circuit affirmed Kolodesh's sentence of 176 months’ imprisonment and a restitution order of $16.2 million. View "United States v. Kolodesh" on Justia Law