Eight people in the US have been charged in an extensive bribery and kickback scheme it alleges involved fake companies, sham invoices, a dodgy CIO and made-up IT consulting services.
The scam was lucrative and went on for years, the government alleges, involving some $2.3 million in payouts and kickbacks for two senior IT officials, including the CIO of a large medical cost management company.
The government's case is detailed in several indictments filed this month, and in recent announcements by the US Attorney for the Southern District of New York and other federal agencies, including the US Secret Service.
The scheme worked like this: One vendor would receive $105 to $115 per hour from the medical cost management firm for database administrators. The vendor then kept $62 per hour, while the balance, $43, was allegedly paid as a kickback to two co-conspirators: the medical firm's CIO and its director of database administration, according to court documents. The monthly charges were in the thousands of dollars.
The firm that was allegedly victimised is not identified in court papers or in the government's statement, and is described only as a medical cost management firm. But the people charged in the case are identified, and their work connections are publicly available.
A spokeswoman for the company, MultiPlan Inc. in New York, confirmed that two people charged in the case are former employees. The company says it has 900,000 healthcare providers, and an estimated 57 million consumers who access it products.
The defendants charged with receiving the bribes and kickbacks are Anil Singh, the former senior vice president and CIO, according to court documents, and Keith Bush, the director of database administration.
The government said that Singh and Bush "had considerable influence over the selection of vendors," specifically DBAs. An attorney for Bush declined comment. Singh's attorney was not available.
Singh has pled guilty to charges of conspiracy to commit honest services fraud and money laundering, among others, and faces a maximum sentence of 70 years in prison on all counts. Bush faces similar charges, and an equally lengthy prison sentence, the government said.
MultiPlan, in a statement, said that in July 2012 it "was alerted that two employees and a vendor representative were engaged in illegal activities.
"We immediately engaged legal counsel and a team of experienced investigators to conduct an internal investigation, which confirmed the allegations. Based on the findings of the investigation, we terminated the employees, with cause, and severed our relationship with the vendor that was initially identified," said MultiPlan.
The information was brought to the Manhattan US attorney. "Thereafter, our continued internal investigation identified a number of additional vendor representatives as being involved in questionable activities. We severed our relationship with all of them," the company said.
MultiPlan said that is it "pleased that these individuals are being brought to justice."
MultiPlan said the scheme had no impact on business operations. "Over the course of the entire investigation, our business has been operating normally, no client data was at risk at any time, and the integrity of our systems was always intact. We continue to work with our employees as well as external consultants to ensure that we maintain the high standards of ethics and integrity for which MultiPlan is known," the company said.
It's unclear from the charging documents to what extent services were actually delivered, if at all, and if H-1B or other visa holding workers were used at all.
The amount of billable hours appears substantial; an invoice for one month totaled $76,824. One vendor, not identified, received $6.6 million from 2010 to 2012, according to court papers. Another firm was paid about $11.5 million.
Charged with paying the bribes and kickbacks are Sarvesh Dharayan, 42; Sanjay Gupta, 38; Venkata Atluri, 41; Rangarajan Kumar, 47; Vadan Kumar Kopalle, 43; and Darren Siriani, 45.
"This scheme was motivated by greed and it deprived its victim, a company in the health care field, of the honest labour of its employees," said Thomas O'Donnell, a special agent in charge at the Health and Human Services, Office of Inspector General - one of the agencies involved in the investigation. "We will continue to aggressively investigate those who pay kickbacks and bribes to gain an advantage in the public and private health care sectors," he said.