Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that SPYROS PANOS, a former orthopedic surgeon, who was previously convicted of health care fraud, was charged with wire fraud, health care fraud, and aggravated identity theft, in connection with a scheme in which he assumed the identity of a licensed orthopedic surgeon and obtained over $860,000 in payments for reviewing patient files in Workers Compensation cases. PANOS was arrested this morning at his home in Hopewell Junction, New York, and was presented before U.S. Magistrate Judge Paul E. Davison in White Plains federal court this morning.
According to the allegations contained in the Complaint unsealed today[1]:
SPYROS PANOS, the defendant, was an orthopedic surgeon practicing in Dutchess County and residing in Hopewell Junction (the “PANOS Residence”). In or about August 2013, PANOS surrendered his license to practice medicine, and on or about October 31, 2013, he pled guilty, in United States District Court for the Southern District of New York, to a health care fraud charge (the “Health Care Fraud Charge”). In or about April 2014, PANOS began serving a 54-month sentence. On or about September 16, 2016, PANOS was released to a halfway house and then, about a month later, to home confinement. Since March 2017, he has been serving a two-year term of supervised release.
In connection with medical treatment relating to Workers’ Compensation claims, a peer review may be conducted when a treating physician requests a variance in treatment. The doctor performing the peer review is a licensed independent doctor who reviews the patient file but does not examine the patient, and writes a report opining whether the variance is appropriate. There are companies that supply doctors who conduct such peer reviews. Prior to being assigned to perform peer reviews, the doctor must establish that he/she has the proper credentials by providing, among other things: the schools from which the doctor earned his/her degrees and other educational credentials, the states in which he/she is licensed to practice medicine, and other pedigree and background information such as birth date and social security number.
In or about December 2013 (which was after PANOS pled guilty on October 31, 2013, and before he surrendered to serve his sentence on April 2, 2014) a company called Excel O LLC (hereafter “Excel O”) was formed. The registered agent for Excel O is a family member of PANOS and is not a licensed physician (“Family Member-1”).
An orthopedic surgeon purporting to be practicing medicine at “Excel Orthopedics” (the “Excel Doctor”) performed peer reviews for several review companies. The same credentialing information for the Excel Doctor was submitted to five of the Review Companies (the “Five Review Companies”), and they paid for the Excel Doctor’s peer review services by checks made out to Excel O LLC or Excel Orthopedics. The Excel Doctor communicated with them using the same email address (the “Email Account”) that is subscribed to by the Excel Doctor and was created on or about September 13, 2013, approximately one month before SPYROS PANOS, the defendant, pled guilty to the Health Care Fraud Charge. Thereafter, PANOS communicated with at least two of the companies by email and logging on to the companies’ secure servers through an IP address assigned to PANOS’s residence.
On or about December 21, 2013, approximately six months before PANOS surrendered to serve his prison sentence, an account in the name of Excel O was opened at a local credit union (“Excel O Account-1”). Family Member-1 is the only name associated with the account. Between the time Excel O Account-1 was opened until about three months after PANOS surrendered to serve his sentence for the Health Care Fraud Charge, checks totaling over $239,000, issued by one of the above review companies, as well as a sixth review company, made out to Excel O LLC or Excel Orthopedics, were deposited into Excel O Account-1. No further checks from peer review companies were deposited into Excel O Account-1.
On or about December 2, 2016, approximately two months after PANOS was released from prison, a second Excel O account was opened at the same credit union (“Excel O Account-2”) and, again, Family Member-1 is the only name associated with the account. Between in or about December 2016 and in or about October 2017, over $636,500 in checks issued by the Five Review Companies, made out to Excel O LLC or Excel Orthopedics, were deposited into Excel O Account-2.
After the Review Companies’ checks were deposited into these accounts, money was removed through withdrawals of cash or checks that were made out to Family Member-1, drawn on the accounts, and then deposited into a third account (the “Family Account”). The Family Account is in the name of Family Member-1 and two other members of PANOS’s family, neither of whom is a licensed physician. From the Family Account, some money was withdrawn and over $100,000 was transferred to bank accounts in Hong Kong. A member of PANOS’s family deposited Review Company checks into Excel O Account-2, withdrew money from that account, and transferred money into the Family Account. And, on several occasions in September and October of 2017, PANOS and Family Member-1 went to the credit union and wire transferred money out of the Family Account.
The doctor whose credentialing information was submitted to the review companies and represented to be the Excel Doctor’s credentials (“Doctor-1”) is a licensed physician who is an orthopedic surgeon employed by a practice in Westchester County, not Excel Orthopedics. Doctor-1 did not submit his/her credentialing information to the review companies referred to above, did not conduct any peer reviews, did not authorize PANOS or anyone else to use his/her credentialing information to conduct peer reviews, and did not receive any of the review company fees for services he/she was falsely represented to have performed.
PANOS, 49, is charged in three counts. The first count charges him with wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The second count charges him with health care fraud, which carries a maximum sentence of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The third count charges him with aggravated identity theft, which requires a two year prison term to be served consecutive to a sentence imposed for the wire and health care fraud charges. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the U.S. Postal Inspection Service, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the New York Inspector General for their assistance.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
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