Montclair-Based Doctor Sentenced for His Part in a $100 Million Medical Scheme

A doctor with a medical practice in Montclair was sentenced on Friday to 14 months in prison for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, its president and numerous associates.

According to a release from the U.S. Attorney – District of New Jersey, Franklin Dana Fortunato, 65, of Montville, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to violating the Federal Travel Act, as well as filing a false tax return.

Including Fortunato, 38 people — 26 of them doctors — have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has so far recovered more than $11 million to date through forfeiture.

According to documents filed in this and related cases and statements made in court, Furtunato admitted he accepted bribes in return for referring patient blood specimens to BLS. Fortunato received more than $100,000 in bribe payments — often more than $5,000 per month — from BLS disguised through sham lease and sham service agreements between 2006 and 2009. BLS made more than $430,000 through testing on blood specimens referred by Fortunato.

According to court documents, Fortunato admitted that he failed to report those bribes as income. From 2004 to 2008, he also failed to disclose and report as income $540,000 in patient co-pays and other monies paid to him by other health care providers. Fortunato failed to pay more than $160,000 in taxes he owed as a result of that unreported income.