Johnny-on-the-spot

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14066943 - close up of businessman's hand counting money

A person nicknamed “Johnny-on-the-spot,” is someone who is described as being available to perform a service, deal with an emergency or take advantage of an opportunity, quickly and efficiently. Today’s fraudster, a former anesthesiologist from Altoona, Pennsylvania, was a “Johnny-on-the-spot” when it came to operating several businesses that provided a host of services for his clients. His customers and patients lauded him as an excellent physician and co-worker, but the lawyer who represented the defendant in his healthcare fraud and tax fraud cases, described him as a “lousy businessman.”

The former anesthesiologist, who had practiced for more than 20 years, owned and operated four pain management clinics in Pennsylvania, as well as a car wash. While he appeared to be an accomplished physician and businessman, he was actually experiencing cash flow problems. (Court documents show that at the time of his first court case, his liabilities exceeded his assets by $5 million. Did he not have a bookkeeper or accountant that could guide him in how to solve his problem?)

To help keep his multiple businesses afloat, he avoided paying payroll taxes and used that money to cover expenses for his Altoona-based anesthesiology practice. (He did not pay his payroll taxes associated with his clinics for more than one-and-a-half years, resulting in a loss of $656,197 to the Internal Revenue Service (IRS). He also neglected to pay $54,317 in payroll taxes for his car wash.)

Hang on folks. There’s more. The physician was also involved with other doctors and businessmen in a scheme to receive reimbursements from insurance companies for costly compounded pain creams. (These prescriptions were not medically necessary.) The scam netted $170 million in insurance company payments.

The doctor is also responsible for an additional $3,022,476 in payments to the IRS for his failure to pay payroll taxes and as restitution for “kickbacks’ he received from the scheme that also defrauded Medicare and Medicaid. This deceptive scam involved teaming up with a drug testing lab where the doctor would submit requests to the lab for drug tests and then the lab would bill Medicare and Medicaid. He received monthly payments for referring cases to the lab. (As a result, he collected $2.3 million from Medicare and $1.14 million from Medicaid.) He then deposited the illegally collected money into the checking account for his pain clinics.

The former physician is to serve 84 months in prison concurrently with the previous 60-month sentence he received for tax fraud. (So, he will actually serve five years, not seven.) At the conclusion of his prison term, he will serve three years of probation. He must also pay the IRS $722,476 and the Department of Health and Human Services $2,300,000. (This is on top of the $15 million he already owes for defrauding the insurance companies.)

The doctor, who was once was described as a top-notch physician, has relinquished his license to practice medicine. (Since this “Johnny-on-the-spot” physician took advantage of multiple opportunities to defraud the government, it now looks like he’s left with operating his car wash. Let’s hope he can clean up the messy web of fraud he has left behind.)

Today’s “Fraud of the Day” is based on an article entitled, City doctor pleads guilty to fraudpublished by Altoona Mirror on June 23, 2017.

JOHNSTOWN – Dr. John H. Johnson, an Altoona anesthesiologist, entered guilty pleas Thursday to conspiracy to defraud Medicare and Medicaid and failure to remit payroll taxes for employees of his doctor’s office and a local car wash business, Johnny On The Spot.

The charges will land Johnson in a federal prison for seven years.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.