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Prosecutors Announce Charges In Alleged New Jersey Lab Kickback Scheme

New Jersey U.S. Attorney Paul Fishman (credit: USAO)

New Jersey U.S. Attorney Paul Fishman (credit: USAO)

CBS New York (con't)

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NEWARK, N.J. (CBSNewYork/AP) – Four people have been arrested as part of a federal investigation into a New Jersey based medical lab accused of running up the bill on blood tests by allegedly bribing doctors to order unnecessary screenings.

Federal agents arrested Parsippany-based Biodiagnostic Laboratory Services president and part-owner David Nicoll, a New Jersey physician and two other BLS employees on bribery charges Tuesday morning, prosecutors announced.

U.S. Attorney Paul Fishman said doctors were having their loyalties bought with kickbacks from BLS.

“The complaint clearly reflects that there were a lot of doctors, not just three or four or five, a lot of doctors who were involved with BLS and were participating in this scheme,” Fishman told reporters including WCBS 880’s Jim Smith on Tuesday afternoon. “Not only did they break their patients’ trust, but they broke many federal laws.”

According to the complaint unsealed on Tuesday, investigators allege that since 2006, BLS funneled cash to doctors in exchange for ordering tens of millions of dollars in unnecessary blood tests.

“By taking the money, doctors put illegal profits before the interests of their patients,” Fishman said. “BLS put money between doctors and their oath.”

“No patient should have to worry that their doctor’s loyalty and judgment have been bought by a salesman who is trying to make a buck,” Fishman said.

Dr. Frank Santangelo, 43, who has offices in Montville and Wayne, is accused of receiving more than $700,000 in bribes. The complaint alleges that he also referred more than $4 million in business to BLS.

WEB EXTRA: Read The Complaint (pdf)

He is the only doctor charged so far in the alleged plot.

Nicoll, 39, of Mountain Lakes, his brother and a senior BLS staffer Scott Nicoll, 32, of Wayne and Craig Nordman, 34, of Whippany face federal charges for the scheme, prosecutors announced.

The BLS employees are charged with conspiring to bribe physicians. Santangelo is charged with accepting bribes and for violating his duty to patients.

Each of the four charged in the alleged scheme face up to five years in prison if convicted.

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