NEWARK, N.J. (CBSNewYork/AP) — Thirteen people have been arrested, in what New Jersey authorities said was a scheme to pay illegal kickbacks to doctors in exchange for patient referrals.

New Jersey Attorney General John Hoffman said Thursday that Rehan “Ray” Zuberi, the owner of numerous MRI centers, operated an enterprise that allegedly generated millions of dollars in illegal profits by submitting fraudulent applications to Medicaid — despite being barred from the program due to a previous conviction.

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Prosecutors alleged Zuberi used his business, Diagnostic Imaging Affiliates (DIA) of Hackensack, to pay more than $300,000 in bribes to medical practitioners in exchange for them referring patients to him for expensive diagnostic tests.

Zuberi, 45, of Boonton Township, was arrested Tuesday and was being held on $1 million bail.

The investigation into the alleged scheme began thanks to an anonymous tip, New Jersey acting insurance fraud Prosecutor Ronald Chillemi told 1010 WINS.

“We believe this began around 2008, so about six years ago. The anonymous tip came in, in about April of 2013. So we’re just a little over a year since we received the anonymous tip and for a case of this size and complexity, that’s moving very quickly,” he said.

Following the tip, Chillemi said they began to use various avenues to investigate the claims, including “looking at things like bank records, patient records, claims to Medicaid, public information sources about relationships or how money is spent.

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“That’s how we developed the connections and the money flow that are part of this investigation,” he added.

Many insurance programs lost a significant amount of money in the scheme, according to Chillemi. He said New Jersey’s Medicaid program lost $8 million based on approximately 300,000 claims.

The investigation was dubbed “Operation Rayscam,” according to published reports.

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