An orthopedic surgeon was sentenced today to 33 months in federal prison for accepting more than $315,000 in bribes and kickbacks for performing spinal surgeries at a now-defunct Long Beach hospital whose owner was imprisoned for committing workers’ compensation insurance fraud.
David Payne, 65, of Irvine, was also fined $20,000 and ordered to forfeit $316,597, according to the U.S. Attorney’s Office.
Payne was found guilty in March in downtown Los Angeles of one count each of conspiracy and use of an interstate facility in aid of bribery, and two counts of honest services wire fraud.
According to court documents and evidence presented at trial, Michael Drobot—the owner of Pacific Hospital—conspired with doctors, chiropractors and marketers to pay kickbacks and bribes in return for the referral of patients to the hospital for spinal surgeries and other medical services.
The services and surgeries were paid for primarily through the California workers’ compensation system. During its final five years, the scheme resulted in the submission of more than $500 million in medical bills for spinal surgeries involving kickbacks.
Payne received bribes from Drobot of up to $15,000 for each spinal surgery that he performed at Pacific Hospital. The top bribe payment was for lumbar spinal surgeries Payne performed on patients at the hospital with implants from one of Drobot’s companies. Drobot and Payne covered up the bribes by disguising them as payments for marketing services and fees based on a sham contract, evidence showed.
In April 2013, law enforcement searched Pacific Hospital, which was sold later that year, bringing the kickback scheme to an end.
To date, two dozen defendants, among them doctors and surgeons, have been convicted for participating in the scheme, federal prosecutors said.