An orthopedic surgeon was found guilty of 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, officials announced today.
Dr. David Hobart Payne, 65, of Irvine, was found guilty late Friday at the conclusion of a six-day trial. The jury in downtown Los Angeles found Payne guilty of one count of conspiracy, two counts of honest services wire fraud, and one count of use of an interstate facility in aid of bribery.
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 Pacific 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.
In total, Payne received more than $315,000 in illegal payments, according to the Justice Department.
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 kickback scheme.
U.S. District Judge Josephine L. Staton scheduled a June 2 sentencing hearing, at which time Payne will face up to 50 years in federal prison, prosecutors noted.