Malden Company Sued By U.S. Attorney Received $350K+ PPP Loan

MALDEN, MA — A Malden-based spinal device company accused of paying kickbacks to surgeons who used its products received at least $350,000 in Paycheck Protection Program loans, according to data released by the U.S. Small Business Association Monday. SpineFrontier, Inc. was among the 23 Malden businesses that received $350,000 to $1 million in loans.

In March, the U.S. Attorney's office filed a civil health care fraud complaint against SpineFrontier and its executives, founder and CEO Kingsley Chin and CFO Aditya Humad. The company is accused of paying and conspiring to pay kickbacks to surgeons in the form of sham consulting fees through consulting firm Impartial Medical Experts, LLC, a third-party firm run by Chin's wife, Vanessa Dudley.

SpineFrontier and IME are accused of paying more than $8 million in kickbacks to surgeons, which generated more than $100 million in revenue, with the vast majority of SpineFrontier's total domestic sales revenues coming from kickback-tainted surgeries, the USAO said.

The lawsuit alleges that payments were made to surgeons to induce them to use SpineFrontier's devices in spinal surgeries. The defendants are accused of violating the Anti-Kickback Statute, costing federal health care programs millions of dollars in false claims, according to the USAO's complaint.

Authorities settled civil health care fraud claims against six doctors who said they received kickbacks from SpineFrontier through IME for consulting work they did not do. Each doctor admitted that SpineFrontier, Chin or Humad instructed him to bill "consulting" hours to SpineFrontier for every surgery in which he used its device, regardless of whether he spent any time consulting, the USAO said.

SpineFrontier was among the 13 percent of businesses that took PPP loans of $150,000 and above. While these loans accounted for nearly three-quarters of the total amount of money approved, about 87 percent of the loans were for less than $150,000, CNBC reported.

The SBA said that industries getting the largest share of PPP money were health and social assistance, professional, scientific and technical services, construction and manufacturing, an umbrella under which SpineFrontier would fall.

The case against the company is ongoing.