Doctor Sentenced In Massive Healthcare Fraud Scheme

MIDDLETOWN, NY — A doctor in the Hudson Valley will be going to prison for his part in a health care fraud scheme.

Audrey Strauss, the United States Attorney for the Southern District of New York, said James Spina, 63, of Middletown, was sentenced Tuesday to nine years in prison after pleading guilty in 2019 to one count of conspiracy to commit healthcare fraud.

He was also sentenced to three years of supervised release and ordered to pay more than $9.76 million in restitution and to forfeit more than $9.1 million.

Strauss said Spina led a sophisticated, widespread and callous scheme that put greed and profits ahead of patients and their well-being.

"In doing so, he betrayed his professional obligations and bilked insurance companies and Medicare out of millions of dollars," she said. "Thanks to the coordinated efforts of federal and state investigative agencies, Spina will now serve a lengthy sentence in federal prison."

According to prosecutors, Spina operated Dolson Avenue Medical, a multi-disciplinary medical clinic in Middletown.

The practice purported to provide a variety of pain management and rehab services, including physical medicine, chiropractic services, physical therapy, diagnostic testing and acupuncture.

In addition to the practice, there were other corporations that billed Medicare and other health insurance providers.

Prosecutors said, on paper, the practice and other corporations appeared to be separate entities with different owners, but Spina, who is a doctor of chiropractic — not a medical doctor — along with his co-defendant, were the real owners and operators of the different corporations.

Spina and his co-conspirators made all the decisions for the corporations, including payroll, hiring and firing, rent and billing to insurance providers.

Spina and one of his co-conspirators were the financial beneficiaries of the practice and the other corporations, authorities said.

The business recruited medical doctors and other professionals to serve as the fake owners in an effort to conceal Spina's ownership.

He also transferred revenue from the companies into other businesses that he and a co-defendant owned. Phony and nonexistent addresses were used for the corporations to make it appear they were operating out of separate locations.

In addition, Spina and others showed little regard for whether medical services were necessary or even if they were actually provided to patients. They did, according to prosecutors, submit claims to insurance companies that were not rendered, submit multiple claims for the same service and altered and made up medical records.

As part of the fraudulent scheme, one of the doctors introduced a lucrative procedure called a facet injection. Because the facet joints to which the injections are applied are near the spinal cord, such procedures are high-risk, with a small margin for error. The doctor had no formal training in the procedure and taught himself by shadowing other doctors and watching YouTube videos.

Prosecutors said Spina was intimately involved with all billing-related aspects of the facet injections and continued to encourage their use even after several patients suffered serious, adverse events. One patient died of complications following a facet injection, authorities said.

Like Hudson Valley Patches' Facebook Pages.