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Man Sentenced In Health Care Kickback Conspiracy

TEXARKANA, Texas: U.S. Attorney Brit Featherston says his court sentenced a Coronado, California, man to federal prison for conspiring to commit health care kickbacks.

A jury found Vincent Marchetti, Jr., 58, guilty by a jury on Dec. 16, 2021, following a month-long trial. He was sentenced to 48 months in federal prison by U.S. District Judge Robert W. Schroeder, III, on Aug. 30, 2022.

“Taxpayers deserve to have their tax dollars spent judiciously and within the confines of appropriate laws and rules. But, unfortunately, the intentional failure to do so breeds a lack of confidence in valuable processes that ensure efficient use of money for citizens’ benefit,” said Brit Featherston, U.S. Attorney. “Kickback arrangements like these means additional costs, not value.

Unfortunately, American taxpayers bear those costs. This case sends a message that no matter who you are if you do wrong, you will be found out and brought to justice. I congratulate the prosecution team on a job very well done.”

“Individuals who participate in kickback schemes compromise the integrity of medical decision-making while increasing health care costs for everyone,” said Acting Special Agent in Charge Mike Stapleton with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to investigate such schemes and bring to justice those who steal from these programs for personal gain.”

“The defendant exploited the health care industry by conspiring with others to pay and receive illegal kickbacks to enrich himself. The defendant’s conduct taints the efforts of hardworking healthcare workers dedicated to acting in the best interest of their patients,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “The FBI will continue to work with our public and private sector partners to pursue individuals who exploit patients and insurance holders for their financial benefit.”

“Health care fraud is estimated to cost the U.S. over $68 billion annually,” said Lester R. Hayes Jr., Special Agent in Charge Homeland Security Investigations Dallas. “Each time we discover a fraudulent claim or medical kickback scheme, the foundation of our national health care system is in jeopardy. Our special agents will work tirelessly to bring those to justice who attempt to defraud our health care system.”

According to information presented in court, Marchetti conspired with others to pay and receive kickbacks in exchange for the referral of, arranging for, and recommending health care business, specifically pharmacogenetic (PGx) tests. Pharmacogenetic testing, also known as pharmacogenomic testing, identifies genetic variations. It tells how an individual patient metabolizes certain drugs. The illegal arrangement concerned the referral of PGx tests to clinical laboratories in Fountain Valley, California; Irvine, California; and San Diego, California. As a result, more than $28 million in illegal kickback payments were exchanged by those involved in the conspiracy.

In December 2019, the government charged twelve individuals from three states for their roles in the kickback conspiracy. A federal grand jury in the Eastern District of Texas returned an indictment against Philip Lamb, 47, of Scottsdale, Arizona; Nicolas Arroyo, 40, of Tempe, Arizona; Vincent Marchetti, Jr.; William Flowers, 57, of Houston; Steven Donofrio, 48, of Temecula, California; James J. Walker, Jr. a/k/a Jimmy Walker, 48, of Frisco; Timothy Armstrong, 65, of Frisco; Virginia Blake Herrin, 57, of Frisco; Patrick Ridgeway, 53, of Jackson, Mississippi; Chismere Mallard, 42, of McAllen; Dr. Ray W. Ng, 66, of Dallas; and Ashley Kretzschmar, 37, of Aledo; for conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute.

Also pleading guilty to related charges were Philip Lamb, Nicolas Arroyo, Jimmy Walker, Timothy Armstrong, Virginia Blake Herrin, Patrick Ridgeway, Chismere Mallard, and Ashley Kretzschmar. Kimberly Willette, 61, of Friendswood, and Edwin Chad Isbell, 48, of Atascocita, also pleaded guilty to related charges.

On Apr. 25, 2022, the court sentenced Nicolas Arroyo to 21 months in federal prison. On Aug. 23, 2022, the court convicted Kimberly Willette to one year and one day in federal prison, and Patrick Ridgeway was sentenced to a three-year term of probation and ordered to pay a $100,000 fine.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of, arranging for, or recommending the ordering of items or services payable under federal health care programs. Under federal statutes, violations of the Anti-Kickback statute are punishable by up to five years in federal prison.

The U.S. Department of Health and Human Services, the Office of Inspector General, the FBI Dallas – Frisco Resident Agency, the U.S. Department of Homeland Security, and Homeland Security Investigations investigated this case. It was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld, Lucas Machicek, and Adrian Garcia, with assistance from Assistant U.S. Attorneys Brent Andrus, Stephan E. Oestreicher, Jr., and L. Frank Coan, Jr., and Special Assistant U.S. Attorney Laurel E.P. Simmons.