A former union official at the Lear Corp. plant in Arlington has been sentenced to 13 years in federal prison and ordered to pay $2.4 million in restitution for using his position to refer co-workers to a chiropractor who billed Blue Cross Blue Shield of Texas for millions in treatment that was never provided, the U.S. attorney’s office said.
Reginald Guy, 44, a former representative for the United Auto Workers, was sentenced Monday in Fort Worth by U.S. District Judge Reed O’Connor after being convicted of all 10 fraud charges in July along with Abbas Zahedi, 49, of Carrollton. Zahedi pleaded not guilty like Guy and will be sentenced Jan. 5.
Patients themselves were slipped kickbacks and cash bonuses, along with work excuse notes and prizes, for referring others to the chiropractor, according to court documents.
The only patient prosecuted was Donna Harris of Haltom City, who later became a clinic employee. She was given an eight-month prison term and ordered to make $2 million in restitution.
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Blue Cross began investigating after spotting conspicuously large claims for occupational therapy and chiropractic services from two clinics where Zahedi worked, DFW Rehab & Diagnostics in Grand Prairie and Metroplex DFW Sports Rehab Center in Arlington, said Kathy Colvin, a spokeswoman for the U.S. attorney’s office in Dallas.
One of the eventual six defendants in the case tipped the FBI to the scheme after being contacted by the Blue Cross, Colvin said.
All but Guy and Zahedi ended up cooperating with authorities, Colvin said. A court filing showed that the four received plea bargains and were sentenced Monday.
Aside from Harris, they are James Sterns, 50, of Desoto, the owner of Metroplex, who was given 10 months in prison and ordered to repay $2.2 million restitution; insurance claims processor Tina Perkins, 43, of Dallas, 10 months and $2.4 million restitution; and physical therapist Gregory Wattron, 56, of Grapevine, six months and $1.3 million restitution.
The indictment said Harris, Perkins’ sister-in-law, continued to allow insurance claims to be submitted when no treatment was given even after she began working for Zahedi as his Grand Prairie office manager. She also allowed false claims to be made for her immediate and extended family members, it said.
Wattron was given cash in exchange for allowing Sterns and Zahedi to use his name and medical provider number on claims submitted to Blue Cross for physical therapy that was not given, the indictment said.
Guy’s attorney, Robin McCarty of Midlothian, said his client will appeal the verdict, asserting that the former union rep had no idea about the false billing. Moreover, direct participants in the scheme including its “mastermind” got off with relatively light sentences in exchange for testifying against Guy, McCarty said.
“We felt as though Reginald Guy was associated with the wrong people and he really didn’t have knowledge of what went on with all the co-defendants,” said McCarty, who described Guy as a highly religious man and recovering alcoholic who started a Christian outreach program for alcoholics and drug addicts called Road 2 Recovery Ministries.
The chief conspirator, the lawyer said, was Sterns, owner of the Arlington clinic and a longtime friend of Guy’s, who later hired him to handle marketing.
“James Sterns was the mastermind behind this operation and for him to be able to plead down to 10 months for cooperating and testifying against Mr. Guy when he had a much, much larger exposure — that’s certainly unfair for Mr. Guy,” McCarty added.
“Sterns used his friendship to drag Guy into this,” McCarty said. “We don’t believe they actually proved Mr. Guy intentionally and knowingly participated in any fraud.”
In all, McCarty said, Guy received only about $3,000 and the millions sought in restitution from the defendants is actually far more than Blue Cross lost. The U.S. attorney’s office declined to specify the exact amount that was scammed. Blue Cross did not respond to an email seeking comment.
Prosecutors said Guy was employed by Lear, a supplier of seats and other parts for SUVs built at the General Motors plant in Arlington, from 2000 until he was fired in 2009. As a union representative, he referred “numerous” Lear employees to Zahedi and used his UAW affiliation to recruit more plant workers even after he was sacked, they said.
Guy was hired as Metroplex’s office manager in 2010 and became a consultant for Zahedi‘s Grand Prairie clinic the following year, the indictment said.