21 with ties to Dallas medical center indicted in bribery scheme

A federal grand jury has indicted 21 people who invested in or worked at the now-defunct Forest Park Medical Center in north Dallas in a bribery scheme that concentrated on referring patients to the healthcare facility in exchange for illegal kickbacks.

Forest Park was an out-of-network hospital that could set its own prices and receive generally greater reimbursements.

An indictment unsealed Thursday accuses executives and physicians of paying and taking bribes and kickbacks for patient referrals with high-reimbursement private medical insurance. Owners, managers and employees are also accused of trying to sell to other facilities for cash patients with lower-paying insurance, such as Medicare and Medicaid.

As a result of the bribes, kickbacks and other inducements, from 2009 to 2013, the medical center billed such patients’ insurance plans and programs well over $500 million and collected over $200 million in paid claims, a U.S. attorney’s statement says.

Those tainted billings included more than $10 million to the Defense Department healthcare program Tricare, more than $25 million to the Labor Department workers’ compensation program for federal employees and more than $60 million to the healthcare program for federal employees and retirees, court documents said.

Each of the 21 defendants named in the indictment is charged with one count of conspiracy to pay and receive healthcare bribes and kickbacks. Each faces up to five years in federal prison and a $250,000 fine.

Among those listed is David Daesong Kim, 54, a bariatric surgeon who operated in Dallas, Fort Worth, Colleyville and Frisco. Federal prosecutors say Kim received nearly $4.6 million for referring patients to Forest Park, according to the indictment.

“Medical providers who enrich themselves through bribes and kickbacks are not only perverting our critical healthcare system, but they are committing a serious crime,” John Parker, U.S. attorney for the Northern District of Texas, said in an emailed statement. “Massive, multifaceted schemes such as this one, built on illegal financial relationships, drive up the cost of healthcare for everyone.”

Forest Park’s Fort Worth and Southlake medical centers were part of a chain of doctor-owned luxury hospitals that started in Dallas. There also were facilities in Frisco and San Antonio. A hospital in Austin never opened.

The Forest Park facilities operated on a business model that promised their patients more pleasant surroundings — natural lighting, interior decor with mood lighting and private rooms — as well as more individualized attention.

What really set the facilities apart was an approach that had the hospitals seeking more-upscale patients with private insurance and not Medicare or Medicaid medical coverage under the Affordable Care Act. But it was a failed business model.

Eventually, the chain collapsed and went into bankruptcy. Forest Park Medical Center Fort Worth, on the Edwards Ranch property in west Fort Worth, was sold to Texas Health Resources, and the Southlake facility was sold to Methodist Health System.

The north Dallas hospital’s buildings have been sold to HCA North Texas for $125.4 million.

Those named in the indictment include Kim; Shawn Mark Henry, 46, of Fort Worth; Alan Andrew Beauchamp, 64, Richard Ferdinand Toussaint Jr., 58, Wade Neal Barker, 51, Kelly Wade Loter, 48, Douglas Sung Won, 45, Michael Bassem Rimlawi, 45, William Daniel Nicholson IV, 46, Israel Ortiz, 49, Iris Kathleen Forrest, 56, Andrew Jonathan Hillman, 40, and Semyon Narosov, 51, all of Dallas; Wilton McPherson Burt, 61, of Costa Rica; Andrea Kay Smith, 37, of Rockwall; Carli Adele Hempel, 40, of Plano; Mrugeshkumar Kumar Shah, 42, of Garland; Gerald Peter Foox, 69, of Tyler; Frank Gonzales Jr., 41, of Midland; and Royce Vaughn Bicklein, 44, of San Antonio.

The indictment also provides for the forfeiture of any property linked to the allegations.

Staff writer Max B. Baker contributed to this report, which includes material from The Associated Press.

This story was originally published December 1, 2016 at 5:53 PM with the headline "21 with ties to Dallas medical center indicted in bribery scheme."