A Malden spinal device manufacturer and two of its top executives were charged Tuesday with bribery and money laundering for their roles in an alleged kickback scheme where surgeons were paid sham consulting fees to use the company’s products, generating millions in revenues, the US Attorney’s office for Massachusetts said in a statement.
SpineFrontier Inc. chief executive Kingsley R. Chin, 57, of Fort Lauderdale, Fla, and chief financial officer Aditya Humad, 36, of Cambridge were each charged with one count of conspiracy to violate an anti-kickback statute, six violations of that statute, and one count of conspiracy to violate the statute, prosecutors said.
Chin and Humad allegedly entered into contracts with surgeons, agreeing to pay between $250 and $1,000 an hour for “consulting,” while instead paying them to use the company’s products, prosecutors said.
Chin and Humad allegedly designed and used the consulting program, which purportedly gathered feedback on the company’s products, to “induce” surgeons to use the company’s products in surgeries paid for by federal health care programs like Medicare, the statement said. Bribes in the alleged scheme were often determined based on a review of the surgeries the products were used in and how much SpineFrontier had earned as a result.
Chin and Humad allegedly paid surgeons between $32,625 and $978,000 in bribes during the scheme, prosecutors said.
“Kickback arrangements pollute federal health care programs and take advantage of patient needs for financial gains,” said Acting United States Attorney Nathaniel R. Mendell in the statement. “Medical device manufacturers must play by the rules and we will keep pursuing those who fail to do so, regardless of how their corruption is disguised.”
The charges Chin and Humad face could lead to a sentence of more than 40 years behind bars.
Humad’s lawyer said his client “denies all charges, and looks forward to his day in court.”
Humad was arraigned in Boston federal court Tuesday and pleaded not guilty, a spokeswoman for Mendell’s office said.
He was released on several conditions — including that he surrender his passport, not possess a firearm, and avoid all contact with former employees of the company, former physician-consultants, and current employees.
Humad was ordered to past a $500,000 bond in the next two weeks.
Chin will make an initial appearance in federal court in Florida on Wednesday, the spokeswoman said.
Material from the Associated Press was used in this report.