On September 7, 2021, Kingsley R. Chin, MD, CEO of SpineFrontier, Inc.; Aditya Humad, CFO of SpineFrontier, Inc.; and SpineFrontier, Inc., were arrested and indicted on one count of conspiracy to violate the Anti-Kickback Statute, six counts of violations of the Anti-Kickback Statute and one count of conspiracy to commit money laundering.
According to the indictment, from late 2012 to around June 2019, Chin, Humad, and SpineFrontier paid and conspired to pay millions of dollars in bribes to surgeons via sham consulting fees for work that was not performed. The defendants allegedly entered into contracts with surgeons, paying hourly rates between $250 and $1,000 per hour for purported consulting for SpineFrontier. However, instead of consulting services, the indictment notes that the defendants paid the surgeons for using SpineFrontier’s products.
Additionally, while the surgeon consulting program was purportedly directed at gathering technical feedback about SpineFrontier’s products, Chin and Humad allegedly designed and used the program (and the bribes paid under the program) to induce surgeons to use SpineFrontier’s products in surgeries paid for by federal health programs, such as Medicare, Medicaid, and TRICARE. Furthermore, it is alleged that the surgeons typically only spent “only a small fraction” of the reported time – if any at all – performing actual consulting activities.
The indictment alleges that there were several occasions where bribes were determined based on the number of procedures a surgeon performed and the revenue generated by those procedures for SpineFrontier. Each surgeon described in the indictment was paid between $32,625 and $978,000 in bribes. There are five unnamed spine surgeons and one unnamed neurosurgeon mentioned in the indictment as co-conspirators. Specific alleged acts conducted by each of the co-conspirators are outlined in the indictment, including Surgeon 3, who was told by Humad that SpineFrontier would approve more of his submitted consulting hours if he used more expensive SpineFrontier products.
“As alleged, Chin, Humad, and their medical device company SpineFrontier conspired to pay out millions of dollars in kickbacks in the form of sham consulting fees to surgeons across the country who sadly, prioritized these payoffs over their patients’ best interests. We believe they also cheated taxpayers who ultimately foot the bill for their medical procedures,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s arrests show that the FBI will not hesitate to go after those who try to undermine the integrity of the medical decision-making process to take advantage of patients for their own personal gain.”
Earlier Action
This is not the first we have heard of trouble within SpineFrontier – in March 2020, the Department of Justice filed a civil lawsuit against the company, alleging that Chin, Humad, and others incentivized surgeons to use SpineFrontier products by paying kickbacks, resulting in more than $100 million in product sales.
The indictment and arrests follow two prior guilty pleas filed in related criminal prosecutions. In August 2020, Jason Montone, DO, pled guilty to conspiracy to violate the Anti-Kickback Statute and obstruction. John Balzer also pled guilty in August 2020 to conspiracy to violate the Anti-Kickback Statute and one count of witness tampering. Montone and Balzer are scheduled to be sentenced in March 2022.