Former Verona Doc Faces New Charges of Kickbacks, Tax Evasion

This story was originally posted by Mike D'Onofrio on Livingston Patch.

A Livingston doctor who formerly had a practice in Verona faces new charges of taking kickbacks and failing to claim nearly $1 million in taxes, according to the U.S. Attorney's Office. 

Yash Khanna, 71, was indicted by a federal grand jury on Wednesday for an alleged kickback scheme lasting three years where he received thousands of dollars in cash in exchange for referrals and for failing to file tax returns on nearly $1 million in income, according to U.S. Attorney Paul J. Fishman.

Khanna is a family physician and was the owner and operator of Family Medicine & Pediatrics in East Orange and West Essex Medical Group PA in Verona. 

Khanna was charged with one count of conspiracy to violate the federal health care Anti-Kickback Statute, two separate counts alleging substantive violations of the Anti-Kickback Statute, and three counts of willfully failing to file a federal tax return.

The Livingston doctor was originally arrested on a complaint in December 2011 and indicted in May 2012 on only one count of violating the Anti-Kickback Statute in relation to a two-year scheme to receive cash kickbacks in exchange for his diagnostic testing referrals. 

The new charges announced Wednesday allege Khanna's conspiracy lasted at least three years and that he failed to file tax returns for approximately $1 million in both legal and illegal income. 

The Alleged Kickback Scheme 

The U.S. Attorney alleges that from 2009 through December 2011, Khanna conspired with Orange MRI to solicit and receive cash kickbacks in return for referring patients for diagnostic tests such as MRIs and CAT scans. 

Khanna and Orange MRI representatives negotiated the value of kickbacks that Orange MRI would pay him per test he referred, and they were paid for a period of at least three years.

Khanna and Orange MRI’s executive director agreed Khanna would be paid $50 for every MRI referral of a Medicare or Medicaid patient and $75 for every MRI referral of a patient with private health insurance.

Khanna also failed to file his 2008-10 federal tax returns. The U.S. Attorney alleges Khanna earned approximately $381,000 in 2008, $400,000 in 2009 and $214,000 in 2010.

Potential Penalties 

The Livingston doctor faces steep penalties and prison time if he is convicted. 

The conspiracy and kickback charges each carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the loss caused by the offense. 

The tax charges each carry a maximum potential penalty of a year in prison and a $100,000 fine, or twice the loss caused by the offense.