Unlicensed Doctor Admits Participating in Insurance Fraud Scheme, Distributing Prescription Narcotics

David B. Fein, United States Attorney for the District of Connecticut, announced that FRANCISCO R. CARBONE, 53, of Fairfield, waived his right to indictment and pleaded guilty today before United States District Judge Stefan R. Underhill in Bridgeport to multiple federal charges stemming from his participation in an insurance fraud scheme and a conspiracy to illegally distribute prescription narcotics.

According to court documents and statements made in court, CARBONE previously had been licensed to practice medicine, working as a sole practitioner in Bridgeport. In March 2005, CARBONE’s license to practice medicine was revoked by the State of Connecticut.

Between December 2006 and February 2010, CARBONE conspired with an attorney and a chiropractor to defraud several insurance companies by exaggerating the auto accident injuries of the attorney’s clients to justify a larger monetary settlement with the insurance companies. As part of the scheme, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents. Typically, the attorney would instruct his clients to see CARBONE, who both the attorney and the chiropractor knew was an unlicensed doctor. CARBONE and others would then provide prescriptions for pain medication for the clients, even if it was not needed. CARBONE also fabricated medical records, including the clients’ injuries and medical condition, even though CARBONE had not done any medical examination on the vast majority of the patients. The fabricated reports were given to the attorney who provided them to the insurance carriers in support of settlements.

CARBONE, at the request of the attorney and chiropractor, also referred clients to a diagnostic testing company owned by the chiropractor to receive “nerve conduction velocity testing” (NCV), even though CARBONE had no prior knowledge of NCVs and did not rely on the test results for any medical purpose. The chiropractor’s office would submit a bill to the attorney in the amount of approximately $2000 for each NCV test that was performed, which would eventually be paid out of settlement proceeds.

CARBONE, the attorney and the chiropractor also engaged in a scheme to defraud the State of Connecticut. By law, the State of Connecticut is entitled to 50 percent of the proceeds of a personal injury case if the individual who receives a settlement has been on public assistance, or has outstanding child support obligations. Through this scheme, the attorney would provide a fraudulent settlement statement to the State that inflated the payments to the attorney, chiropractor and CARBONE, and reduced the net payout to the client.

CARBONE and the chiropractor, at the attorney’s request, regularly kicked back a portion of their medical fees to the attorney’s clients.

From November 2006 through January 2010, James W. Marshall, Jr., a licensed doctor of osteopathic medicine in Monroe, wrote prescriptions for pain medication, including oxycodone and hydrocodone, for CARBONE’s patients. On March 1, 2011, Marshall pleaded guilty to one count of conspiring to distribute controlled substances outside the scope of the usual course of professional practice, admitting that he wrote more than 145 prescriptions for more than 4400 pills to numerous patients, without personally meeting, examining, or consulting with the patients who would receive the prescriptions.

Today, CARBONE pleaded guilty to one count of conspiring to commit mail fraud to defraud insurance carriers, one count of conspiring to commit mail fraud to defraud the State of Connecticut, one count of making a false statement relating to health care matters, and one count of conspiring to distribute controlled substances outside the scope of the usual course of professional practice. The charges carry a maximum term of imprisonment of 65 years.

CARBONE’s criminal history includes federal convictions in 1999 for violating the Medicare/Medicaid anti-kickback statute and for filing a false federal tax return, for which he was sentenced to four months of imprisonment. In 2002, CARBONE was sentenced to an additional 13 months of imprisonment for violating the conditions of his supervised release.

U.S. Attorney Fein stated that the investigation is ongoing.

This case is being investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau and Metropolitan Property and Casualty Insurance’s Special Investigation Unit. The case is being prosecuted by Assistant United States Attorneys Christopher W. Schmeisser and Susan Wines.