Former Alabama Organ Center Executive Sentenced for Fraud

BIRMINGHAM—U.S. District Judge R. David Proctor today sentenced the former director of the Alabama Organ Center to 13 months in prison for his role in a scheme to take kickbacks from a funeral home that did business with the organ center, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Patrick J. Maley.

Judge Proctor also ordered the defendant, Demosthenes Lalisan, 45, to pay $489,551 in restitution to the University of Alabama Health Services Foundation and to forfeit $242,344 to the federal government as proceeds of illegal activity. The Alabama Organ Center is a component of the Health Services Foundation and is the federally approved organ procurement organization for the state of Alabama.

The judge ordered Lalisan to remain on supervised release for three years after completing his prison sentence. As a special condition of that release, if Lalisan seeks employment in any occupation involving the rendering of health care services, he must inform the prospective employer of his conviction and provide a copy of his plea agreement.

Lalisan and his co-defendant, Richard Alan Hicks, 40, pleaded guilty in November to one count each of conspiracy to commit health care fraud, health care fraud, and mail fraud. Hicks’ sentencing is scheduled June 5. Hicks is the former associate director of the Organ Center. He and Lalisan will both be responsible for paying the restitution.

From about March 2007 until June 2011, Lalisan solicited and received kickbacks totaling $242,344, and Hicks received kickbacks totaling $256,207 from a local funeral home that did business with the organ center, according to court documents. In exchange for the kickback payments, Lalisan and Hicks promoted the funeral home and recommended its hiring by the organ center for services paid for by the Health Services Foundation. Neither Lalisan nor Hicks disclosed to the organ center or the foundation that they were receiving payments from the funeral home. Both men falsely represented to the foundation that neither of them had any financial conflicts of interest from customers, suppliers, contractors or competitors, according to court documents.

The investigation revealed no evidence that indicated Lalisan’s and Hicks’s conduct endangered the public or donors or recipients of organs or tissue.

This prosecution is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The FBI investigated the case. Assistant U.S. Attorney Elizabeth A. Holt is prosecuting the case.