Imaging-center chain CEO gets 5 years in prison for $250M MRI bribe scheme
The CEO of several Southern California imaging companies has been sentenced to five years in federal prison for running an elaborate MRI bribe scheme, the Department of Justice announced Friday.
A U.S. district judge also ordered Sam Solakyan to pay nearly $28 million in restitution to the insurers he scammed. And once he’s released from jail, the 40-year-old Glendale, California, man is barred from doing business in the healthcare and workers’ compensation industries during his three-year term of supervised release.
Federal jurors convicted Solakyan on one count of conspiracy to commit healthcare fraud and 11 more counts of honest-services mail fraud back in July. He and colleagues reportedly ran their “cross-referral scheme” between 2013-2016, offering bribes and kickbacks to steer patients toward their services.
“[Solakyan] paid some $9 million in kickbacks in order to generate over $250 million in fraudulent medical billings, the vast majority of which were for MRIs that were…totally medically unnecessary,” prosecutors wrote in a sentencing memorandum. “[Solakyan] devised, and through his kickbacks fueled, a cross-referral scheme that incentivized [co-conspirators] to herd patients to physicians who overprescribed ancillary services in exchange for cash and other economic benefits.”
The one-time investor and entrepreneur served as founder and CEO of Glendale-based Vital Imaging Inc. and the San Diego MRI Institute, operating centers in the Bay Area, Los Angeles, Orange County and San Diego. Beginning around mid-2013, Solakyan conspired with a chiropractor, patient-scheduling company MedEx and others, working with “corrupt doctors” to exchange cash for new patients.
Those involved hid their financial relationships by entering various “sham” agreements, the DOJ said last year, labeled as “marketing,” “administrative services,” or “scheduling.” However, Solakyan was actually paying volume-based, per-MRI scan bribes and kickbacks to induce docs to refer patients to the his companies. Two recruiters set quotas for physicians, collecting more than $8.6 million for obtaining such MRI referrals, according to evidence presented during the eight-day trial.
All told, Solakyan submitted or had some influence on more than $250 million in claims for medical services procured through bribes and kickbacks. Authorities first arrested the former CEO back in September 2018. Solana Beach chiropractor Steven Rigler pleaded guilty in 2015 to one count of conspiracy to commit honest-services mail fraud and was sentenced to six months in federal prison. Recruiters Fermin Iglesias, 41, of Glendale, and Carlos Arguello, 39, of Bonita, also previously pleaded guilty and received five-year and four-year sentences, respectively.
Solakyan founded private equity firm S3 Capital Inc. in 2015, according to his LinkedIn profile, with investments in more than a dozen companies. As CEO of venture capital firm Global Holdings Inc. before that, he oversaw “substantial growth,” including several major acquisitions under its portfolio. Those included Vital Imaging, once one of California’s largest MRI providers at the time, according to a bio on IMDB.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.