Owner of Florida-Based Telehealth Service Pleads Guilty in $73 Million Kickback Scheme

It has been an incredibly busy year for justice officials in their mission to keep the American medical space free of fraudsters and bad actors. While many of these criminal enterprises remain, the government has continued in its mission to eradicate their activities.

This month, the United States Department of Justice apprehended the latest organization to showcase fraudulent tendencies. In an official press release, the Justice Department confirmed that it had reached a settlement with Leonel Palantik - a 42-year-old man from Aventura, Florida, for his role in a fraudulent medical operation.

Greasing the Wheels for Preferential Treatment

According to the press release, Leonel Palatnik is the co-founder and head of Panda Conservation Group, LLC. The company provides laboratory testing services through several of its subsidiaries, including Amerihealth, MP3 Labs Inc., and Ambrose Health. While it focuses on general testing, Panda Conservation Group is especially noted for its focus on genetic testing.

The court documents asserted that Palantik and several other parties connected to Panda Conservation Group had made payments to one Michael Stein, the owner of 1523 Holdings Plc. The payments had been made under the guise of “IT and Consulting Services,” but they were actually kickbacks to telehealth service providers.

In general, the entire arrangement was for Stein and 1523 Holdings to encourage telemedicine providers to recommend testing from Panda Conservation Group. The arrangement would have seen more people come to Panda for their genetic testing services, thus boosting the company’s bottom line as a direct consequence.

Besides the dubious nature of the business contract, Stein and 1523 Holdings were also alleged to have taken advantage of several amendments to telehealth rules enacted during the coronavirus pandemic. These amendments allowed the company to provide access to Medicare laboratories, which would bill for services that would eventually be charged to the government.

In exchange for these kickbacks, healthcare service providers agree to refer their beneficiaries to Panda’s laboratories to get their testing services. These restrictions had been loosened to help ensure that people who needed help would be able to access them. With a much freer regulatory environment, telehealth service providers were able to bill for more services without the need to establish patient relationships.

Sadly, many health providers have also been using these fewer restrictions to charge unreasonable fees for services. Many of these services charged by Panda were unnecessary, and the patients themselves were charged outrageous sums for them.

Huge Implications for Everyone

In general, the conspiracy between Panda and 1523 Holdings is reported to have defrauded citizens - and the Medicare system - of $73 million. The case against Palatnik was eventually brought as part of the COVID-19 Health Care Fraud law enforcement action. Under this action, law enforcement agents have brought charges against 14 defendants, all spanning seven judicial districts.

The action itself is also a collaboration between several agencies, including the Health Care Fraud Unit’s COVID-19 Interagency Working Group and the COVID-19 Fraud Enforcement Task Force. With a focus on investigating coronavirus-related healthcare fraud, the task force currently has a great deal of work to do. The case of Panda and 1523 Holdings is just one of the many available.

Palatnik himself has pled guilty to one count of conspiracy to offer kickbacks and one count of paying a kickback. He will be sentenced on November 9, and he faces up to 15 years behind bars. A federal district court judge will handle Palatnik's case.

Further investigations are still ongoing, with leads from the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), the FBI’s Miami and Dallas Field Office, and the FBI’s Healthcare Rapid Response Team.

More Clarity Required on the Case

It remains unclear who specifically brought the case against Panda and 1523 Holdings since the Justice Department failed to mention them. At the same time, it seems too early to know how much the defendants will have to pay back in fines and penalties. However, if they have to make penalty payments, the whistleblowers in question might be in line to get monetary compensation under the False Claims Act.

The False Claims Act is one of the strongest whistleblower protection laws in the country. It posits that people who offer information about fraudulent schemed - especially those that lead to a monetary loss on the government’s part - will be eligible for monetary compensation. Generally, whistleblowers get between 15 and 30 percent of the funds recovered. They will also be able to get additional compensation if other fines are imposed.

So far, the False Claims Act has been very helpful in curbing financial crime.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

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