Gadsden Man Charged with Multi-Million-Dollar Kickback and Health Care Fraud Conspiracies

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FILE PHOTO: The U.S. Department of Justice Building is pictured

Tuscaloosa, Ala. – A federal grand jury last week indicted a Gadsden man for conspiring to pay and receive kickbacks and commit health care fraud, announced U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Acting Special Agent in Charge Felix A. Rivera-Esparra, and U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Tamala E. Miles. 

A six-count indictment filed in U.S. District Court charges James Ewing Ray, 51, of Gadsden, Alabama, with one count of kickback conspiracy, four substantive kickback counts, and one count of health care fraud conspiracy. 

Ray owned Integrity Medical, LLC, a company through which he marketed health care items and services to medical providers.  According to the indictment, between about 2012 and 2018, Ray conspired with others to pay and receive kickbacks to induce medical providers to issue medically unnecessary prescriptions and order medically unnecessary goods and services, which were then billed to Medicare and other health insurers.

One of those services was electro-diagnostic testing by QBR, a Huntsville-based testing company whose owner, John Hornbuckle, is under indictment in a related case.  The indictment against Ray alleges that QBR billed insurers millions of dollars for electro-diagnostic testing that its technicians performed, regardless of whether there was a medical need for them.  QBR is alleged to have paid Ray a fee for every patient his doctors referred, and to have paid those doctors a per-patient fee for their referrals.  Federal insurers were billed millions of dollars for these tests, the indictment alleges.

The maximum penalty for kickback conspiracy is five years in prison.  The maximum penalty for health care fraud conspiracy  is ten years in prison.  Each of the four substantive kickback counts carries a maximum of ten years in prison.

The FBI and HHS-OIG investigated the case.  Assistant U.S. Attorneys J.B. Ward and Don Long are prosecuting the case. 

An indictment contains only charges.  A defendant is presumed innocent unless and until proven guilty.