The Fifth Circuit has affirmed the convictions of former Boston Heart Diagnostics executives and sales representatives in a criminal Anti-Kickback Statute case arising from what prosecutors described as a sham management-services organization structure used to funnel payments to physicians in exchange for referrals. The decision in United States v. Theiler leaves intact conspiracy convictions tied to a broader healthcare-billing and referral scheme involving Boston Heart Diagnostics, Inc. and several individual defendants, including Susan Hertzberg, Matthew Theiler, David Kraus, and Thomas Hardaway.

For healthcare enforcement practitioners, the ruling is a notable appellate endorsement of the government’s theory that formally documented business arrangements can still amount to criminal kickback conduct when the substance of the arrangement is referral-driven.

The Justice Department has announced an $8.33 million settlement with Modern Nuclear to resolve allegations that the company paid unlawful kickbacks to medical practices tied to its mobile PET scan services, leading to claims reimbursed by federal healthcare programs. While the matter was resolved without a determination of liability, the settlement is a notable reminder that the government continues to treat kickback-driven referral arrangements as a core healthcare-fraud enforcement priority.

According to the government’s allegations, the company’s financial arrangements with physician practices crossed the line from legitimate business relationships into conduct that potentially violated the Anti-Kickback Statute. That matters because claims submitted to federal programs that are allegedly tainted by kickbacks can also trigger liability under the False Claims Act, dramatically increasing exposure through treble damages and per-claim penalties.

For legal and compliance professionals, the case underscores a recurring enforcement theory: even when the underlying services are medically appropriate, the manner in which referrals are obtained can create FCA risk.