Federal jury finds surgeon Fonn guilty of kickback scheme

A federal jury in St. Louis has found Cape Girardeau neurosurgeon Dr. Sonjay Fonn and his fiancee, Deborah Seeger, guilty of submitting false and fraudulent Medicare and Medicaid claims.

The jury handed down the guilty verdicts Thursday in the 11-day civil trial, finding Fonn and Seeger of Cape Girardeau conspired to violate the federal False Claims Act, the federal prosecutor’s Office said in a news release.

The jury made a number of findings in its verdict, including a $1.65 million recovery to the Medicare and Medicaid programs under the government’s conspiracy claim.

The court also imposed a statutory penalty of $5,500 to $11,000 on each of 228 false claims, the release said, for a total of $1.25 million to $2.5 million.

According to federal prosecutors, the defendants’ civil liability will be determined by the court at a later date, using the jury findings.

According to federal prosecutors, Seeger started a spinal implant distributorship called DS Medical in November 2008. Fonn then used spinal implants from DS Medical for most of the spinal implant surgeries he performed from 2009 to 2012, prosecutors.

The trial involved federal program payments for 228 spinal surgeries involving Medicaid and Medicare patients, the release said.

According to the release, Seeger typically received 50 percent commissions on implants Fonn used during surgeries, “meaning Dr. Fonn’s treatment choices directly impacted” his fiancee’s distributorship income.

Trial evidence showed after Seeger received commissions, Seeger spent some of that income to benefit Fonn through home improvements, purchase of a yacht and other “purchases and expenditures,” the release stated.

Federal prosecutors alleged the defendants and their corporations violated the anti-kickback

statute, a federal law that bars health-care providers from making patient referrals in exchange for any direct or indirect benefits.

The federal suit began as a civil case brought by a handful of Cape Girardeau doctors and two others in 2012.

Those individuals will receive a percentage of the award.

Cape Girardeau physicians Terry Cleaver, Kyle Colle, Scott Gibbs (now deceased), Paul Tolentino and Kevin Vaught, surgical assistant Daniel Henson and Cape Girardeau resident Paul Cairns filed a civil suit in federal court five years ago against Fonn and Seeger and their medical companies regarding kickback allegations.

In a 2012 court filing, it was alleged Fonn and Seeger had an “exclusive arrangement” that resulted in large profits for the defendants.

“Fonn has bragged that his earnings and Seeger’s earnings exceed $8 million per year,” according to the court document.

In 2014, the government intervened in the civil suit, essentially taking over prosecution of the civil case.

Fonn’s attorney, James Martin, argued in a court filing in September 2014 that “nothing in the complaint suggests it is against the law for a doctor to send business to a vendor because of love and compassion, out of friendship or to assist one’s life partner in their business development.”

That same year, a federal grand jury handed down a four-count criminal indictment accusing Fonn and Seeger of one count of conspiracy to solicit and receive illegal kickbacks and three felony counts of anti-kickback violations.

The criminal case against Fonn and Seeger alleged they operated DS Medical LLC together as a distributor of medical devices and supplies Fonn used in his practice, Midwest Neurosurgeons LLC.

The indictment accused Fonn of altering his medical practice to include more surgeries than usual and to use more spinal implants in those surgeries during the time DS Medical was operating.

It also accused DS Medical of charging manufacturers exorbitant commissions that Fonn and Seeger

allegedly used to buy a home, boat, airplane and make improvements to their house.

In December 2015, U.S. Magistrate Judge Abbie Crites-Leoni dismissed the criminal case against Fonn and Seeger at the request of prosecutors.

mbliss@semissourian.com

(573) 388-3641