Leader of N.J. radiology kickback scam pleads guilty, offered deal to help prosecute others

Rehan “Ray” Zuberi, who formerly operated the Diagnostic Imaging Affiliates network of imaging centers now embroiled in a massive kickback scandal in New Jersey, has admitted guilt along with his wife, Humara Paracha, for their part in the scheme to buy referrals and falsify records to increase reimbursement.

Specifically, Zuberi plead guilty to first-degree financial facilitation of criminal activity and second-degree conspiracy to commit commercial bribery, according to New Jersey’s acting Attorney General John J. Hoffman and the Office of the Insurance Fraud Prosecutor.

Zuberi is facing a possible 10 years in prison, with a minimum of four years before being eligible for parole. Paracha will face probation, but the pair will be ordered to pay $1 million in restitution.

Zuberi may be able to cut down his prison time, however, thanks to a plea deal that offers to reduce his sentence by six months for every five kickback-accepting doctors he helps the state prosecute, according to a report from North New Jersey’s The Record.

Between 2008 and 2014, Zuberi and others involved in the scheme provided thousands of kickbacks in order to garner referrals to Diagnostic Imaging Affiliates. They also changed records about where services were being provided to boost reimbursement rates. Officials said the plan generated millions in fraudulent Medicaid payments.

“Zuberi built a company that made millions and whose business model was predicated on paying bribes and making misrepresentations to insurance companies,” Hoffman said in a statement. “His criminal enterprise was noteworthy for the sheer volume of greedy transactions that left a long trail of evidence that led to this successful prosecution.”

Acting Insurance Fraud Prosecutor Ronald Chillemi added:  “Bribery undermines the insurance market, causing business to flow to the wrong places, which inflates rates for everyone that pays premiums. To their patients, a doctor’s opinion is sacred, and it should not be for sale.”

The case grabbed headlines when Zuberi was arrested in June 2014 as part of a sting operation dubbed “Operation RayScam.” Last fall, seven other practitioners were arrested in connection with the kickback scheme.

Zuberi’s guilty plea for the kickback scam was not the first time he’s pleaded guilty to fraud—and was not even the only scam he pleaded guilty to on that same day. On Monday, after admitting to paying the kickbacks, he then pleaded guilty in an unrelated criminal investigation in which he was accused of falsifying reports to receive excessive insurance payments on imaging equipment repairs. Back in 1998, he pleaded guilty to defrauding Medicaid, served 10 months in prison and was barred from participating in the Medicaid program, according to The Record. Zuberi was reinstated to Medicaid in 2011.