Malden Executives Face Federal Charges In Kickback Scheme: USAO

MALDEN, MA — Two executives of a Malden-based spinal device manufacturer are facing federal charges in connection with a kickback scheme to further the use of the company's products.

Federal prosecutors say SpineFrontier, Inc.'s founder and CEO, Kingsley Chin, and chief financial officer, Aditya Humad, paid surgeons millions of dollars in phony consulting fees in exchange for the use of its spinal devices.

Chin and Humad agreed to pay the surgeons between $250 and $1,000 an hour to consult for SpineFrontier – work the U.S. Attorney's office says the surgeons never performed. Surgeons received between $32,625 and $978,000 in bribes over the course of the conspiracy, according to the indictment.

"Kickback arrangements pollute federal health care programs and take advantage of patient needs for financial gains," Acting U.S. Attorney Nathaniel R. Mendell said. "Medical device manufacturers must play by the rules, and we will keep pursuing those who fail to do so, regardless of how their corruption is disguised."

While the consulting program was billed as a means of receiving feedback about SpineFrontier's products, it was used to entice surgeons into using the products in surgeries that were funded by federal health care programs such as Medicare, Medicaid, TRICARE and VHA, the indictment further alleges.

"As alleged, Chin, Humad, and their medical device company SpineFrontier conspired to pay out millions of dollars in kickbacks in the form of sham consulting fees to surgeons across the country who, sadly, prioritized these payoffs over their patients' best interests," Joseph Bonavolonta, special agent in charge of the FBI Boston Division, said. "We believe they also cheated taxpayers, who ultimately foot the bill for their medical procedures."

Federal authorities say SpineFrontier reviewed the number of procedures a surgeon performed and how much revenue those procedures generated for the company in order to determine bribe amounts. The surgeons involved spent very little time, if any at all, doing actual consulting work, according to the indictment.

Chin and Humad were indicted Tuesday on one count of conspiracy to violate the Anti-Kickback Statute, six counts of violations of the Anti-Kickback Statute and one count of conspiracy to commit money laundering.

Their indictment follows guilty pleas by Missouri-based surgeon Jason Montone and Kansas-based distributor John Balzer in connection with the scheme, as well as a civil health care fraud complaint filed against SpineFrontier and a third-party firm run by Chin's wife, through which authorities allege the bribes were paid.

Montone and Balzer are scheduled to be sentenced in March 2022.