Health Law

Ex-Hospital CEO Faces Criminal Racketeering Case, Accused of Taking $1.4M in Kickbacks Over a Decade

A former CEO of the Hospital for Special Surgery in New York is facing a federal criminal racketeering case on charges that he took some $1.4 million in illegal kickbacks between 1996 and 2007 from vendors, a hospital employee and a United Kingdom healthcare organization.

John R. Reynolds left his job as the hospital CEO in 2008 and has been defending a related civil suit. His lawyer in that case, Michael Grudberg, did not immediately respond to a Bloomberg request for comment concerning the indictment on charges of racketeering and making false statements to the government that was announced Wednesday in federal court in Manhattan.

However, the Associated Press reports Grudberg said the charges are ‘‘without basis in fact or law’’ and added that his client looks forward to addressing them in court.

If convicted, Reynolds could be sentenced to as much as 25 years.

A press release by the U.S. Attorney in Manhattan provides further details and notes that the false statements charges concern what Reynolds told the U.S. Department of Health and Human Services Inspector General’s office in May 2008 about other participants in the claimed scheme.

A Crain’s New York Business article published in 2009 discusses prior civil litigation against Reynolds concerning claimed kickbacks related to his work at the hospital.

The New York Post also has a story about the indictment.

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