Etowah County men sentenced to federal prison terms for health care fraud

Two Etowah County men were sentenced to federal prison terms on Thursday for their roles in health care fraud conspiracies that prosecutors say cost insurers millions of dollars.

James Ewing Ray, 53, of Gadsden, was sentenced to 40 months and David Lyle Shehi, 43, of Rainbow City to 28 months in prison by U.S. District Judge L. Scott Coogler for conspiracy to commit health care fraud, according to a news release from Prim Escalona, U.S. Attorney for the Northern District of Alabama.

Coogler also ordered Ray to forfeit more than $850,000 and to pay restitution of more than $5.3 million to victims of the fraud, according to the releaser.

Shehi also was ordered to forfeit cash and pay restitution; the amounts were not specified.

According to plea agreements in the case, Ray was a sales representative marketing various health care products and services to physicians, including topical prescription creams, durable medical equipment and electro-diagnostic testing. He was paid fees for those products and services. Shehi owned Etowah Pain, a clinic in Rainbow City.

Both admitted receiving kickbacks from QBR, an electro-diagnostic testing company in Huntsville: Ray for enlisting providers to order tests from the company and Shehi for ordering tests that were inappropriately billed to Medicare and other health insurance providers.

According to plea agreements, medical providers also got kickbacks from QBR, disguised as hourly payments for the ordering physician's time, but instead they were payments for every patient issued a test.

The FBI and the Department of Health and Human Service Office of the Inspector General investigated the case; assistant U.S. Attorneys J.B. Ward and Don Long prosecuted it.