The criminal conviction of a trusted employee at an Arkansas neurosurgery practice shows that you need to keep close tabs on key employees to make sure they don't slip into illegal activities. Crooked staffers who know how to work the system can make a lot of money ordering expensive orthopedic items, in particular.

Geffrey A. Yielding, LPN, was working as a physician's assistant for Richard Jordan, MD, who performs cranial, spinal and peripheral nerve surgery in Little Rock, Ark. Court records show Mr. Yielding used his authority to order unneeded products at Baptist Health Medical Center-North Little Rock for Dr. Jordan's surgeries. He allegedly bribed Jordan Wall, a charge nurse at the hospital, to order devices at the hospital's expense from Mr. Yielding's wife, an independent agent selling products from Orthofix, a manufacturer of external bone growth stimulators, and Osteotech, a supplier of allograft bone. Investigators found the couple pocketed $380,000 in commissions in the scheme and paid $50,000 in bribes to Mr. Wall.

When the hospital uncovered the 2-year scheme, it terminated Mr. Wall and another employee and reported the matter to the FBI for a criminal investigation. Alerted by Mr. Wall, Mr. Yielding tried to cover up the bribes by representing them as a loan and created a fake promissory note. Both men were put on trial. Mr. Wall, who subsequently testified against Mr. Yielding, was sentenced to probation and a fine. Mr. Yielding was sentenced in May 2009 to 11-and-a-half years in prison and ordered to pay $944,995 in restitution.

"Hopefully, this will send scrub technicians, physicians assistants and operating room nurses a stern message: 'You play, you will pay,'" editorialized the "Spine Blogger" after Mr. Yielding's conviction. Osteotech, Orthofix and Dr. Jordan did not face any allegations of wrongdoing.

An appeals court upheld Mr. Yielding's conviction in an Oct. 5 decision. In his appeal, Mr. Yielding challenged a variety of legal points in the case, including charges that he violated the federal Anti-kickback Statute prohibiting payments for referral of services under Medicare. Mr. Yielding contended he was protected by a safe harbor under the Anti-kickback Statute because his payments to Mr. Wall were part of a legitimate business relationship. As proof he cited the promissory note. But the appeals court concluded the promissory note was fake and concluded that the 2 men did not have a legitimate business relationship.

Mr. Yielding also objected to admission of evidence at the trial alleging that in 1998 he had stolen funds from Dr. Jordan and in 1995 from another employer. He said the information was not relevant to the case and had prejudiced the jurors. The appeals court, however, ruled the information was important in understanding his "knowledge and intent."

Mrs. Yielding died 3 years before the trial. (Her death, which occurred as she drove through a fast food restaurant, occurred the day before she was to testify to a grand jury in another criminal investigation involving orthopedic products.) After she died, her husband attempted to subpoena information from her attorney to use in his own case, but the trial court allowed only certain information to be handed over and ruled that the rest was protected under attorney-client privilege. The appeals court affirmed that position, noting the attorney-client privilege applies even after death.

"Healthcare fraud is one of the FBI's highest investigative priorities," stated Thomas J. Browne, an FBI agent involved in Mr. Yielding's case, in a release issued around the 2009 trial. "This office will continue to aggressively investigate these matters and we encourage the public to report any information they may have regarding health care fraud to the FBI or the Office of Health and Human Services."

Leigh Page