Doctors-lawyers kickbacks case nets another guilty plea

By Steve Kanigher

Published Monday, March 8, 2010 | 11:01 a.m.

Updated Monday, March 8, 2010 | 3:18 p.m.

Former medical consultant Howard Awand pleaded guilty this morning to concealing and not reporting a felony crime in connection with a scheme that allegedly involved physicians and lawyers who defrauded clients, Nevada's U.S. Attorney Daniel Bogden said.

Awand, a 65-year-old resident of Vevay, Ind., entered his plea before Senior Judge Justin Quackenbush in U.S. District Court.

Awand's plea came two weeks after co-defendant Noel Gage, a Las Vegas attorney, pleaded guilty to a felony obstruction of justice charge.

Both Awand and Gage were originally charged with conspiracy and fraud in 2007 and accused of being part of a network of Las Vegas physicians and lawyers who allegedly defrauded clients by protecting doctors from malpractice lawsuits and sharing kickbacks from legal settlements.

“All of the defendants originally charged in this conspiracy have now entered guilty pleas to federal felony offenses,” Bogden said. “We are very pleased with the outcome of this prosecution.”

Awand pleaded guilty to one count of misprision of felony. Under federal law, in order to prove that a person has committed misprision of a felony, prosecutors must show that a defendant knew that another person committed a felony, concealed this information, and did not notify appropriate authorities about the crime as soon as possible.

Awand is scheduled to be sentenced on June 25. He faces up to three years in prison and a $250,000 fine, as well as restitution and a period of supervised release. The terms of the plea agreement state that Awand is free to argue for any sentence and the government will stand silent on a sentencing recommendation regarding any period of incarceration. Instead, the government will defer to the court.

According to the plea agreement, Awand admitted that he was a medical consultant in Las Vegas and worked with local lawyers and doctors on personal injury cases. Two of the local doctors with whom Awand had business and financial relationships were Las Vegas spine surgeons Dr. Mark Kabins and Dr. John Thalgott.

On August 3, 2000, Kabins assisted Thalgott in performing spine surgery on patient Melodie Simon. Simon became paralyzed from complications that arose after the surgery. Kabins knew that experts could say that he fell below the standard of care in his treatment of Simon, and that he could be sued. To avoid being sued, Kabins asked Awand to set up a meeting with Simon’s attorney, Gage, to persuade Gage not to sue him or Thalgott.

In the spring of 2001, Awand introduced himself to Gage and explained the services he performed as a medical consultant. Gage agreed to pay Awand 40 percent of legal fees earned by Gage on any case Awand referred to Gage. In the summer of 2001, Awand told Gage that he should not sue Kabins and Thalgott because the anesthesiologist, Dr. Daniel Burkhead, was responsible for Simon’s injury.

At that time, Gage rejected Awand’s suggestions. In September 2001, though, Awand referred a lucrative personal injury case to Gage. Immediately thereafter, Gage shifted his focus from building a medical malpractice case against Dr. Kabins to building a medical malpractice case against Dr. Burkhead.

During the fall of 2001, Awand arranged for Gage to meet Kabins and Thalgott and to hear Kabins’ explanation of how Burkhead could have injured Simon. At the beginning of the meeting, Gage obtained the assurance that each person would keep the meeting secret. Gage told Kabins and Thalgott that he would not sue them if they agreed to testify against Burkhead.

In January 2002, at Gage’s direction, Awand caused Kabins to write a report blaming Burkhead for injuries to Simon. The report concealed information that could have been used to show that Kabins may have been at least partially responsible for the injuries. Awand also edited the report.

In May 2002, Gage conducted depositions of Kabins and Thalgott. In the deposition, Kabins testified falsely that he had not spoken with Gage before the deposition and he failed to disclose information that could have been used to show that he was at least partially responsible for Simon’s injuries. Awand knew that Gage and Kabins had committed mail fraud by sending Kabins’s report and false deposition testimony to an expert to be used to build a case to sue Burkhead.

Awand concealed this information and did not report it to proper authorities. Later, Gage sued Burkhead and others for malpractice, but did not sue Kabins or Thalgott. Awand believed that Gage’s decision not to sue Kabins and Thalgott was influenced in part by Gage’s desire to receive case referrals from Awand.

Gage, in his plea, also agreed to pay Simon $702,600, and is scheduled to be sentenced on June 3.

Kabins pleaded guilty on Nov. 23 to one count of misprision of felony, and was sentenced on Jan. 14 to five years of probation, six months of home confinement, and 250 hours of community work service. He was also ordered to pay $3.5 million in restitution.

Awand was also convicted by a federal jury on Jan. 7 of four counts of willful failure to pay tax, and is scheduled to be sentenced on that matter on April 7.

The cases are being investigated by the FBI, IRS Criminal Investigation, and the Nevada Attorney General’s office, and prosecuted by Assistant U.S. Attorneys Steven Myhre and Daniel Schiess.