Alabama Medical Fraud Scheme Leads to Prison Sentences for Four Individuals

In Alabama, a sophisticated fraud operation that cost insurers up to $28 million has culminated in significant prison sentences for four individuals, including a medical sales representative and a pain clinic owner.

James E. Ray, 53, from Gadsden, received a 40-month sentence for his role in the conspiracy to commit healthcare fraud, with orders to forfeit $850,000 and pay over $5 million in restitution. David Shehi of Rainbow City, owner of Etowah Pain clinic, was sentenced to 28 months for receiving kickbacks in exchange for ordering unnecessary nerve tests.

Their scheme, operational from 2012 to 2018, involved kickbacks for prescribing unneeded compounded drugs and services, impacting Medicare, Medicaid, and various insurance carriers.

Other participants, John Hornbuckle and Dr. Eric Beck, received sentences of six years and 15 months, respectively. The case underscores the ongoing challenges within the healthcare and insurance industries to combat fraudulent activities that inflate costs and undermine the integrity of medical treatment and workers’ compensation claims.