Boston, MA – A Long Island man has pleaded guilty in federal court to orchestrating a massive health care fraud scheme involving millions of dollars in illegal kickbacks paid to doctors for ordering unnecessary brain scans.
James Rausch, 57, of Port Jefferson Station, New York, entered a guilty plea on June 10 to one count of conspiracy to violate the Anti-Kickback Statute, according to the U.S. Attorney’s Office for the District of Massachusetts. Rausch served as the Director of Operations and Sales for the Northeast region of a mobile medical diagnostics company. His sentencing is scheduled for July 10, 2025, before U.S. District Judge Nathaniel M. Gorton.
Federal prosecutors said Rausch and his co-conspirators paid kickbacks to physicians from March 2015 through September 2020 to incentivize them to order medically unnecessary transcranial doppler (TCD) scans, a type of ultrasound used to measure blood flow in the brain.
The scheme allegedly involved fraudulent “rental” and administrative service agreements, which were designed to disguise the kickbacks as legitimate business expenses. In reality, payments were tied directly to the volume of scans ordered by the physicians.
According to court documents, the fraudulent conduct generated more than $70 million in false Medicare claims, with approximately $27.2 million paid out by the federal health program.
“The scale of this fraud is staggering, not just in dollars, but in the breach of trust it represents in our health care system,” said U.S. Attorney Leah B. Foley, whose office led the prosecution.
The charge Rausch faces carries a maximum sentence of five years in prison, three years of supervised release, and a $250,000 fine. The court will determine the final sentence based on federal guidelines and the circumstances of the
