Indictment clouds hang over doctor in ongoing ‘referral scheme’ probe

There’s been a lull, at least publicly, in the probe into Las Vegas doctors and lawyers since March 18, when there was a hung jury in the case of attorney Noel Gage.

The 8-4 split in favor of conviction caused a mistrial, and then on June 17 the federal judge dismissed the indictment after federal prosecutors refused to give Kabins immunity from prosecution so he could testify in the next trial on Gage’s behalf.

So the workaholic doctor continued working, making from $5 million to $9 million in annual income, and little happened until Oct. 30, when the office of U.S. Attorney Greg Brower filed its brief challenging the dismissal of the case by U.S. District Judge Justin Quackenbush.

That document made it clear that federal prosecutors are eager to indict Kabins. Real eager. The brief nearly read like an indictment, as it summarized Kabins’ actions and what the government contended are his falsehoods.

While arguing the legal reasons why the federal judge had no business ordering prosecutors to grant anyone immunity, the 51-page appeal brief called Kabins a grand jury target again, again and again, and laid out the government’s theory as to why he should be indicted.

The first to be indicted was Howard Awand, the alleged ringleader of the conspiracy. No. 2, and the first to go to trial, was lawyer Gage. Kabins would be the third, and the first doctor in the ongoing grand jury investigation, a dubious honor at best.

The government contends the conspiracy revolved around referring personal injury clients to doctors and lawyers. “In return for the client referrals, the lawyers paid kickbacks to Awand in the form of unethical fee-splits and promised Awand they would not bring medical malpractice suits against the doctors, including Kabins, who participated in the referral scheme with Awand.”

In return, the doctors would testify for the lawyers picked by Awand and would take payment in liens, sometimes bypassing billing insurance, the government alleged. (Awand supposedly bought the medical liens at a deep discount and then the patient paid the full cost when the case was resolved either in court or through an insurance settlement.)

If true, the scheme defrauded the personal injury clients by making it less likely they could successfully sue for medical malpractice and by reducing how much they might receive for their injury.

The client featured in the three-week trial was school teacher Melodie Simon.

After she was operated on by Drs. John Thalgott and Kabins and became a paraplegic, she went to Gage to sue for medical malpractice. She was told she had as much as a $10 million case. Yet when it ended, she settled for $2 million.

According to the testimony of Thalgott, who became a government witness, there was malpractice and he and Kabins had a secret meeting with Gage and agreed to place the blame on the anesthesiologist. In exchange, Gage did not sue them.

Kabins has contended there was no malpractice on his part. His attorney David Chesnoff argued Kabins deserved immunity from prosecution so he could testify on Gage’s behalf.

The government said not a chance, because Kabins is a target and likely to be indicted. (Apparently sooner, rather than later.) Plus, prosecutors believe his testimony would be false so it makes no sense to give him immunity.

There’s talk this appeal could ultimately go to the U.S. Supreme Court because the legal questions involve whether the judicial branch can force the executive branch to do its bidding on this immunity question.

In other words, I’ll be writing about this for years.

That doesn’t mean the government can’t move forward with others like Kabins, even if the charges against Gage and Awand are on hold for years while the immunity question is appealed to the 9th U.S. Circuit Court of Appeals.

Readers are constantly asking for updates on this case, and it’s obvious there’s a lot of public interest. Whether they’re patients or clients, people want to believe their doctors and their attorneys are looking out for their best interests and are doing what they’re paid to do and not double-dealing.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison.