The former vice president of marketing for defunct Doctors Hospital of Hyde Park, Chicago, was sentenced to 37 months in prison and ordered to pay $5 million in restitution in a criminal fraud and kickbacks case. The executive, Robert Krasnow Sr., pleaded guilty in January 2001 to racketeering and tax evasion; his sentencing, in U.S. District Court in Chicago, was delayed because he was cooperating in the investigation and had health problems, prosecutors said. Physician Monty McClellan, who pleaded guilty to fraud and tax charges in the case, was sentenced last month to two years in prison and $500,000 in restitution. It's unknown whether others will face criminal charges in connection with the scheme. Prosecutors said Krasnow paid kickbacks for patient referrals to several physicians and along with McClellan was responsible for hundreds of unnecessary tests and hospitalizations -- often involving homeless people who agreed to the care in exchange for cash or cigarettes. In all, Medicare and Medicaid paid more than $7 million for unnecessary services at the hospital in the 1990s, prosecutors said.
Doctors Hospital filed for Chapter 11 bankruptcy in April 2000 and closed soon after. A pending lawsuit in U.S. Bankruptcy Court in Chicago accuses the hospital's former owner, ophthalmologist James Desnick, of borrowing and stealing millions of dollars from the hospital, ultimately forcing it into bankruptcy. Desnick and the hospital paid $18.5 million from 1999 to 2000 to settle various civil fraud charges, including cost-reporting violations and pneumonia upcoding. He has not been charged in the ongoing criminal case. -- by Mark Taylor