A former Middletown chiropractor who masterminded a massive healthcare insurance fraud but then claimed he had no basis for pleading guilty, has lost his bid for release from prison.
U.S. District Judge Kenneth M. Karas denied a writ of habeas corpus to set aside James Spina’s 2021 conviction for conspiracy to commit healthcare fraud.
“Simply put, there is no way to interpret the clear record to suggest that petitioner thought he was admitting only to state law violations,” Karas ruled in a Nov. 18 opinion. “Thus, there is no basis whatsoever to conclude that petitioner’s detailed plea allocution failed to provide a factual basis to accept his guilty plea.”
From 2011 to 2017, Spina and other conspirators billed Medicare and private health insurance companies for $80 million and netted tens of millions, according to court records.
He provided pain management and rehabilitation services at Dolson Avenue Medical in Middletown. But he used several phony clinics in a scheme to double bill for services. By spreading the bills across several corporate names, he decreased the risk of getting caught by any one healthcare insurer.
Spina and his co-conspirators also billed for unnecessary services and never-performed services, altered medical records, and withheld patient records to obstruct audits by Medicare and private insurers.
He encouraged a neurologist to administer a lucrative procedure, facet injections, despite knowing that several of the patients had suffered adverse reactions from the delicate procedure. One patient, in 2017, died shortly after receiving the injection.
Spina pleaded guilty to healthcare care fraud conspiracy in 2019.
Magistrate Judge Judith McCarthy found Spina competent to plead guilty at a plea hearing, Karas said, and found him fully aware of the rights he was giving up by pleading guilty.
Spina acknowledged, for instance, that he had reviewed a plea deal with his attorney and acknowledged the terms. He testified, “I knew what I was doing was in violation of the law.” And he agreed not to appeal the sentencing.
In April 2021, Karas sentenced Spina to nine years in prison and three years of supervised release, and ordered him to pay $9.8 million in restitution.
Despite the appeal waiver, Spina appealed, claiming the sentence was unreasonable. The Court of Appeals dismissed his petition.
Then last year Spina petitioned to have the sentencing set aside, arguing that he had received ineffective legal assistance. He said McCarthy had failed to personally inform him of the elements of the offense at the plea hearing, for instance, and that he had admitted only to violating a state law and not to a federal violation.
“Both claims are contradicted by the indisputable record and therefore lack any merit, Karas says. “While petitioner now hopes to minimize his conduct by suggesting he violated only New York State law, his own admissions from his plea allocution show that he knowingly and willfully participated in a scheme to defraud healthcare benefit programs, including … Medicare.”
Spina, 66, is imprisoned at the Otisville Federal Correctional Institution, about seven miles away from his former clinic. He is scheduled for release in March 2028.
