Trial over kickback allegations against Cape doctor begins Wednesday

Nearly two years after federal criminal charges were dismissed against Cape Girardeau neurosurgeon Sonjay Fonn, the government is prosecuting him in a civil suit stemming from allegations of kickbacks involving his medical practice that mirror the previous criminal case.

A jury trial in the case is scheduled to begin today in federal court in St. Louis before U.S. District Judge Audrey Fleissig.

According to the court clerk’s office, the trial could last 10 days.

Federal prosecutors successfully argued to hold the trial in St. Louis. Among other things, then-federal prosecutor Richard Callahan said in a memorandum it would be easier to find “potential jurors with no prior connection” to the parties involved in the case.

Callahan wrote Fonn “has been involved with some advertising of his medical services and also owns a number of local businesses” that could make it more difficult to select a jury if the trial were held at the federal courthouse in Cape Girardeau.

Fonn and his fiancee at the time, Deborah Seeger, who operated a medical sales firm, are accused in the civil case of violating federal law by making “false claims” or fraudulent claims in the form of Medicare reimbursement payments of ineligible medical procedures, services or charges, according to the suit.

The defendants also are alleged to have “engaged in, solicited, offered and received illegal kickbacks in connection with furnishing covered goods and/or services or referring a patient to a provider of those services.”

In a ruling on a motion in the case in August, Fleissig summarized the allegations.

She said the “operative complaint” accuses Fonn and his practice, Midwest Neurosurgeon LLC; and Seeger and her company, D.S. Medical LLC, of submitting “false claims” for Medicare and Medicaid reimbursements for surgeries performed by Fonn at Saint Francis Medical Center between December 2008 and March 2012, and for the purchase of implant devices used in those surgeries.

“The claims for reimbursement were allegedly false because they did not disclose that they were the result of alleged kickbacks that violated the federal criminal anti-kickback statute,” the judge wrote in summarizing the complaint.

According to the court document, D.S. Medical is alleged to have received commissions from manufacturers of spinal-implant devices used by Fonn. Seeger and D.S. Medical are alleged to have shared those commissions with Fonn.

The government seeks a monetary award to recover “costs” under the federal False Claims Act and the anti-kickback statute, as well as damages, according to court documents.

The federal suit started out as a civil case brought by a handful of Cape Girardeau doctors and two others in 2012.

Those individuals would receive a percentage of the award if federal prosecutors win the case.

Cape Girardeau physicians Terry Cleaver, Kyle Colle, Scott Gibbs (now deceased), Paul Tolentino and Kevin Vaught, surgical assistant Daniel Henson and Cape Girardeau resident Paul Cairns filed a civil suit in federal court five years ago against Fonn and Seeger and their medical companies regarding kickback allegations.

In a 2012 court filing, it was alleged Fonn and Seeger had an “exclusive arrangement” which resulted in large profits for the defendants.

“Fonn has bragged that his earnings and Seeger’s earnings exceed $8 million per year,” according to the court document.

In 2014, the government intervened in the civil suit, essentially taking over prosecution of the civil case.

Fonn’s attorney, James Martin, argued in a court filing in September 2014 that “nothing in the complaint suggests it is against the law for a doctor to send business to a vendor because of love and compassion, out of friendship or to assist one’s life partner in their business development.”

That same year, a federal grand jury handed down a four-count, criminal indictment accusing Fonn and Seeger of one count of conspiracy to solicit and receive illegal kickbacks and three felony counts of anti-kickback violations.

The criminal case against Fonn and Seeger alleged they operated DS Medical LLC together as a distributor of medical devices and supplies Fonn used in his practice, Midwest Neurosurgeons LLC.

The indictment accused Fonn of altering his medical practice to include more surgeries than usual and to use more spinal implants in those surgeries during the time DS Medical was operating.

It also accused DS Medical of charging manufacturers exorbitant commissions, which Fonn and Seeger allegedly used to buy a home, boat, airplane and make improvements to their house.

In December 2015, U.S. Magistrate Judge Abbie Crites-Leoni dismissed the criminal case against Fonn and Seeger at the request of prosecutors.

Martin, Fonn’s attorney, said after dismissal of the criminal charges that “we never believed that a crime was committed.”

Callahan, the prosecutor, said at the time his office would not comment on the dismissal of the criminal charges because of the ongoing civil litigation in which “we are seeking fines and penalties.”

mbliss@semissourian.com

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