The U.S. government has charged the former chief executive officer of Campus Eye Management Holdings, E. Bruce DiDonato, for allegedly using his eye surgery centre to commit health care fraud totalling $3.4 million.

In a statement on Wednesday, the U.S. Justice Department said Mr DiDonato was indicted on one count of conspiracy to commit health care fraud and two substantive counts of health care fraud.

The charges also include one count of conspiracy to offer and pay health care kickbacks in connection with illegal referrals, and three substantive counts of paying health care kickbacks.

Mr DiDonato founded New Jersey-based Campus Eye LLC and Campus Eye Surgery Centre LLC. In 2021, he sold part of his stake in the companies to outside investors and became the CEO of the newly formed Campus Eye Management Holdings.

According to the attorney’s office, before and after completing the deal, U.S. authorities alleged that the suspects used Campus Eye entities to commit Medicare fraud by conspiring with others to perform and bill for unnecessary diagnostic tests at the surgery centre.

He was also accused of colluding with ophthalmologists by paying them bribes to prompt them to refer patients in need of eye surgeries to Campus Eye, where they were then subjected to duplicative or unnecessary diagnostic tests.

Both before and after he and outside investors formed the Campus Eye Entities and he became the CEO, Mr DiDonato allegedly conspired with others to defraud Medicare by performing and billing for unnecessary diagnostic tests at the surgery centre.

Mr DiDonato allegedly paid kickbacks and bribes to ophthalmologists in exchange for their referral of patients who needed eye surgeries. Then he allegedly subjected the patients to diagnostic tests that were duplicative of tests they had previously received or were unnecessary for the type of surgery being performed.

The prosecutors also mentioned Mr DiDonato attempted to conceal his payments for bribes and kickbacks by creating fake consulting agreements and disguising referral-based payments as monthly consulting fees tied to a percentage of Medicare reimbursements for patients referred to him from the previous year.

During the course of the scheme, it was alleged that the suspect caused the submission of approximately $3.4 million in fraudulent claims to Medicare, of which Medicare paid approximately $1 million.

If convicted, Mr DiDonato faces a statutory maximum sentence of 10 years’ imprisonment on the health care fraud conspiracy and substantive health care fraud counts, five years’ imprisonment on the kickback conspiracy count, as well as 10 years’ imprisonment for each of the substantive kickback counts.

Separately, the DOJ reached an agreement with Campus Eye Entities to stop criminal investigations into the companies themselves and would not prosecute them in connection with the alleged fraud committed by Mr DiDonato and others.