New York man admits in Massachusetts court to scheme that led to approximately $70.6 million in fraudulent bills submitted to Medicare

BOSTON – James Rausch, a 57-year-old New York-based director of operations and sales for the Northeast region of a mobile medical diagnostics company, pleaded guilty in federal court in Boston on June 14, 2025, to conspiring to offer and pay kickbacks to doctors in exchange for ordering medically unnecessary brain scans.

According to the Massachusetts Department of Justice, Rausch, from Port Jefferson Station, N.Y., admitted to one count of conspiracy to violate the anti-kickback statute. U.S. District Court Judge Nathaniel M. Gorton set sentencing for July 10, 2025. The charges were filed in May 2025.

Between March 2015 and September 2020, Rausch allegedly collaborated with others, including two managers at a mobile medical diagnostics company conducting transcranial doppler (TCD) scans, which measure blood flow in the brain. The group arranged kickback agreements with doctors, paying them in cash or by check based on the number of TCD ultrasounds ordered. To conceal the payments, Rausch and his co-conspirators created sham rental and administrative service agreements, falsely suggesting doctors were paid for the use of office space or administrative resources at fair market value, rather than for the volume of referrals.

The scheme led to approximately $70.6 million in fraudulent bills submitted to Medicare, with Medicare paying the TCD company about $27.2 million for these claims.

Conspiracy to violate the Anti-Kickback Statute carries a potential penalty of up to five years in prison, three years of supervised release, and a fine of up to $250,000. A federal district court judge will determine the sentence based on the U.S. Sentencing Guidelines and applicable statutes.

The announcement was made by United States Attorney Leah B. Foley; Roberto Coviello, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General; Kimberly Milka, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation Division, Boston Field Office; Carol S. Hamilton, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division; and Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs Office of Inspector General, Northeast Field Office. The case is being prosecuted by Assistant U.S. Attorneys Howard Locker and Mackenzie A. Queenin of the Health Care Fraud Unit.