Biodiagnostic Laboratory Services president arrested for health care fraud, kickbacks

Police removing evidence at BLS (Michael Karas/The Record)

Police removing evidence from BLS (Michael Karas/The Record)

David Nicoll, part owner and president of Biodiagnostic Laboratory Services (BLS) in New Jersey, has been arrested along with his brother and cousin on charges of defrauding Medicare and private insurers of at least tens of millions of dollars.  A New Jersey internist, Dr. Frank Santangelo, was also arrested for allegedly receiving $700,000 in kickbacks for his referral of $4.2 million worth of laboratory studies to BLS.

The arrests followed a years-long investigation into BLS and its dealings by federal and other law enforcement authorities, including the Postal Service.

The alleged scheme involved BLS paying “numerous” doctors to refer specimens to BLS in exchange for often thousands of dollars a month “under the guise of lease, service, and/or consulting agreements.”  Basically, BLS supposedly would “lease” space in doctor’s offices that the lab did not need or use.  One doctor received $2,200 per month for leasing 100 sq ft of office space.  At least one other physician was paid $1,500 per month to fill out a one page questionnaire each month that required less than two minutes to complete.

According to a conversation via text message between Dr. Santangelo and David Nicoll highlighted in the complaint, Dr. Santangelo may have been receiving $40-50,000 per month for his referrals.

In addition to providing the specimens, referring physicians are also accused of providing erroneous diagnostic codes to justify unnecessary lab testing, which could remain in patient’s records for the rest of their lives, and could possibly lead to future misdiagnoses.

Over the course of the alleged conspiracy (2006-2012), BLS is thought to have generated over $200 million in revenue, $33 million of which went to its now 39 year old president, David Nicoll.

According to the FBI, Mr. Nicoll spent:

…more than $5 million on high-end and collectible automobiles, including approximately $580,000 for a Yenko Nova and approximately $365,000 for a Yenko Chevelle, approximately $300,000 for a Ferrari, and approximately $291,000 for a Corvette; more than $700,000 to purchase a Manhattan apartment for a female companion; $600,000 on private jet charters; $392,000 on tickets to sporting events; $216,000 at electronics stores; and $154,000 at a gentleman’s club and restaurant.

All four men were released on bail:  $1 million for Mr. Nicoll, $500K for his brother and $250K for his cousin and Dr. Santangelo.

Yenko Nova

Yenko Nova

Yenko Chevelle

Yenko Chevelle

Obviously I know what a Ferrari is, but I had never heard of Yenko automobiles, so I looked them up and basically, Yenko was a custom muscle car shop in Pennsylvania in the 60’s and 70’s.  I guess some people like them, but to me, not worth $300K+.  And definitely not worth risking going to jail for.

I often wonder if lavish spending leads to fraud or vice versa.


  1. dr.cosell says:

    Sadly, I have never driven a car worth going to jail for. I will have to put that on my bucket list.

  2. Susan Healy says:

    It is now June 13, 2014. Mr. Nicoll and his brother are still not in jail.. It’s a year later……What’s happening?
    Thought by now I’d have seen it on an episode of
    American Greed……

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