Judgment Day for Surgeon Who Admitted to Fake Surgeries

While admitting to faking operations, he pleaded guilty to health care fraud.

March 7, 2014, 7:54 AM

March 7, 2014— -- An orthopedic surgeon who admitted to botching and faking thousands of surgeries over a five-year period was sentenced today to four-and-a-half years in federal prison for one count of health care fraud.

Dr. Spyros Panos, who practiced medicine in Poughkeepsie, N.Y., pleaded guilty to one count of health care fraud last October. In addition to his sentence, he was fined $250,000 and ordered to pay the government $5 million as restitution for false and overstated Medicare charges. He was also ordered to surrender all licenses to practice medicine in states where it had not already been suspended.

The federal court in White Plains, N.Y., was packed with both supporters and alleged victims of Panos.

Pam Bisaccia said Panos performed several surgeries on her both of her Achilles tendons that have left her unable to walk. She read a victim's impact statement to the court before Panos was sentenced. In the statement she said that the surgeries have ruined her life.

"Shaving my legs feels like ripping off skin," she said. "Each step feels like walking on hot coals."

She said her grandchildren can no longer sit on her lap because it causes too much pain.

According to an explanation submitted to the court by the government, Panos was charged with health care fraud because he knowingly provided false information to health insurance providers, including Medicare, that resulted in millions of dollars in excess payments to him and his medical practice, Mid-Hudson Medical Group. Under the law, this constitutes insurance fraud, which is a form of health care fraud.

Panos also read a prepared statement before sentencing. His voice cracked and, at one point, he began sobbing as he spoke of accepting responsibility for his actions. He apologized to his former colleagues, patients and family. He said he intended to atone for his sins so he could one day look in his children's eyes and hope for forgiveness.

In advance of the hearing, Panos submitted a letter to the court explaining why he filed the false insurance claims. The letter said that by 2008, two years after he joined the board of his medical practice, he was falsifying insurance records almost every time he performed surgery.

“I wish I could tell you I had noble motives for this -- but I did not,” Panos wrote. “I did this out of greed and insecurity. ... The influx of money I was bringing into Mid-Hudson increased my pay and earned me the admiration of my fellow shareholders. It was as simple as that.”

More than 260 Civil Cases Still Pending

But many of the more than 260 plaintiffs who have filed civil suits against him say it is not so simple for them.

“He has taken so much away from so many people. No matter what jail time he got it isn’t enough for what he has done to everybody,” said Christine Steele, a 50-year-old single mother of two and a former postal worker who had two unnecessary knee surgeries performed by Panos. He mishandled the last surgery so badly, she said, she was forced to file for disability four years ago and has been unable to work full-time ever since.

Debra Nenni McNamee, whose mother, Constance Nenni, died shortly after having a faked knee surgery by Panos, said that while she is glad he is finally being punished for his crimes, she is angry that he will never be tried for what he allegedly did to her mother.

“As he sits in jail, now he will know what it is like to miss people that he loves,” McNamee said. "But he can see them again someday and we will never see her again."

McNamee and her family were in court for the sentencing. They wore t-shirts bearing a photo of their mother and the words, “In Memory of Constance Nenni 2010.” As Panos' sentence was read, McNamee was visibly shaken. Later, she said she had been expecting the judge to follow the federal government's sentencing recommendation that called for Panos to spend a minimum of seven years behind bars.

Panos, his attorneys and the attorney for Mid-Hudson Medical Group did not reply to numerous requests by ABC News to comment on the proceedings.

Panos submitted dozens of character references to the court in a bid to reduce his jail time. Most of those letters were written by friends, neighbors, former patients or priests who met Panos at church or through his volunteer work. The letters spoke of Panos' dedication to his family and the practice of medicine, as well as the hardship his family would experience should he go to prison. Notably, only one doctor, a psychiatrist who was not part of his former medical practice, submitted a supporting letter.

The federal government countered with its own memorandum stressing the bold and enduring nature of Panos’ crimes.

“Panos performed thousands of surgical procedures, and often as many as 20 or more in a single day, for which he and MHMG submitted claims in excess of $35,000,000 to health care providers,” the government sentencing memorandum read. “Panos routinely saw at least 60 patients in a single office day at MHMG, and at times saw more than 90 patients in a single office day.”

The memorandum added that once the scheme was uncovered, Panos tried to cover up his crimes by blaming them on clerical errors. Even after he was fired from his practice, he falsely claimed to prospective employers that the billing discrepancies were the result of his surgical notes being improperly transcribed by his wife and others, the memorandum said.

The memorandum also noted that Panos was rewarded handsomely for his misconduct. During the years 2007 through 2011, Panos received more than $7.5 million in compensation from his employer.

Victims May Now Get Their Day in Court

With the criminal case against Panos officially resolved, lawyers for the plaintiffs in the civil cases said they hoped they could finally move forward. Immediately after the sentencing, the Putnam County, N.Y., judge overseeing the civil cases, Lewis S. Lubell, issued an order to remove an "order of stay" that was preventing any defendants in the case -- including Panos, Mid-Hudson Medical Group and various hospitals and surgical centers where Panos performed surgery -- from directly responding to the civil actions.

JT Wisell, who, along with his legal partner, Nancy McGee, represents more than 150 civil plaintiffs, previously told ABC News the stay had been put in place so Panos could avoid self-incrimination in the criminal case. Wisell said he hoped his cases would now be able to move forward.

“The plaintiffs are hoping for closure.” he said.

However, Charles Rock, who also represents several plaintiffs in civil cases filed against Panos, said it was unclear what will happen next.

“The sentencing is a resolution of the fraud criminal issue but, as for the impact on the civil matters, we don’t know yet,” he said.

Plaintiff Debra Cole said that, while she is glad Panos has finally been sentenced, she has mixed emotions.

“Of course, I don’t think what he has admitted to in criminal court is the total truth," she said. "He has only admitted to insurance fraud as far as I know, not medical malpractice. Those are two different things. He needs to admit his full guilt."

McNamee said she is looking forward to getting answers for all of the questions she said have eluded her family in the four years since her mother's death.

“He could never have done what he did without a lot of people helping him,” she said. “Doctors, nurses, his medical group -- they made millions and no one else is paying the price. They still go on with life as normal and they are still collecting money and still thriving. My mother is gone forever.”

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