Surgeon Pleads Guilty to Fraud for Faking Surgeries

Nov. 6, 2013— -- An orthopedic surgeon who botched and faked thousands of surgeries over a five-year period has pleaded guilty to one count of healthcare fraud.

Dr. Spyros Panos, who practiced medicine in Poughkeepsie, N.Y., changed his plea from not guilty to guilty when he appeared in federal court in White Plains, N.Y. last week.

Under a plea arrangement, he faces up to 10 years in federal prison and must pay a $250,000 fine. He has also agreed to pay the government $5 million as restitution for false and overstated Medicare and Medicaid charges.

Panos was freed on bail and will be sentenced in March next year.

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"I willingly and knowingly executed a scheme to defraud the health care benefit programs by causing my medical practice, Mid-Hudson Medical Group in Dutchess County, New York, to submit bills to insurance providers that included inaccurate billing codes in order to obtain higher insurance payments than that would have been paid for the procedures I actually performed," Panos read aloud from a written statement in court after entering his plea.

According to court transcripts, by pleading guilty, Panos admitted to making false representations of the medical services he performed. For example, Panos claimed he performed various techniques and procedures during surgeries when in fact he did not, either because they weren't medically necessary or because they would have resulted in reduced payments from insurance providers.

The charges stated that from 2007 through 2011 Panos reported performing "thousands of surgical procedures, often as many as 20 or more in a single day," included many which were never carried out. Panos and his former medical group submitted claims in excess of $35 million to health care providers.

The federal government claimed that as part of his scheme to defraud insurance providers, he routinely saw up to 90 patients in a single office day, charging insurance carriers an additional $3.5 million in claims during that time period, court records show.

Panos was joined in court by his wife, mother and two brothers. He showed no emotion as he read his plea and statement. But after his guilty admission he turned to his family and began sobbing.

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"Mr. Panos, the only thing I'm going to say to you is that you appear to have a lot of support. That's a very positive sign. I pray for you and your family that all goes well from here on in and I wish you best of luck," District Judge Nelson Roman said to him.

Hundreds of Civil Cases Still Pending

Plaintiffs who have civil lawsuits still pending against Panos were far less sympathetic.

"I don't feel sorry for him at all. My family has been crying for four years," said Debra Nenni McNamee, whose mother Constance Nenni died shortly after having an allegedly faked knee surgery by Panos.

In March 2010, her mother underwent surgery to repair a left knee that had grown arthritic from 76 years of wear and tear, McNamee said. She died less than 24 hours later.

McNamee said she was glad that Panos was finally forced to admit his guilt publically, though she said she is frustrated that the only thing he has confessed to is fraud.

There are 261 civil cases against Panos for performing fake, mismanaged or unneeded surgeries.

"The biggest disappointment is that his fraud case has consumed three years but the malpractice cases and the human beings he hurt have been put on hold," she said. "I can only hope that our cases move forward now. We've been put on the back burner so the state can get their money back and we've been left with nothing but grief."

Another alleged victim, Christine Steele, agreed that the plea was a long time in coming.

"I'm glad that he has admitted guilt because he hurt a lot of people, but it is very hard to forgive him or feel sorry for him," she said. "He had such a charismatic bedside manner, it's hard to believe he is such a monster.

The 50-year-old single mom of two said that she has been left permanently disabled by two surgeries allegedly bungled by Panos. She said that because she cannot stand or walk for long periods she had to leave her job as a postal office manager and is no longer able to work.

Moving The Civil Cases Forward

Debra Cole, a retired phone company employee who had two allegedly bogus surgeries performed by Panos, said while she is pleased Panos will now have to pay for his crimes, she does not believe he acted alone.

"I'm very suspicious of the way things happened. There has to be others involved," she said.

As is the case in many of the civil suits brought against Panos, Cole's names his former employer Mid Hudson Medical Group as well. Many of the suits also name St. Francis Hospital or Vassar Brothers Hospital in Poughkeepsie where the surgeries took place.

Panos' lawyer Jeffery Feldman said that neither he nor Panos would comment on the criminal case or any of the pending civil suits. Representatives for Saint Francis and Vassar Brothers Hospitals also said they had no comment. And Dr. Joseph Garvey, the chief operating officer of the Mid Hudson Medical Group, did not immediately respond to ABC for comment.

In his statement to the court, Panos did not point the finger at any of the other civil defendants.

JT Wisell, a lawyer representing more than 150 of the plaintiffs along with his partner Nancy Mcgee, referred to Panos as "The Hudson Valley Hack." He said he is certain other medical professionals knew Panos was scheduling too many surgeries and should have spoken up.

However, Wisell said that it's still unclear how Panos's guilty plea to the federal crimes will affect the civil cases because Judge Lewis Lubell, the civil judge overseeing those cases, has yet to lift a stay that prevents lawyers from questioning Panos, anyone associated with the Mid Hudson Medical Group or with the hospitals involved.

"The stay should immediately be lifted to allow the plaintiff's cases allowed to go forward," Wisell said. "We should be allowed to start asking questions to find out what Mid Hudson Medical and the hospitals knew about his misdeeds and why didn't they do anything to stop him."

Lubell did not immediately respond to a request for comment.

McGee said that the criminal charge does nothing to compensate Panos's alleged victims for the injuries they sustained due to his actions. She said that criminal guilt only addresses the economic loss sustained by the government and the private insurance carriers.

"These plaintiffs have been suffering for years, and for many, they will continue to suffer for the rest of their lives because of what he did, she said. "Hopefully, the guilty plea is sufficient for the court to lift the stay and let these cases proceed forward so the victims of Dr. Panos's scheme can get justice."

McNamee said she and the other alleged Panos victims want most is closure.

"The government had their day in court," she said. "We want ours."