Former Mount Sinai Official Indicted for Bid Rigging, Fraud

John Commins, April 7, 2010

A federal grand jury in Manhattan has indicted a former Mount Sinai Medical Center and School of Medicine purchasing agent for his alleged role in a bid-rigging and fraud conspiracy related to maintenance and insulation contracts at the hospital, the Department of Justice announced.

The three-count indictment charges Mario Perciavalle with conspiring to rig bids on the Mount Sinai contracts between June 2004 and September 2005. Perciavalle and unnamed co-conspirators allegedly made it appear that Mount Sinai was awarding competitive contracts, when they had actually submitted intentionally high, non-competitive bids, DOJ said.

Perciavalle and his co-conspirators also allegedly committed mail fraud between March 2003 and September 2005 when Perciavalle awarded work at Mount Sinai to a co-conspirator's company while Perciavalle was allegedly getting cash kickbacks. Perciavalle is also charged with mail fraud related to alleged payments mailed by Mount Sinai to Percivalle's co-conspirator for work done on the rigged contracts, DOJ said.

A bid-rigging conviction carries a maximum penalty of 10 years in prison and a $1 million fine. The fraud conspiracy conviction carries a maximum penalty of 20 years in prison and a $1 million fine. The maximum fine for both charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime, if either of those amounts is greater than the statutory maximum fine, DOJ said.

The indictment against Perciavalle is the latest chapter in an ongoing federal antitrust investigation of bid rigging, fraud, bribery, and tax-related offenses relating to construction, maintenance, and service contracts administered by the Engineering Department of Mount Sinai and the Facilities Operations Department and the Engineering Department at New York Presbyterian Hospital.

Last week, a federal grand jury indicted former re-insulation contractor David Porath and co-conspirator Andrzej Gosek for allegedly participating in a bid-rigging scheme at New York Presbyterian Hospital.

So far, eight people and three companies have pleaded guilty to charges arising from the investigation.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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