Malik file photo 2014

Malik file photo 2014

Dr. Sandeep Sherlekar, left, and Dr. Atif Malik in 2014 at the American Spine Center.

A pain management clinic run by doctors accused of Medicare fraud filed for bankruptcy and will shut down its Frederick lab.

Advanced Pain Management Services, renamed the American Spine Center and most recently operating under the name Orthopedic and Wellness, filed for bankruptcy on March 16 in the Western District of Kentucky.

Filing for Chapter 11 bankruptcy will allow it to continue operating as it restructures its debt and considers selling off parts of the business.

The company owes SunTrust Bank $1.7 million, according to court records.

While the Orthopedic and Wellness clinic in the 1000 block of Key Parkway will remain open, an Advanced Pain Management lab at 141 Thomas Johnson Drive in Frederick must be vacated within two weeks, according to court records. SunTrust has a lien on the property and can repossess it.

Orthopedic and Wellness CEO Kal Kahloon stressed that the company as an entity was never accused of any crimes.

“The company itself was never under investigation,” he said. “The company itself is not accused of any wrongdoing.”

The company’s clinic in Germantown closed at the end of last month, according to postings on its website and social media page. Kahloon said the office was not doing well financially.

While the bankruptcy was filed in Kentucky, the parties involved in the case agreed on Thursday to make a motion to transfer the case to a Maryland court.

The bankruptcy came as American Spine Center principal Atif Babar Malik faces criminal charges related to accusations that he was part of a kickback scheme that collected around $1.37 million from a urine testing lab.

He is also accused of participating in a plan to defraud Medicare by $530,000 in reimbursements.

Malik continues to work at Orthopedic and Wellness as he awaits trial.

“An accused [person] is presumed to be innocent until proven guilty. ... He is seeing patients as he did before,” Kahloon said.

The other American Spine Center founder, Sandeep Sherlekar, also faced the same fraud charges. He died by suicide on Sept. 30, 2016, in Frederick after the indictment was unsealed.

New York resident Konstantin Bas, CEO of the laboratory testing company accused of colluding with American Spine Center, already pleaded guilty to conspiracy to violate the anti-kickback act.

Bas is scheduled to be sentenced June 23 when he will face up to five years in prison and a $250,000 fine.

Frederick resident Vic Wadhwa pleaded guilty to his role as a “go-between” to the American Spine Center and the lab and is awaiting sentencing.

Mubtagha Shah Syed, of New Jersey, similarly pleaded guilty to violating the anti-kickback act after admitting to helping set up the agreement between American Spine Center and the laboratory testing company. His sentencing is scheduled for Dec. 13.

Muhammad Ahmad Khan, CEO of American Spine Center at the time of the alleged crimes, faces kickback charges as well.

Sherlekar, Malik and Khan were additionally accused of conspiring to defraud the IRS by failing to report cash payments to American Spine Center and filing false tax returns between January 2009 and 2013.

Follow Kelsi Loos on Twitter: @KelsiLoos.

(8) comments

crc1busdriver

Finally, Finally, they caught up with the criminal activity these people are involved in, and have been for years. My husband started out with these people, and is now dead of suicide, as well. People who feed people who are in pain, pain killers until they are addicted, should be charged with their deaths. Finally, Justice for Tom

Duck N Accountability

It is refreshing that FNP is finally taking notice of these serious issues, despite the fact they have been ongoing since Dr. Sherlekar's passing on 9/30/16.
Would have been nice if this company, to whom the city of Frederick has, in the past, awarded (unfounded) accolades, would for once, try to be honest. Might do them some good with everyone - patients: past, present, (future? lol), providers (some of whom apparently were not even aware that they were working for someone other than American Spine despite the website change and all), and the remaining staff (oh, and btw...they let everyone except the ones they can easily manipulate go with just two weeks to find new positions! They've ruined several entire families who had both bread-winners employed by AS, lied to others to keep them from going to competitors, despite them being offered other positions and then, they were subsequently let go, and more....)
Isn't it ironic that it was not until the comments to the article published prior to this article were public that nothing had been announced about closures of offices on their website? Suddenly, about two days ago, a notice that the Germantown office 'would be' closing on 3/31/17, was posted on their site. Cover up much?
The bankruptcy petition lists $1.842 mil in assets and $2.507 mil in liabilities. Their largest creditor appears to be Suntrust which is owed about $2 million which is guaranteed by Malik and Sherlekar (now his estate). Suntrust declared a default on October 11, 2016 and accelerated the due date to make the loans due immediately.
There are 2 cases to evict APMS from the Key Parkway location.
The budget for future activities shows APMS losing $115k per month which it assumes it can collect in receivables, but how will they pay their providers, staff, and the debt in question????
APMS has requested court permission to take a $175k loan from Potomac Spine LLC, which is owned by Kal and Nina Kahloon and Dr. Ojeyemi. Hope Dr. Ojeyemi, a young surgeon who was thought to have promise, knew what he was doing by signing on the dotted line with a company known for some potentially criminal behavior.
Watch this situation carefully, citizens of Frederick and Maryland at large. There will be much more to come.

Good1best

Germantown location was closed before 2017 I should now i'm a patient that wasn't told Intel the last minute and move my appointment to Frederick Maryland that's over 4-5 months ago an I had no idea 💡 That anyone was under investigation my patient care was being affected but didn't know that they were doing for a fact illegal things!! What's ironic about it Is they tell me just last month that my papers are back up in the system which doesn't make sense because I personally turned in paperwork that has to do with my medical care also last year I had this problem with them saying you didn't have documentation from doctors even though I was told my other doctors did submit paperwork to them!! I was very uncomfortable just last month because I saw someone taken videos outside then came in and took pictures of the board they had positions that were seeing patients that day. Then I knew with no doubt something was going on then I looked up the practice to see if they and any criminal cases open an I stumbled upon this I couldn't Believe what I seen an read! I also from last year was Bill and $15 Which can't be because I never pay a co-pay ever!!

Good1best

Germantown, Maryland location close October of last year "2016"

Good1best

The new practice is under the same building that was being investigated for the death of the doctor an was the same place of old practice

jerseygrl42

wonder where these crooks got their "education"....disgusting

Good1best

OK this one guys being charged this is part of that article: New York resident Konstantin Bas, CEO of the laboratory testing company accused of colluding with American Spine Center, already pleaded guilty to conspiracy to violate the anti-kickback act.

Bas is scheduled to be sentenced June 23 when he will face up to five years in prison and a $250,000 fine. But look at this link to this guy still practicing and making kits there a new laboratory testing An how do we know if he's doing this legally here's the link: http://www.rfdtv.com/story/34689102/konstantin-bas-ceo-of-availius-llc-has-announced-the-launch-of-a-new-product-a-specimen-collection-kit-for-clinical-laboratories

Good1best

http://www.prnewswire.com/news-releases/konstantin-bas-ceo-of-availius-llc-has-announced-the-launch-of-a-new-product-300333514.html

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