Las Vegas spine surgeon indicted on fraud charges

By Mary Manning, Cara McCoy

Published Wednesday, March 11, 2009 | 12:52 p.m.

Updated Wednesday, March 11, 2009 | 6:56 p.m.

A federal grand jury has indicted Las Vegas orthopedic spine surgeon Mark B. Kabins on conspiracy and fraud charges, U.S. Attorney Greg Brower of Nevada said Wednesday.

Kabins, 48, is charged with one count of conspiracy and seven counts of mail and honest service fraud, Brower said. The grand jury returned the indictment Wednesday and it was unsealed Wednesday morning.

He pleaded not guilty to all counts Wednesday afternoon in U.S. District Court and was released on his own recognizance. Holding hands with his wife, he left the courtroom amid a throng of supporters.

"Dr. Kabins is one of the finest people I know. He's engaged in no wrongdoing," said attorney David Chesnoff. "He should never have been charged and we're looking forward now to defending this case. When you represent someone who declares their innocence over and over again, it's a privilege to do it."

Chesnoff, of the firm Chesnoff & Schonfeld, was partners with Oscar Goodman before Goodman retired in 2001 to focus on his duties as mayor of Las Vegas.

Kabins' indictment comes on the heels of the July dismissal of the case against personal injury lawyer Noel Gage. Federal prosecutors are in the midst of appeals over the dismissal of that case, U.S. Attorney for Nevada Greg Brower said.

Kabins is accused of falsifying medical records and conspiring with Gage and medical consultant Howard Awand to defraud a woman who was paralyzed after routine back surgery in 2000.

Kabins and others devised and participated in a scheme to defraud patient Melodie Simon, a former Olympian, and anesthesiologist Dr. Daniel Burkhead, and to deprive Simon of the right to honest services from her attorney, the indictment says.

"The investigation is ongoing, but this indictment does focus on the one particular Melanie Simon case," Brower said. The indictment isn't connected with the dismissal of the Gage case, he said, and Kabins "has been a target of the investigation for quite some time."

The cases are separate: They've been indicted separately and prosecutors will pursue each case separately, Brower said.

Gage's first trial ended with a hung jury on March 18, 2008. Brower said at the time that he intended to retry the case, but a judge dismissed it after federal prosecutors declined to grant Kabins immunity to testify against Gage.

Simon became paralyzed from complications after routine spinal surgery performed by Doctor John Thalgott and Kabins on Aug. 3, 2000, the indictment says.

The purpose of the scheme to defraud was to prevent Simon from suing Kabins and Thalgott, and to ensure she would instead sue Doctor Burkhead, an anesthesiologist who performed a medical procedure on Simon after her initial surgery, the indictment says.

Generally, the indictment alleges Kabins created false and fraudulent medical records, corruptly referred lucrative personal injury cases to Simon's attorney, Gage, to influence him not to sue Kabins and Thalgott, and gave false and misleading testimony during a deposition to deceive others into believing that Burkhead was solely responsible for Simon's injuries. It also alleges he concealed from Simon and Burkhead the true nature of the cause of Simon's injuries and the viability of her potential malpractice case against Kabins and Thalgott and that he entered into a secret agreement with Gage to testify against Burhkhead and to cooperate to obtain false evidence against him.

The indictment also alleges that the following acts further the fraud that occurred between September 2001 and October 2004:

-- In September 2001 Kabins caused Awand, a medical consultant, to refer Simon's medical malpractice case to Gage to influence him not to sue Kabins and Thalgott. Kabins and Thalgott then secretly met with Awand and Gage to discuss the Simon case.

-- In December 2001 Thalgott arranged for another doctor he knew to act as a medical expert in the Simon case.

-- On Jan. 1, 2002, Awand wrote a letter to Kabins, in which he confirmed a secret agreement between Gage, Awand and Kabins, asked Kabins to have others contact the expert whom Thalgott had located, and discussed payments from Kabins and Thalgott to Awand for providing them with malpractice protection.

-- In January 2002 Kabins caused a false and fraudulent report to be prepared for Gage relating to the medical care and treatment provided to Simon.

-- On May 15, 2002, Kabins falsely and fraudulently testified in a civil deposition taken in Simon's case against Burkhead and others.

-- On July 24, 2002, Kabins caused Gage to file a complaint with the Southern Nevada Medical Dental Screening Panel fraudulently naming Burkhead as a defendant, but not naming Kabins as a defendant.

-- In June 2003, Kabins caused Gage to file a complaint in the Eight Judicial Court for Clark County, fraudulently naming Burkhead and others as defendants, but not naming Kabins as a defendant.

-- In June 2004 Kabins caused Burkhead and his malpractice insurer to agree to settle the lawsuit.

-- In October 2004 Kabins caused Burkhead's malpractice insurer to pay Simon about $2 million to settle the suit against Burkhead.

Kabins appeared before U.S. Magistrate Judge George W. Foley, Jr. on Wednesday. A trial date was set for May 5.

If convicted, he faces up to 20 years in prison and a $250,000 fine on each count.

Kabins was licensed by the Nevada State Board of Medical Examiners on June 6, 1992 and is in good standing with the board.

The case is being investigated by the FBI, IRS Criminal Investigation and the Nevada Attorney General's Office and is being prosecuted by Assistant U.S. Attorneys Steven W. Myhre and Daniel R. Schiess.