Howard Awand gets 4 months in medical fraud case

By Steve Kanigher

Friday, June 25, 2010 | 4:33 p.m.

Howard Awand today received a four-month prison sentence and was ordered to pay $700,000 in restitution for serving as a medical consultant who admitted that he failed to report to proper authorities that Las Vegas attorney Noel Gage and Dr. Mark Kabins had committed fraud.

“We are very pleased to have resolved these cases with felony convictions and orders for significant monetary penalties,” Nevada's U.S. Attorney Daniel Bogden said. “We are confident that these prosecutions have sent a significant message to the medical and legal community that obstructing a federal criminal investigation is a serious felony offense which can lead to criminal charges.”

Awand, 65, of Vevay, Ind., was sentenced by Senior U.S. District Judge Justin Quackenbush. Awand pleaded guilty in March to one count of misprision of felony. He was also convicted in Las Vegas in January of four counts of willful failure to pay tax, for which he was sentenced in April to four years in prison and ordered to pay $2.5 million in restitution.

According to the plea agreement, Awand admitted that he was a medical consultant in Las Vegas and worked with local lawyers and doctors on personal injury cases. Two local doctors with whom Awand had business and financial relationships were Las Vegas spine surgeons Kabins and Dr. John Thalgott.

On Aug. 3, 2000, Kabins assisted Thalgott in performing spine surgery on patient Melodie Simon. Simon became paralyzed from complications that arose after the surgery. Kabins knew that experts could say that he fell below the standard of care in his treatment of Simon, and that he could be sued. To avoid being sued, Kabins asked Awand to set up a meeting with Simon’s attorney, Gage, to persuade Gage not to sue him or Thalgott.

In the spring of 2001, Awand introduced himself to Gage and explained the services he performed as a medical consultant. Gage agreed to pay Awand a referral fee of 40 percent of legal fees earned by Gage on any case Awand referred to him. In the summer of 2001, Awand told Gage that he should not sue Kabins and Thalgott because anesthesiologist, Dr. Daniel Burkhead, was responsible for Simon’s injury. At that time, Gage rejected Awand’s suggestions.

In September 2001, though, Awand referred a lucrative personal injury case to Gage. Immediately thereafter, Gage shifted his focus from building a medical malpractice case against Kabins to building a medical malpractice case against Burkhead.

During the fall of 2001, Awand arranged for Gage to meet Kabins and Thalgott and to hear Kabins’ explanation of how Burkhead could have injured Simon. At the beginning of the meeting, Gage obtained the assurance that each person would keep the meeting secret. Gage told Kabins and Thalgott that he would not sue them if they agreed to testify against Burkhead.

In January 2002, at Gage’s direction, Awand caused Kabins to write a report blaming Burkhead for injuries to Simon, concealing information that could have been used to show that Kabins may have been at least partially responsible for the injuries. Awand also edited the report. In May 2002, Gage conducted depositions of Kabins and Thalgott.

In the deposition, Kabins testified falsely that he had not spoken with Gage before the deposition and he failed to disclose information that could have been used to show that he was at least partially responsible for Simon’s injuries. Awand knew that Gage and Kabins had committed mail fraud by sending Kabins’s report and false deposition testimony to an expert to be used to build a case to sue Burkhead. Awand concealed this information and did not report it to proper authorities.

Later, Gage sued Burkhead and others for malpractice, but did not sue Kabins or Thalgott. Awand believed that Gage’s decision not to sue Kabins and Thalgott was influenced in part by Gage’s desire to receive case referrals from Awand.

Gage pleaded guilty on Feb. 23 to felony obstruction of justice charges. He was sentenced on June 3 to three years probation and 90 days of home confinement. He also was fined $25,000 and ordered to pay $702,600 to Simon.

Kabins pleaded guilty on Nov. 23 to one count of misprision of felony. He was sentenced on Jan. 14 to five years of probation, six months of home confinement, and 250 hours of community work service. He was also ordered to pay $3.5 million in restitution.

The cases were investigated by the FBI, IRS Criminal Investigation, and the Nevada Attorney General’s office, and prosecuted by Assistant U.S. Attorneys Steven Myhre and Daniel Schiess.