Massachusetts Law Firm Sued by Attorney General Over Illegal Kickback Scheme

September 28, 2020

Massachusetts Attorney General Maura Healey has filed a lawsuit against a Massachusetts law firm, alleging it accepted tens of thousands of dollars in illegal kickbacks from a pharmacy in exchange for referring hundreds of its personal injury clients to the pharmacy.

In a complaint filed in Suffolk Superior Court, Healey contended that Keches Law Group P.C. violated the state’s consumer protection law by accepting more than $90,000 in kickbacks from Injured Workers Pharmacy (IWP) in exchange for referring at least 800 clients to the pharmacy. Healey alleges in the complaint that Keches Law Group did not disclose its financial interest in the referrals or obtain its clients’ informed consent, according to a press release issued by Healey’s office.

“Lawyers in Massachusetts are expected to follow the law,” Healey said in the release. “Clients should feel confident that they are getting unbiased advice from their lawyers, not being steered towards providers that are secretly paying for referrals.”

The Massachusetts Attorney General’s Office began investigating Keches Law Group in connection with an investigation into IWP’s dispensing practices. The investigation into IWP resulted in an $11 million consent judgment to resolve claims that the pharmacy violated Massachusetts’ consumer protection law by failing to implement adequate safeguards against unlawful and dangerous controlled substance dispensing and by paying kickbacks for new patient referrals, the release stated.

According to Healey’s complaint, Keches entered a one-year “marketing agreement” with IWP in March 2017 that alleged IWP would pay Keches $4,000 per month to link to IWP’s website and promote IWP’s pharmacy services. But internal emails showed the actual purpose of the monthly payments was to compensate Keches for referring at least 40 of its clients to IWP each month.

The complaint further contends that Keches and IWP agreed to a second unwritten arrangement in January 2018, in which IWP agreed to pay for Keches’ social events in exchange for referrals. IWP paid for Keches’ social events costing more than $74,000, including an X1 racing event, a yacht outing and a nearly $24,000 holiday luncheon, the complaint alleges, adding that Keches’ referrals under the 2017 and 2018 agreements generated more than $1.2 million in revenue for IWP.

The AG’s lawsuit seeks an order from the court permanently enjoining Keches from further violations of the consumer protection law, together with consumer restitution, civil penalties and attorneys’ fees and costs.

“Keches Law Group (KLG) is surprised and disappointed that the Attorney General’s Office (AGO) has brought a civil Chapter 93A claim based on the firm’s short-term marketing arrangement with an online pharmacy,” said Thomas F. Maffei of Sherin and Lodgen LLP, counsel to KLG, in an emailed statement. “KLG cooperated with the AGO’s unrelated investigation of that pharmacy and immediately terminated its commercial relationship. There was no quid pro quo, and to their knowledge no client was harmed. KLG denies that its conduct was unfair or deceptive in any way and disputes the AGO’s [Attorney General’s Office] characterization of the facts. For 35 years, KLG has fought to protect the rights and interests of thousands of injured Massachusetts workers and accident victims. KLG will continue to do so while it defends this claim.”

This matter is being handled by Senior Enforcement Counsel Gillian Feiner, Special Assistant Attorney General Matthew Lashof-Sullivan and Paralegal Philipp Nowak of the AG’s Health Care and Fair Competition Bureau, with assistance from Assistant Attorney General David Kim of the AG’s Administrative Law Division.

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