I-Team: Probe Targeting Las Vegas Doctors and Lawyers Moves Forward - 8 News NOW

George Knapp, Investigative Reporter

I-Team: Probe Targeting Las Vegas Doctors and Lawyers Moves Forward

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Federal authorities are moving forward with a conspiracy investigation targeting several of the valley's best-known doctors and lawyer. FBI agents began the probe back in 2003.

Federal prosecutors turned up the heat in front of a grand jury putting some of the most successful doctors and lawyers in Las Vegas in the crosshairs of this investigation. They reportedly called themselves the "Medical Mafia."

The FBI suspects them of conspiring to rip off patients, clients, and insurance companies for tens of millions of dollars. Testimony before a federal grand jury began Tuesday, Feb. 20 and prosecutors paraded more witnesses into the federal building Wednesday, Feb. 21 in preparation for possible indictments. The Channel 8 I-Team was the only news crew on the scene.

Click here to read 'Federal Grand Jury Issues Subpoenas in Insurance Scam,' which contains names of interest to investigators.

The people who've been gliding in and out of the federal building since Tuesday are not rich or famous. They are the alleged victims of the millionaire lawyers and doctors who are suspected of rigging the system to line their own pockets.

FBI agents have reportedly gathered so much information about more than a dozen attorneys and physicians that they weren't sure which cases and charges to pursue. Knowledgeable sources say prosecutors have narrowed their focus to concentrate on cases involving conspiracy.

For example, Cheyenne High School teacher Melodie Simon was paralyzed following two surgeries by two doctors. FBI agents believe the doctors and their two lawyers met with alleged medical fixer Howard Awand and agreed to go after the aenesthesiologist. Agents have been told that Attorney Robert Eglet advised his partner not to worry about a defense expert witness. Sure enough, that witness didn't show for the trial.

The FBI has long suspected that Awand facilitated kickbacks to doctors -- sometimes hundreds of thousands of dollars per case -- money taken from settlements or jury awards in injury cases like Melodie Simon's. Simon declined to comment on her case except to say there are about 20 others just like it.

Peggy Lopez won a multimillion-dollar verdict against Sears, Roebuck and Company after her hand was crushed in an accident. Once again, the FBI thinks her doctors and lawyers divyed up the spoils with the help of Awand.

In a wedding ceremony video obtained by the I-Team, Awand makes an inside joke to Attorney Robert Vannah, who is also said to be a possible target. "It will be worth at least four and a half million dollars."

That video, which also shows Robert Eglet and his wife Tracy, another possible target, is now believed to be in the hands of federal prosecutors. Subpoenas for financial records were sent out in November 2005. Since then, some of the attorneys who were served have said they are being targeted because of their success against the insurance industry.

Sources close to the case say prosecutors now have a paper trail to show the flow of money from the lawyers to the doctors, even though records were post dated. And, the I-Team has learned, some of those professionals who were once targets of the probe are now cooperating with prosecutors and are telling the grand jury just how the alleged scheme worked and, more pointedly, who was involved.

At one point in the investigation, the government planned to go after cases in which medical bills were jacked up through the use of unnecessary surgeries. Since experts can disagree on just what is unnecessary, prosecutors are now focusing on what they consider obvious conspiracies.

Grand jury testimony is often a precursor to indictments. However, as a matter of policy, the U.S. Attorney's office will not comment on anything that is before a grand jury.

Email your commentsto Investigative Reporter George Knapp.

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