Sacred Heart Doctor Cleared In Federal Kickback Case

CHICAGO (STMW) -- A doctor accused of taking kickbacks in exchange for patient referrals to the now-shuttered Sacred Heart Hospital was cleared by a federal judge Wednesday.

Prosecutors said Rajiv Kandala's contract to educate patients and staff on palliative care at the West Side hospital was simply a "disguise" for an improper deal to steer patients to the hospital. A grand jury accused Kandala of accepting two $4,025 checks to that end dated in December 2012 and February 2013.

But U.S. District Judge Matthew Kennelly acquitted Kandala on both counts Wednesday, the Chicago Sun-Times is reporting. He noted the two payments came after Kandala stopped sending patients to Sacred Heart, and he said prosecutors failed to meet their burden of proof.

Kandala's attorney, Ted Poulos, did not immediately comment after court. The same judge convicted another Sacred Heart doctor, Shanin Moshiri, two weeks ago for taking a $2,000 kickback.

Prosecutors said Sacred Heart officials also provided Kandala with the services of another doctor who agreed to treat Kandala's patients at Sacred Heart at a reduced rate. Kandala didn't pay that doctor, and the arrangement ended in December 2012, court records show.

In a secretly recorded March 2013 phone conversation, Kandala balked after a hospital official asked him to collect his paycheck in person. The official said Sacred Heart owner Ed Novak was upset about the lack of patient referrals. Kandala allegedly replied that, "when he's holding checks there's nothing gonna happen."

"He's not going to get a thing!" Kandala said, according to court records.

But the evidence supported a kickback conspiracy "only among the hospital administrators," Kandala's attorneys wrote in court filings.