Baltimore spine doctor sentenced to three years for kickback scheme, wire fraud

Baltimore Sun (MD)

The Maryland Board of Physicians is considering revoking a Baltimore spine doctor’s license as he serves a three-year sentence in federal prison for a prescription drug kickback scheme.

Dr. Thomas Raley Jr. was sentenced last year to 36 months in federal prison after pleading guilty to kickback conspiracy and wire fraud charges in the U.S. District Court for the Eastern District of Virginia. The charges stemmed from prescriptions and referrals he issued from his practice, Advanced Spine and Pain, which had locations in Canton, Halethorpe, White Marsh and Severna Park, as well as northern Virginia.

The spine doctor and his business also paid over $3 million to settle a related civil case, according to a news release from the U.S. Attorney’s Office for Virginia’s Eastern District. He left and sold the practice in August 2022, months after he pleaded guilty.

Federal prosecutors said Raley and an Illinois-based attorney, Seth Michael Myers, solicited pharmacists to pay kickbacks in return for the orthopedic surgeon referring expensive compounded medications to their pharmacies. He made nearly $2.5 million working with a New Jersey pharmacist to find formulas that insurance companies would pay the most money for, and intentionally used ingredients with higher reimbursement rates to make more money, according to an agreed-upon statement of facts filed by prosecutors.

Raley’s wife received a salary of $200,000 from a company established to collect kickback payments, which was also used to fund part of Raley’s purchase of a building on South East Avenue in Canton. The building, which was owned by the Archdiocese of Baltimore as part of the St. Brigid Catholic Church property, was then turned into the Canton Flats apartment complex.

Raley’s attorney, Nina J. Ginsberg, wrote in a court filing before the doctor’s sentencing that the doctor knew receiving kickbacks violated federal law and health care agreements he had signed, but “not that his conduct was a crime.”

She noted the compound medications in question were pain creams, safer alternatives to opioids that allowed Raley to reduce opioid dependence in many of his patients.

The Alexandria-based lawyer attached over 50 letters from family and his satisfied patients, including Masrour Barzani, the current prime minister of the Kurdistan regional government in Iraq.

“If given the chance, Tom will continue to dedicate himself to improving the lives of others,” Barzani, who has been treated by Raley several times since meeting him in 2011, wrote.

The Maryland physicians board reprimanded Raley last year for failing to cooperate with its investigation of his practice, and is now considering a petition filed by the state Office of the Attorney General in January to revoke his medical license.

Raley is serving at the Federal Correctional Institution in Cumberland. He is expected to be released in October 2024, according to the federal Bureau of Prisons.