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Doctor accused of fraud painted a thief, victim

Dr. Frank Lobacz, accused of health-care fraud, leaves

Dr. Frank Lobacz, accused of health-care fraud, leaves court in Central Islip. (Oct. 19, 2010) Credit: Patrick E. McCarthy

Sharply contrasting pictures of a Bay Shore physician were painted Tuesday at the start of his trial on charges of masterminding a multimillion-dollar fraud.

The case against Dr. Frank Lobacz is "about theft and greed . . . simple and straightforward," said Assistant U.S. Attorney Michael Canty in his opening remarks in U.S. District Court in Central Islip.

But Lobacz's attorney, Barry Pittman, said that his client was innocent, a victim of a combination of actions by some of his office staff, a physician he had hired to work for him, his accountant and his stock brokers.

Pittman also said all the actions his client are charged with occurred between 2000 and 2008 while Lobacz was seriously ill with still-continuing heart problems.

Pittman did not say whether those responsible for the actions Lobacz was eventually charged with acted out of malice or mistakes or various combinations of the two.

Canty, who was prosecuting the case with Assistant U.S. Attorney James Miskiewicz, said that Lobacz defrauded two health insurance companies, looted his own employees' pension fund, and evaded income taxes on the money he made through his illegal actions and his financial investments.

Lobacz is charged with conspiracy to commit health care fraud, filing false reports on the employees' pension plan with the federal government and income tax evasion.

Canty said Lobacz received a total of $700,000 from GHI and United Health Care in illegal reimbursements for medical care to his wife, children, and a couple who were friends of his, for exaggerated or nonexistent treatment. Many of the treatments supposedly involved injections for pain.

One of the doctors employed by Lobacz, who supposedly treated his children, "doesn't even know his children," Canty said.

Lobacz also used his employees' pension plan "as a personal piggy bank," taking out $600,000 for personal expenses, Canty said. Canty also said Lobacz failed to report money he made in financial investments to the Internal Revenue Service on his income tax returns.

The trial is expected to continue for the next four weeks before U.S. District Court Judge Denis Hurley.

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