Press Release  AG Healey Sues Massachusetts Law Firm Over Illegal Kickback Scheme

Boston — Attorney General Maura Healey today filed a lawsuit alleging a Massachusetts law firm 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 today, AG Healey alleges that Keches Law Group, P.C. engaged in unfair and deceptive acts under 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 without disclosing its financial interest in the referrals or obtaining their clients’ informed consent.

“Lawyers in Massachusetts are expected to follow the law,” said AG Healey. “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 AG’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 resolving claims that the pharmacy violated the state’s consumer protection law by failing to implement adequate safeguards against unlawful and dangerous controlled substance dispensing and by paying kickbacks for new patient referrals.

According to the AG’s complaint, Keches entered a one-year “marketing agreement” with IWP in March 2017 that, on its face, purported that IWP would pay Keches $4,000 per month to link to IWP’s website and promote IWP’s pharmacy services. But internal emails show the true purpose of the monthly payments was to compensate Keches for referring at least 40 of its clients to IWP each month. The AG’s complaint further alleges that Keches and IWP agreed to a second unwritten arrangement in January 2018, pursuant to which IWP agreed to pay for Keches’ social events in exchange for referrals. IWP ultimately 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. 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. 

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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