Collusion case looks beyond taking one surgeon’s word over another’s

There was a time spine surgeons John Thalgott and Mark Kabins saw a lot of each other.

When Thalgott sought to recruit a young surgeon in the late 1980s to work in Southern Nevada, he chose Kabins and took him under his wing. They worked patient files together and operated side by side.

While their medical and billing staffs were separate, they shared office space. They might not have been partners, but they were nearly as close, at least in the early years.

Over time, their relationship changed. They worked less together, and saw each other less often. Their practices were both successful, and each performed hundreds of operations every year.

Whatever alliance Thalgott and Kabins shared changed for good following the Aug. 3, 2000, spine surgery of Melodie Simon, who was left paralyzed because of preventable complications involving post-operative bleeding.

Simon hired seasoned litigator Noel Gage in 2001 to pursue a malpractice lawsuit against Kabins, Thalgott, and anesthesiologist Daniel Burkhead. What happened next has become the subject of a federal criminal conspiracy and fraud case that is entering its second act in U.S. District Court.

The government alleges a clandestine meeting was held between Gage, trial consultant Howard Awand, and Kabins and Thalgott in which an agreement was reached that would save the surgeons from the potential loss of millions in the litigation in exchange for sending work to Gage.

Burkhead, according to the government, was victimized and his insurance provider paid $2 million in a case that might have netted four times that much.

Thalgott signed an immunity arrangement with federal prosecutors, agreed to cooperate and even sent Simon a $1.5 million check.

Thalgott testified last year against Gage in a criminal case based largely on the same fact pattern and criminal theory now facing Kabins. The result was a hung jury, subsequent mistrial and a load of disappointment for the U.S. attorney's office.

Will the government fare better against Kabins?

A conviction could hinge on the testimony of Kabins' former medical mentor, Thalgott. Unlike Gage, whom Thalgott essentially didn't know, the proximity of Kabins to the government's star witness is undeniable.

Thalgott was, of course, not in the crowd of well-wishers who assembled Wednesday outside U.S. District Court when Kabins made his initial appearance and entered a plea of not guilty with his attorney David Chesnoff.

"I wonder, if there's a next round of indictments for somebody other than Kabins, will they all go down and do that again?" Thalgott asked.

He wasn't simply being sarcastic. It's no secret the Kabins indictment is meant to be a lynchpin that will help establish the government's broad investigation into suspected fraud and collusion between local personal injury attorneys and doctors.

A conviction of Kabins, a prolific surgeon well known to the targeted attorneys and their favorite trial consultant, Awand, could crack the case wide open.

Of course, another embarrassing loss might achieve the opposite effect. A lot is at stake.

And Thalgott knows it. He has endured immense pressure the past two years. His reputation, medical practice and insurance status have taken hits. Despite his limited involvement with most of the major players in the investigation, Thalgott is described as a co-conspirator in the Kabins indictment.

"The first thing I pride myself on is being an ethical, moral, standup guy that tries to look at the important situation and make the right decision and then stand by it," Thalgott said.

"I believe that I have done the right thing by helping the federal government, and I'm committed to helping the federal government in the ways that they need my assistance. And I also want to help the community, just like I've tried to do in my medical practice, and the rest of my commitments to making Las Vegas better. ... I was doing my best to rectify what I thought was something that was being done wrong in the community that I was watching. Not only in my involvement with Melodie Simon, but in the overall community. It hasn't been without cost."

As the stakes have climbed, Thalgott said he has not been in touch with either the FBI or the U.S. attorney.

"I've had zero communication with their office," Thalgott said. "I think they've been busy."

We'll know soon enough whether the government's work will pay off this time.

Meanwhile, Thalgott and Kabins will be seeing each other again soon, this time in court.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith/.