Opinion ID: 752178
Heading Depth: 3
Heading Rank: 2

Heading: Kickbacks on Aviation Fuel Purchases

Text: 11 First American purchased most of its fuel and leased hangar and office space from Golden Isles Aviation, Inc., on St. Simons Island. For some time, Golden Isles had discounted the fuel sold to First American because of the volume purchased. When First American leased new hangar and office space, however, the companies struck a new deal. Golden Isles would continue to charge less for the fuel First American purchased according to a volume-based stepped percentage. But the difference between retail and First American's price would go into a rebate account with Golden Isles. Golden Isles initially applied the rebate account to renovation costs for First American's hangar, but later the rebates went to pay other maintenance expenses. Jim McManus would typically present invoices to Golden Isles to be paid out of the rebate account, or he would charge bills on a credit card paid by Golden Isles out of the rebate account. Checks from this account also reimbursed Jack for fuel he bought for some personal flights; thus, although it would appear that Medicare was not fueling the flights, through the rebate mechanism it was. 12 First American and Jack never disclosed this arrangement to Aetna. Rather, First American reported the full fuel cost as part of its travel expenses. Thus, First American had the advantage of using the rebate money without having to justify the relation between the expenditures and patient care.