DME Owners Face 55 Years Behind Bars

The owners and operators of four orthotic brace suppliers in Texas and Arkansas recently were convicted for their part in a $6.5 million kickback scheme that included federal anti-kickback law violations.

Husband and wife Bruce and Bobbi Stroud, along with Kenric Griffin, owned and operated New Horizons Durable Medical Equipment, Striffin Medical Supply, 4B Ortho Supply, and Grace Professional DME. According to evidence presented at trial, the three, through their companies, billed an estimated $12.5 million in claims to Medicare for unnecessary braces based on orderes received in exchange for illegal kickbacks. Medicare paid out approximately $6.5 million. The defendants entered into several sham agreements with purported marketing companies that characterized the payments as marketing expenses.

The Strouds were among 58 individuals charged in September 2019 during coordinated healthcare fraud enforcement operations across Texas that included multiple investigations and jurisdictions.

The three were convicted of conspiracy to defraud the United States and to offer and pay illegal healthcare kickbacks, as well as seven violations of the Anti-Kickback Statute. The defendants are all scheduled to be sentenced on Sept. 7 and each face a total of up to 55 years in prison.

In July 2021, we wrote about another Texas couple who owned and operated two Dallas-based DME companies were convicted of one count of conspiracy to defraud the United States and to pay and receive healthcare kickbacks and one count of conspiracy to commit money laundering. They were sentenced to more than 12 years in prison for a $27 million Medicare kickback conspiracy.

The feds have made it clear in recent years that they are focusing on cleaning up kickbacks in the DME industry. In April 2019, the federal government staged a months-long investigation into the industry known as “Operation Brace Yourself.” It spanned 20 FBI offices and several other partner agencies. The operation targeted ongoing schemes, in which companies were utilizing telemarketing, telemedicine, call centers and paying illegal bribes to secure signed physicians’ DME brace orders for use as support for fraudulent claims submitted to the federal programs. It was dubbed one of the largest Medicare fraud schemes in U.S. history billing more than $1 billion for unnecessary medical equipment.

The Health Law Offices of Anthony C. Vitale can provide you with compliance oversight services, assuring that your business relationships are compliant with all federal and state fraud, waste and abuse laws. We also represent healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare and Medicaid fraud and false claims, among others. For more information you can contact us at 305-358-4500 or send us an email to and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale