Feds Charge 78 in Connection With Healthcare Fraud Schemes Totaling $2.5B

Seventy-eight people recently were charged in connection with healthcare fraud schemes that bilked the federal government out of $2.5 billion.

The charges related to alleged telemedicine, prescription drug, opioid distribution, and clinical lab testing schemes that took place in 13 states, including Florida.

Those charged allegedly defrauded programs for the care of the elderly and disabled, and, in some cases, the defendants used the proceeds to buy luxury items, including exotic automobiles, jewelry and yachts. The Justice Department, which seized or restrained millions of dollars in cash, automobiles, and real estate, worked with numerous federal and state law enforcement agencies that are part of ongoing investigations about which we previously wrote.

In a case involving the alleged organizers of one of the largest healthcare fraud schemes ever prosecuted, an indictment in the Southern District of Florida alleges that the CEO, former CEO, and vice president of business development of purported software and services companies conspired to generate and sell templated doctors’ orders for orthotic braces and pain creams in exchange for kickbacks and bribes. The conspiracy resulted in the alleged submission of $1.9 billion in false and fraudulent claims to Medicare and other government insurers for orthotic braces, prescription skin creams, and other items that were medically unnecessary and ineligible for reimbursement.

The enforcement actions included some of the “largest and most complex cases that the department has prosecuted and demonstrates the department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms,†said Assistant Attorney General Kenneth A. Polite, Jr., in a news release.

In another telemedicine fraud case in the Eastern District of Washington, a licensed physician was charged for signing more than 2,800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated.

The action also included charges against 10 defendants in connection with the submission of more than $370 million in fraudulent claims submitted for prescription drugs. In one case, the owner and corporate officer of a pharmaceutical wholesale distribution company was charged in an alleged $150 million fraud scheme in which the company purchased illegally diverted prescription HIV medication, and then marketed and resold the medication by falsely representing that the company acquired it through legitimate means.

To cover up their scheme, the defendant and others falsified labeling and product tracing documentation to make it appear legitimate. Pharmacies purchased the misbranded medications, sold them to patients, and billed them to healthcare benefit programs, all while the defendants reaped substantial illegal profits.

In a related case, an individual in the Southern District of Florida was sentenced to 15 years in prison for his role in the scheme. According to court documents, the defendant illegally acquired large amounts of prescription drugs from patients for whom the drugs had been prescribed, but not yet taken. The defendant and others then repackaged the drugs and sold them to wholesale companies. In some cases, the medication that the defendant sold contained the wrong medication, broken pills, and even pebbles, leading to complaints by pharmacies. The defendant used his share of the ill-gotten gains to buy luxury items, including a $280,000 Lamborghini, a $220,000 Mercedes, and three boats.

The enforcement action also included charges against 24 physicians and other licensed medical professionals who provided patients with opioids they did not need. The charges also include cases where healthcare companies, physicians, and other providers paid cash kickbacks to patient recruiters and beneficiaries in return for patient information, so that the providers could submit fraudulent bills for Medicare reimbursement.

Since March 2007, the Healthcare Fraud Strike Force program, comprised of 15 strike forces operating in 25 federal districts, has charged more than 5,000 defendants who collectively have billed federal healthcare programs and private insurers more than $24 billion.

The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for more than three decades. Our firm represents clients under investigation by a wide range of state and federal agencies including the FBI, Drug Enforcement Administration, U.S. Attorney’s Office, Attorney General’s Office, State Attorney’s Office, Medicaid Fraud Control Unit, Medicare Fraud Task Force, as well as licensing boards and other enforcement agencies. If you find yourself the target of an investigation, contact a qualified healthcare attorney who specializes in criminal healthcare fraud. For more information call us at 305-358-4500 or email info@vitalehealthlaw.com