INDUSTRYNEWS
One of the largest health care fraud schemes investi-
gated by the FBI and the U.S. Department of Health
and Human Services Office of the Inspector General
(HHS-OIG) and prosecuted by the Department of
Justice resulted in charges against 24 defendants,
including the CEOs, COOs and others associated with
five telemedicine companies, the owners of dozens
of durable medical equipment (DME) companies and
three licensed medical professionals, for their alleged
participation in health care fraud schemes involving
more than $1.2 billion in loss, as well as the execution
of over 80 search warrants in 17 federal districts. In
addition, the Center for Medicare Services, Center
for Program Integrity (CMS/CPI) announced today
that it took adverse administrative action against 130
DME companies that had submitted over $1.7 billion in
claims and were paid over $900 million.
Assistant Attorney General Brian A. Benczkowski of the
Justice Department’s Criminal Division, U.S. Attorney
Sherri A. Lydon of the District of South Carolina,
U.S. Attorney Craig Carpenito of the District of New
Jersey, U.S. Attorney Maria Chapa Lopez of the Middle
District of Florida, Assistant Director Robert Johnson
of the FBI’s Criminal Investigative Division, Deputy
Inspector General for Investigations Gary Cantrell of
the U.S. Department of Health and Human Services
Office of Inspector General (HHS-OIG), Chief Don
Fort of the IRS Criminal Investigation (CI) and Deputy
Administrator and Director of CPI Alec Alexander of
the CMS/CPI made the announcement.
Today’s enforcement actions were led and coordi-
nated by the Health Care Fraud Unit of the Criminal
Division’s Fraud Section in conjunction with its
Medicare Fraud Strike Force (MFSF), as well as the U.S.
Attorney’s Offices for the Districts of South Carolina,
New Jersey and the Middle District of Florida. The
MFSF is a partnership among the Criminal Division,
32
Pedorthic Footcare Association | www.pedorthics.org
U.S. Attorney’s Offices, the FBI and HHS-OIG. In addi-
tion, IRS-CI and other federal law enforcement agen-
cies participated in the operation.
The charges announced today target an alleged scheme
involving the payment of illegal kickbacks and bribes
by DME companies in exchange for the referral of
Medicare beneficiaries by medical professionals work-
ing with fraudulent telemedicine companies for back,
shoulder, wrist and knee braces that are medically
unnecessary. Some of the defendants allegedly con-
trolled an international telemarketing network that
lured over hundreds of thousands of elderly and/or
disabled patients into a criminal scheme that crossed
borders, involving call centers in the Philippines and
throughout Latin America. The defendants allegedly
paid doctors to prescribe DME either without any
patient interaction or with only a brief telephonic con-
versation with patients they had never met or seen.
The proceeds of the fraudulent scheme were allegedly
laundered through international shell corporations and
used to purchase exotic automobiles, yachts and luxury
real estate in the United States and abroad.
“These defendant—who range from corporate execu-
tives to medical professionals—allegedly participated
in an expansive and sophisticated fraud to exploit
telemedicine technology meant for patients otherwise
unable to access health care,” said Assistant Attorney
General Benczkowski. “This Department of Justice will
not tolerate medical professionals and executives who
look to line their pockets by cheating our health care
programs. I commend the Criminal Division prosecu-
tors and our partners from U.S. Attorney’s Offices and
law enforcement agencies across the country for their
unrelenting efforts to stop this alleged fraud before
more money was stolen from American taxpayers.”
“Simply put, the law applies equally to all in South
Carolina,” said U.S. Attorney Sherri Lydon. “The same