Past Cases

The following is a list of various types of Medicare fraud that have occured over the past few years. As the list shows, there are a myriad amount of ways in which one can steal from the government. Each year, it seems that cheaters become more and more creative, so it is imperative that the public learn about these schemes and the government stay one step ahead.

Submitting False Claims

The efforts of the government's new crackdown on fraud seems to be paying new dividends every week: Illinois launched a massive operation called "Dr. Feelgood," which targeted the prescribing of medically unnecessary drugs to Medicare patients and doctors who push drugs for their own profit. According to prosecutors speaking in May 2010, the three-year operation had netted  21 federal and state convictions involving almost 3 dozen medical professionals from southern Illinois.

Massive healthcare fraud rings continue to be uncovered by federal officials in California. On May 20, 2010, the F.B.I, Office of the Inspector General and the Department of Health and Human Services announced a 20-count indictment of 11 individuals charged with opening three health clinics in Sacramento, Richmond and Carmichael and submitting more than $5 million in false claims to Medicare.The leader of the conspiracy, Vardges Egiazarian, 60, of Panorama City, was sentenced to six and a half years in prison and ordered to pay over $1.5 million to Medicare in restitution.

Ademola Adeptu, Springdale, Maryland, pleaded guilty to one count of health care fraud on Dec. 2, 2009. Between August 2008 and April 2009, while working in the finance department of the Children’s National Medical Center, Adeptu submitted six false invoices claiming payment due in the amount of $95,420 for medical services rendered to Children’s. Among other items, Mr. Adeptu purchased a 2002 Land Rover, Freelander SE with the proceeds of his crime.

Jaya H. Maddur, M.D., a gastroenterology specialist and the chief of staff of the Sierra Vista Regional Health Center, agreed to pay $400,000 for submitting, and causing to be submit, claims for payment to TRICARE that misrepresented the services rendered.

88-year-old Adam John Sortini visited nursing facilities throughout Northern California and performed hearing tests not reimbursable under Medicare because they are routine in nature and can be performed without a physician's order. Sortini had targeted elderly victims, many of whom were mentally incompetent.

Billing Night Hours During The Day

Fairfield County Healthcare Associates, P.C., doing business as Pediatric Healthcare Associates (PHA), paid $74,644 to resolve allegations of improper billing of a “special services” code.  According to certain guidelines, medical practices can charge more for performing services at a time when the office would normally be closed. The Government alleges that PHA routinely billed for the special add-on code when the practice was not closed, but instead was open for business and regularly scheduling patients.  During part of the time period in question, PHA had hours posted on its web site indicating that its offices were open in the evenings until 9 p.m. on most weekdays, and that the practice was open and had regular hours on Saturdays and Sundays.  Although PHA was regularly open during these time periods, it routinely billed Medicaid for the add-on code and received additional payments, above and beyond the usual payments for the services in question.

Paying Patients To Play Along

There is a disturbing new trait emerging in healthcare fraud schemes: many operators, who need to defraud Medicare, are targeting drug addicts who will sign off on fake documents for medication and procedures in order to receive a kickback in the form of cash or narcotics. Ingrid Mazorra pleaded guilty in January on charges of operating a fraudulent infusion and injection center, Xpress Center, Inc., that routinely billed Medicare for non-existent or unnecessary medical treatments. Mazorra admitted to paying patients kickbacks for performing fake and unnecessary checkups or signing falsified papers.

Here is a fraud of dizzying proportions that demonstrates the deep problems facing Medicare today. Professionals signing off on fake billings is one thing, but what happens when patients and doctors explicitly work together? In October 2009 Scarlet Duarte and Rechart Garcia were convicted for her role in a fraud involving five Miami-based clinics: the Research Center of Florida, Inc., M & C Health Center, Corp., Project New Hope, Corp., L & R Medical Center, Corp., and L & B Health Center, Inc., and a sixth clinic that operated in Collier and Lee Counties, RL & V Medical Services, Corp. The conspirators paid Medicare beneficiaries to pretend to receive treatment at the clinics, and then billed Medicare for treatment that was never provided nor necessary. The six clinics submitted approximately $51.8 million in fraudulent claims and received approximately $21.1 million.

Miami physician Keith Russell, physician’s assistant Jorge Luis Pacheco and physician’s assistant Eda Marietta Milanes were each convicted for their roles in fraud schemes that involved billing Medicare for $10,903,509 worth of unnecessary HIV infusion treatments and receive over $3 million in restitution. According to prosecutors, the three used M&P Group of South Florida Inc. and Tendercare Medical Center Inc. as their bases of operation, which purported to specialize in the treatment of HIV. They brought in patients who agreed to play along with the scheme, with each patient received $200 per visit. One admitted that he used the kickbacks to fuel his cocaine addiction.

Between November 2003 and November 2006, Alejandro Gonzalez, Robert Rodriguez, and Manuel Camacho successfully stole $12 million from Medicare through established medical clinics in South Florida that administered infusion therapies for the treatment of AIDS patients. However, no treatments were provided and patients received a kickback just for signing-in at the clinic. In this way, the defendants billed Medicare for millions of dollars for treatments that were not rendered, and, in fact, were not medically necessary. The three were convicted in November 2009.

The most common victims of fraud can often be society's most vulnerable: Robert Borseau, the co-owner and former chairman of City of Angels Medical Center, pleaded guilty in March 2009 to paying kickbacks to professionals who brought homeless individuals from Skid Row into Angels for unnecessary in-patient hospitalizations. Borseau has agreed to pay $4.1 million in restitution to Medicare.

Nursing Care Fraud

Two Alabama healthcare companies settled for $1.4 million over charges of over-billing Medicare. King & Associates, a consulting company for nursing facilities owned by Marie King, and Southerncare, Inc., an organization run by William King Jr. and in the business of preparing Medicare cost reports for nursing facilities, worked in tandem to cause certain nurses to charge Medicare for more work than their physicians actually performed.

Selling Unapproved Medical Devices

Overcharging Medicare is one thing, but putting patients' lives at risk is much different: Spectranetics Corporation, a medical device manufacturer, has agreed to pay the United States $4.9 million in civil damages plus a $100,000 forfeiture to resolve claims against the company, the Justice Department announced today. The claims arise from allegations that the company illegally imported unapproved medical devices and provided them to physicians for use in patients, conducted a clinical study in a manner that failed to comply with federal regulations and promoted certain products for procedures for which the company had not received Food and Drug Administration approval or clearance. According to the prosecution, Spectranetics illegally imported unapproved medical devices from overseas manufacturers and distributed  those devices for use in human patients, and failed to meet its reporting obligations to FDA regarding a study named “CORAL” (Coronary graft Results after Atherectomy with Lasers) and another associated study in connection with the devices listed above. 

Lax Standards To Turn A Profit

Bottom-line pressure and medicine should never mix. Take the case of one Dr. Rajashakher P. Reddy, President of Atlanta-based Reddy Solutions, Inc., indicted in November 2009 for Medicare fraud. Reddy Solutions, a practice specializing in radiology coverage, receives x-rays from hospitals, examines and comments on them, and sends them back to the hospitals strapped for resources who need to outsource radiology work. The indictment alleges that, from May 2007 to January 2008, Dr. Reddy signed off on thousands of x-rays without having one glanced at them, instead hiring non-physicians who called themselves Radiology Practice Assistants to prepare the reports as if he had done them himself.

Durable Medical Equipment Fraud

Once again another scheme using the elderly to bill Medicare for high-powered wheelchairs. Maria Nela Moreno, from Fresno, California, travelled to local meetings of seniors and low-income senior living centers  recruiting recipients of the high-price wheelchairs. She tricked them into giving up their identification cards and Medicare insurance numbers by convincing that Medicare was running out of money and that they needed to buy quickly. Conspirators also used the stolen information to create bogus prescriptions. Moreno was sentenced to over a year in jail on May 24, 2010.

Yasmanny Benavides almost cheated Medicare out of $20 million until the feds caught wind of his scheme. Benavides controlled and operated Lacary Medical Services Equipment, Inc. and Lily Orthopedic, Inc., which purportedly provided durable medical equipment to Medicare beneficiaries.  From July 2003, through December 2003,  Benavides, as President, Secretary, and Registered Agent of Lacary Medical, caused the submission of false and fraudulent claims to Medicare on behalf of Lacary Medical and Lily Orthopedic, Inc., for almost $20 million, seeking reimbursement for the cost of DME items and services that were not prescribed by doctors or provided as claimed. Benavides received 12 years in prison in May 2010.

Another Florida case involving medical equipment: Maria A. Aloise, through her Hialeah-based Atenas Medical Equipment, Inc., which provided durable medical equipment (“DME”) to Medicare beneficiaries, was convicted in February 2010 for submitting almost $1.5 million in fraudulent claims to Medicare seeking reimbursement for DME items, such as oxygen concentrators and hospital beds, that had not been prescribed by physicians nor provided to Medicare beneficiaries

An FBI investigation established that Maria F. Hernandez conspired with others to defraud the Medicare program through the fraudulent submission of $5.7 million in durable medical equipment (DME) claims from 2005 through 2006. Hernandez used a relative’s medical billing company to submit the false claims. The claims concerned three separate DME companies that Hernandez and her co-conspirators controlled through straw owners in an effort to conceal their own interests. Medicare paid the Hernandez companies approximately $1.9 million based on the false claims, which were for DME items that were neither prescribed by doctors nor delivered to Medicare patients. In documents filed with the Court, Hernandez admitted to receiving upwards of $30,000 per month from her fraudulent ventures.

If life in the real medical world is too difficult, why not just lie about a disease and "invent" useless devices to cure it? Kansas couple Carole E. Bradford and Robert W. Bradford were charged for conspiracy to violate the Federal Food, Drug and Cosmetic Act by marketing a microscope that could detect Lyme disease through their company American Biologics. They pushed marketing materials full of false information, such as claims that the disease was the "plague of the 21st century" and was a contributing factor to 50% of all chronic illnesses, and sold "the Bradford Variable Projection Microscope," which they claimed could be used to find Lyme disease.

With almost half a trillion dished out through Medicare each year, it should not come as a surprise that some individuals will be go to great lengths to shave some off for themselves: Adonis Ortiz controlled and operated Daky Medical Supply, Corp., which purportedly provided durable medical equipment to Medicare beneficiaries. Ortiz was the President, Vice President, Secretary, Treasurer, and Registered Agent of Daky Medical, and caused the submission of $6,180,030 in false claims to Medicare for DME items and services that were not prescribed by doctors or provided as claimed, often with records of already dead patients. Ortiz used his second durable medical equipment company, Reny Medical Equipment & Supply Inc. to submit around $7,000,000 to and receive approximately $2,796,316 from Medicare.

The owner and operator of Cooper Medical Supply, Ajibola Adekeunle Sadiqr, pleaded guilty in May 2010 with a $1 million power wheelchair scheme. Sadiqr worked with Leonard Nwafor, the owner of another DME supply company, Maria Nela Moreno, and others to purchase fraudulent prescriptions and medical documents. Nwafor and Moreno were convicted earlier in 2010 in connection with the scheme.

The Los Angeles Medicare Fraud Strike Force charged 20 individuals involved in durable medical equipment (DME) companies with a healthcare scheme amounting to $26 million through the billing of unneeded power wheelchairs and hospital beds. 

Injection Fraud

Flor Crisologo, the owner and operator of J & F Community Medical Center Inc., was charged for allegedly submitting almost $23 million in fraudulent claims to Medicare using a Medicare program for HIV injection and infusion services. Crisologo hired a physician to sign off on unnecessary tests, sign falsified analyses and "authorize" treatments so Medicare services would be tricked into thinking patients were being treated. Like every other Florida HIV infusion case, the majority of the procedures were superfluous and the patients received a cash bonus for playing along.

David Marrero was convicted in May 2010 for a $5.8 million scheme through his practice, Tendercare Medical Center Inc. In 2005, Tendercare began billing Medicare for  medically unnecessary injection and infusion treatments, most of which were not even provided.  Medicare paid Tendercare approximately $2.7 million as a result of those fraudulent claims. Marrero attempted to bill Medicare for 100 injections for one just one patient, the equivalent of one liter of medicine. The Medicare employment sensed something was wrong as this amount as it is medically impossible to perform this many injections on one individual.

Glen R. Justice, an Orange County cancer doctor who runs the Pacific Coast Hematology/Oncology Medical Group, was charged in April 2010 with fraudulently billing Medicare and other health insurance companies up to $1 million for injectable cancer medications that he never provided. Justice is guilty of billing for injections never made and for "upcoding" injections, i.e., charging for more expensive shots than he administered.

Another Florida Medicare scheme totaling over $20 million shouldn't be much of a surprise anymore. Efren Mendez and Damian Beltran pleaded guilty in April 2010 for conspiracy to commit healthcare fraud that involved purported treatment of HIV+ Medicare beneficiaries at Research Center of Florida, Inc. Research Center submitted $21,043,982 in Medicare claims and received $10,944,088. However, Research Center personnel generally administered smaller doses of the medications than Research Center purported in its claims, or no treatment at all. Mendez admitted to paying Medicare recipients cash kickbacks for attending Research as fake patients.

In a 16-count indictment unsealed in early April 2010, six defendants, Modesto De La Vega, Rolando Nogueira, Joaquin Vega, Gladis Badia, Jose Nogueira and Victoria De La Vega were charged with conspiring to submit $13.6 million in false and fraudulent claims to the Medicare program for HIV infusion services that were allegedly provided at T & R Rehabilitation Clinic in Miami. According to the indictment, Rolando Nogueira owned and operated T & R Rehab while Modesto De La Vega was the operator of T & R Rehab’s HIV infusion practice.  The indictment alleges that Rolando Nogueira and Modesto De La Vega billed the Medicare program for HIV infusion therapy services that were medically unnecessary and were never provided.  In addition, Modesto and Victoria De La Vega allegedly paid kickbacks to Medicare beneficiaries to induce them to sign logs at T & R Rehab stating that they had received the treatments that were billed to Medicare when, in fact, they had not.  The indictment also alleges that Jose Nogueira managed T&R Rehab’s fraudulent HIV infusion operation.

Ihosvany Marquez was pronounced guilty in April 2010 for duping Medicare out of an astounding $21.6 million through the use of  seven purported Miami-based medical clinics.  The clinics in question were Zigma Medical Care, Inc., Tender Loving Care Medical Center, Inc., Professional Medical Health, Inc., Metro Med Care, Inc., San Diego Medical & Rehab Center, Inc., Eulogia's Diagnostic Medical Center, Inc., and Stop Injury Medical Center, Inc.  These clinics allegedly submitted at least $55 million in false claims to Medicare for infusion therapy, injection therapy, and other expensive medical treatments designed to treat Medicare beneficiaries suffering from a wide variety of ailments, including cancer, HIV, AIDS, chronic pain, and varicose veins. According to the charges, Marquez and his conspirators  recruited  “straw” owners for each company and paid them large sums of cash to sign the corporate records, bank records, and other business documents.

Jose Garcia, operator of Global Med-Care Corp. in Washington, D.C., and his co-defendant, Nayda Freire, were charged in 2008 with allegedly conspiring between April 2003 and November 2003 to submit approximately $10.9 million in false and fraudulent claims to the Medicare program for HIV infusion services allegedly provided at their practice. Garcia and Freire allegedly retained and trained physicians and physicians’ assistants as part of the scheme at Global Med-Care to make it appear that legitimate HIV infusion and medical services were being provided. The indictment also alleges that Garcia and Freire laundered the proceeds of their crimes by sending the proceeds to sham management and marketing companies owned and controlled by their co-conspirators, Carlos, Luis and Jose Benitez. Thomas MacKenzie, who along with Luis Benitez had originally provided the funding and staff to open Global, pleaded guilty to the larger $119 million HIV infusion fraud scheme in 2008.

Two Miami doctors, Walter Proano and Manuel Barbeite, were convicted in August 2009 for their involvement in a scheme with Diagnostic Medical Choice, a Southwest Miami clinic that billed the Medicaid and Medicare programs for expensive infusion medications intended to treat a rare illness suffered by a small portion of those inflicted with HIV/AIDS. The physicians wrote prescriptions for large quantities of these medications and sought federal and state reimbursement, but the clinic had little if any of the medications in stock and rarely if ever provided infusions to patients.

Always double-check whats in that injection: Ramon Santos was employed by two separate HIV-infusion clinics, The Better Health Consulting Clinic and Mitto Health Center Inc, which purportedly provided infusion treatments to HIV-positive Medicare beneficiaries. From 2004 through June 2006, both Mitto and Better Health claimed that they were providing expensive HIV-infusion therapies when, in fact, they were providing the patients with nothing more than injections or infusions of Vitamins B-6 and B-12. During the course of the conspiracy, the two clinics submitted more than $12 million in false claims to Medicare. Santos, who was not a licensed physician’s assistant, played the part and examined patients, prepared treatment plans and prepared false medical paperwork used to defraud Medicare. 

Six Miami-Dade County residents, Carmen Lourdes del Cueto, M.D., Roberto Rodriguez, M.D., Carlos Garrido, M.D., Gonzalo Nodarse, Alexis Carrazana and Alexis Dagnesses, were all indicted by a grand jury in Miami on Feb. 12, 2009, for conspiracy to commit a $10 million health care fraud out of Midway Medical, a Miami clinic specializing in HIV treatment. The indictment alleges that the physicians ordered medically unnecessary infusions and injections, and falsified medical records to make it appear that the HIV services were necessary. The indictment also alleges that many of the infusions or injections were never actually provided. Del Cueto, Rodriguez, Garrido and Nodarse were charged with conspiracy to launder health care fraud proceeds, as well as three counts each of substantive money laundering. Dagnesses allegedly tampered with patients' samples to make them HIV positive when in fact they tested negative.

Orlando Pascual Jr., co-owner of two Miami clinics named Medcore Group LLC (Medcore) and M&P Group of South Florida Inc. (M&P) that specialized in the treatment of HIV-positive patients, admitted that, beginning in August 2004 and continuing through November 2006, he conspired with others to submit approximately $5.3 million in fraudulent claims to Medicare. Pascual admitted that Medcore and M&P were operated for the purpose of defrauding Medicare, that the treatments for infused or injected drugs were not medically necessary, and that he and others paid cash kickbacks to the patients for every visit to the clinic. To obtain all the cash necessary to pay the patients, Pascual stated that he and others would write checks that appeared legitimate to people who would cash the checks and then return the cash to them for a fee. Harold Sio, one of the scheme's conspirators, pleaded guilty later in 2009.