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Feds Find Largest Healthcare Fraud, Charge 24 Executives Responsible For Over $1.2B in Losses

One of the largest health care fraud cases was recently discovered by Federal officials, uncovering more than $1.2B in losses, and resulting in 24 arrests involving fraud in telemedicine programs and durable medical equipment (DME) disbursements.

Healthcare fraud comes in many different forms and remains one of the most active areas of false claims litigation. The False Claims Act has been an important tool in the fight against government programs fraud since it was first enacted to combat war profiteering during the U.S. Civil War. While investigations like these lead to successful indictments, the system also depends on vigilant whistleblowers telling their story with the help of an experienced False Claims Act attorney.

This latest investigation, led by the FBI and the U.S. Department of Health and Human Services Office of the Inspector General, discovered the widespread fraud,(through a whistleblower? Do we know?) which included C-level executives allegedly accepting illegal kickbacks and bribes from DME companies. The bribes were in exchange for medical referrals to Medicare beneficiaries by medical professionals using fraudulent telemedicine companies for medically necessary back, shoulder, wrist, and knee braces.

The allegations include controlling international telemarketing networks that lured unsuspecting elderly and disabled patients into the scheme using call centers in the Philippines and throughout Latin America. Doctors were allegedly paid by the DME providers to prescribe their equipment without any or very brief patient interaction. The money was allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts, and luxury real estate in the United States and abroad. Collectively, the CEOs, COOs, executives, business owners and medical professionals involved in the conspiracy allegedly caused over $1 billion in government losses.

“These defendants — who range from corporate executives 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 prosecutors 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.”

 “Today, one of the largest health care fraud schemes in U.S. history came to an end thanks to close collaboration and coordination between the FBI and partners including HHS-OIG and IRS-CI,” said FBI Assistant Director Robert Johnson.  “Health care fraud causes billions of dollars in losses, it deprives real patients of the critical health care services they need, and it can endanger the lives of real patients so individuals like those arrested today can profit from their criminal activity.”

© 2020 by Tycko & Zavareei LLP


About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...