A Shocking Case of Deception and Abuse… But Are the Allegations All Fair?
As medical fraud defense lawyers, our blog frequently focuses on overzealous prosecutors and the cases in which innocent health care providers are target unfairly.
There’s a good reason for this: Federal law enforcement agents are extremely aggressive sometimes too aggressive, even in their effort to crack down on crooked claims from clinics. As a result, sometimes they make mountains of molehills and bring a world of injustice crashing down on medical providers who were genuinely proceeding in good faith when they made a simple mistake.
We like to shed light on those stories because they remind health care professionals how important it is to be cautious and proactive when submitting CMS invoices, responding to audits, and otherwise handling Medicare billing disputes.
But that’s not the case today. Today, we’re telling you about a case of fraud and abuse that if the allegations are true (and we’ll touch on that all-important “if” below) goes beyond egregious.
Yet still, even in the startling scandal, we’re about to detail, there may very well be innocent medical professionals who’ve been swept up in the government’s rush to judgment.
Let’s look at how that happens… and the (allegedly) shameful scheme that has dozens of people looking at potentially lengthy prison sentences.
The Scheme as Alleged: A Health Care Fraud Scandal
20 people (including four doctors) and 14 different corporations have reportedly been indicted on a laundry list of federal criminal charges stemming from a massive Medicaid / Medicare / Managed Care Organizations fraud scheme. In total, prosecutors say, the operation was responsible for about $146 million in fraudulent billings over the course of three years.
Here’s how the Kings County, New York District Attorney says it went down:
A network of individuals and corporations banded together to operate bogus medical clinics in New York clinics that provided absolutely no legitimate patient care whatsoever.
The defendants allegedly hired recruiters to hit the streets in low-income areas of New York… outside a soup kitchen in East New York, a job center in Bushwick, and around other community centers in the metro area.
Recruiters would approach people and ask them if they had a Medicare or Medicaid card. If the answer was yes, they were offered cash to get in a car and go to a clinic in Brooklyn.
There, they’d be given various and hasty medical exams ultrasounds, cardiograms, allergy tests, etc. all of them medically unnecessary. Technicians performed the tests, doctors read the results, and the clinic promptly billed CMS.
Prosecutors acted on a tip and sent in an undercover agent. “The undercover spent an hour at the office and the health care provider was billed for 18 separate tests that should have taken 12 hours,” Acting Brooklyn District Attorney Eric Gonzalez told the New York Daily News.
For the individuals involved, compensation was modest but persuasive (and in cash):
- $30 to $40 for the “patients”
- $30 to $50 for the recruiters
- $25 to $50 per test for the doctors reading the results
- Doctors who signed the necessary paperwork might have been paid more
When the funds came back from CMS, they didn’t go directly to the perpetrators, the DA says. Instead, they traveled through a network of shell companies in Singapore, Pakistan, Turkey, Taiwan, Lithuania, China, and elsewhere, and then made their way to the defendants.
The suspects are accused of using the proceeds in the way one might expect high-end white-collar criminals to splurge their loot:
- A $3.25 million apartment in downtown Brooklyn (bought outright with cash)
- A $2.8 million apartment in Brighton Beach
- Shopping sprees at luxury retailers
- Extravagant handbags
- Luxury travel
- Other big buys, ranging from real estate to personal property
In fact, the government has already frozen more than 100 bank accounts connected to the allegations, as well as 11 properties valued at over $10 million.
The Charges
The indictment lists an astounding 878 counts. The charges reportedly include:
- Health care fraud (18 U.S. Code 1347)
- Money laundering
- Grand larceny
- Enterprise corruption
- Falsifying business records
- Offering a false instrument for filing
- Scheme to defraud
…among other charges. The defendants could face up to 25 years in federal prison on the top count.
But Allegations Aren’t Always What They Seem
Medicare and Medicaid are important systems, and no one wants to see them rocked by flagrant instances of multi-million-dollar theft and abuse.
But as shocking as the DAs’ narrative might be, it’s important to remember that these kinds of press releases from prosecutors don’t always tell the whole story.
The indictment names 34 defendants, for example (20 of them individuals, the other 14 corporations). But the government’s announcement only details the alleged activities of a few of those people, and it describes the evidence in generalities.
Also included in the indictment are more low-level individuals: technicians, support staff, office managers, etc. How many of these people were truly fully aware of what they were involved with? (Fraud is an intent crime, after all, so the defendants must have acted knowingly and willfully to be convicted on any of the fraud counts). Or have some of them been roped in unfairly?
We don’t have enough information about this case to say for sure. But we do know it isn’t uncommon for prosecutors to go further than they have to. Are all 34 defendants truly culpable? Are all 878 criminal counts supported by both fact and law?
Prosecutors frequently use statutes like 18 U.S. Code 1349 (conspiracy and attempt), 18 U.S. Code 1341 (mail fraud), and 18 U.S. Code 1343 (wire fraud) to cast a very wide net.
Everyone Deserves a Defense: A Passionate, Strategic, and Clever Defense
Even in the most notorious and challenging cases, anyone accused of a crime by the government deserves a strong, competent, and zealous legal defense.
If you made a mistake, the government might try to impose an unfairly harsh sentence or add on additional charges you don’t deserve. Alternatively, they might make procedural mistakes that violate your legal rights. Whatever the case may be, you deserve to have someone protecting your future and fighting for the best possible outcome in your case and that should be someone with real experience and a strong record of success.
The former federal prosecutors at The Criminal Defense Firm have spent years fighting for medical providers accused of health care fraud. We offer free consultations. To talk with a medical fraud defense lawyer, please contact us online or call 866-603-4540 right away.
Medical Fraud Defense Firm. Primary Office in Dallas, TX.
Brian Kuester offers his extensive experience to counsel companies and individuals under civil or criminal government investigation. When resolution requires litigation, clients choose Mr. Kuester’s proven court and litigation experience.