A Los Angeles-area doctor and a patient recruiter pleaded guilty for their roles in a power wheelchair fraud scheme that defrauded Medicare of over $10.1 million. The doctor from Los Angeles, and the recruiter from Huntington Park, California, pleaded guilty before U.S. District Judge George Wu in the Central District of California to one count of health care fraud and one count of conspiracy to commit health care fraud, respectively.
The doctor admitted that he defrauded Medicare by participating in a power wheelchair fraud scheme with the operators of fraudulent durable medical equipment (DME) supply companies. According to court documents, DME suppliers provided the doctor with patients recruited by street-level patient recruiters or “marketers,” who illegally solicited people with Medicare benefits for power wheelchairs and other DME that the people did not need. In court documents, the recruiter admitted that he was one of these marketers.
The recruiter approached people at their homes, swap meets, grocery stores and other locations, and made various misrepresentations to the people about his true identity and Medicare. He admitted that these misrepresentations allowed him to gain the trust of Medicare beneficiaries and convince them to provide him with their Medicare billing and personal information, which the co-conspirators used to defraud Medicare. The recruiter also admitted that, through his misrepresentations, he convinced people to travel with him to fraudulent medical clinics and DME supply companies owned and operated by his co-conspirators. The doctor admitted that he owned one of these fraudulent medical clinics, Beth Medical Clinic, which he operated in Los Angeles.
At Beth Medical, the doctor wrote medically-unnecessary prescriptions for power wheelchairs and DME. He admitted he knew that the DME supply companies used the medically-unnecessary prescriptions and documents that he wrote to submit claims to Medicare for medically-unnecessary power wheelchairs and DME. For example, he admitted that the operators of fraudulent DME supply company Bonfee Inc., who were indicted with the co-conspirators on Medicare fraud charges, paid the doctor to write a medically-unnecessary power wheelchair prescription for one of Bonfee’s customers, and then used that prescription to submit a false power wheelchair claim to Medicare that totaled over $6,000.
The recruiter admitted that his profit from the scheme came in the form of illegal kickbacks paid to him for every person whose Medicare billing and personal information his co-conspirators successfully used to bill Medicare for power wheelchairs or other items of DME. According to court documents, once his co-conspirators successfully billed Medicare, the recruiter delivered the power wheelchairs and other DME to the people whom he recruited. During these deliveries, he observed that the people could walk, and that they did not have a legitimate need for the wheelchairs and other DME.
As a result of their conduct, both admitted that they and the owners and operators of Bonfee, Lutemi Medical Supplies, and other fraudulent DME companies submitted and caused to be submitted over $10,132,178 in false and fraudulent claims to Medicare. Both admitted that Medicare paid Bonfee and the other DME supply companies over $5,388,754 on these false and fraudulent claims.
Two additional co-defendants, a former pastor who owned Bonfee, and another doctor, have pleaded guilty to Medicare fraud charges and are scheduled for sentencing on August 15, 2013, and September 26, 2013, respectively. The owner of Lutemi, a registered nurse, was arrested on May 14, 2013, on Medicare fraud charges. The nurse is scheduled for trial on October 22, 2013.
At sentencing, scheduled for September 30, 2013, the doctor and the recruiter each face a maximum penalty of ten years in prison and a $250,000 fine. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
See the DOJ Announcement