On July 20, 2022, the Department of Justice announced that it had filed criminal charges against 36 defendants in 13 federal districts across the country, charging more than $1.2 billion in alleged telemedicine, genetic testing programs cardiovascular and cancer and durable medical equipment (DME). . The Centers for Medicare & Medicaid Services and the Center for Program Integrity also took adverse administrative action against 52 providers involved in similar programs, resulting in the Department seizing more than $8 million in cash, luxury vehicles and other goods.
Dozens charged in $1.2 billion nationwide telemedicine and EMR fraud scheme
The defendants charged included an executive of a telemedicine company, owners and managers of clinical laboratories, durable medical equipment companies, marketing organizations and medical professionals. The charges, which were the result of a coordinated nationwide law enforcement effort, involved illegal kickbacks and bribes paid by lab owners and operators to other healthcare professionals in exchange for patient referrals. Medical professionals have referred patients to Medicare for costly and medically unnecessary EMR and cardiovascular genetic testing that (i) does not diagnose a current heart condition and (ii) has not been approved, according to court documents. by Medicare to screen for an increased risk of developing cardiovascular disease in the future.
A defendant who operated multiple clinical labs was accused of submitting more than $174 million in false claims to Medicare stemming from unlawfully paying bribes to merchants who then bribed telemedicine companies in exchange for referrals for these genetic tests. The government alleged that the defendant laundered the illicit funds into various bank accounts and entities to purchase at least $7 million worth of luxury goods and real estate that the indictment seeks to confiscate.
Other defendants were accused of using deceptive means to induce Medicare beneficiaries to accept cardiovascular genetic testing and other genetic testing and equipment. Telemedicine companies have arranged for medical professionals to order these expensive tests and EMRs, whether medically necessary and with little or no interaction with the patient. DMO and genetic test results were often not provided to patients.
Read the press release here.
California man convicted in $27 million PPP fraud scheme
On July 20, 2022, a Southern California man was sentenced to 11 years and three months in prison after a federal jury found him guilty of bank fraud, making false statements to a financial institution and money laundering. money, for submitting fraudulent claims to the Paycheck Protection Program. (PPP) loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act.
Evidence presented at trial demonstrated that between April and June 2020, the defendant submitted 27 PPP applications, seeking a total of $27 million in PPP loans, to four banks on behalf of eight companies that the defendant solely owned. The defendant’s fraudulent claims indicated that each of his businesses had 100 employees and an average monthly payroll of $400,000, when in fact the businesses had no employees or payroll expenses. The defendant also allegedly fabricated documents submitted to the US Internal Revenue Service showing that his companies each had an annual payroll of $4.8 million. Three of the defendant’s companies received $3 million in PPP loans as a result of his fraudulent claims. Evidence at trial demonstrated that the defendant used the fraudulently obtained PPP loans for personal expenses instead of the salary and business expenses for which the funds were intended.
Read the press release here.
US citizen pleads guilty in international bank fraud scheme
A US citizen who previously resided in Ukraine has pleaded guilty to conspiracy to commit bank fraud as part of an international scheme to illegally debit money from the bank accounts of US consumers. Conspiracy members created fake websites claiming to offer cloud storage, among other goods and services, and set up front companies to receive funds from victims. They then debited the victims’ bank accounts, falsely telling the banks that the victims had authorized the charges as payment for the products advertised on the websites (which the victims would never receive). To avoid scrutiny from the banks, the conspiracy members made false claims to the banks regarding the legitimacy of the transactions, and they also tricked the accounts into making “micro-debits” to other controlled and funded bank accounts. by the conspiracy to reduce return rates. on transactions and thus reduce the likelihood that banks will close accounts. Members of the criminal enterprise also operated a call center to handle complaints from victims to deter them from reporting unauthorized transactions to banks and government agencies.
This defendant, in particular, opened four US commercial deposit accounts at a bank branch in Las Vegas, under the direction of a co-conspirator operating outside the United States. The accounts were created for a shell company called “Silver Safe Box”, of which the defendant was identified as the only member and authorized signatory. Between December 2019 and approximately January 2021, conspiracy members funded over 800,000 “micro-debits”, ranging from $0.99 to $1.85, through Silver Safe Box accounts. The defendant’s support of the criminal enterprise also included recruiting new members and assisting the call center in Ukraine by creating a scenario for responses to victims’ complaints. The accused admitted that there were probably more than $1.5 million in debits from the victim for his role in the conspiracy. The accused will be sentenced on October 12 and faces a maximum of 30 years in prison.
Read the press release here.