From the U.S. Department of Justice – Office of Public Affairs:
The Justice Department, together with federal and state law enforcement partners, announced today a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that included over $2.5 billion in alleged fraud.
The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles, jewelry, and yachts. In connection with the enforcement action, the Department seized or restrained millions of dollars in cash, automobiles, and real estate.
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” said Attorney General Merrick B. Garland. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who allegedly exploit patients and health care benefit programs for personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted, and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
“Health care fraud is a complex and ever-evolving threat that negatively impacts the American people,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “Today’s nationwide coordinated law enforcement action is a testament to the tenacity of the FBI and our partners, as well as our combined efforts to pursue anyone who conspires to exploit our health care system for financial gain.”
“Patients trust federal health care programs to provide high quality care. When bad actors steal from these programs, they hurt patients,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “HHS-OIG is dedicated to protecting federal health care programs and putting patients first. Thank you to our law enforcement partners, especially the Medicaid Fraud Control Units, that participated in this effort.”
“At the Drug Enforcement Administration (DEA), we are committed to protecting the safety and health of all Americans,” said DEA Administrator Anne Milgram. “When individuals divert addictive opioid medications for personal gain, they are knowingly putting Americans at risk, all too often causing harm and even death. DEA is committed to taking decisive action to hold accountable anyone who participates in these dangerous schemes.”
“The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) provides community health care to family members of our nation’s disabled or deceased veterans, and the defendants’ alleged criminal actions resulted in a multibillion-dollar fraud scheme that puts those benefits at risk and pilfers significant taxpayer funds,” said Inspector General Michael J. Missal of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “The VA-OIG’s continued oversight of VA’s multiple healthcare programs, including CHAMPVA, is one of the agency’s highest priorities. We thank our outstanding law enforcement partners for their efforts in this investigation.”
Telemedicine Fraud
The enforcement action included charges against 11 defendants in connection with the submission of over $2 billion in fraudulent claims resulting from telemedicine schemes. In a case involving the alleged organizers of one of the largest health care fraud schemes ever prosecuted, an indictment in the Southern District of Florida alleges that the chief executive officer (CEO), former CEO, and Vice President of Business Development of purported software and services companies conspired to generate and sell templated doctors’ orders for orthotic braces and pain creams in exchange for kickbacks and bribes. The conspiracy allegedly resulted in the submission of $1.9 billion in false and fraudulent claims to Medicare and other government insurers for orthotic braces, prescription skin creams, and other items that were medically unnecessary and ineligible for Medicare reimbursement.
As part of the alleged conspiracy, individuals in a massive telemarketing operation, located in the United States and abroad, targeted the elderly and disabled with direct mail, television advertisements, and other forms of advertising to induce them to contact offshore boiler-rooms staffed by individuals who “up-sold” the elderly and disabled on unnecessary medical equipment and prescriptions. According to the indictment, the software platform that the defendants allegedly operated was actually a conduit for these telemarketers to coordinate the payment of illegal kickbacks and bribes to telemedicine companies to obtain doctors’ orders for Medicare beneficiaries. The defendants allegedly programmed the software platform to generate false and fraudulent orders for telemedicine practitioners to sign and obstruct Medicare investigations by concealing that the interactions with beneficiaries had occurred remotely using telemedicine. The program-generated orders falsified certifications that the telemedicine doctors had examined the beneficiaries in person, and falsified diagnostic testing that Medicare required for brace orders. After the original CEO sold the company in a corporate acquisition, the new corporate leadership allegedly chose to continue the pre-existing fraud scheme.
In another telemedicine fraud case, in the Eastern District of Washington, a licensed physician was charged for signing more than 2800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated. As alleged, the physician took less than 40 seconds to review and sign each order.
The cases announced today build on earlier telemedicine enforcement actions involving over $10.1 billion in fraud. The April 2019 Operation Brace Yourself Telemedicine and Durable Medical Equipment Takedown alone resulted in an estimated cost avoidance of more than $1.9 billion in the amount Medicare paid for orthotic braces in the 20 months following that enforcement action, preserving the Medicare trust fund for necessary medical care.
Pharmaceutical Fraud
The enforcement action also included charges against 10 defendants in connection with the submission of over $370 million in fraudulent claims submitted in connection with prescription drugs. In one case announced today, the owner and corporate officer of a pharmaceutical wholesale distribution company was charged for an alleged $150 million fraud scheme in which the company purchased illegally diverted prescription HIV medication, and then marketed and resold the medication by falsely representing that the company acquired it through legitimate channels. The defendant allegedly purchased the diverted medication at a substantial discount from individuals who obtained the drugs primarily through illegal “buyback” schemes in which they paid HIV patients cash for their expensive HIV medication and repackaged those pills for resale. To cover up their scheme, the defendant and others falsified labeling and product tracing documentation to make it appear legitimate. Pharmacies purchased the misbranded medications, dispensed them to patients, and billed them to health care benefit programs, all while the defendants reaped substantial illegal profits.
In a related case, on June 15, an individual in the Southern District of Florida was sentenced to 15 years in prison for his role in this nationwide scheme. According to court documents, the defendant illegally acquired large quantities of prescription drugs from patients for whom the drugs had been prescribed but not yet consumed. The defendant and others then repackaged the drugs and sold them to wholesale companies. In some instances, the medication that the defendant sold contained the wrong medication, broken pills, and even pebbles, leading to complaints by pharmacies. The defendant used his share of the proceeds to purchase luxury goods, including a $280,000 Lamborghini, a $220,000 Mercedes, and three boats.
Opioid Distribution and Other Types of Health Care Fraud
The charges also targeted over $150 million in false billings submitted in connection with other types of health care fraud, including the illegal distribution of opioids and clinical laboratory testing fraud. Today’s enforcement action includes charges against 24 physicians and other licensed medical professionals who lined their own pockets, including doctors who allegedly put their patients at risk by illegally providing them with opioids they did not need. The charges also include cases where healthcare companies, physicians, and other providers paid cash kickbacks to patient recruiters and beneficiaries in return for patient information, so that the providers could submit fraudulent bills for Medicare reimbursement.
The Center for Program Integrity of the Centers for Medicare & Medicaid Services (CPI/CMS) separately announced today that it took adverse administrative actions in the last six months against 90 medical providers for their alleged involvement in health care fraud.
Principal Assistant Deputy Chief Jacob Foster and Acting Assistant Chief Rebecca Yuan of the National Rapid Response Strike Force of the Criminal Division’s Fraud Section led and coordinated today’s enforcement action. The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting these cases, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of cases involved in today’s enforcement action are available on the Department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-case-summaries.
In addition to the FBI, HHS-OIG, DEA, and CMS/CPI, State Medicaid Fraud Control Units, HSI, FDA, IRS-CI, VA-OIG, USPS-OIG, FDIC-OIG, OPM-OIG, Amtrak-OIG, and other federal and state law enforcement agencies participated in the operation, including Indiana.
Indiana Office of Attorney General:
- Melissa Lou Fannin, 43, of Hartford City, Indiana, was charged by criminal complaint with obtaining a controlled substance by fraud, furnishing false or fraudulent information, and possession of a narcotic drug. As alleged in the complaint, Fannin, a registered nurse, worked at a hospital and dispensed hydromorphone at a rate 155% higher than the next registered nurse in the same unit and was documenting waste at a rate 116% higher than the next registered nurse in the same unit. The complaint alleges that Fannin admitted to investigators that she took controlled substances for her own use and dispensed hydromorphone for herself when she falsely documented that it had been administered to a patient or wasted. The case is being prosecuted by Deputy Attorney General Grainne Kao of the Indiana Office of the Attorney General.
- Erin McMillan, 44, of Columbus, Indiana, was charged by criminal complaint with obtaining a controlled substance by fraud, furnishing false or fraudulent information, and failure to make, keep, or furnish a record. As alleged in the complaint, McMillan, a licensed practical nurse, documented dispensing a medication on dates that she did not work and without the medication actually being administered to a patient. The complaint further alleges that video footage from the facility where she worked showed McMillan remove medications from the narcotic box without leaving the area to go administer the medications and walk back behind the nurses’ station and put items into her personal bag. The case is being prosecuted by Deputy Attorney General Grainne Kao of the Indiana Office of the Attorney General.
- Heather Heugel, 37, of Plainfield, Indiana, was charged by criminal complaint with obtaining a controlled substance by fraud, furnishing false or fraudulent information, and failure to make, keep, or furnish a record. As alleged in the complaint, Heugel, a licensed practical nurse, worked for Avon Health and Rehabilitation Center where she dispensed controlled substances to residents without documenting administration, documented administration of controlled substances to residents who did not typically ask for their as-needed medications and who denied receiving controlled substances, and documented the dispensing of controlled substances on dates when timesheets show she was not working. The case is being prosecuted by Deputy Attorney General Grainne Kao of the Indiana Office of the Attorney General.
- Victoria Bell, 57, of Michigan City, Indiana, was charged by criminal complaint with obtaining a controlled substance by fraud and failure to make, keep, or furnish a record, in connection with stealing oxycodone. As alleged in the complaint, after Bell’s assignment to the locked narcotic cart at the facility where she worked as a registered nurse, oxycodone was determined to be missing. The complaint further alleges that Bell admitted to stealing the medication. The case is being prosecuted by Deputy Attorney General Grainne Kao of the Indiana Office of the Attorney General.
- Traci Lindfors, 50, of Michigan City, Indiana, was charged by criminal complaint with obtaining a controlled substance by fraud, furnishing false or fraudulent information, and failure to make, keep, or furnish a record. As alleged in the complaint, Lindfors, a licensed practical nurse, documented dispensing controlled substances with no subsequent documentation of administration to the patient. The complaint further alleges that Lindfors documented dispensing as-needed medications to patients who did not request medications from any other nurse for the entire month, and on dates that Lindfors was not in the building. The complaint further alleges that one resident indicated he had not received his medication from Lindfors, and a drug screen yielded negative results for medication. The case is being prosecuted by Deputy Attorney General Grainne Kao of the Indiana Office of the Attorney General.
- Wendy Hahn, 52, of Indianapolis, Indiana, was charged by criminal complaint with obtaining a controlled substance by fraud, furnishing false or fraudulent information, and theft. As alleged in the complaint, Hahn, a registered nurse, was arrested in Rush County, Indiana, on unrelated charges and had controlled substances packaged for patients within her vehicle. The complaint further alleges that due to a unique coding on the packaging, the investigator was able to link this specific medication to the exact dispensing and administration and determine that Hahn had documented this medication as administered to a patient. The case is being prosecuted by Deputy Attorney General Grainne Kao of the Indiana Office of the Attorney General.
- David Tanner, 55, and Daniel Tanner, 52, both of Marshall County, Indiana, were charged by complaint in connection with their operation of Concierge Medicine of Marshall County (“Concierge Medicine”). David Tanner was charged with practicing medicine without a license and practicing nursing with a suspended or revoked license. Daniel Tanner was charged with aiding, inducing, or causing each of the offenses with which David Tanner was charged, as well as issuing invalid prescriptions. As alleged in the complaint, Daniel Tanner, a nurse practitioner, owned and operated Concierge Medicine and employed his brother David Tanner as a nurse, despite David’s nursing license having been indefinitely suspended since 2005. The complaint further alleges that during the times that Daniel Tanner was out of the office, David Tanner practiced as a nurse at Concierge Medicine by examining patients, taking vital signs, recommending medications, providing medical opinions, evaluating and diagnosing patients, and prescribing medication using Daniel Tanner’s DEA number. The case is being prosecuted by Deputy Attorney General Jennifer Anwarzai of the Indiana Office of the Attorney General.
Featured photo by Tara Winstead from Pexels