The Department of Justice announced Thursday that nearly 200 people have been indicted for their involvement in various health care fraud schemes across the U.S. Federal authorities say intended losses amount to more than $2.7 billion.
Attorney General Merrick Garland announced the indictment of 193 people in 32 federal districts, including 76 doctors, nurses and other medical professionals. Garland said the defendants were charged in a two-week investigation involving multiple law enforcement agencies across the country that led to the seizure of “more than $231 million in cash, luxury vehicles, gold and other assets.”
“Whether they’re a drug cartel trafficker, a corporate executive or a medical professional employed by a medical company, if they profit from the illegal distribution of controlled substances, they will be held accountable,” Garland said in a statement. “The Department of Justice will bring to justice criminals who defraud the public, steal from taxpayer-funded programs and put people at risk for their own profits.”
According to the Department of Justice, the defendants are accused of running a variety of multi-million dollar schemes, including false billing, wire fraud, health care fraud and money laundering. Five lawsuits were filed in federal court in Arizona involving a $900 million fraud scheme targeting elderly and terminally ill patients.
Earlier this month, federal authorities arrested and indicted the founder and CEO and president of the clinical division of a major telemedicine company. Prosecutors accused the company of illegally distributing Adderall and other medications. Garland said Thursday that five additional defendants had been indicted for their role in a scheme to distribute more than 40 million “medically unnecessary pills.”
In Florida, company executives committed more than $90 million in fraud by distributing counterfeit and fraudulent HIV medications across the country, according to the Justice Department. Federal authorities also cited other scams targeting Native Americans at fake sober living facilities, the illegal prescribing and distribution of opioids, and telemedicine and lab fraud by medical professionals.
In a separate announcement Thursday, the Justice Department said the Center for Medicare & Medicaid Services’ Center for Program Integrity “has filed adverse administrative actions against 127 health care providers over the past six months for allegedly engaging in health care fraud.”
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Unnecessary amniotic membrane transplants for ‘fragile patient wounds’
In Arizona, four people were indicted for submitting $900 million in false and fraudulent claims for amniotic wound graft procedures performed on elderly Medicare patients, many of whom were terminally ill and receiving hospice care, according to the Department of Justice.
According to court documents, the victims were targeted through multiple wound care companies owned by Alexandra Goerke, 38, and Jeffrey King, 49. Goerke and King were indicted on a variety of charges, including conspiracy, health care fraud, accepting bribery and money laundering.
Prosecutors alleged that two nurses were also involved in the scheme.
According to the Department of Justice, “the defendants indiscriminately applied unnecessary and extremely costly amniotic membrane grafts to these vulnerable patients’ wounds, often disproportionately oversized, superficial wounds that did not require treatment, without coordinating with the patients’ primary physicians or providing adequate infection treatment.”
Court documents also allege that King pressured nurses to perform transplants, leading to some patients dying the same day or within days of receiving the procedures.
According to the Department of Justice, King and Goerke accepted more than $330 million in illegal bribes in exchange for buying Medicare bills. As part of the investigation, federal authorities seized more than $70 million, including four luxury vehicles, gold, jewelry and cash.
According to the Justice Department, Medicare paid more than $1 million per patient for unnecessary transplants, totaling more than $600 million over a 16-month period.
Patients given placebo were left unconscious for 24 hours
In Florida, three owners of a wholesale pharmaceutical company have been charged with distributing counterfeit and fraudulent HIV drugs, the Department of Justice announced. Adam Brosius, 59, Patrick Boyd, 43, and Charles Boyd, 46, were indicted on wire fraud charges.
According to the indictment, the drug company purchased more than $90 million in “heavily discounted and diverted” prescription drugs from five black market suppliers, which the three defendants then allegedly resold to pharmacies across the country.
The drugs were distributed with false documentation concealing the drugs’ original source, according to the indictment. The pharmacies then distributed the drugs to “unsuspecting patients,” according to the Department of Justice.
“As a result, patients have sometimes found a bottle labeled as a prescription medication that contained a completely different medication,” Garland said. “One patient lost consciousness and was unconscious for 24 hours after taking an antipsychotic medication that he believed was a prescribed HIV medication.”
Homeless people and Native Americans targeted in treatment program
Four individuals were indicted in Arizona and Florida on charges of making false and fraudulent claims to patients seeking treatment for drug and alcohol addiction, according to the Department of Justice. The scheme generated more than $146 million in false and fraudulent claims.
One indictment charges that Rita Conago, 52, paid bribes in exchange for referring vulnerable patients, including homeless and Native American patients from reservations. Conago owned an outpatient treatment center in Arizona that was registered as a provider with the state’s Medicaid agency.
According to the indictment, Anago fraudulently billed Arizona Medicaid for substance abuse treatment services that “were never provided or were provided at such a low level that they did not serve their therapeutic purpose.”
“The defendants are charged with money laundering for allegedly making lavish purchases with the proceeds of the fraud, as well as obstruction of justice for falsifying records in response to a grand jury document subpoena,” the Justice Department said.
