Federal officials broke up a billion-dollar nationwide kickback conspiracy that lured and sold medically unnecessary braces to hundreds of thousands of seniors. More than 80 search warrants in 17 federal districts have been served and charges were being brought against two dozen defendants in different states including South Carolina. According to U.S. Attorney for South Carolina, the investigation is one of the largest Medicare fraud investigations in the history of the FBI, the Department of Health and Human Services and the IRS.
According to law enforcement agencies, the scheme involved selling cheap, Chinese-made arm, leg, back and neck braces to thousands of elderly and disabled Medicare patients, who paid for them with Medicare. The conspiracy used telemarketing and online advertisements to reach out to seniors offering “free” orthopedic braces and recommend Medicare-eligible people to contact overseas call centers. The call centers after verification of Medicare coverage, linked them up with telemedicine companies and doctors for consultations, who wrote prescriptions for orthopedic braces, regardless of whether the patients needed them or not. Then, the call centers would gather prescriptions and sell them to medical equipment companies, which would dispatch the braces to patients and bill Medicare.
Reportedly, the perpetrators laundered the profits through offshore shell companies and then used the money to purchase exotic cars, yachts and luxury real estate in the native and abroad. According to Medicare’s anti-fraud unit, action is being taken against 130 medical equipment companies involved in the scheme. The loss to Medicare was estimated at more than $1.2 billion.
One of the key conspirators of the scheme is charged of money laundering, mail fraud, conspiracy and making false statements. According to an indictment in the case, he had an interest in ten medical equipment companies and four other companies in six different states. Federal officials pursue to seize 22 separate bank accounts and five cars from him, including two Mercedes, a Ferrari and an Infiniti.
Federal charges leading to convictions have long-term consequences. Because these charges have severe penalties, a professional should be retained to prepare a robust defense and collect and present evidence to prove that a suspect is not guilty of the charges.