Feds break up $1.2B Medicare orthopedic brace scam

Federal agents take part in arrests Tuesday in New York City

Federal agents take part in arrests Tuesday in New York City

WASHINGTON (AP) - Federal authorities said Tuesday they've broken up a $1.2 billion Medicare scam that peddled unneeded orthopedic braces to hundreds of thousands of seniors via foreign call centers.

They were lured by an worldwide telemarketing network involving call centers in the Philippines and Latin America, the Department of Justice said.

One of the largest healthcare frauds in American history caused more than United States dollars 1 billion in losses after hundreds of thousands of patients were lured into the scheme, U.S. investigators said Tuesday, announcing charges against 24 people.

The FBI announced on Tuesday that it has charged 24 individuals, including CEOs and COOs of medical equipment companies, with participation in one of the largest health care fraud schemes in USA history against Medicare recipients.

They laundered the money through worldwide shell corporations and then used it to buy exotic automobiles, yachts and luxury real estate in the US and overseas, he said.

DME companies paid kickbacks and bribes to medical professionals working with fraudulent telemedicine companies in exchange for the referral of Medicare beneficiaries for medically-unnecessary back, shoulder, wrist and knee braces, the USA attorney said. Beneficiaries who expressed interest would be patched through to call centers involved in the scheme.

Medicare then footed the bill.

Those participating would get financial kickbacks, and those accused in the scheme spent the money - almost $1 billion - on luxury items such as real estate, cars, and yachts. They billed the program a total of $1.7 billion, of which more than $900 million was paid out.

The Health and Human Services inspector general's office says the fast-moving scam morphed into multiple related schemes.

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Together, Carpenito said, they engineered a $454 million illegal health care kickback referral and worldwide money-laundering scheme.

In addition, Joseph DeCoroso, M.D., 62, of Toms River, was charged in a $13 million conspiracy to commit health care fraud and separate charges of health care fraud for writing medically unnecessary orders for DME.

In addition to the strike force prosecution, Carpenito's office charged Neal Williamsky 59, of Marlboro, and Nadia Levit, 39, of Englishtown, who own more than DME companies, in connection with a $150 million kickback scheme.

The defendants allegedly paid doctors to prescribe medical equipment without any patient interaction or with only a brief phone call.

The doctors would write prescriptions for orthopedic braces, regardless of whether the patients needed them or not. "We all suffer when schemes like this go undiscovered". Others did not respond to messages.

"All taxpayers will endure the rising cost of healthcare premiums and out-of-pocket costs as a result of fraud on our Medicare system", Lydon said.

In recent years, Medicare has tried to adapt techniques used by credit card companies to head off fraud.

Officials said the government has options to recoup at least some of the money lost to Medicare, including seizing fraudsters' assets and accounts, as well as property purchased with the proceeds of the scam. Administrative penalties were also issued against 130 orthopedic equipment suppliers, DOJ said. "But after giving out your identifying information, it could be compromised to perpetuate additional fraud". "Medicare fraud is not a victimless crime".

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