DOJ Announces Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19 | OPA


The Division of Justice at the moment introduced prison prices towards 14 defendants, together with 11 newly-charged defendants and three who had been charged in superseding indictments, in seven federal districts throughout the US for his or her alleged participation in varied well being care fraud schemes that exploited the COVID-19 pandemic and resulted in over $143 million in false billings.

“The a number of well being care fraud schemes charged at the moment describe theft from American taxpayers via the exploitation of the nationwide emergency,” mentioned Deputy Lawyer Basic Lisa O. Monaco. “These medical professionals, company executives, and others allegedly took benefit of the COVID-19 pandemic to line their very own pockets as an alternative of offering wanted well being care providers throughout this unprecedented time in our nation. We’re dedicated to defending the American folks and the important well being care advantages packages created to help them throughout this nationwide emergency, and we’re decided to carry those that exploit such packages accountable to the fullest extent of the legislation.”

Moreover, the Heart for Program Integrity, Facilities for Medicare & Medicaid Companies (CPI/CMS) individually introduced at the moment that it took adversarial administrative actions towards over 50 medical suppliers for his or her involvement in well being care fraud schemes referring to COVID-19 or abuse of CMS packages that had been designed to encourage entry to medical care throughout the pandemic.

“Medical suppliers have been the unsung heroes for the American public all through the pandemic,” mentioned FBI Director Christopher Wray. “It’s disheartening that some have abused their authorities and dedicated COVID-19 associated fraud towards trusting residents. The FBI, together with our federal legislation enforcement and personal sector companions, are dedicated to persevering with to fight healthcare fraud and shield the American folks.”

The defendants within the instances introduced at the moment are alleged to have engaged in varied well being care fraud schemes designed to take advantage of the COVID-19 pandemic. For instance, a number of defendants supplied COVID-19 assessments to Medicare beneficiaries at senior residing amenities, drive-through COVID-19 testing websites, and medical places of work to induce the beneficiaries to supply their private figuring out data and a saliva or blood pattern. The defendants are alleged to have then misused the data and samples to submit claims to Medicare for unrelated, medically pointless, and much dearer laboratory assessments, together with most cancers genetic testing, allergy testing, and respiratory pathogen panel assessments. In some instances, and as alleged, the COVID-19 check outcomes weren’t supplied to the beneficiaries in a well timed trend or weren’t dependable, risking the additional unfold of the illness, and the genetic, allergy, and respiratory pathogen testing was medically pointless, and, in lots of instances, the outcomes weren’t supplied to the sufferers or their precise major care docs.  The proceeds of the fraudulent schemes had been allegedly laundered via shell firms and used to buy unique vehicles and luxurious actual property.

“It’s clear fraudsters see the COVID-19 pandemic as a money-making alternative — creating fraudulent schemes to victimize beneficiaries and steal from federal well being care packages,” mentioned Deputy Inspector Basic for Investigations Gary L. Cantrell of  Well being and Human Companies – Workplace of Inspector Basic (HHS-OIG). “Our company and its legislation enforcement companions are aggressively and successfully investigating these egregious crimes, which is made equally clear given the outcomes of this takedown. We are going to proceed to help the unprecedented COVID-19 public well being effort by holding accountable individuals who use misleading techniques to revenue from the pandemic.”

In one other sort of COVID-19 well being care fraud scheme introduced at the moment, defendants are alleged to have exploited insurance policies that had been put in place by CMS to allow elevated entry to care throughout the COVID-19 pandemic. For instance, pursuant to the COVID-19 emergency declaration, telehealth laws and guidelines had been broadened in order that Medicare beneficiaries may obtain a wider vary of providers from their docs with out having to journey to a medical facility. The instances introduced at the moment embody first within the nation prices for allegedly exploiting these expanded insurance policies by submitting false and fraudulent claims to Medicare for sham telemedicine encounters that didn’t happen. As a part of these instances, medical professionals are alleged to have supplied and paid bribes in trade for the medical professionals’ referral of medically pointless testing.

The legislation enforcement motion at the moment additionally contains the third set of prison prices associated to the misuse of Supplier Reduction Fund monies. The Supplier Reduction Fund is a part of the Coronavirus Assist, Reduction, and Financial Safety (CARES) Act, a federal legislation enacted March 2020 designed to supply wanted medical care to Individuals affected by COVID-19.

The Fraud Part is prosecuting the instances within the following districts: Western District of Arkansas, Northern District of California, Center District of Louisiana, Central District of California, Southern District of Florida, District of New Jersey, and the Jap District of New York.

Right now’s enforcement actions had been led and coordinated by Assistant Chief Jacob Foster and Trial Attorneys Rebecca Yuan and Gary A. Winters of the Nationwide Fast Response Strike Power of the Well being Care Fraud Unit of the Felony Division’s Fraud Part, at the side of the Well being Care Fraud Unit’s Medicare Fraud Strike Forces (MFSF) in Miami, Los Angeles, the Gulf Coast, and Brooklyn, in addition to the U.S. Attorneys’ Workplaces for the Northern District of California, Western District of Arkansas, and Center District of Louisiana.

The MFSF is a partnership among the many Felony Division, U.S. Attorneys’ Workplaces, the FBI and HHS-OIG. As well as, U.S. Postal Inspection Service, Inner Income Service Felony Investigation, Veterans Affairs Workplace of Inspector Basic, Division of Protection Workplace of Inspector Basic, Federal Deposit Insurance coverage Company, Louisiana Medicaid Fraud Management Unit, and different federal and state legislation enforcement businesses participated within the legislation enforcement motion.

The legislation enforcement motion was introduced in coordination with the Well being Care Fraud Unit’s COVID-19 Interagency Working Group, which is chaired by the Nationwide Fast Response Strike Power and organizes efforts to deal with criminality involving well being care packages throughout the pandemic.

The Fraud Part leads the Medicare Fraud Strike Power. Since its inception in March 2007, the Medicare Fraud Strike Power, which maintains 15 strike forces working in 24 federal districts, has charged greater than 4,200 defendants who’ve collectively billed the Medicare program for almost $19 billion. As well as, the HHS Facilities for Medicare and Medicaid Companies, working at the side of the HHS-OIG, are taking steps to extend accountability and reduce the presence of fraudulent suppliers.

Case Summaries

Western District of Arkansas

  • Billy Joe Taylor, 42, of Lavaca, Arkansas, was charged by prison criticism with well being care fraud in reference to an alleged scheme to defraud the US of over $88 million, together with over $42 million in false and fraudulent claims throughout the COVID-19 well being emergency that had been billed together with claims that had been submitted for testing for COVID-19 and different respiratory sicknesses. Taylor, the proprietor and operator of Vitas Laboratories LLC and Seaside Tox LLC, two testing laboratories, allegedly used entry to beneficiary and medical supplier data from prior laboratory testing orders to submit fraudulent claims for urine drug assessments and different laboratory assessments, together with respiratory pathogen panel and COVID-19 assessments, that weren’t truly ordered or carried out. The criticism additionally alleges that a whole bunch of claims had been submitted for beneficiaries after that they had died or in any other case ceased offering samples. The case is being prosecuted by Senior Litigation Counsel James Hayes and Trial Lawyer D. Keith Clouser of the Nationwide Fast Response Strike Power, and Assistant U.S. Lawyer Kenneth Elser of the U.S. Lawyer’s Workplace for the Western District of Arkansas.

Northern District of California

  • Mark Schena, 58, of Los Altos, California, the president of Arrayit Company, is charged together with two others, the Arrayit Vice President of Advertising and the President of an Arizona advertising and marketing group, in reference to the submission of over $70 million in false and fraudulent claims for allergy and COVID-19 testing. The superseding indictment towards Schena contains new counts of well being care fraud, a conspiracy to pay kickbacks, and fee of kickbacks in reference to false and fraudulent statements in regards to the existence, regulatory standing, and accuracy of an Arrayit COVID-19 check. The conspiracy allegedly sought to induce the ordering of the Arrayit COVID-19 check and to bundle, i.e., require mixture with, the COVID-19 check and Arrayit’s medically pointless allergy check. The COVID-19 check outcomes weren’t supplied in a well timed trend and weren’t dependable in detecting COVID-19. The instances are being prosecuted by Appearing Principal Deputy Assistant Chief Justin Weitz of the Market Integrity and Main Fraud Unit of the Fraud Part, Assistant Chief Jacob Foster of the Nationwide Fast Response Strike Power, and Assistant U.S. Lawyer Wil Frentzen of the U.S. Lawyer’s Workplace for the Northern District of California.

Central District of California

  • Petros Hannesyan, 36, of Burbank, California, was charged with the theft of presidency property and wire fraud in reference to $229,454 that he obtained from COVID-19 aid packages. Hannesyan, the proprietor of Hollywood Dwelling Well being Companies, Inc., a house well being company positioned in Los Angeles, allegedly misappropriated funds from the CARES Act Supplier Reduction Fund and submitted false mortgage functions and a false mortgage settlement to the Financial Harm Catastrophe Mortgage Program, moderately than use the funds for COVID-19 affected person care and to help small companies experiencing disruption as a result of COVID-19 pandemic. The case is being prosecuted by Trial Lawyer Alexis Gregorian of the Los Angeles Strike Power.

Southern District of Florida

  • Michael Stein, 35, and Leonel Palatnik, 42, each of Palm Seaside County, Florida, had been charged in reference to an alleged $73 million conspiracy to defraud the US and to pay and obtain well being care kickbacks throughout the COVID-19 pandemic. Stein, the proprietor and operator of purported consulting firm 1523 Holdings, LLC, and Palatnik, an proprietor and operator of Panda Conservation Group, LLC, a Texas firm that owned and operated testing laboratories in Dallas and Denton, Texas, allegedly exploited short-term waivers of telehealth restrictions enacted throughout the pandemic by providing telehealth suppliers entry to Medicare beneficiaries for whom they might invoice consultations. In trade, these suppliers agreed to refer beneficiaries to Panda’s laboratories for costly and medically pointless most cancers and cardiovascular genetic testing. The case is being prosecuted by Trial Lawyer Ligia Markman of the Nationwide Fast Response Strike Power.
  • Juan Nava Ruiz, 44, and Eric Frank, 47, each of Coral Springs, Florida, had been charged for an alleged $9.3 million well being care kickback scheme, together with Christopher Licata, 44, of Boca Raton, Florida, who was beforehand charged in a separate Indictment. Licata, an proprietor of Boca Toxicology, LLC, a scientific laboratory primarily based in Boca Raton, allegedly supplied and paid kickbacks to affected person brokers, together with Ruiz and Frank, in trade for referring Medicare beneficiaries to Boca Toxicology for varied types of genetic testing and different laboratory testing that they didn’t want, together with the submission of $422,748 in claims associated to medically pointless respiratory pathogen panel testing and genetic testing that was improperly bundled with COVID-19 testing. The instances are being prosecuted by Trial Lawyer Jamie de Boer of the Miami Strike Power. 

Center District of Louisiana

  • Malena Lepetich, 38, of Belle Chase, Louisiana, was charged for an alleged $15 million scheme to commit well being care fraud, to defraud the US, and to pay and obtain well being care kickbacks. Lepetich, the proprietor of MedLogic, LLC, a scientific laboratory primarily based in Baton Rouge, Louisiana, allegedly solicited and obtained kickbacks in trade for referrals of urine specimens for medically pointless testing. Lepetich additionally allegedly supplied to pay kickbacks for referrals of specimens for COVID-19 and respiratory pathogen testing. Lastly, Lepetich allegedly induced the submission of over $10 million in claims to Medicare, Medicaid, and Blue Cross Blue Defend of Louisiana for panels of pricy respiratory testing that was medically pointless. The case is being prosecuted by Trial Lawyer Justin M. Woodard of the Gulf Coast Strike Power and Assistant U.S. Lawyer Kristen Craig of the U.S. Lawyer’s Workplace for the Center District of Louisiana.

District of New Jersey

  • Alexander Baldonado, 65, of Queens, New York, was charged with six counts of well being care fraud. Baldonado, a medical physician, allegedly participated in an occasion that marketed COVID-19 testing. Along with authorizing the COVID-19 assessments, Baldonado allegedly ordered costly and medically pointless most cancers genetic testing for Medicare beneficiaries who attended the occasion. Baldonado additionally allegedly billed Medicare for providers, together with prolonged workplace visits, that he by no means supplied to those beneficiaries. Roughly $2 million in claims had been submitted on account of Baldonado’s COVID-19 well being care fraud scheme, and roughly $17 million in claims had been submitted on account of Baldonado’s broader well being care fraud scheme. The case is being prosecuted by Trial Lawyer Rebecca Yuan of the Nationwide Fast Response Strike Power.
  • Donald Clarkin, 65, of Staten Island, New York, was charged in reference to a $5.4 million conspiracy to defraud the US and pay and obtain well being care kickbacks. Clarkin, a companion at a diagnostic testing laboratory, allegedly exploited the pandemic by providing kickbacks in trade for respiratory pathogen panel assessments that might be improperly bundled with COVID-19 assessments and billed to Medicare. Clarkin additionally allegedly paid and obtained kickbacks and bribes in trade for arranging for the ordering of medically pointless genetic assessments that had been ineligible for Medicare reimbursement. The case is being prosecuted by Trial Lawyer Rebecca Yuan of the Nationwide Fast Response Strike Power.  

Jap District of New York

  • Peter Khaim, 41, and Arkadiy Khaimov, 38, each of Forest Hills, New York, who owned and managed a number of New York pharmacies and sham pharmacy wholesaling firms, had been charged in a superseding indictment for his or her participation in an alleged $45 million well being care fraud, wire fraud, and cash laundering scheme. The defendants and their co-conspirators allegedly obtained billing privileges for a number of pharmacies by utilizing nominees to function the purported house owners and supervising pharmacists. The defendants then allegedly submitted false and fraudulent claims to Medicare, together with by utilizing COVID-19 “emergency override” billing codes to avoid in any other case relevant pre-authorization necessities and limits on the frequency of refills for costly medicine (primarily, the most cancers remedy gels Targretin and Panretin). The defendants allegedly used an elaborate community of worldwide cash laundering operations to hide and disguise the proceeds of the scheme. The case is being prosecuted by Trial Lawyer Andrew Estes of the Brooklyn Strike Power.

The Division of Justice wants the general public’s help in remaining vigilant and reporting suspected fraudulent exercise. To report suspected fraud, contact the Nationwide Heart for Catastrophe Fraud (NCDF) at (866) 720-5721 or file a web-based criticism at: Complaints filed shall be reviewed on the NCDF and referred to federal, state, native, or worldwide legislation enforcement or regulatory businesses for investigation.

To be taught extra in regards to the division’s COVID response, go to: For additional data on the Felony Division’s enforcement efforts on PPP fraud, together with court docket paperwork from vital instances, go to the next web site:

An indictment, criticism, or data is merely an allegation, and all defendants are presumed harmless till confirmed responsible past an inexpensive doubt in a court docket of legislation.


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