Medicaid is a federal healthcare program created with the objective of providing quality care to patients across the United States. Yet, there are cold hearted and evil individuals who have figured out a way to exploit the program for personal gain. It is said to be unbelievably easy. In fact, it has become possible to make a living by stealing from Medicaid. One fraudster claims that he routinely brought in millions of dollars from healthcare fraud for over a decade. He’s even bragging about it! Let’s explore the crazy world of Medicaid fraud schemes.
DME Fraud in South Florida
DME includes durable medical equipment such as wheelchairs and oxygen equipment. In recent years, a decoy medical supply company in South Florida attempted to steal $500,000 from Medicare using this equipment. The company simply purchased lists of patients from doctors. For this wild scheme to be possible, fraudulent doctors are compensated with kickbacks or in other cases, threatened if they don’t release patient names. Once the stolen money is deposited in a bank account, money launderers withdraw the money from the account, and hide the origin of the money.
With a list of thousands of patients and open wifi, this fraudulent company was able to begin their business of submitting false claims to Medicare. While limited identifying details of this case exist, we know that the operation was shut down before Medicare dispensed any money.
Unmasking the Impact of Covid-19
If attempting to steal thousands of dollars wasn't audacious enough, imagine doing so in a space merely two floors above a South Florida regional office of the U.S. Department of Health and Human Services' criminal investigative unit. It appears that Medicaid fraudsters have gotten more shameless over years, especially with the rollout of Covid-19 relief funds and similar aid such as the CARES Act.
The 2020 CARES Act increased Medicare reimbursement to care for Covid–19 patients by 20 percent. It also lowered the Medicare sequester and in turn added an additional two percent for health services provided from May 1st to December 2020. With Medicare sequestration, federal spending is reduced to address budget concerns. Most importantly, it allowed for doctors to conduct patient visits through telecommunication to avoid in person contact. While the CARES Act’s original intention was to give providers an incentive to treat patients, it appears as though criminals saw this as an incentive as well.
The smile behind the scheme
Jesus Garces, currently serving a twelve and a half-year prison sentence for one count of conspiracy to commit healthcare fraud and wire fraud, was caught on a hidden camera smiling as he counted the cash stolen from Medicare. In 2021, inspector general agents discovered $2.5 million vacuum-sealed in bricks, carefully packaged, and then concealed within PVC pipes. This astonishing find serves as a testament not only to the audacity of DME schemes but also to the staggering amount that can be illicitly obtained.
According to Ricardo Carcas, the special agent leading the Garces investigation, DME schemes often involve what they refer to as a "shell" storefront, posing as a legitimate medical equipment company. In Garces' case, the empty storefront only contained a desk and a shelf with a few orthotic braces, and it was closed during business hours. The key to confirming the operations’ fraudulence was identifying the referring doctors who signed off on patients that were billing their equipment to Medicare. These patients never saw these doctors. A grand scheme of such measures requires multiple criminals to work together.
Lifestyles of the Rich and Famous
In 2020, Latisha and Timothy Harron were charged with a $13 million fraud scheme, which they used to finance and flaunt a luxurious lifestyle showcased on social media. The hashtags used in Timothy Harron's Instagram posts, such as "millionaire," "goals," and "entrepreneur," were deceiving as they falsely portrayed themselves as wealthy individuals when, in reality, they were nothing more than criminals.
The Harrons resided in Las Vegas but went through obituary listings in North Carolina to obtain the names of individuals who had passed. From a state verification system, they obtained the Medicaid identification numbers of the deceased. The numbers of those who had unused coverage for home healthcare services were then used to file false claims for services. This was all possible due to the fraudulent businesses created, Agape Healthcare Systems Inc. and Assured Healthcare Systems L.L.C.. According to Robert J. Higdon Jr., the U.S. Attorney for the Eastern District of North Carolina, this scheme was the most horrific case of Medicaid fraud within his jurisdiction.
$13 million funded a life full of private jets, penthouses, luxury resorts, expensive clothing and jewelry including a $588,455 Tiffany ring. However, once the Harrons were indicted, they swapped out Tiffany rings for handcuffs. Their charges included 54 counts of wire fraud, one count of healthcare fraud, six counts of aggravated identity theft, one count of conspiracy to commit money laundering, and 11 counts of conducting transactions in criminally derived property with fraud and money laundering. In May of 2021, Latisha Harron was sentenced to 14 years and 2 months and ordered to pay restitution to the North Carolina Medicaid Program in the amount of $13,396,921.64.
Medicaid fraud is a serious offense that, despite offering immediate gratification, carries the risk of severe consequences, including imprisonment and substantial financial penalties. If an individual becomes the subject of a Medicaid fraud investigation, they can expect to receive a letter from the Human Resources Administration (HRA) via mail. This letter will request the submission of various documents and eventually lead to an interview with an investigator. Attorney Inna Fershteyn showcases a proven track record of successfully resolving such matters and securing favorable settlements for clients. Her experience is complimented by client testimonials that affirm her efficiency in such cases. If you or someone you know have found themselves involved in a Medicaid Fraud investigation, please contact the Medicaid Fraud Attorney at (718) 333-1233.