WASHINGTON – A federal jury in Miami today convicted two physicians and two medical assistants in connection with a $5.3 million Medicare fraud scheme, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced.
After a two-week trial in federal court in Miami, a jury found David Rothman, M.D., 66; Keith Russell, M.D., 65; Eda Marietta Milanes, 43; and Jorge Luis Pacheco, 50; guilty on all charged counts, including conspiracy to commit health care fraud and multiple counts of health care fraud for submitting claims to Medicare for unnecessary medications.
According to evidence presented at trial, the defendants worked as doctors and medical assistants at two Miami clinics, Medcore Group LLC (Medcore) and M&P Group of South Florida Inc. (M&P Group), that purported to specialize in the treatment of human immunodeficiency virus (HIV). Evidence at trial established that Rothman was the medical director for both Medcore and M&P Group between May 2004 and January 2006. Russell took over as medical director at M&P Group after January 2006. Pacheco and Milanes worked as medical assistants for Russell at M&P Group.
One of the owners of the clinics, Tony Marrero, testified at trial that the clinics were established for the sole purpose of defrauding Medicare. Marrero testified that the scheme was to submit claims for medically unnecessary HIV infusion and injection treatments. Evidence at trial showed that Medcore and M&P Group billed Medicare for $5,300,186 and were paid $2,511,387 during two years of operations. Marrero testified that the unnecessary medicines were not administered to patients, and that the clinics were only operated to create the appearance of legitimacy. Marrero stated that he had an arrangement with a pharmaceutical wholesale company, Lifecare Medical, to buy invoices showing the purchase of large amounts of medications, when only minor amounts were actually bought. Marrero; his wife, Belkis Marrero; his brother-in-law, Orlando Pascual; the owner of Lifecare Medical, Harold Sio; a patient recruiter and clinic employee, Alberto R. Gonzalez; and a medical assistant at Medcore, Luz Borrego; each previously pleaded guilty in connection with this scheme.
Borrego testified that she manipulated the patients’ blood samples at Medcore to ensure that lab results would appear to support the Medicare claims. Borrego stated that she would not give the medications ordered by Rothman because she knew the medications could harm the patients.
Trial testimony established that every patient who went to Medcore and M&P Group was paid a cash kickback of up to $200 per visit. The scheme relied upon 20 patients during the two-year period at both clinics. Four patients testified that they took kickbacks and never received any medication at the clinics. One patient testified that he used his payments from the clinics to support his cocaine addiction. Another patient testified that he did not have HIV, even though the clinics’ documents showed he was being infused with medication to treat HIV.
Evidence introduced at trial documented that Rothman worked at other Miami-area infusion clinics, which billed Medicare for more than $60 million between 2004 and the end of 2005. Trial evidence also established that Russell worked at Tendercare Medical Center (Tendercare), another fraudulent infusion clinic, with Pacheco and Milanes at the same time as M&P Group. Further, two of the patients who testified at trial received kickbacks from both Tendercare and M&P Group.
According to evidence presented at trial, Milanes was paid extra by Marrero at M&P Group to manipulate blood samples to justify the false claims. Pacheco worked directly for Marrero to determine what drugs would be falsely billed to Medicare through M&P Group. Trial testimony established that Pacheco was a physician in Cuba prior to coming to the United States.
On March 14, 2009, while trial was ongoing, Pacheco attempted to flee the United States, according to evidence presented in court. He was apprehended heading south on Krome Avenue in Miami-Dade County with $12,600 in cash and a false Florida driver’s license in the name of Jose Luis Falcon. Evidence presented to the court proved that prior to being apprehended, Pacheco cut off his ankle monitor in violation of the terms of his pre-trial release. Documents seized from Pacheco at the time of his apprehension contained multiple contacts in the Dominican Republic. According to evidence presented at court, Pacheco stated to officers that he was "going fishing." Judge Ungaro revoked his bond and remanded him into custody for the remainder of the trial.
"The jury’s verdict shows that medical professionals, trusted to provide necessary care and medicine to their legitimate patients, can and will be held accountable when they defraud the Medicare program," said Acting Assistant Attorney General Rita M. Glavin of the Criminal Division. "The Department of Justice will continue our vigorous pursuit of those who steal from Medicare for their own personal benefit."
"The Medicare program relies on physicians to be the first line of defense against fraud," said Bernardo Rodriguez, Acting Special Agent-in-Charge of the Miami Office of Inspector General, Department of Health and Human Services. "As in this case, when doctors shirk that responsibility and steal from Medicare, we have to prosecute them to the fullest extent of the law."
This case was investigated by the FBI and the Department of Health and Human Services (HHS), Office of Inspector General, Office of Investigations. The Homestead, Fla., Police Department, along with the FBI and HHS, were critical in the apprehension of Pacheco during his attempted flight during trial.
Pacheco and Milanes were remanded into custody following the verdicts. Rothman and Russell were required to post bond and are under house arrest until sentencing. Rothman faces a maximum of 50 years in prison. Russell, Milanes and Pacheco each face a maximum of 30 years in prison. Sentencing for all defendants has been scheduled for June 26, 2009.
The case was prosecuted by Deputy Chief Kirk Ogrosky, Assistant Chief John S. (Jay) Darden and Trial Attorney Charles D. Reed of the Criminal Division’s Fraud Section, with the investigative assistance of HHS and the FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 192 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.