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Thursday, August 25, 2011
Detroit-Area Clinic Owner Sentenced to 48 Months in Prison for Medicare Fraud Schemes Totaling More Than $15 Million

WASHINGTON— An owner of three Detroit-area clinics was sentenced to 48 months in prison today for his role in schemes that attempted to defraud the Medicare program of more than $15 million, the Departments of Justice and Health and Human Services (HHS) announced.

 

Jose Rosario, 54, was sentenced by U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan.  In addition to the prison term, Rosario was sentenced to three years of supervised release and was ordered to pay, jointly and severally with other defendants in the case, $10.7 million in restitution.   Judge Rosen ordered the sentence to run consecutive to a 46 month sentence that Rosario received in the Southern District of Florida in July 2011, in connection with an unrelated mortgage fraud case.  

 

Rosario pleaded guilty on Aug. 18, 2009, to one count of conspiracy to commit health care fraud.    According to court documents, Rosario acknowledged that in approximately September 2006, he and a co-defendant incorporated Sacred Hope Medical Center Inc. in Michigan.  Sacred Hope purported to specialize in providing injection and infusion therapy services to Medicare patients.  Rosario admitted that he and the co-defendant were the owners of the clinic, and agreed to split the profits generated there evenly between them.

 

According to court documents, during the time that Sacred Hope was open, the clinic routinely billed the Medicare program for services that were medically unnecessary and/or never provided.  Rosario admitted that he knew the clinic purchased only a small fraction of the medications that the clinic billed to Medicare.  Rosario admitted he participated in hiring co-conspirators to falsify the medical files to make the treatments purportedly provided at Sacred Hope appear legitimate, when in fact he knew they were not.

 

Rosario also admitted that Medicare beneficiaries were not referred to Sacred Hope by their primary care physicians or for any legitimate medical purpose.   Rather, they were recruited to come to the clinic through the payment of kickbacks. In exchange for the kickbacks, the beneficiaries visited the clinic and signed documents falsely indicating that they had received the services billed to Medicare.  According to information contained in the plea documents, kickbacks came in the form of cash and prescriptions for narcotic drugs.  

 

In addition to the conduct at Sacred Hope, Rosario admitted to being a part owner of Dearborn Medical Rehab Center (DMRC), another infusion clinic, and to playing similar roles at a third Detroit-area infusion clinic, Xpress Center.  Rosario admitted that he was fully aware that the DMRC and Xpress Center routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided.  Rosario admitted that the purpose of the DMRC and Xpress Center was not to provide legitimate health care to patients, but rather to defraud the Medicare program.

 

Between approximately March 2006 and March 2007, Rosario admitted to causing the submission of approximately $15.3 million in false and fraudulent claims to Medicare for services purportedly provided at Sacred Hope, DMRC and Xpress Center.  Based on the fraudulent claims, approximately $10.7 million was paid.

 

Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.  

 

This case was prosecuted by Assistant Chief Benjamin D. Singer and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney John K. Neal of the Eastern District of Michigan.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. 

 

Since its inception in March 2007, Medicare Fraud Strike Force operations in nine districts have charged 1,000 defendants that collectively have billed the Medicare program for more than $2.3 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.  

 

To learn more about the HEAT team, go to: www.stopmedicarefraud.gov.  

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