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Press Release

Hospice Medical Director Sentenced for $150M Hospice Fraud Scheme

For Immediate Release
Office of Public Affairs

A hospice medical director was sentenced yesterday to four years and two months in prison for his role in a scheme that involved the submission of over $150 million in false and fraudulent claims to Medicare for hospice and other health care services.

According to court documents, from 2009 to 2018, Jesus Virlar-Cadena, 52, served as the medical director of the Merida Group, a large health care company that operated dozens of locations throughout Texas. Evidence at the trial of co-defendants Rodney Mesquias, Henry McInnis, and Francisco Pena, showed that the Merida Group marketed their hospice programs through a group of companies known as the Merida Group. They enrolled patients with long-term incurable diseases, such as Alzheimer’s and dementia, as well as patients with limited mental capacity who lived at group homes, nursing homes, and in housing projects. In some instances, Merida Group marketers falsely told patients they had less than six months to live. They also sent chaplains to the patients based on the false pretense they were near death.

In order to bill Medicare for these services, the Merida Group hired Virlar and other medical directors, but made payment of their medical director fees contingent upon an agreement to certify unqualified patients for hospice. In addition to regular medical director payments, Virlar received luxury trips, bottle service at exclusive nightclubs, and other perks in exchange for his certification of unnecessary hospice patients. In exchange for these illegal kickbacks, Virlar himself certified over $18 million in unnecessary hospice services as part of the over $150 million conspiracy.   

Mesquias was previously sentenced to 20 years in prison and McInnis was previously sentenced to 15 years in prison. Pena passed away before sentencing.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Alamdar Hamdani for the Southern District of Texas, Special Agent in Charge Jason E. Meadows of the Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division made the announcement.

HHS-OIG, the FBI, and Texas Health and Human Services Commission investigated the case.

Principal Assistant Chief Jacob Foster and former Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz for the Southern District of Texas prosecuted the case.

Updated September 28, 2023

Financial Fraud
Health Care Fraud
Press Release Number: 23-1065