Owner of Detroit-Area Medical Clinic and Physician Sentenced to Prison for $2.3 Million Infusion Therapy Scheme
Money Launderer Sentenced to Prison in Connection
with a Separate Medicare Fraud Scheme
WASHINGTON – An owner and a physician associated with a Detroit-area infusion therapy clinic were sentenced to 120 months and 97 months in prison, respectively, for their leading roles in a $2.3 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced. In a separate case, a money launderer was sentenced to one year in prison in connection with a Medicare fraud scheme at a separate Detroit-area clinic.
Juan De Oleo, 51, an owner of Xpress Center Inc. (XPC); Dr. Rosa Genao, 52, a physician associated with XPC; and Noel Freytes, 36, a money launderer for Dearborn Medical Rehabilitation Center (DMRC), were all sentenced by U.S. District Court Judge Denise Page Hood in the Eastern District of Michigan. In addition to their prison terms, De Oleo and Genao were sentenced to three years of supervised release and were ordered to pay jointly and severally $1.7 million in restitution. Freytes was also sentenced to two years of supervised release and ordered to pay $519,540 in restitution, jointly and severally with his co-defendants.
De Oleo and Genao were convicted after a seven-day trial in August 2010. De Oleo was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and two counts of money laundering. Genao was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and one count of destruction or alteration of records.
According to evidence presented at trial, De Oleo and others established XPC for the sole purpose of defrauding Medicare. XPC was an outpatient clinic that purported to specialize in infusion and injection therapy. Further, De Oleo and his co-conspirators imported the concept of infusion clinic fraud to Detroit from South Florida after increased law enforcement scrutiny there.
De Oleo enlisted his wife, Genao, to help falsify medical files at XPC to make it appear that the clinic’s patients actually needed the medications being billed to Medicare. According to the evidence presented at trial, Genao wrote down fictitious symptoms in the patient charts maintained by the clinic in order to justify expensive and exotic medications that the clinic billed to Medicare.
Evidence at trial showed that XPC purchased only a small fraction of the medications that the clinic billed the Medicare program for providing. Patients were prescribed medications at the clinic based not on medical need, but rather on what medications were likely to generate the highest Medicare reimbursements.
Evidence at trial showed that Medicare beneficiaries were not referred to XPC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of cash kickbacks. In exchange for those kickbacks, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare.
As the evidence at trial showed, between approximately November 2006 and March 2007, the defendants submitted approximately $2.3 million in claims to Medicare for injection therapy services that were never provided and were not medically necessary. Medicare paid approximately $1.7 million of those claims.
In a separate Medicare fraud case, Freytes pleaded guilty in September 2010 to laundering money on behalf of an owner of DMRC, a separate clinic in the Detroit-area. Freytes’ money laundering efforts were designed to disguise the origins of proceeds obtained through a fraudulent infusion therapy scheme at DMRC. Freytes admitted that he deposited checks from a DMRC account that were made out to a company he owned. Freytes withdrew a large percentage of the money in his company’s account and returned most of it to the co-defendant owners and operators of DMRC. Freytes admitted to having laundered or having attempted to launder $519,540 on behalf of the DMRC owners.
Today’s sentences were 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.
The XPC case was prosecuted by Trial Attorneys Benjamin D. Singer and Gejaa T. Gobena of the Criminal Division’s Fraud Section. The DMRC case was prosecuted by Trial Attorney Gejaa T. Gobena, Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan and Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The cases were investigated by the FBI and HHS-OIG, and were 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 obtained indictments of 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 Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.