Owner of Durable Medical Equipment Companies Charged in Nearly $30 Million Fraud Scheme

BOSTON – The owner of Pharmagears, LLC (Pharmagears) and RR Medco, LLC (RR Medco) has been charged in connection with a nearly $30 million fraud scheme involving medically unnecessary durable medical equipment (DME), including orthotics such as back and knee braces.

Raju Sharma, 61, of Sharon, was charged by criminal complaint with one count of conspiracy to commit health care fraud. Sharma was arrested this morning and later released on conditions following an initial appearance in federal court in Boston.

“As alleged, Mr. Sharma exploited vulnerable Medicare beneficiaries and defrauded the system of millions of dollars meant for legitimate medical care. His actions caused millions of dollars of waste on DME products beneficiaries did not need and did not want. He did this to enrich himself – and allow him to purchase luxury cars and high-end watches – all at the expense of the American people,” said United States Attorney Leah B. Foley. “This office will continue to hold accountable those who undermine the integrity of our healthcare system for personal gain. Fraudsters who think they can manipulate the system without consequence should take heed: we will investigate you, we will prosecute you, and we will hold you accountable to ensure that justice is served.”

“Today's arrest underscores HHS-OIG's commitment to protecting patients and taxpayers from fraudulent schemes that exploit our health care system and are motivated by pure greed,” stated Special Agent in Charge Roberto Coviello with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will continue to work tirelessly with our law enforcement partners to investigate allegations that individuals and entities are profiting from deceiving and abusing federal health care programs.” 

“Raju Sharma apparently thought he had hit upon a surefire moneymaker when he allegedly conspired with others to fraudulently bill Medicare for almost $30 million worth of durable medical equipment that was unwanted, unnecessary and useless to patients so he could purchase luxury vehicles and expensive watches for himself,” said Jodi Cohen, Special Agent in Charge, Federal Bureau of Investigations, Boston Division. “Health care fraud isn’t some quick and easy way to bulk up your bank account. It’s a costly, consequential federal crime that strains the system and cheats the taxpayers who fund it. Anyone involved in, or entertaining, similar activity should know that the FBI will pursue anyone trying to steal from this country’s vital health care system.”

According to the charging documents, between February 2021 and February 2025, Sharma, on behalf of Pharmagears and RR Medco, entered into contracts with telemarketing companies that generated DME orders by targeting Medicare beneficiaries. Sharma then allegedly billed Medicare for this medically unnecessary DME, which Medicare beneficiaries often did not want or could not use and/or a medical practitioner ordered without having met or examined the beneficiary or were ordered by the fraudulent use of practitioners’ national provider identifiers without their knowledge or assent. It is alleged that these DME orders were also obtained in violation of the Anti-Kickback Statute, because although Sharma agreed in the contracts to pay the marketing companies a flat fee for their services, Sharma in fact paid the marketing companies on a per-lead, or per-order, basis.  

It is further alleged that Sharma worked with multiple other co-conspirators, including family and acquaintances, to open and operate additional DME companies in the same fraudulent manner. In total, the companies owned, operated, or connected with Sharma allegedly billed Medicare approximately $29.6 million for these fraudulent DME orders and were paid approximately $15.8 million. According to the charging documents, Sharma made substantial profits from this alleged fraud, which he used to purchase luxury goods, including two Ferraris, a Mercedes-Benz Model S and at least three Rolex watches. The Court issued seizure warrants for these luxury goods in connection with today’s charges.

The charge of conspiracy to commit health care fraud provides for a sentence of up to 10 years in prison, supervised release for up to three years, and a fine of up to $250,000 or twice the gross pecuniary gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

U.S. Attorney Foley, HHS-OIG SAC Coviello and FBI SAC Cohen made the announcement today. Valuable assistance was provided by the United States Marshals and the Sharon Police Department. Assistant U.S. Attorneys Lauren Graber and Sarah Hoefle of the Criminal Division are prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.