Orlando, FL –United States Attorney Roger B. Handberg announces today that Central Medical Systems, LLC, Joan Harley, and Alan Trent Harley have agreed to pay the United States $600,000 to resolve allegations that they violated the False Claims Act by participating in a scheme to defraud Medicare.
The United States previously intervened in a civil whistleblower lawsuit against Central Medical Systems and Alan Trent Harley on January 18, 2018, and later filed an amended complaint adding Joan Harley, Arthur Wright, and Meddex Solutions, LLC, as defendants, alleging the defendants conspired to make false claims to the United States in violation of the False Claims Act.
The civil lawsuit and settlement relate to the submission of claims for wound care supplies sold by Central Medical Systems. According to the lawsuit, Alan Trent Harley would routinely change quantities of items while billing and manipulated orders in Central Medical Systems’ billing software. This allegedly resulted in Central Medical Systems seeking and receiving inflated Medicare payments for more expensive products than were provided to patients or for products that were never provided at all.
The government’s suit also alleges that, after the United States intervened in the lawsuit, Central Medical Systems and Alan Trent Harley conspired with Joan Harley (his wife), Arthur Wright, and Meddex Solutions to fraudulently submit Central Medical Systems’ claims through Meddex Solutions in an attempt to bypass Medicare’s suspension of payments to Central Medical Systems.
Alan Trent Harley pleaded guilty to one count of wire fraud on November 30, 2020, and was sentenced to 15 months’ imprisonment. According to court documents in that criminal case, Harley co-founded Central Medical Systems in 1986. As president and sole active owner of the business, Harley was responsible for submitting claims to Medicare on behalf of Central Medical Systems. From at least 2011 through 2015, Harley knowingly defrauded the government of more than $870,000 by submitting fraudulent claims to Medicare. Although his employees provided him with accurate data about which wound care supplies were sent, and in what quantities, Harley frequently changed that data (with respect to both product type and quantities) before submitting claims to Medicare, in order to obtain fraudulently higher reimbursements from Medicare.
The United States previously entered into a civil settlement agreement with Arthur Wright and Meddex Solutions, effective June 1, 2021, under which they agreed to pay the United States $77,741.93, to resolve the False Claims Act allegations against them in this case.
“This is another example of our office’s commitment to prosecute those – individual or corporate – who seek to exploit Medicare for their personal gain, and at the expense to taxpayers,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “We will continue to use all available resources at our disposal to pursue those who defraud our nation’s federal healthcare programs.”
“Health care professionals are required to follow Medicare rules and accurately bill for services provided. Fraudulently billing Medicare for personal gain cheats millions of people who fund the program and contributes to the soaring cost of health care,” stated Omar Perez Aybar, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General. “Working closely with our law enforcement partners, we will continue to pursue those who exploit government health care programs.”
The settlement resulted from a lawsuit originally filed in the United States District Court for the Middle District of Florida by Relator Jael Cancel. Ms. Cancel sued under the qui tam, or whistleblower, provisions of the False Claims Act that permit a private citizen to sue on behalf of the United States for false claims and to share in the recovery. The Act also allows the United States to intervene and prosecute the action. The United States intervened in this matter and litigated the case. Ms. Cancel will receive $144,000 of the proceeds from the civil settlement with Central Medical Systems, Alan Trent Harley, and Joan Harley.
The United States’ intervention in and settlement of this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
This settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Middle District of Florida and the HHS Office of Inspector General. Assistant United States Attorney Jeremy R. Bloor led the investigation.
The case is captioned United States ex rel. Cancel v. Central Medical Systems, LLC et al., Case No. 6:14-cv-512-ORL-28TBS. The claims resolved by the settlement are allegations only, and there has been no determination of liability.