National Health Care Fraud Takedown Results In Charges Against Over 412 Individuals Responsible For $1.3 Billion In Fraud Losses

WASHINGTON – Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.

Attorney General Sessions and Secretary Price were joined in the announcement by Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting Director Andrew McCabe of the FBI, Acting Administrator Chuck Rosenberg of the Drug Enforcement Administration (DEA), Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), Chief Don Fort of IRS Criminal Investigation, Administrator Seema Verma of the Centers for Medicare and Medicaid Services (CMS), and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS).

Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.

The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 91 Americans die every day of an opioid related overdose.

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Attorney General Sessions. “Amazingly, some have made their practices into multimillion dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start. The consequences are real: emergency rooms, jail cells, futures lost, and graveyards. While today is a historic day, the Department's work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

“Today’s announcement demonstrates the Department of Justice’s commitment to focus investigative resources on individuals who choose to pursue profit over public health. Ultimately, health care fraud deprives the elderly and disabled from benefits they are entitled to receive,” said US Attorney Rosa Emilia Rodríguez-Vélez. “We will continue to aggressively pursue and prosecute those who commit fraud against our nation’s federal healthcare programs.”

“Healthcare fraud is not only a criminal act that costs billions of taxpayer dollars - it is an affront to all Americans who rely on our national healthcare programs for access to critical healthcare services and a violation of trust,” said Secretary Price. “The United States is home to the world’s best medical professionals, but their ability to provide affordable, high-quality care to their patients is jeopardized every time a criminal commits healthcare fraud. That is why this Administration is committed to bringing these criminals to justice, as President Trump demonstrated in his 2017 budget request calling for a new $70 million investment in the Health Care Fraud and Abuse Control Program. The historic results of this year’s national takedown represent significant progress toward protecting the integrity and sustainability of Medicare and Medicaid, which we will continue to build upon in the years to come.”

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

As part of this national effort, the District of Puerto Rico charged 13 individuals in six separate indictments, including three physicians and two pharmacists, in four schemes involving drug diversion, Medicaid fraud, and the theft of funds from a health care program. Defendants Miguel Hernández-Marquez, owner of Farmacia Condado Moderno in Caguas; Guillermo Tirado-Menéndez, a physician specialized in internal medicine with offices located in Caguas and Cidra; Gilberto Figueroa-Trinidad, aka “Chino;” Rebecca Sierra-López, aka “Rebe,” a nurse; William Vélez-Montes, a pharmacist; and Myrna Nevares-Sobrino, a pharmacist, are charged for their participation in a conspiracy to manufacture, distribute and dispense - outside the scope of professional practice and not for a legitimate medical purpose - a controlled substance, that is, at least 70,000 units of Oxycodone (commonly known as Percocet), and at least 40,000 units of Alprazolam (commonly known as Xanax).

In a separate indictment, defendants Hernández-Marquez, Figueroa-Trinidad, Vélez-Montes and Nevares-Sobrino; along with Luis Vélez-Quiñones, a physician specialized in internal medicine with office located in Guánica; and Laura López-Rolón are charged with conspiracy to manufacture, distribute and dispense - outside the scope of professional practice and not for a legitimate medical purpose - a controlled substance, that is, at least 77,000 units of Oxycodone, at least 47,000 units of Alprazolam, and at least 40,000 units of Tramadol.

In a third indictment, Ivette Caraballo-Pérez, aka “Tita” and Steven Velázquez-Pérez are charged with conspiracy to possess with intent to distribute Oxycodone. The fourth indictment charges José Vega-Emmanuelli, a DEA registrant with the authorization to dispense controlled substances, with possession with intent to dispense, outside the scope of professional practice and not for a legitimate medical purpose, Oxycodone and Alprazolam.

Defendant Luz De Alba Quezada-De Jesús, a Postal Service employee, is charged with health care fraud and false statements relating to health care matters. Quezada-De Jesús certified that she was unemployed in order to receive Medicaid benefits, also known as Mi Salud, through First Medical Health Plan Inc. In a separate indictment, Yalixa Flores-Fuentes, employed by MMM Healthcare, LLC is charged with bank fraud, aggravated identity theft, and embezzlement in connection with health care. Flores-Fuentes submitted false invoices for catering services and, using her status as an employee of MMM, caused checks to be drawn which she later cashed for herself.

The cases are being handled by Assistant U.S. Attorneys Teresa Zapata-Valladares, and Susan Z. Jorgensen, and Special Assistant U.S. Attorney Amanda C. Soto-Ortega.

“The arrests conducted in Puerto Rico last Monday as part of the nationwide “Diversion and Health Care Takedown” shed some light to the communities in the island that DEA, other federal and state agencies will target any kind of illicit drug trafficking activity threatening our communities,” stated DEA Special Agent in Charge Matthew G. Donahue. “The opioid addiction issue in the United States has become a national crisis, for this reason we are working hard and proactively to keep our neighborhoods and communities safe and to protect the lives of our citizens. This enforcement operation sends a message to the medical professionals that once they dishonor their Hippocratic Oath, DEA will investigate them and bring any physician or pharmacist to justice that violates federal narcotics laws and regulations. Law enforcement agencies/departments in Puerto Rico are part of our communities support networks and our goals and mandates are to prevent the individuals responsible who are dealing and trafficking in these opioid substances from killing our families and friends selling one baggy, one deck, capsule, and one pill. DEA will stay here, and we will prevail.”

“This indictment is another reminder that the misappropriation of federal funds is illegal and unacceptable,” said Scott J. Lampert, Special Agent in Charge, Office of Inspector General, U.S. Department of Health and Human Services. “HHS-OIG, along with our law enforcement partners, will not tolerate this behavior and will remain vigilant in our efforts to protect the integrity of our federal health care programs.”

Eileen Neff, Special Agent-in-Charge, U.S. Postal Service Office of Inspector General stated: “The U.S. Postal Service Office of Inspector General investigates those who would defraud the Postal Service as well as Postal Service employees alleged to commit fraud against other government programs. We will continue to work closely with our law enforcement partners in investigations such as this and we thank the U.S. Attorney’s Office and HHS-OIG for their assistance with our investigations.”

The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

This operation also highlights the great work being done by the Department of Justice’s Civil Division. In the past fiscal year, the Department of Justice, including the Civil Division, has collectively won or negotiated over $2.5 billion in judgements and settlements related to matters alleging health care fraud.

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