Seven Charged in Puerto Rico as part of Largest National Medicare Fraud Takedown in History

SAN JUAN, Puerto Rico – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings.  Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests.  In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act.  This coordinated takedown is the largest in history, both in terms of the number of defendants charged and loss amount.    

“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – It is a serious crime,” said Attorney General Loretta Lynch.  “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment.  They target real people – many of them in need of significant medical care.  They promise effective cures and therapies, but they provide none.  Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends.  The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”

 “The defendants charged today received moneys from services that were not rendered or care that wasn’t needed,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “Our office will continue to work with our federal, state and local law enforcement partners and focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.”

On June 15, 2016, a Federal grand jury returned an indictment charging Arlene Carlo-Montalvo with 48 counts of theft or embezzlement in connection with health care, 48 counts of wire fraud, two counts of misuse of social security number, and two counts of aggravated identity theft. 

The charges stem from Carlo-Montalvo’s role in a scheme or artifice to defraud Medical Card System Inc., also known as MCS, in the amount of $219,508.56, by means of fraudulent pretenses and using social security numbers assigned to other persons. Carlo-Montalvo, as an employee of MCS, created a fictitious vendor and would manipulate the system to submit false invoices for services not rendered. The agencies in charge of the investigation are Social Security Administration- Office of Inspector General and Homeland Security Investigations.

Another six individuals are facing civil actions for fraudulently obtaining the benefits with the submission of false information and with salaries that exceeded $50,000.00. Specifically, during 2015, the individuals fraudulently enrolled in the Medicaid health care benefit program, by providing false statements and representations regarding eligibility criteria, such as income, among others.  By misrepresenting core eligibility requirements during the enrollment process they were able to fraudulently obtain health care services for which they would otherwise be ineligible, and causing several unique premium payments to be submitted as false claims.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 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 and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion. 

Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings.  Today’s announcement marks the second time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.

The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.

A complaint or indictment is merely a charge, and all defendants are presumed innocent unless and until proven guilty.

The court documents for each case will posted online, as they become available, here: https://www.justice.gov/opa/documents-and-resources-june-22-2016-medicare-fraud-strike-force-press-conference.