Billion-dollar Medicare fraud ring investigation started in South Carolina, feds say

April 09-- Apr. 9--COLUMBIA, S.C. -- The scheme involved offshore call centers in the Philippines, money laundering, bribes, kickbacks, U.S. doctors, companies with hidden owners and thousands of cheap, Chinese-made arm, leg, back and neck braces.

The nationwide kickback conspiracy generated some $1 billion in unlawful Medicare payments to some two dozen perpetrators, federal officials said Tuesday in Columbia.

And one of the key pieces of the far-flung operation was a 43-year-old Mount Pleasant man, Andrew Chmiel, whose indictment on charges of money laundering, mail fraud, conspiracy and making false statements was announced Tuesday by U.S. Attorney for South Carolina Sherri Lydon.

Chmiel's alleged illegal schemes, which are believed to have started in 2014, generated more than $200 million, federal officials said.

Lydon called the investigation "one of the largest Medicare fraud investigations in the history of the FBI, the Department of Health and Human Services ... and the IRS" and said the probe has resulted in the dismantling of a "nationwide fraudulent scheme."

Hundreds of thousands of elderly and disabled Medicare patients were "lured" into the criminal scheme and ordered medically unnecessary braces, according to a press release by the U.S. Justice Department in Washington. Medicare is a federal health insurance program that cares for some 44 million people, mostly seniors.

So far in the case, more than 80 search warrants in 17 federal districts have been served and 24 defendants have been charged, Lydon said. Searches and seizures in the case were being carried out Tuesday by more than 100 law officers from six federal agencies. Officials code-named the investigation "Operation Brace Yourself."

Bart Daniel, Chmiel's lawyer, a white-collar crime defense attorney, said he is still reviewing the indictment but declined to comment further. A date for Chmiel's first appearance in court has not been set.

Defendants include owners and managers at telemedicine companies, medical equipment companies and three "licensed medical professionals," Lydon said.

"The proceeds of the scheme were used to purchase exotic cars, yachts and luxury real estate across the United States," she said.

The conspiracy used TV and online advertisements to encourage Medicare-eligible people to call international call centers, which then pre-qualified the person as Medicare-eligible and linked them up with doctors, telemedicine companies and medical equipment companies that went on to bill Medicare "millions upon millions of dollars," federal officials said.

The offshore call centers, which were not named in Chmiel's indictments, appear to have been essential to the scheme.

Chmiel had an interest in 10 medical equipment companies and four other companies in six different states, according to an indictment in the case.

The final step in the scheme involved the companies fraudulently billing Medicare and getting the payments, Lydon said.

Jody Norris, Hess of FBI operations in South Carolina, called the scheme "a massive fleecing of America" that spanned "coast to coast."

The investigation originated in Charleston, Norris said. Other states where the fraud was based included Florida, California, New Jersey, Texas and Pennsylvania.

"These individuals were motivated by greed," said Matthew Line, head of the Charlotte IRS office.

Lydon said the Medicare fraud "is not a victimless crime.

"Ultimately, it is the taxpayers who will pay for higher healthcare premiums and out-of-pocket costs that result from fraud on our Medicare system," she said.

Federal officials seek to seize 22 separate bank accounts and five cars from Chmiel, including two Mercedes, a Ferrari and an Infiniti.

Assistant U.S. Attorneys Jim May and Will Lewis will prosecute the S.C. portion of the case.

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