How to steal a billion dollars from Uncle Sam

Brett Blackman sits behind bars in the federal prison in Miami after receiving a 19-year prison sentence from U.S. District Judge David Leibowitz.

His crime? He aimed to steal $1 billion from the government and succeeded in getting Medicare and other insurers to pony up more than $450 million globally.

Blackman was behind one of the largest telemedicine frauds ever prosecuted, though at the rate the government is bringing new cases, more record-shattering fraudsters may be waiting in the wings.

Most of the cases are far smaller, though. Maybe tens of millions of dollars. In some cases, even less.

They usually follow the same basic pattern: Unscrupulous medical professionals ask the government to pay for unnecessary treatments, enriching the doctors who approve the orders, the companies that manufacture and sell the treatments, and the coordinators, such as Blackman, who bring them all together.

Prosecutors say he managed to rope nearly 350,000 people into his scheme. They were patients with government-backed healthcare, such as Medicare, and he cajoled them into applying for orthotic braces or pain creams, even though they had no valid medical reason.

Of the $452 million paid out, more than $52 million in fraud losses was tied directly to Blackman's network.

"Blackman found a unique way to defraud Medicare: a system of creating fake prescriptions for orthotics and pain creams en masse," Darren Halverson, a trial attorney in the Justice Department Criminal Division's Fraud Section, told the judge in a memo asking for a long sentence.

He said Blackman showed "no regard for the hundreds of thousands of beneficiaries who received no care but whose Medicare benefits were billed to the tune of $1 billion."

Blackman's genius, prosecutors said, was his ability to slip into the seams of the modern health care system, positioning himself in the center of a web of telemedicine doctors ready to churn out prescriptions and medical equipment companies eager to fulfill those orders.

It all began with mailers suggesting limited-time offers. Those who called were connected to telemarketers in India and the Philippines, who would pressure the patients into signing up for the orthotics and creams.

The telemarketers were trained not to accept "no" as an answer.

The patients were then funneled to DMERx, Blackman's web-based platform, and their orders were billed to Medicare. Sometimes, no medical professional ever conducted an exam, though by the time the order reached Medicare for reimbursement, it was accompanied by certifications that an exam had in fact taken place.

Dr. Sargon Audisho, who was involved in the scam, said he would sign 100 orders a day. He acknowledged that it was "impossible" for him to have examined that many people. Although he may retain an active license in Illinois, he faced disciplinary actions or lost licenses in other states.

More than 346,000 people were prescribed through the scam, which lasted four years.

Most were prescribed at least four braces. More than 1,200 of them were prescribed at least 21 braces apiece.

Blackman made money on all ends. Telemarketing partners paid for the mass mailings, and Blackman took a $10 cut of a fulfilled order — $5 for the telemedicine sign-off and $5 for the prescribed brace.

Blackman, in his attorney's memo to the judge, said he personally ended up with only several million dollars and argued that his case was not so "cut and dried" as prosecutors suggested.

For one thing, Blackman was not just a purveyor of braces; he was also a customer. He credited a back brace with allowing him to move again. One daughter told the judge he was motivated by a desire for "others suffering similar pain to experience that same relief."

"He wanted fewer patients falling through the cracks and fewer families facing unnecessary costs because health care systems couldn't communicate," another daughter said.

Blackman also said his case was not a "classic fraud" because real people were getting real braces or pain creams that they had, in the end, asked for — and that a real doctor had signed off on.

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