Justice Department charges 36 in $1.2 billion healthcare fraud schemes

The U.S. Department of Justice on Wednesday charged three dozen people for allegedly orchestrating healthcare fraud schemes that involved ordering unnecessary or fraudulent medical tests and equipment.

The schemes spanned 13 federal districts that defrauded $1.2 billion in orders of unnecessary telemedicine, cardiovascular and cancer genetic testing as well as durable medical equipment, the Justice Department said in a statement.

In addition to the 36 individuals charged, the Centers for Medicare and Medicaid Services announced it took adverse administrative actions against 52 healthcare providers involved in similar schemes and seized $8 million in cash, luxury vehicles and other fraud proceeds.

"The Department of Justice is committed to prosecuting people who abuse our health care system and exploit telemedicine technologies in fraud and bribery schemes," Assistant Attorney Kenneth A. Polite Jr., of the Justice Department's Criminal Division, said. "This enforcement action demonstrates that the department will do everything in its power to protect the healthcare systems our communities rely on from people looking to defraud them for their own personal gain."

Those charged by the Justice Department allegedly used telemedicine to obtain orders for fraudulent or unneeded medical tests that were billed to Medicare and other insurance companies without any interaction with patients in many cases.

The fraudulent tests also provided little or no valuable information to the patients or their primary care doctors.

Owners and operators of medical laboratories charged in the cases also allegedly paid illegal kickbacks and bribes to telemedicine companies, medical professionals and medical equipment companies in exchange for patient referrals seeking to bolster their business.

In one such case, Jamie McNamara, the owner of multiple clinical labs in Missouri, allegedly executed a scheme in which marketing companies paid telemedicine centers to call patients and offer them no-cost, Medicare-approved cardiovascular and genetic testing. A medical professional was then paid to clear the tests regardless of whether they were necessary for the patients.

McNamara and other co-defendants are also accused of using "shell laboratories" to submit false or unnecessary claims to Medicare for the fraudulent tests and equipment worth more than $174 million which was laundered through a "complex network" of bank accounts and assets such as luxury vehicles, real estate and a yacht.

The Justice Department said that telemedicine schemes account for more than $1 billion of the total alleged losses associated with the charges.

"Fraudsters and scammers take advantage of telemedicine and use it as a platform to orchestrate their criminal schemes," said Luis Quesada, assistant director of the FBI's Criminal Investigative Division. "This collaborative law enforcement action shows our dedication to investigating and bringing justice to those who look to exploit our U.S. healthcare system at the expense of patients."