Seven sentenced in conspiracy to defraud federal health insurance programs

Seven individuals have been sentenced after pleading guilty for their roles in a kickback conspiracy to enrich themselves at the expense of the United States and beneficiaries of federal health insurance programs.

Evidence presented to the Court showed the kickback scheme generally operated as follows:

* Durable Medical Equipment Companies ("DME Companies") entered into agreements with marketing companies and/or call centers to purchase completed product orders, sometimes referred to as "leads."

* These completed product orders included patient information and signed prescriptions for durable medical equipment.

* Marketing companies and/or call centers entered into agreements with telemedicine companies to obtain the signed prescription and the telemedicine companies contracted with physicians, often referred to as "telemedicine physicians."

* The telemedicine physicians involved in the kickback conspiracy would often sign the prescriptions of the federal health insurance program beneficiaries without ever speaking to, examining, or following up with the patients. The telemedicine physicians did not have patient/healthcare professional relationships.

* The DME companies would pay the marketing companies and/or other call centers on a per-prescription basis. The DME companies would then take prescription and patient information and submit or cause to be submitted claims, or bills, to federal health insurance programs.

* To disguise the arrangement between the marketing companies/call centers and DME companies, the marketing companies/call centers sent invoices to the DME companies that disguised the fact that what was being purchased was a signed prescription and patient information.

* The scheme used drop ship companies to process the orders and ultimately ship the DME products to the beneficiaries. These dropship companies were paid by the DME companies participating in the scheme.

The individuals sentenced were involved in the kickback conspiracy as owners of the marketing companies or call centers, owners of the dropship companies, telemedicine physicians, or owners of the DME companies billing the federal health insurance programs.

The following individuals have been sentenced by Senior United States District Judge Joseph F. Anderson, Jr.:

1. Henry Barton was sentenced to 24 months in federal prison, to be followed by three-year term of court-ordered supervision. Barton was also ordered to pay $1,850,000.00 in restitution.

2. David Tsui was sentenced to 15 months in federal prison, to be followed by three-year term of court-ordered supervision. Tsui was also ordered to pay $1,003,300.00 in restitution. The dropship company Tsui owned was ordered to pay a $400,000 fine.

3. Jeffrey Hoffman was sentenced to 12 months and 1 day in federal prison, to be followed by three-year term of court-ordered supervision. Hoffman was also ordered to pay $238,150.00 in restitution.

4. Steve Lowell was sentenced to 12 months and 1 day in federal prison, to be followed by three-year term of court-ordered supervision. Lowell was also ordered to pay $919,548.00 in restitution.

5. Christina Anderson was sentenced to 3 years' probation, to be followed by three-year term of court-ordered supervision. Anderson was also ordered to pay $14,863.00 in restitution.

6. Kathryn VanRavenstein was sentenced to 5 years' probation, 8 months of which will be on home detention, and ordered to pay $46,250.00 in restitution.

7. John Hynes was sentenced to 5 years' probation, 180 days of which will be on home detention, and ordered to pay $39,925.00 in restitution.

These sentencings are the result of an investigation by the Federal Bureau of Investigation, Office of the Inspector General - Veteran Affairs, and the Office of the Inspector General - Health and Human Services, specifically Special Agent Ryan Schubert. Assistant United States Attorney Amy Bower prosecuted the case for the District of South Carolina.

These sentences are the result of a national case spearheaded by the District of South Carolina that led to prosecutions in several federal districts around the United States. The case was prosecuted in conjunction with the Department of Justice Healthcare Fraud Strikeforce.

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Original text here: https://www.justice.gov/usao-sc/pr/seven-sentenced-kickback-conspiracy-defraud-federal-health-insurance-programs