SAN DIEGO – Federal officials today announced a historic nationwide
enforcement action involving 345 charged defendants across 51 federal
districts, including more than 100 doctors, nurses and other licensed
medical professionals located in San Diego and across the country.
These defendants have been charged with submitting more than $6
billion in false and fraudulent claims to federal health care programs
and private insurers, including more than $4.5 billion connected to
telemedicine, more than $845 million connected to substance abuse
treatment facilities, or “sober homes,” and more than $806 million
connected to other health care fraud and illegal opioid distribution
schemes across the country.
In San Diego, the U.S. Attorney’s Office announced charges against
defendants in several unrelated cases who collectively attempted to
defraud Medicare of nearly $1 billion and Tricare of over $70 million.
In addition, some defendants were charged with distributing fentanyl
causing deaths in San Diego County.
“These frauds represent a staggering amount of theft to federal
health programs, and ultimately the victims are every patient,” said
U.S. Attorney Robert Brewer. “We will continue to investigate and
prosecute these selfish criminals whose deplorable schemes drive
healthcare costs sky high for everyone.” Brewer praised the federal
agents and prosecutors who endeavor to expose these fraudsters and
protect patients. Prosecutors who worked on these cases include Blanca
Quintero, Valerie H. Chu, Mark Pletcher, Kevin Larsen, Josh Green, Drew
Galvin, Paul Starita, Dylan Aste and Larry Casper.
“These cases demonstrate our commitment to pursuing medical
providers, suppliers and others who insist on placing profits before
patients,” said Timothy B. DeFrancesca, Special Agent in Charge, Office
of the Inspector General for the U.S. Department of Health and Human
Services. “We will continue to root out fraud, waste, and abuse in
federal healthcare programs and hold accountable people who brazenly
steal from the vital programs.”
“The FBI, together with our federal, state, and local partners,
remains steadfast in our commitment to uncover and investigate health
care fraud, no matter what form it takes,” said Suzanne Turner, Special
Agent in Charge of the FBI's San Diego Field Office. “Our agents will
continue this important work to ensure public and private health care
dollars are used as intended, to promote the health and safety of all
Americans and safeguard continued access to critical health care
services.”
U.S. Attorney Brewer announced the following charges in San Diego as part of the national takedown:
- United States v. Burruss, et. al. On September 29, 2020,
Charles A. Burruss and Ardalaan “Armani” Adams were charged with
conspiracy to commit wire fraud for participating in a massive scheme to
pay kickbacks for referrals of Medicare patients, then bill Medicare
for Durable Medical Equipment (“DME”) sent to those patients, who had
not been examined by a physician, and who generally did not need, and
many times did not want, the equipment. According to the charging
documents, the defendants created a network of over 30 DME companies in
the names of straw and nominee owners, to increase their profits and
avoid scrutiny and audits from Medicare that could occur if the same
companies submitted hundreds or thousands of bills for similar DME
products in a short period of time. The United States alleges that the
Medicare beneficiaries were often harassed by telemarketers through
multiple phone calls per day, to accept back, knee, wrist, and other
braces covered by Medicare. Because they were paid by the brace, the
telemarketers used fast-talking, high-pressure tactics to “upsell”
patients (although the patients actually paid nothing for the braces,
not even the required co-pays) to consent to receiving multiple
products, up to a goal of what was called the “iron man kit” – back
brace, neck brace, shoulder brace, two knee braces, two ankle braces,
and two wrist braces. Marketing companies purchased those patient
names, then paid telemedicine doctors to sign prescriptions and issue
cut-and-paste justifications for patients they hadn’t examined and had
rarely spoken with. The DME companies owned or managed by Burruss and
Adams paid for the referral of these Medicare patients, generally
between $250 and $380 for each referral of brace for a Medicare patient,
in violation of the Anti-Kickback Statute. All told, Burruss and
Adams, through their more than 30 different DME companies, submitted
bills topping $871 million, and received a whopping $424,648,137 in
payment for supplying the mostly-unneeded braces. While Medicare was
the primary target of the fraud, bills were submitted to Tricare,
Civilian Health and Medical Program of the Department of Veterans
Affairs (“CHAMPVA”), and Medi-Cal as well. DME companies associated with
Burruss and Adams submitted claims for over 181,218 Medicare
beneficiaries nationwide, including 11,312 elderly or disabled residents
of California. The defendants have also been charged in the District
of New Jersey and the Middle District of Florida for related conduct.
- United States v. Bell, et al. On September 18, 2020,
father-and-son duo Anthony Duane Bell Sr. and Anthony Duane Bell Jr.
were indicted for conspiracy to commit wire fraud for participating in a
huge scheme to pay kickbacks for referrals of Medicare patients, then
bill Medicare for Durable Medical Equipment (“DME”) sent to those
patients, who had not been examined by a physician, and who generally
did not need, and many times did not want, the equipment. Through
their companies, Universal Medical Solutions, the Bells paid between
$250 and $380 for each referral of brace for a Medicare patient, in
violation of the Anti-Kickback Statute, in order to submit thousands of
dollars in bills for the DME to Medicare, in violation of the health
care fraud statutes, according to the indictment. Through just their
single company, the Bells submitted over $49 million in bills to
Medicare in less than two years. They also perpetuated their business
model to increase their own profits by providing funds and the necessary
contacts and introductions to set up other DME companies, and
encouraging those DME companies to pay unlawful kickbacks by purchasing
completed doctors’ orders – all so that they could obtain a “revenue
share” (that is, a portion of the payments that those other DME
companies received from Medicare). As a further deceptive aspect of
their scheme, the defendants lied to Medicare about the ownership and
control over their company, and Bell Jr. told multiple lies to the FBI
when interviewed about the company in April 2019.
-
- United States v. Collins, et. al. On June 9, 2020, Jimmy
Collins, Ashley Collins, Kyle Adams, Daniel Castro, and Jeremy Syto were
indicted for health care fraud and paying and receiving kickbacks for
Tricare referrals for their efforts to supply expensive compound
medications to beneficiaries covered by Tricare, the health care benefit
program for military service members and their dependents. Jimmy and
Ashley Collins, a husband-and-wife team, allegedly created a
multi-level-marketing network, paying marketing representatives to
recruit Tricare beneficiaries at military bases such as Twenty-nine
Palms and Miramar by paying them hundreds of dollars to sign up to
receive the worthless compound creams. If those service members
recruited additional Tricare beneficiaries, they received a portion of
the TRICARE reimbursement that resulted. Doctors in Tennessee, who had
never examined nor spoken with their purported patients, issued hundreds
of prescriptions for these pharmaceuticals to the San Diego soldiers
and sailors. The average price of these compounded drugs was $14,510.33
apiece. The conspiring pharmacies submitted over $65 million in bills to
Tricare for these drugs, which most beneficiaries did not need and
which many simply threw into the trash. With their ill-gotten gains,
Jimmy and Ashley Collins purchased an $8 million yacht and farm
equipment, which has been forfeited. Former U.S. Marines Adams and
Castro, and U.S. Navy service member Syto, have pleaded guilty,
admitting their participation in the Tricare fraud and kickback scheme.
Each admitted to having received over $100,000 in kickbacks for
receiving the worthless creams and for recruiting other service members
into the scheme.
- United States v. Green, et. al. On June 29, 2020, Melinda
Green and Ron Green were indicted for health care fraud and paying
kickbacks for Tricare referrals for their efforts to supply expensive
compound creams to beneficiaries covered by Tricare, the health care
benefit program for military service members and their dependents.
Though neither defendant is a pharmacist, they concocted compounds with
the highest-priced ingredients in order to maximize the reimbursement
from Tricare, then pushed their marketing representatives to pay doctors
and clinics to prescribe these compounds that were supposedly
customized for a patient’s individual needs. Through their companies,
NHS Pharma and NHS Pharma Sales, they submitted over $4.5 million in
bills to Tricare for these compounds, which beneficiaries did not need.
The defendants are next due in court on January 8, 2020.
The following cases were included in today’s takedown figures, but have been previously announced by this office:
- United States v. Matthews. On August 24, 2020, Donald
Joseph Matthews, the former Vice President of Market Development for
local genetics company Proove Biosciences, Inc., pleaded guilty to
participating in a conspiracy to pay kickbacks to doctors for referring
Medicare patients to Proove for genetic tests. To paper-over the
illegal kickback scheme, the payments were disguised as compensation to
doctors for participating in a clinical research study, although no
study existed and doctors were told to fabricate the number of “hours”
they worked on the study, when in reality they were being paid for each
patient referred to Proove. Proove submitted more than $45 million in
claims to Medicare for tests procured by the unlawful kickbacks and
received approximately $21 million in unlawful payments.
https://www.justice.gov/usao-sdca/pr/vp-genetics-company-pleads-guilty-paying-physicians-sham-clinical-research-fees-part-21
- In re Progenity. On July 21, 2020, the United States
reached a settlement with San Diego-based research laboratory Progenity,
Inc., in which the company agreed to pay $49 million to resolve claims
that it had defrauded Tricare, Medicare, and state health care benefit
programs by knowingly using the incorrect code to bill for genetic
testing that would otherwise not have been covered by those programs.
https://www.justice.gov/usao-sdca/pr/san-diego-laboratory-admits-fraudulent-tricare-billing-agrees-pay-49-million
- Dr. Prakash Bhatia. On April 30, 2020, local
psychiatrist Dr. Prakash Bhatia agreed to pay $145,000 to resolve
allegations that he overprescribed opioids, including fentanyl,
hydromorphone, morphine, methadone, oxycodone, and oxymorphone, in
violation of the civil provisions of the Controlled Substance Act. The
United States’ allegations included that Dr. Bhatia inappropriately
prescribed opioids along with benzodiazepines and/or muscle relaxants to
the same patients, combinations known to increase the risk of abuse,
addiction, and overdose.
https://www.justice.gov/usao-sdca/pr/san-diego-psychiatrist-pays-145000-resolve-opioid-overprescribing-investigation
In addition, in light of the ongoing opioid epidemic and an alarming
increase in fentanyl overdose deaths within the Southern District, the
U.S. Attorney’s Office continues to aggressively prosecute those
responsible for illegally distributing fentanyl and other opioids that
cause death irrespective of the defendant’s place in the chain of
distribution of such deadly drugs.
- United States v. Garcia. On May 20, 2020, Lorenzo
Anthony Garcia was indicted for distributing fentanyl that resulted in
the death of a 15-year old high school junior who was a member of his
school varsity football team. https://www.justice.gov/usao-sdca/pr/law-enforcement-issues-public-safety-warning-about-extreme-danger-fentanyl
- United States v. Davis. On August 18, 2020, Perry Edward
Davis was indicted for distributing fentanyl and cocaine resulting the
death of a 25-year old victim. The charges followed after three people
overdosed and collapsed within minutes of each other outside of a local
cocktail bar. Two females were revived by paramedics but the male
victim did not survive.
Today’s enforcement actions were led and coordinated by the
Criminal Division, Fraud Section’s Health Care Fraud Unit, in
conjunction with its Health Care Fraud and Appalachian Regional
Prescription Opioid (ARPO) Strike Force program, and its core partners,
the U.S. Attorneys’ Offices, HHS-OIG, FBI, and DEA, as part of the
department’s ongoing efforts to combat the devastating effects of health
care fraud and the opioid epidemic. The cases announced today are
being prosecuted by Health Care Fraud and ARPO Strike Force teams from
the Criminal Division’s Fraud Section, along with 43 U.S. Attorneys’
Offices nationwide, and agents from HHS-OIG, FBI, DEA, and other various
federal and state law enforcement agencies.
Some of the cases listed above are part of the joint FBI and HHS
Operation Rubber Stamp and the 2020 Telemedicine takedown, which was
coordinated by The National Rapid Response Strikeforce of the Health
Care Fraud Unit of the Criminal Division Fraud Section. The Telemedicine
takedown involves charges and guilty pleas in connection with
widespread telemedicine schemes involving over $4 billion in false
billing. The focus on telemedicine fraud builds on the 2019 telemedicine
and durable medical equipment takedown ("Operation Brace Yourself"),
which resulted in an estimated cost avoidance of over $1.5 billion in
the amount paid by Medicare for orthotic braces in the seventeen months
since the takedown, preserving the Medicare trust fund for legitimate
medical care. In addition, CMS/CPI separately announced today that it
took the largest number of adverse administrative actions resulting from
a single administrative health care fraud investigative initiative in
history in revoking the Medicare billing privileges of 256 additional
medical professionals for their involvement in telemedicine schemes.
For further information about the national takedown, see https://www.justice.gov/opa/pr/national-health-care-fraud-and-opioid-takedown-results-charges-against-345-defendants.
DEFENDANTS Case Number 202980-WQH
Charles A. Burruss, 51, San Diego, CA
Ardalaan “Armani” Adams, 33, San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Commit Wire Fraud – Title 18, U.S.C., 1349
Maximum penalty: Twenty years in prison and $500,000 fine, or twice the pecuniary gain / loss
AGENCIES
Federal Bureau of Investigation
US. Department of Health and Human Services, Office of Inspector General
DEFENDANTS Case Number 202887-WQH
Anthony Duane Bell Sr., 52, El Cajon, CA
Anthony Duane Bell Jr., 30, Los Angeles, CA
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud and Pay Kickbacks – Title 18, U.S.C., 371
Maximum penalty: Five years in prison and $500,000 fine
Health Care Fraud – Title 18, U.S.C., 1347
Maximum penalty: Ten years in prison and $500,000 fine, or twice the pecuniary gain / loss
Unlawful Remuneration – Title 42, U.S.C., 1320d-7b(b)
Maximum penalty: Four years in prison and $500,000 fine, or twice the pecuniary gain / loss
False statement to Government – Title 18, U.S.C., 1001
Maximum Penalty: Five years in prison and $250,000 fine
AGENCIES
Federal Bureau of Investigation
US. Department of Health and Human Services, Office of Inspector General
DEFENDANTS Case Number 18CR432-JLS
Jimmy Collins, 56, Tennessee
Ashley Collins, 34, Tennessee
Kyle Adams, 33, Texas
Daniel Casto, 32, Illinois
Jeremy Syto, 27, California
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C., 1349
Maximum penalty: Ten years in prison and $500,000 fine
Conspiracy to Pay and Receive Illegal Remunerations – Title 18, U.S.C., 371
Maximum penalty: Five years in prison and $500,000 fine
Receive Illegal Remunerations – Title 42, U.S.C., 1320a-7b(b)(1)
Maximum penalty: Four years in prison and $500,000 fine
Pay Illegal Remunerations – Title 42, U.S.C., 1320a-7b(b)(2)
Maximum penalty: Four years in prison and $500,000 fine
AGENCIES
Defense Criminal Investigative Service
Federal Bureau of Investigation
DEFENDANTS Case Number 18CR432-JLS
Melinda Green, 59, Escondido, CA and Windermere, FL
Ronald Green, 66, Escondido, CA and Windermere, FL
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud and Pay Kickbacks – Title 18, U.S.C., 371
Maximum penalty: Five years in prison and $500,000 fine
Unlawful Remuneration – Title 42, U.S.C., 1320d-7b(b)
Maximum Penalty: Four years in prison and $500,000 fine, or twice the pecuniary gain / loss
AGENCY
Defense Criminal Investigative Service
DEFENDANT Case Number 20CR1222-GPC
Lorenzo Anthony Garcia, 21, Brawley, CA
SUMMARY OF CHARGES
Manufacture, distribute, or possess with intent to manufacture,
distribute, or dispense a controlled substance resulting in death or
serious bodily injury – Title 21, U.S.C., Section 841(a)(1), (b)(1)(C)
Maximum Penalty: Mandatory minimum 20 years in prison, Maximum life in prison
AGENCY
Drug Enforcement Administration
DEFENDANT Case Number 20CR2500-LAB
Perry Edward Davis, 44, San Diego, CA
SUMMARY OF CHARGES
Manufacture, distribute, or possess with intent to manufacture,
distribute, or dispense a controlled substance resulting in death or
serious bodily injury – Title 21, U.S.C., Section 841(a)(1), (b)(1)(C)
Maximum Penalty: Mandatory minimum 20 years in prison, Maximum life in prison
AGENCIES
Drug Enforcement Administration
El Cajon Police Department
*The charges and allegations contained in an indictment or complaint
are merely accusations, and the defendants are considered innocent
unless and until proven guilty.
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