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Those charged in "Operation Brace Yourself" – seven of them in New Jersey – included the CEOs, COOs and others associated with five telemedicine companies, the owners of dozens of durable medical equipment (DME) companies and three licensed medical professionals, U.S. Attorney Craig Carpenito said.
Some of them controlled the international telemarketing network, with call centers in the Philippines and throughout Latin America, he said.
Together, they “took advantage of unwitting patients who were simply trying to get relief from their health concerns” in one of the biggest health-care fraud cases in U.S. history, Carpenito said.
Those charged "preyed upon the patients' weakened state and pushed millions of dollars’ worth of unnecessary medical devices, which Medicare paid for, and then set up an elaborate system for laundering their ill-gotten proceeds.”
The ringleaders paid doctors to prescribe the equipment either without any patient interaction or with only a brief phone call “with patients they had never met or seen,” the U.S. attorney said.
They laundered the money through international shell corporations and then used it to buy exotic automobiles, yachts and luxury real estate in the U.S. and abroad, he said.
DME companies paid kickbacks and bribes to medical professionals working with fraudulent telemedicine companies in exchange for the referral of Medicare beneficiaries for medically-unnecessary back, shoulder, wrist and knee braces, the U.S. attorney said.
The international call center targeted Medicare beneficiaries nationwide, then “up-sold” them to accept numerous “free or low-cost” DME braces whether or not they needed it, he said.
Medicare then footed the bill.
Collectively, the CEOs, COOs, executives, business owners and medical professionals involved in the conspiracy are accused of causing over $1 billion in losses, Carpenito said.
Since its inception in March 2007, the federal Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 U.S. districts, has charged nearly 4,000 defendants with bilking the Medicare program of more than $14 billion.
More than 80 search warrants were executed by agents from the FBI and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) during raids in New Jersey, Florida and South Carolina during "Operation Brace Yourself," the government said.
In the District of New Jersey, strike force attorneys brought charges against:
- Creaghan Harry, 51, of Highland Beach, FL, who owned the centers and telemedicine companies;
- Lester Stockett, 51, of Deerfield Beach, FL, the CEO;
- Elliot Loewenstern, 56, of Boca Raton, FL, the vice president of marketing.
Together, Carpenito said, they engineered a $454 million illegal health care kickback referral and international money-laundering scheme.
In addition, Joseph DeCoroso, M.D., 62, of Toms River, was charged in a $13 million conspiracy to commit health care fraud and separate charges of health care fraud for writing medically unnecessary orders for DME.
DeCoroso in many instances wrote the orders without ever speaking to the patients, Carpenito said.
In addition to the strike force prosecution, Carpenito’s office charged Neal Williamsky 59, of Marlboro, and Nadia Levit, 39, of Englishtown, who own more than DME companies, in connection with a $150 million kickback scheme.
His team also charged 26-year-old Albert Davydov of Queens with participating in a similar $35 million scheme.
In addition, the Center for Medicare Services Center for Program Integrity (CMS/CPI) administrative action against 130 DME companies that received more than $900 million after submitting over $1.7 billion in claims, Carpenito said.
“Health care fraud causes billions of dollars in losses, it deprives real patients of the critical health care services they need, and it can endanger the lives of real patients so individuals like those arrested today can profit from their criminal activity,” FBI Assistant Director Robert Johnson said.
The case produced by the government “details broad corruption, massive amounts of greed, and systemic flaws in our healthcare system that were exploited by the defendants,” IRS-CI Chief Don Fort added. “We all suffer when schemes like this go undiscovered.”
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