From the U.S. Attorney's Office, Middle District of Florida:
Tampa, FL – U.S. Attorney Maria Chapa Lopez; Attorney General Jeff Sessions; Shimon R. Richmond, Special Agent in Charge for the U.S. Department of Health & Human Services Office of Inspector General; A.D. Wright, Special Agent in Charge of the DEA Miami Division; John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service-Southeast Field Office; Eric W. Sporre, Special Agent in Charge of the FBI Tampa Division; and Social Security Acting Inspector General Gale Stallworth Stone announced today that 21 individuals were charged in the Middle District of Florida for their alleged participation in various fraud schemes involving, among other things, health care fraud, distributing and dispensing controlled substances not for a legitimate medical purpose and outside the usual course of professional practice, conspiracy to solicit and receive health care kickbacks, and theft of government funds.
These charges are part of the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE, and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, including medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
“As patients, individuals place great confidence in their healthcare providers to ensure that the treatment and care they receive is delivered at the highest level,” said U.S. Attorney Chapa Lopez. “As taxpayers, our citizens expect that the programs they fund are utilized as they are intended, in a safe and prudent manner, free from fraud and deception. We will continue to work with our partners to ensure that these expectations are met.”
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
“Health care fraud and opioid abuse are threats to this country, both in terms of the well-being of patients and the viability of government health care programs,” said Shimon R. Richmond, Special Agent in Charge for the U.S. Department of Health & Human Services Office of Inspector General. “This takedown sends a clear message that criminals who engage in health care fraud schemes and illicit opioid distribution will be caught. Working collaboratively with our state and federal partners, we will continue to bring these criminals to justice.”
“DEA is committed to ending the opioid crisis that continues to plague Florida and endanger the welfare of our communities. We are equally committed to preventing prescription drug abuse which facilitates addiction and too often results in death,” said DEA Miami Field Division Deputy Special Agent in Charge Jaime Camacho. “The DEA Miami Field Division will continue to work with our law enforcement partners to protect our communities and ensure that medical professionals do not abuse their authority by over-prescribing unnecessary controlled medications.”
John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service-Southeast Field Office stated, "As part of the National Health Care Fraud multi-agency joint effort, the DCIS-Southeast Field Office contributed significant resources and efforts to achieve a successful operation to effectively combat widespread fraud and abuse, and preserve the integrity of TRICARE, a vital DoD program serving U.S. service members, retirees, and their families."
“The FBI Tampa Division is committed to working collaboratively with our federal, state and local partners to address the opioid crisis and health care fraud in our communities. The tireless efforts put forth by the investigators and attorneys in this investigation will have a significant impact and we will continue to work with a sense of urgency to identify others involved in similar schemes,” said Eric W. Sporre, Special Agent in Charge of the FBI Tampa Division.
“We often find that people who try to defraud Social Security are also taking advantage of other government benefit programs,” said Social Security Acting Inspector General Gale Stallworth Stone. “That’s why we maintain strong partnerships with other Federal, State, and local agencies, because our responsibility to taxpayers doesn’t end at Social Security. SSA OIG will continue to work closely with our law enforcement partners to detect and prevent benefit fraud across the country.”
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.
This operation also highlights the great work being done by the Department of Justice’s Civil Division. In the past fiscal year, the Department of Justice, including the Civil Division, has collectively won or negotiated over $2 billion in judgements and settlements related to matters alleging health care fraud.
Middle District of Florida Case Summaries
Dr. Charles Gerardi has been charged with conspiracy, health care fraud, and obstruction of a federal audit. Gerardi is a licensed psychologist who was formerly associated with a group practice known as Geriatric Psychological Specialists (GPS). According to court documents, GPS contracted with nursing homes and other long-term care facilities to provide psychological services to residents. For years, Gerardi impermissibly billed Medicare for providing medically unnecessary psychotherapy to Medicare beneficiaries who suffered from severe dementia and, at times, he billed for psychotherapy when he was actually performing medication management, a non-covered service when performed by a psychologist. First Coast initiated an audit of Gerardi’s practices in 2012. Gerardi tried to obstruct the audit by creating phony patient records and providing those records to the auditor. Finally, when First Coast placed Gerardi on prepayment review for the 20-minute billing code he had used for years, Gerardi changed his submitted billing code to reflect 45-minute sessions but continued to provide patients only 20-minute sessions.
Dr. Zachary Bird was charged in a six-count indictment with distributing and dispensing controlled substances not for a legitimate medical purpose and outside the usual course of professional practice. Bird is an anesthesiologist that operated a pain management clinic called Physicians Wellness and Pain Specialists (PWPS) in Tampa. According to court documents, this clinic functioned as a “pill mill” where Bird prescribed large quantities of opiates to his patients. Specifically, from January 2015 to the end of May 2018, Bird prescribed approximately 5.2 million tablets of hydrocodone, methadone, morphine, and oxycodone at PWPS. Bird was arrested on June 25, 2018.
Dr. Jeffrey Abraham has pleaded guilty to a one-count information charging him with distribution of controlled substances not specified by his DEA registration. Abraham was previously employed at two local Veterans Affairs hospitals in the Tampa-area. As a VA physician, he was authorized by the DEA to write prescriptions for controlled substances only as part of official federal duties. According to the plea agreement, Abraham resigned from the VA to work at a pain management clinic in Tampa. His official federal duty registration was not transferable, and Abraham did not obtain a new DEA registration to write controlled substance prescriptions to the patients he saw while employed at the clinic. From August 2017 to March 2018, while at the clinic, Abraham wrote over 2,000 prescriptions for controlled substances, including more than 600 prescriptions for hydromorphone and over 1,000 prescriptions for oxycodone. On March 8, 2018, Abraham admitted to federal agents that he knew his official federal duty DEA registration number could not be used at the clinic, and agreed to surrender his DEA registration.
Alcira Mercedes Wells and her former husband, Edward Leonard Wells, Jr., have been charged with conspiracy, healthcare fraud, and aggravated identity theft. According to the indictment, between May 2014 and February 2015, Centurion Compounding, Inc., a marketing firm that was located in Florida, employed representatives to market compounded medications for conditions like pain and scars to beneficiaries of health care benefit programs, especially TRICARE. Lifecare and Oldsmar Pharmacies billed the beneficiaries’ health care benefit plans for these creams, which ranged in price from approximately $900 to $21,000 for a one-month supply. Lifecare and Oldsmar, at various times, paid Centurion a portion, approximately 50%, of each claim paid by the health care benefit programs, minus expenses, for each prescription. Centurion, in turn, paid its marketing representatives a percentage of each paid claim, which ranged from 15-30% of the total claim amount after expenses. From September 2014 to February 2015, Alcira Wells was a Connecticut-based Centurion marketing representative married to Edward L. Wells, Jr., who was in the Army stationed at Ft. Bragg in North Carolina. Alcira Wells obtained from her mother-in-law, a nurse at a Navy hospital in Jacksonville, Florida, signed prescription forms prescribing Centurion-marketed compounded creams to Edward Wells and his brother. These prescriptions featured Alcira Wells’s Centurion rep number and the signature of a physician in Jacksonville. After receiving these signed prescription forms, Alcira Wells, with Edward Wells’s knowledge and consent, photocopied or otherwise duplicated them. The Wellses then submitted numerous fraudulent prescriptions for Centurion-marketed compounded medications for U.S. Army personnel stationed at Ft. Bragg and others living in Connecticut, which prescriptions the Jacksonville-based physician never wrote, authorized, or knew about. Edward Wells handed out Centurion prescription forms to personnel stationed with him in North Carolina, most of whom were subordinate in rank, and paid and offered to pay these TRICARE beneficiaries to obtain the compounded creams. After the soldiers filled out or provided their identifiers, Edward transmitted the beneficiaries’ information to Alcira Wells in Connecticut; she then transferred it onto forms with the doctor’s duplicated signature. Alcira Wells submitted these prescriptions first to Centurion and then to Lifecare or Oldsmar Pharmacy for filling, and all were billed to TRICARE. Centurion paid and promised to pay Alcira Wells and those working with her commissions for each filled prescription. The total claimed amount or intended loss was at least $1,246,787.00 and the total amount paid by TRICARE was $1,061,137.16.
Dion Gregory Fisher and Samuel Blaine Huffman have been charged with conspiracy to possess with the intent to manufacture and distribute, and possession with the intent to distribute, counterfeit oxycodone pills made with fentanyl and a fentanyl analogue. Fisher is also charged with multiple counts of distributing the counterfeit oxycodone pills and engaging in money laundering-illegal monetary transactions using proceeds of the drug crimes.
Phillip Morose has been charged with conspiracy to possess with the intent to distribute and to distribute counterfeit oxycodone pills made with fentanyl and a fentanyl analogue.
Christopher McKinney has agreed to plead guilty to conspiring with Fisher, Morose and others to manufacture and distribute counterfeit oxycodone pills made with fentanyl and a fentanyl analogue. According to the plea agreement, Fisher and McKinney manufactured and sold counterfeit oxycodone pills. Fisher supplied the fentanyl and pill processing materials, and pressed the powder fentanyl into counterfeit oxycodone pills with the help of Huffman. McKinney sold the pills to Morose, using the U.S. Mail to exchange packages of pills and currency. His change of plea hearing is set for July 2, 2018.
Konrad Guzewicz has entered pleas of guilty to four counts of money laundering. According to the plea agreement, Guzewicz engaged in illegal monetary transactions involving proceeds of the drug crimes with which Fisher has been charged. Guzewicz admitted that Fisher recruited him to launder large sums of cash generated by the distribution of counterfeit oxycodone pills made with fentanyl and other controlled substances or analogues, and he personally participated in the laundering of at least $120,000 in drug proceeds for Fisher.
Caridad Limberg-Gonzalez and Dr. Thomas Carpenter have been charged with one count of conspiracy to commit health care fraud and wire fraud, four counts of health care fraud and three counts of making false statements in connection with heath care matters. According to the indictment, Limberg-Gonzalez owned Foundational Health, a Tampa-area clinic, and Carpenter was the medical director there. Between May 2011 and October 2016, Limberg-Gonzalez caused Foundational Health to submit $1.8 million in claims to Part B of the Medicare program listing Carpenter as the rendering physician. In truth, the services were provided by nurse practitioners, physician’s assistants, and medical doctors who were not enrolled in the Medicare program, all without any supervision by Carpenter. In addition, Limberg-Gonzalez gave Carpenter plans of care and face-to-face encounter forms authorizing home health services to sign. Carpenter signed the documents, even though he never saw or cared for the patients identified in those documents. According to the indictment, Accurate Home Health, a Tampa-area home health agency, relied on the documents that Carpenter signed to submit approximately $762,000 in claims to Part A of the Medicare program.
Roselle Fitzgerald has been charged with one count of theft of government funds, two counts of false statement to a federal agency, seven counts of counterfeit or forged securities, and three counts of fraudulent use of a means of identification. According to the indictment, Fitzgerald worked as a title closer at various law firms while simultaneously obtaining Social Security Disability Insurance and Medicare benefits to which she was not entitled. She also made material false statements to employees of the Social Security Administration regarding her work activity. In addition, Fitzgerald possessed counterfeit or forged checks from the law firms at which she was employed and used the means of identification of others in connection with the counterfeit or forged checks. The indictment also notifies Fitzgerald that the United States is seeking a money judgement in the amount of $192,091.20, the proceeds of theft of government funds and the counterfeit or forged securities.
Erving Rodriguez was charged by information with one count of conspiracy to solicit and receive health care kickbacks. The charge stems from Rodriguez’s role as the owner of ER Pro Corp., a marketing company that purportedly provided marketing services to pharmacies. According to court documents, from approximately January 2015 through August 2015, Rodriguez was involved in a scheme whereby he was paid by Life Worth Living Pharmacy for sending prescriptions for expensive compounded creams to the pharmacy that were ultimately billed to TRICARE. Rodriguez received approximately $3,185,155.96 in kickback payments for prescriptions that were ultimately billed to TRICARE for approximately $7,625,263.38.
Homer Zulaica was charged by information with conspiracy to offer and pay health care kickbacks stemming from his role as a sales representative for QMedRX, a compounding pharmacy. According to court documents, from approximately May 2013 through April 2014, Zulaica paid health care kickbacks to, among others, a physician and TRICARE beneficiaries in return for prescribing and receiving expensive compounded prescriptions that were billed to TRICARE. As a result of these kickbacks, TRICARE paid QMedRX approximately $1,271,198.68.
Dr. Christopher Devine was indicted on one count of conspiracy to commit health care fraud and wire fraud and two counts of health care fraud for his role in prescribing medically unnecessary compounded creams for TRICARE beneficiaries. According to the indictment, from approximately May 2013 through March 2015, Devine provided these prescriptions for medically unnecessary compounded drugs to a sales representative, Homer Zulaica, and in return received health care kickbacks. The compounded drugs were ultimately billed to TRICARE and resulted in a loss of approximately $1,640,363.98.
Omar Zoobi, a pharmacist and co-owner of Metro Pharmacy (“Metro”) and Metro RX Pharmacy LLC (“Metro RX”), and Gregory Sikorski, a physician’s assistant, were indicted in a 10-count indictment charging each with one count of conspiracy to commit health care fraud and wire fraud, four counts of health care fraud, and one count of conspiracy to defraud the United States and pay and receive health care kickbacks. Zoobi was also charged with two counts of paying health care kickbacks and Sikorski was charged with two counts of receiving health care kickbacks. The charges stem from a scheme whereby Zoobi and another co-conspirator allegedly paid kickbacks to Sikorski in return for prescribing medically unnecessary compounded creams that were billed by Metro and Metro RX to Medicare. Metro and Metro RX also billed Medicare for prescription drugs that were not dispensed or were not dispensed as prescribed. As a result of these actions, from approximately January 2012 through February 2018, Medicare paid Metro and Metro RX approximately $5,511,963.53.
Ashraf Badr, a pharmacist and co-owner of Metro Pharmacy (“Metro”) and Metro RX Pharmacy LLC (“Metro RX”), was charged by information with one count of conspiracy to commit health care fraud stemming from his role in a scheme whereby Badr and a co-conspirator paid a physician’s assistant kickbacks in return for prescribing medically unnecessary compounded creams that were billed to Medicare. Metro and Metro RX also billed Medicare for prescription drugs that were not dispensed. As a result of these actions, from approximately January 2012 through February 2018, Medicare paid Metro and Metro RX approximately $1,812,499.64.
Andres Arteaga Perez has been charged with one count of theft of government property and one count of aggravated identity theft. According to court documents, Perez applied for and received Social Security Disability Insurance Benefits, Supplemental Security Income, and Medicare benefits under a stolen identity. He received $423,602.80 in Social Security and Medicare benefits to which he was not entitled.
Dr. Michael Frey has pleaded guilty to two counts of conspiracy to receive healthcare kickbacks. In addition to his guilty plea, Frey has agreed to a civil settlement under which he will pay $2.8 million to the United States to resolve allegations that he violated the False Claims Act in a number of ways, including receiving illegal kickbacks and by ordering medically unnecessary laboratory tests. During the relevant period, Frey was a practicing interventional pain management specialist and one of the two principal owners of Advanced Pain Management Specialists, P.A., which is located in Fort Myers. Beginning in 2010, Frey conspired with the owners of A&G Spinal Solutions, LLC, a durable medical equipment provider, to receive compensation in exchange for referrals to A&G Spinal. Frey was paid a percentage of A&G Spinal’s profits based on his referrals and referrals from other providers at Advanced Pain. A&G Spinal rewarded Frey through checks made payable to his wife, creating the impression that Mrs. Frey was an employee of A&G Spinal, when she was not. The two principals of A&G Spinal, Ryan Williamson and William Pierce, have pleaded guilty to conspiring to pay healthcare kickbacks to Frey and are currently awaiting sentencing. In addition, from 2013 to 2015, Frey also received cash payments from Ryan Williamson in exchange for referrals of compound pharmaceutical pain cream prescriptions. Williamson has also pleaded guilty for his role in this arrangement. In his plea agreement, Frey also admitted that he had received kickbacks in the form of speaker fees paid to him in connection with his participation in largely bogus Insys Therapeutics, Inc. speaker event programs. Insys manufactures a fentanyl sublingual spray known as SUBSYS. Insys paid kickbacks to Frey to induce him to write prescriptions for their product. The civil settlement also resolves allegations that, between 2013 and 2016, Frey caused the submission of false claims to Medicare and TRICARE by ordering definitive Urine Drug Testing (“UDT”) in circumstances where such testing was not reasonable and medically necessary. In addition, the civil settlement resolves kickback allegations associated with anesthesia services provided by Anesthesia Partners of SWFL, LLC that was owned by Frey and his partner Dr. Jonathan Daitch. Anesthesia Partners provided anesthesia services exclusively for the procedures performed by the Advanced Pain physicians. They contracted with Certified Registered Nurse Anesthetists (“CRNAs”) to provide the anesthesia services. These CRNAs were paid a contracted rate, and Anesthesia Partners would bill Medicare and TRICARE directly for the anesthesia services they provided. This arrangement resulted in improper reimbursements to Frey as one of the owners of Anesthesia Partners.
The Middle District of Florida cases are being prosecuted by Assistant U.S. Attorneys Kelley Howard-Allen, Rachel Jones, Greg Pizzo, Amanda Riedel, Daniel Baeza, Simon Eth, and Gregory Nolan, Trial Attorneys Alexander Kramer and Timothy Loper of the Criminal Division’s Fraud Section, and Special Assistant U.S. Attorney Suzanne Huyler.