Washington, DC - The Justice Department announced Wednesday a coordinated health care fraud enforcement operation across the state of Texas, involving charges against a total of 58 individuals across all four federal districts in Texas for their alleged involvement in Medicare fraud schemes and networks of “pill mill” clinics resulting in $66 million in losses and 6.2 million pills. Of those charged, 16 were doctors or medical professionals, and 20 were charged for their role in diverting opioids.
The enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF) partners. The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI, Health and Human Services-Office of Inspector General (HHS-OIG) and the Drug Enforcement Administration (DEA). In addition, the operation includes the participation of the Veterans Affairs-OIG, the Department of Labor and various other federal law enforcement agencies and Texas State Medicaid Fraud Control Units.
The charges announced last week aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), Department of Labor-Office of Worker’s Compensation Programs, 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, with a particular focus on medical professionals allegedly involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.
According to the Centers for Disease Control, approximately 115 Americans die every day of an opioid-related overdose.
Today’s arrests come three weeks after the Department announced that the Health Care Fraud Unit’s Houston Strike Force coordinated the filing of charges against dozens in a trafficking network responsible for diverting over 23 million oxycodone, hydrocodone and carisoprodol pills.
“Today’s charges highlight the amazing work being done by the Department’s Medicare Fraud Strike Force and our partners in Texas,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “As we continue to dedicate resources to battle healthcare and opioid fraud schemes in Texas and elsewhere, we are shining an inescapable light on dirty doctors, clinic owners, pharmacists, and others who may have long believed they could perpetrate their frauds behind closed doors.”
“Healthcare should revolve around patients’ well-being – not providers’ personal interests,” said U.S. Attorney Erin Nealy Cox of the Northern District of Texas. “When medical professionals line their own pockets by submitting false insurance claims or prescribing unnecessary medications, equipment, or treatments, it not only drains taxpayer coffers – but it makes healthcare more expensive for everyone else. We cannot allow the healthcare industry to become bloated by fraud.”
“Sadly, opioid proliferation is nothing new to Americans,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “What is new, is the reinforced fight being taken to dirty doctors and shady pharmacists. Texas may have four U.S. Attorneys, but we are focused on one health care mission: shutting down pills mills and rooting out corruption in health care. From Lufkin to Laredo and Dallas to Del Rio, one of us will shut these operations down.”
“Every dollar stolen from Medicare through fraud comes out of the pocket of taxpayers,” said U.S. Attorney Joseph D. Brown of the Eastern District of Texas. “These are real costs that help drive up the cost of medical services for everyone. It is important that there be real consequences for those who cheat the system.”
“I am proud to fight healthcare fraud in Texas alongside Ryan Patrick, Erin Nealy Cox, and Joe Brown,” said U.S. Attorney John Bash of the Western District of Texas. “These crimes drive up the cost of health insurance, waste tax revenue and threaten the well-being of Texans.”
“These arrests across multiple investigations and jurisdictions is further proof that successful teamwork exemplifies Texas law enforcement,” said DEA Houston Special Agent in Charge Will R. Glaspy. “Today’s operation affirms both our commitment to targeting those individuals who illegally divert opioids in our communities, and our collective will to bring those individuals to justice.”
“Health care fraud undermines our country by driving up medical costs, wasting taxpayer dollars, and often harming patients,” said Special Agent in Charge C.J. Porter of HHS-OIG. “Today’s takedown shows that we are fighting hard to protect Medicare and Medicaid and the patients served by those programs. Working closely with our law enforcement partners, our agents are determined to ensure fraudsters pay for their crimes.”
“Today’s announcement demonstrates the close collaboration between the FBI and its law enforcement partners in North Texas,” said Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office. “The enormous economic damage caused by those who defraud crucial public health programs, as well as the ever-increasing loss of life caused by illicit and illegitimate pill schemes cannot be overstated. The public can rest assured the FBI will continue to make these investigations a top priority moving forward.”
Among those charged in the Northern District of Texas are the following:
Dr. Brian Carpenter and Jerry Hawrylak were charged for their alleged participation in a scheme to defraud TRICARE through a compounding pharmacy located in Fort Worth, Texas. The case is being prosecuted by Trial Attorney Brynn Schiess of the Fraud Section.
Leah Hagen and Michael Hagen were charged for their alleged participation in conspiracies to pay and receive kickbacks and launder money through Metro DME Supply and Ortho Pain Solutions, both durable medical equipment (DME) companies in Arlington, Texas. The case is being prosecuted by Trial Attorney Brynn Schiess.
Nilesh Patel, Dr. Craig Henry and Bruce Henry were charged for their alleged participation in a scheme to defraud TRICARE through marketing company RxConsultants and a compounding pharmacy located in Fort Worth, Texas. The case is being prosecuted by Trial Attorney Carlos Lopez of the Fraud Section.
Bruce Stroud and Bobbi Stroud were charged for their alleged participation in a scheme to defraud Medicare through New Horizons Durable Medical Equipment, Striffin Medical Supply and 4B Ortho Supply, all DME companies located in the Dallas/Fort Worth area of Texas. The case is being prosecuted by Trial Attorney Carlos Lopez.
Jamshid Noryian, Dehshid Nourian, Christopher Rydberg, Leyla Nourian, Ashraf Mofid, Dr. Leslie Benson, Dr. Michael Taba and Ali Khavarmanesh were charged for their alleged participation in a scheme to defraud the Department of Labor-Office of Worker’s Compensation and Blue Cross Blue Shield and conspiracies to launder money and evade the payment of taxes through Ability Pharmacy, Industrial & Family Pharmacy and Park Row Pharmacy, all located in the Dallas/Fort Worth area of Texas. The case is being prosecuted by Assistant Chief Adrienne Frazior of the Fraud Section.
Michael Charles Braddick, Kyle Martin Hermesch and Bioflex Medical were charged for their alleged participation in a scheme to defraud the Department of Labor-Office of Worker’s Compensation Programs. Bioflex Medical is located in Dallas, Texas. The case is being prosecuted by Special Assistant U.S. Attorney Jennifer Bray.
Nehaj Rizvi was charged for his alleged participation in a scheme to defraud Medicare through Life Spring Housecall Physicians Inc., a company located in Dallas, Texas. The case is being prosecuted by Assistant U.S. Attorney Douglas Brasher.
Among those charged in the Southern District of Texas are the following:
Diana Hernandez, Kathy Hernandez, Hieu Troung, R.P.H., Clint Randall, Prince White, Charles Walton and Cedric Milbrurn were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through S&S Pharmacy of Houston, Texas. The case is being prosecuted by Trial Attorney Devon Helfmeyer of the Fraud Section.
Franklin Nwabugwu, R.P.H. was charged for his alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through Golden Pharmacy of Houston, Texas. The case is being prosecuted by Trial Attorney Devon Helfmeyer.
Steven Inbody, M.D. and Hoai-Huong Truong were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose. The case is being prosecuted by Trial Attorney Catherine Wagner.
Ashley McCain, John Sims, Gregory Comer, Kesia Banks, Jacqueline Hill and Horace LeBlanc were charged for their alleged participation in a scheme to unlawfully distribute and dispense a controlled substance without a legitimate medical purpose through Continuous Medical Care and Rehabilitation. The case is being prosecuted by Assistant Deputy Chief Aleza Remis of the Fraud Section and Trial Attorney Devon Helfmeyer.
Among those charged in the Eastern District of Texas are the following:
Demetrius Cervantes, 44, of McKinney, Texas, Amanda Lowry, 39, of Sherman, Texas, and Lydia Henslee, 27, of Denison, Texas, were indicted for conspiracy to obtain information from a protected computer and conspiracy to unlawfully possess and use a means of identification. The case involves the breach of a health care provider’s electronic health record (EHR) system in order to steal protected health information and personally identifiable information belonging to patients of the provider. The information that was stolen from the provider was “repackaged” in the form of false and fraudulent physician orders and sold to DME providers and contractors. Within approximately eight months, the defendants obtained more the $1.4 million in proceeds from the sale of the stolen information. The proceeds of the offenses were traced and the following forfeitable assets were identified: a 2019 Land Rover Range Rover SC; a 2019 Dodge Durango; a 2018 Polaris RZR XP4 1000 EPS; a 2019 Can-Am Outlander 450; a 2019 Sea-Doo RXT-X 300 W; a 2019 Sea-Doo RXT-X 300 W; and a 2019 Karavan Sea-Doo Move. This case is being prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and L. Frank Coan.
Joseph Valdie Kimble, 62, of Longview, Texas, pleaded guilty to health care fraud. Kimble operated Tiger EMS, a business providing non-emergency ambulance transport, mostly between skilled nursing centers and hospitals and dialysis centers. Ambulance providers may bill for ambulance services only if there is a demonstrated medical need, which requires that (a) the beneficiary be bed-confined, and it is documented that other methods of transportation are contraindicated; or (b) the beneficiary's medical condition is such that transportation by ambulance is medically required. Kimble disregarded medical necessity requirements and billed Medicare and Medicaid for ambulance services provided to patients for whom ambulance transport was not medically necessary. The plea agreement provides for an agreed sentence of 30 months in prison and $751,986.80 in restitution. This case is being prosecuted by Assistant U.S. Attorney Alan R. Jackson.
Among those charged in the Western District of Texas are the following:
Orlando Garcia-Moya, owner and president of Fleet Ambulance Co. in San Antonio (Fleet), and Melody Ann Villareal, emergency medical technician and Fleet supervisor, were charged for their roles in a scheme to defraud Medicaid by submitting over $2.5 million in fraudulent claims for non-emergency ambulance transportation that was never provided. As a result of the scheme, Fleet received over $1 million in Medicaid funds. The case is being prosecuted by Special Assistant U.S. Attorney Rex Beasley and Assistant U.S. Attorney John Kennedy.
The charges and allegations contained in the indictments are merely accusations. The defendants are presumed innocent until and unless proven guilty.
The Fraud Section leads the MFSF, which is 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. MFSF maintains 15 strike forces operating in 24 districts. Since its inception in March 2007, MFSF has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.