Feds Bust Dozens of Doctors, Medical Companies Who Scammed Elderly and Disabled People to Buy Luxury Yachts and Real Estate in $1 Billion Medicare Fraud Scheme

HHS Office of Inspector General agents take part in arrests on April 9, 2019, in Queens, New York as they break up a billion-dollar Medicare scam that peddled unneeded orthopedic braces to hundreds of thousands of seniors nationwide, using a network of foreign call centers.HHS, Office of Inspector General via AP

Two dozen people, including doctors and owners of medical equipment companies, were charged in a more than $1 billion Medicare scam, authorities said Tuesday.

Investigators uncovered the sprawling plot that targeted elderly and disabled people by setting them up with back, neck and knee braces that they didn’t need, according to federal prosecutors.

Called Operation Brace Yourself, the investigation discovered that medical brace manufacturers were allegedly paying kickbacks and bribes to doctors working with fraudulent telemedicine companies in exchange for Medicare patient referrals for medically unnecessary braces.

The ill-gotten gains were then laundered through international shell companies and used to buy exotic cars, yachts and luxury real estate in the United States and overseas, prosecutors said.

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“The taxpayers should be outraged by this,” Gary Cantrell, who oversees fraud investigations for the Health and Human Services inspector general’s office, said in an interview with NBC News. “These are losses to the Medicare program that we all, as taxpayers, fund.”

As part of the scheme, doctors were paid to prescribe braces to patients they had little to no relationship with. Prescriptions frequently came after doctors had brief conversations via phone or video conference with patients they had never met, prosecutors said.

The global fraud involved call centers in the Philippines and throughout Latin America.

As a result, the personal information of hundreds of thousands of Medicare beneficiaries across the country was compromised and could be used in future schemes, prosecutors said. An even larger number of patients received unwanted braces sent to their homes. The unwanted products could disqualify them from receiving a brace under Medicare if they need one in the future, prosecutors said.

“White-collar crime is not victimless,” Sherri Lydon, U.S. attorney for the district of South Carolina, where the probe originated, said at a press conference announcing the indictments. “All taxpayers will endure the rising cost of health care premiums and out-of-pocket costs as a result of fraud on our Medicare system.”

The family of Neale Sweetman, who lives in Rochester, N.Y., said he received a box of unwanted back and knee braces sent by a medical supply company in Florida and prescribed by a doctor in another state.

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SOURCE: NBC, by Adiel Kaplan, Jay Blackman, Tom Costello and Sarah Ploss