Last week the Department of Justice and HHS-OIG announced sentencing in two unrelated health care fraud cases. On Friday, a Miami pharmacy owner was sentenced to 42 months in prison for her role in the submission of more than $1.5 million in fraudulent claims to Medicare Part D. On Thursday, a co-owner of two Miami clinics was sentenced to 30 months in prison for his role in a scheme to submit $126 million in false claims to private insurers.

In the first case, Tamara Esponda, owner of Biomax Pharmacy, Inc. in Miami was sentenced to 42 months in prison for submitting fraudulent claims to Medicare. In connection with her guilty plea, Esponda admitted that, between October 2012 and September 2013, Biomax Pharmacy submitted almost $1.6 million in fraudulent claims to Medicare for prescription drugs that included Solaraze and Abilify, that were not prescribed by physicians, not medically necessary, not purchased by Biomax Pharmacy and not provided to Medicare beneficiaries.  Medicare paid 100 percent of the claims. (A copy of the indictment can be viewed by clicking here.)

According to Esponda’s admissions, she and her accomplices stole or illegally paid for unique identifying information of Medicare beneficiaries, and used this information to submit the fraudulent claims.  Esponda also admitted that she controlled Biomax Pharmacy’s bank accounts, and that she transferred the payments received from Medicare to herself and her accomplices. In addition to the prison sentence, Esponda was ordered to pay $1,583,975 in restitution.

In the second case, the indictment claimed Humberto Martinez Rodriquez and other co-conspirators used medical director staffing companies to misappropriate doctors’ licensing information, which they then used to submit false claims. The scheme sought to defraud privately insured health care plans located in Miami-Dade County, including Cigna, Blue Cross Blue Shield (BCBS), United Health Care (UHC), Miami-Dade County Public Schools, City of Miami, Pepsi Co., BJ’s Wholesale Club, Inc., Lincoln Property Company, Macy’s Inc., Nextera Energy Inc., Radioshack Corporation, Sodexo, Inc., Southeast Frozen Foods Company LP, and other self-insured employers which offered Administrative Services Only (ASO) insurance plans to their employees. ASO insurance plans reimbursed Cigna, BCBS, and UHS for the money paid out by the insurance companies for health benefits for their respective employees. Therefore, the employers acted in a self-insured role; making them financially responsible for any claim payments to their employees.

Rodriquez was the nominee owner (for eight months) of two of the more than thirty clinics involved in the fraud. The indictment alleged that Rodriquez and other co-conspirators agreed, in exchange for a fee, to have companies be placed in their names, to open bank accounts and check cashing accounts in the names of the companies, and to cash and deposit checks received from Cigna, BCBS, and UHC.

In addition to the prison sentence, Rodriquez will have to pay at least part of $12.3 million in restitution and will be subject to three years of supervised release. In late October, Rodriquez’s two partners were sentenced to 121 months and 48 months.

Both of these cases were investigated by HHS-OIG and the FBI, and were brought as part of the Medicare Fraud Strike Force. The Rodriquez case was part of the largest national Medicare fraud takedown in history which charged seventy-three individuals with more than $712 million in false billings.

In June, Attorney General Loretta Lynch stated, “This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” …”the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives. We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”

For further information on the subject matter of this alert, please contact the following FisherBroyles attorneys for more information.

Brian E. Dickerson

Nicole Hughes Waid