Fraud Cases

CT Pediatricians Settle in Operation Free Shot

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“Kevin J. O’Connor, United States Attorney for the District of Connecticut, and Richard Blumenthal, Connecticut Attorney General, announced that TORRINGTON-WINSTED PEDIATRIC ASSOCIATES, P.C. , located at 538 Litchfield Street, Torrington, Connecticut, and 49 Spencer Street, Winsted, Connecticut; and PEDIATRIC & ADOLESCENT HEALTHCARE, P.C., located at 400 Main Street, Ansonia, Connecticut, and its former owner, WILLIAM SILBERBERG, M.D., have entered into two separate civil settlement agreements with the Government to resolve allegations that they violated the False Claims Act by submitting fa

Texas Home Health Fraudsters Sentenced to Prison

Fraud Cases

After leading investigators on an international chase, Lesa and Pete Hames and co-consipiritor, James Davis, were sentenced to prison December 16, 2004. The Hames inflated Medicare cost reports for their home health agency, causing Medicare to make millions of dollars in overpayments. Lesa received 102 month sentence, while Pete and James were sentenced to 70 months. In addition, they are required to pay almost $3 million in restitution.

Bodybuilder and Editor-in-chief of Rx Muscle Magazine Sentenced to 5 Months

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United States Attorney Carol C. Lam announced that David Palumbo, bodybuilder and editor-in-chief of Rx Muscle magazine, was sentenced today to five months in federal custody, followed by five months of home detention, based on his October 5, 2004 plea of guilty before the Honorable Thomas J. Whelan, to the charge of conspiring to unlawfully distribute human growth hormone. In connection with his guilty plea, Palumbo had admitted that he obtained counterfeit Serostim from Bill Young in San Diego, California, which he would sell to bodybuilders who did not possess a lawful prescription.

Miami Resident Arrested for Illegal Sale of Cancer Medication

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“TALLAHASSEE - Attorney General Charlie Crist today announced the arrest of a South Florida resident on three charges related to his alleged involvement in an interstate prescription drug operation with purchases totaling more than $100,000. Dennys Astorga, 31, of Miami, is accused of facilitating the sale of prescription drugs with fake pedigrees, including medication intended for cancer patients. Without a valid pedigree, which guarantees that a drug is authentic and has been properly stored, a drug cannot be legally sold in Florida. According to the arrest affidavit, Astorga allegedly facilitated transactions between a Texas prescription drug wholesaling operation using the name of San Antonio Health Group, and Florida-based drug distributor AMERx.

Gambro to pay $355 million in fraud case

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Gambro US to pay $355 mln in fraud case - Gambro Healthcare US, Lakewood, Colo., said it will pay $355 mln to settle civil and criminal charges stemming from illegal relationships with doctors and pharmaceutical companies in an alleged decade-long fraud scheme that began in 1991. [Healthcare Fraud News]

The settlement resolves civil liabilities from alleged kickbacks paid to physicians, false statements made to obtain payment for unnecessary services, and payments made to Gambro Supply, a sham DME company.

Another Lupron Guilty Plea

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November 15, 2004, Boston. Dr. John Romano, a urologist in Massachusetts pleaded guilty to fraud for charging Medicare and Medicaid for free samples of Lupron. Sentencing is scheduled for February 2005.

According to the US Attorney’s Office in Massachusetts, four other urologists have been sentenced in connection with this investigation. Dr. Joseph Olstein (Maine), Dr. Rodney Mannion (Indiana), Dr. Jacob Zamstein (Connecticut), and Dr. Joseph Spinella (Connecticut) pleaded guilty healthcare fraud. These doctors were sentenced to probation, in exchange for their help with the Lupron investigation, which resulted in a $1.2 million settlement from TAP Pharmaceutical.

Pittsburgh Dentist Gets 4 Years

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Dr. Alan I. Aronowitz was sentenced this week to four years in jail and ordered to pay $200,000 in restitution to United Concordia insurance after pleading guilty to using unlicensed assistants to perform root canals.

Aronowitz’s lawyer had argued that white-collar criminals should not get jail time.

There’s an attitude that poor people should go to jail, but wealthy educated people should do community service.

“The lawyer is implying that fraud isn’t so bad,” says Robin Mathias, a healthcare fraud control specialist. “There’s an attitude in this country that if a mother steals to feed her kids and pay the rent, she should go to jail, but if a wealthy person steals to get a vacation home, that person should just do community service. This attitude increases healthcare fraud not only because perpetrators think they are unlikely to go to jail if caught, but also because they often convince themselves that what they’re doing isn’t wrong.”

Maine Urologist Receives Light Sentence for Lupron Scam

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Dr. Joseph Olstein helped the government get a $1.2 billion settlement from TAP Pharmaceutical and AstraZeneca. In return he received only a light sentence for his part in the scam. The US Attorney announced that Olstein was sentenced this week to one year probation and a $20,000 fine (in addition to a previous $50,000 restitution payment).

Dr. Olstein pleaded guilty in 2001 to billing insurance companies for free samples of Lupron, which he received from TAP sales people. Lupron is an injectible drug used for treating prostate cancer. Physicians can bill Medicare and other insurers for injectible drugs. Because the free samples were given as a way for physicians to enhance their income, the samples are considered a kick-back. Without the kickbacks that TAP offered to urologists, an equivalent drug that is cheaper than Lupron would probably have been prescribed.

$4.7 Million Injectable Drug Fraud in Florida

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Two owners of a South Florida treatment center for infectious diseases, a physician at the center and a nurse who served as its administrator, were arrested for their roles in a costly Medicaid fraud scheme, according to an October 1, 2004 press release from the Florida Attorney General. The scheme involved billing for prescriptions for medications that were never dispensed and the creation of false medical records to conceal the doctor’s absence from patient treatment and office supervision. Medicaid investigators seized over $1.6 million in illegally purchased assets, including a 40-foot boat, an ocean-view condominium, and a Cadillac SUV.

Greedy Dentists Busted in California

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“It’s all about the money,” was the operating creed of Hatch Dental, as described in a 42-count felony complaint filed by California Attorney General Bill Lockyer on September 22, 2004. The complaint describes how 20 defendants affiliated with three Hatch Dental clinics let greed rule their practice at the expense of patient health and safety.

In spring of 2002, when Brian Kanarek, DDS asked defendant Kyon Maung Teo (the alleged ringleader) why he over-diagnosed treatment, Teo told him, “Something has to pay for this practice.” After Kanarek diagnosed only 2 fillings for a patient whom Teo diagnosed 26, Teo told him to leave Hatch Dental “and don’t come back.”

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