Fraudsters sentenced for various schemes, medical device company settles allegations for $36M

The Department of Justice (DOJ) has continued to crack down on health care fraud in a variety of areas. From a multi-million dollar home health scheme to a mother-son pharmacy fraud team, several perpetrators have been sentenced to prison and ordered to pay restitution for their crimes.

Home health

A Detroit home health care company co-owner was sentenced to 96 months in prison for his part in a fraud scheme. Evidence presented at trial revealed that from 2006 to 2011, he and co-conspirators paid kickbacks to recruiters who passed on cash to patients in order to induce them to sign up for home health care services. Physicians also received kickbacks in exchange for referrals for home health services that were not medically necessary and not provided. This scheme ultimately caused about $33 million in losses to the federal government.

Another co-conspirator was recently sentenced to 360 months in prison for his part in the fraud scheme.

Pharmacy fraud

A mother and son team received prison sentences following their guilty pleas to conspiracy to commit health fraud through their pharmacies. The mother co-owned and operated some Miami-area pharmacies, through which she submitted false and fraudulent claims through Medicare Part D. She led a fraud scheme in which Medicare beneficiaries and patient recruiters were paid for medically unnecessary prescriptions, and various co-conspirators were directed to make kickback payments and conceal fraudulent funds. The son wrote checks to money launderers from the pharmacy in order to facilitate the kickbacks.

In their guilty pleas, the mother admitted that she caused $9.5 million in losses to the government, while the son caused losses of at least $1.5 million. She was sentenced to 120 months in prison, while he was sentenced to 30 months.

Medical devices

Biocompatibles Inc., a medical device manufacturer, pleaded guilty to misbranding an embolic device that was originally designed as a chemotherapy drug delivery device. This device had been cleared for placement in blood vessels to block or reduce blood flow as needed, but was not approved or cleared as a drug-device combination product or a drug-eluting bead. However, Biocompatibles marketed the product for drug delivery for and trained representatives to aggressively penetrate the relevant market. Biocompatibles will pay $36 million to resolve criminal and civil liability, which first stemmed from a qui tam lawsuit brought by a company professional responsible for marketing and management of Biocompatibles’ medical products.