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”), as well as the U.S. Attorney's Offices for the Districts of South Carolina, New Jersey, and the Middle District of Florida. The MFSF is a partnership among the Criminal Division, U.S. Attorney's Offices, the FBI, and HHS-OIG.

According to prosecutors, the charges targeted an alleged scheme involving the payment of illegal kickbacks and bribes by DME companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist, and knee braces that were medically unnecessary. Some of the defendants allegedly controlled an international telemarketing network that lured over hundreds of thousands of elderly or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America. The defendants allegedly paid doctors to prescribe DME either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. The proceeds of the fraudulent scheme were allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts, and luxury real estate in the United States and abroad.

According to allegations in court documents, some of the defendants obtained patients for the scheme by using an international call center that advertised to Medicare beneficiaries and “up-sold” the beneficiaries to get them to accept numerous “free or low-cost” DME braces, regardless of medical necessity. The international call center allegedly paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these Medicare beneficiaries. The telemedicine companies then allegedly paid physicians to write medically unnecessary DME orders. Finally, as alleged, the international call center sold the DME orders that it obtained from the telemedicine companies to DME companies, which fraudulently billed Medicare.

Collectively, as alleged, the CEOs, COOs, executives, business owners, and medical professionals involved in the conspiracy were accused of causing over $1 billion in losses.

Those charged included:

In the District of New Jersey, charges were brought against Creaghan Harry, of Highland Beach, Florida; Lester Stockett, of Deefield Beach, Florida; and Elliot Loewenstern, of Boca Raton, Florida; the owner, CEO, and VP of marketing, respectively, of purported call centers and telemedicine companies, for their alleged participation in an alleged $454 million illegal health care kickback and international money laundering scheme related to the solicitation of illegal kickbacks and bribes in exchange for the referral of DME orders to DME providers.

In addition, Joseph DeCoroso, M.D., of Toms River, New Jersey, was charged in an alleged $13 million conspiracy to commit health care fraud and separate charges of health care fraud for writing medically unnecessary orders for DME, in many instances without ever speaking to the patients, while working for two telemedicine companies. The cases are being prosecuted by Fraud Section Acting Assistant Chief Jacob Foster and Trial Attorney Darren Halverson.

In the Middle District of Florida, charges were brought against Willie McNeal, of Spring Hill, Florida, the owner and CEO of two purported telemedicine companies, for his alleged participation in a $250 million scheme related to the solicitation of illegal kickbacks and bribes in exchange for the referral of DME orders to DME providers. The case is being prosecuted by Fraud Section Acting Assistant Chief Jacob Foster and Trial Attorneys John Michelich, Catherine Wagner, and Sara Clingan.

In the Northern District of Texas, charges were brought against Leah Hagen and Michael Hagen, of Dalworthington Gardens, Texas, owners and operators of two DME companies, for their alleged participation in an alleged $17 million illegal health care kickback scheme related to the payment of kickbacks in exchange for the referral of medically unnecessary DME orders. The case is being prosecuted by Fraud Section Trial Attorneys Brynn Schiess and Carlos Lopez.

In the Western District of Texas, Christopher O'Hara, of Kingsbury, Texas, the owner of a purported telemedicine company, was charged in an alleged $40 million scheme related to the alleged solicitation of illegal kickbacks and bribes in exchange for the referral of DME orders to DME providers. The case is being prosecuted by Fraud Section Trial Attorney Kevin Lowell.

In the Eastern District of Pennsylvania, Randy Swackhammer, M.D., of Goldsboro, North Carolina, was charged for an alleged $5 million conspiracy to commit health care fraud that allegedly involved writing medically unnecessary orders for DME while working for a telemedicine company, in many instances with only a brief telephonic conversation with the patients. The case is being prosecuted by Fraud Section Trial Attorney Adam Yoffie.

In the Central District of California, charges were brought against Darin Flashberg, of Glendora, California, and Najib Jabbour, of Glendora, California, owners of seven DME companies, for their alleged participation in an alleged $34 million scheme related to their payment of kickbacks and bribes in exchange for medically unnecessary DME orders. The case is being prosecuted by Fraud Section Trial Attorney Robyn Pullio.

In the District of South Carolina, charges were brought against Andrew Chmiel, of Mt. Pleasant, South Carolina, owner of over a dozen companies allegedly involved in the scheme, for his alleged participation in a $200 million scheme related to the payment of kickbacks and bribes in exchange for medically unnecessary DME orders. The cases are being prosecuted by Assistant U.S. Attorneys Jim May and Will Lewis of the District of South Carolina.

In the District of New Jersey, charges were brought against Neal Williamsky, of Marlboro, New Jersey, and Nadia Levit, of Englishtown, New Jersey, owners of approximately 25 DME companies, for their alleged participation in an alleged $150 million scheme related to the payment of kickbacks and bribes in exchange for medically unnecessary DME orders. Albert Davydov, of Rego Park, New York, also was charged for his alleged participation in an alleged $35 million scheme related to the payment of kickbacks and bribes in exchange for medically unnecessary DME orders. The cases are being prosecuted by Assistant U.S. Attorneys Brian Urbano and Stephen Ferketic of the District of New Jersey.

In addition to the prosecutions, other enforcement actions were taken, including the execution of search warrants to support related investigative efforts in seven additional U.S. Attorney's Offices to include in various investigations conducted by the District of New Jersey, District of South Carolina, Southern District of California, District of Nebraska, Middle District of Florida, Eastern District of Missouri, and Western District of Washington.

In the Middle District of Florida, search and seizure warrants are being executed at 20 different business locations, including numerous DME companies and a fraudulent telemarketing company. The search and seizures are being executed by over 100 law-enforcement officers from six federal agencies. In addition to the 20 search warrants, millions of dollars and other assets tied to the alleged conspiracy are being seized and/or frozen, including through a civil injunction naming 13 defendants as authorized under 18 U.S.C. § 1345.

The cases announced today are being prosecuted and investigated by U.S. Attorney's Offices nationwide, along with MFSF teams from the Criminal Division's Fraud Section and from the U.S. Attorney's Offices in the District of New Jersey, District of South Carolina, Southern District of California, District of Nebraska, Middle District of Florida, Eastern District of Missouri and Western District of Washington; and agents from the FBI, HHS-OIG, IRS-CI and other federal law enforcement agencies.