On August 10, 2021, the U.S. Department of Justice (“DOJ”) announced that Creaghan Harry, of Florida, was charged for his alleged participation in a scheme that involved submitting over $784 million in false and fraudulent claims to Medicare. This is one of the largest Medicare fraud schemes ever charged, according to the DOJ.
Per the superseding indictment, Mr. Harry, who owns multiple telemedicine companies, used his companies to pay providers to obtain medically unnecessary orders for braces and medication. Mr. Harry allegedly solicited illegal kickbacks and bribes from durable medical equipment (“DME”) suppliers and marketers in exchange for the medically unnecessary DME and medication orders. According to the government, the DME suppliers then used the improper orders received from Mr. Harry’s telemedicine companies to illegally bill Medicare over $784 million, of which Medicare paid over $247 million. Mr. Harry is also alleged to have falsely represented to investors, lawyers, and others that his telehealth companies did not receive kickbacks, but instead received millions from telemedicine services rendered.
Mr. Harry was also charged with tax evasion for allegedly concealing the proceeds from the scheme to avoid paying income taxes. As part of the tax evasion scheme, Mr. Harry allegedly established several shell companies in the names of “straw owners” in the U.S. and foreign countries. The government claimed that Mr. Harry directed DME suppliers and marketers to pay his shell companies instead of the telemedicine companies, and the shell companies transferred money to his telemedicine companies to pay physicians for the medically unnecessary orders. Also, the government noted that Mr. Harry did not file income taxes on the income the shell companies received.
Along with two co-conspirators, Mr. Harry was charged with one count of conspiracy to defraud the government and pay and receive kickbacks, one count of conspiracy to commit money laundering, and four counts of receipt of kickbacks. Mr. Harry faces up to 20 years in jail for the conspiracy to commit health care fraud and wire fraud, 20 years in jail on the conspiracy to commit money laundering, up to five years in jail on each count of tax evasion, up to five years in jail for the conspiracy to defraud government and pay and receive kickbacks, and up to 10 years in jail for each count of receipt of kickbacks. However, the U.S. Sentencing Guidelines and other statutory factors are considered in reaching a final sentencing determination.
Despite the COVID-19 pandemic, the government has continued its enforcement efforts. In the press release, the DOJ noted that the Health Care Fraud Strike Force has charged over 4,600 defendants since 2007. The government’s enforcement efforts will continue. The press release noted that “the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with government investigations, including fraud investigations and prosecutions. If you need assistance with such a matter, please contact us today.