In 2019, the U.S. Department of Justice announced “Operation Brace Yourself,” which included charges against 24 criminal defendants related to dispensing orthotic braces using telemedicine that resulted in an estimated $1.5 billion in cost avoidance, according to the DOJ.  Following Operation Brace Yourself, the DOJ continued enforcement efforts against fraudulent schemes related to telehealth, orthotic devices, and lab testing, which CG attorneys have discussed in client alerts and presentations.  

The government continues take action against companies and their owners who attempt to defraud Medicare.  On April 22, 2021, the DOJ announced charging Christopher Cirri, Thomas Farese, Domenic Gatto, Nicholas DeFonte, and Pat Truglia for their roles in a $65 million nationwide scheme to defraud federal healthcare programs.  The individuals were owners of orthotic brace supply companies and marketing companies. In December 2021, Chilivis Grubman attorneys discussed two durable medical equipment (DME) company owners who were sentenced to 151 months in prison and were ordered to pay about $27 million back to the government in restitution for their role in a Medicare kickback conspiracy. 

The government’s actions have ensnared owners and business executives, with some medical providers facing administrative actions.  However, more medical providers are being sentenced to prison for their actions involving Medicare fraud.  Such was the case for two Florida doctors. 

On April 20, 2023, the DOJ announced that two Florida doctors were sentenced to prison for their involvement in submitting over $31 million in claims for DME that were tainted by illegal kickbacks, medically unnecessary, or not wanted by beneficiaries.  

Dr. Dean Zusmer, a chiropractor, owned four DME companies that billed Medicare $31 million and received $15 million, according to the government. The government alleged that Dr. Zusmer paid marketers with overseas call centers and obtained patient referrals and signed doctors’ orders for braces.  Similar schemes were used by the individuals charged in Operation Brace Yourself.  Dr. Lawrence Alexander, an orthopedic surgeon, was also charged for his role in the scheme.  Dr. Alexander owned one of the DME companies, along with co-conspirator Jeremy Waxman.  The company was put into the name of a relative to conceal his role in the company, according to the government. 

All parties involved have received significant prison sentences for their roles in the scheme.  Jeremy Waxman was previously sentenced to 15 years in prison.  Dr. Zusmer was sentenced to about 8 years in prison and ordered to pay $1.4 million in restitution.  And Dr. Alexander was sentenced to two years and nine months in prison.  

This case was prosecuted by the Criminal Division’s Fraud Section, which leads the Health Care Fraud Strike Force Program; it has charged over 5,000 individuals who are collectively accused of billing the Medicare program and private insurers more than $24 billion.  There is no sign that the government’s enforcement actions will subside.  Individuals and companies doing business with the government, especially those in healthcare, must be especially careful to avoid inadvertently violating federal laws and the maze of administrative regulations. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations and false claims allegations.  If you need assistance with such a matter, please contact us today.