Two Sentenced in St. Lucie Medicare Fraud Scheme
Wifredo Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Christopher Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announce today’s sentencing of Jorge Luis Reyes, 43, of Miami, and Waldo Gonzalez, 40, of Hialeah, on charges of payment of health care kickbacks. U.S. District Judge K. Michael Moore sentenced the defendants to ten years in prison, to be followed by three years of supervised release. A restitution hearing is scheduled for November 5, 2012.
In June 2012, the defendants pled guilty to one count of conspiracy to pay health care kickbacks, in violation of Title 18, United States Code, Section 371 (count 1), and one count of payment of health care kickbacks, in violation of Title 42, United States Code, Section 1320a-7b(b)(2)(A).
According to in-court statements made during the plea hearing and the evidence presented at sentencing, the defendants operated W&J Rehabilitation Center, Inc., with locations in Miami-Dade and St. Lucie counties. Reyes was the president, a director, and the treasurer, and Gonzalez was the vice-president and a director of W&J.
W&J submitted $1,557,600.78 in claims to Medicare Part B for purported treatment to HIV-positive Medicare beneficiaries of prescription drugs between October 20, 2005 and September 18, 2007. Based on these claims, Medicare paid W&J approximately $233,601.37.
In addition to its Part B claims, W&J submitted $13,948,249.34 in claims to six Medicare Part C plan sponsors. Part C is often called Medicare Advantage. In Part C, private companies sponsor insurance plans, which beneficiaries can join if they choose. Medicare pays the sponsor a flat fee for each beneficiary enrolled in one of the sponsor’s plans. W&J claimed that, between December 10, 2007 and December 31, 2008, it had provided treatment to HIV-positive Medicare beneficiaries, again primarily by administration of prescription drugs. Based on these claims, the six Part C plan sponsors paid W&J $2,596,774.90.
In fact, at the direction of the defendants, W&J’s personnel provided none or virtually none of the treatment alleged in W&J’s claims. Instead, the defendants paid the clinic’s patients $100 per day to attend the clinic and sign paperwork attesting to treatment. In some cases, patients were administered vitamins or saline solution instead of the claimed treatment. In other cases, patients signed forms without receiving any purported treatment whatsoever. Defendant Reyes and Gonzalez were the only signatories on W&J’s bank accounts and paid themselves $913,450.37 and $1,114,333.23, respectively, from the proceeds of the fraud.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case was prosecuted by Assistant U.S. Attorney Marc Osborne.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
