Florida Man Charged with Health Care Fraud, Wire Fraud, and Kickback Conspiracy

NEWARK, N.J. – A Florida man was arraigned today on charges relating to his role in a scheme to defraud Medicare by billing for medically unnecessary prescriptions, Attorney for the United States Vikas Khanna announced. 

Eric Van Vleet, 28, of Delray Beach, Florida, is charged in an eight-count indictment with conspiracy to commit health care fraud and wire fraud, health care fraud, conspiracy to violate the federal anti-kickback statute, and payment of illegal kickbacks. Van Vleet appeared today before U.S. District Judge Esther Salas in Newark federal court and was released on $100,000 unsecured bond.

According to the indictment:

From February 2018 to September 2019, Van Vleet operated Hype Med LLC, which generated medically unnecessary prescriptions through a telemarketing and telemedicine scheme.   As part of the health care, wire fraud, and kickback conspiracy, Van Vleet and Hype Med identified Medicare beneficiaries to target for expensive drugs. Call center employees contacted the beneficiaries by telephone to pressure them to agree to try expensive medications, such as pain creams, scar creams, eczema creams, migraine medication, as well as a combination of prescription medications intended to be used as a “foot soak.” Van Vleet and Hype Med then transmitted recordings of telephone calls with the beneficiaries, together with pre-marked prescription pads for particular drugs that would yield exorbitant reimbursements, to telemedicine companies. Hype Med paid the telemedicine companies kickbacks for every beneficiary referred for a prescription, and the telemedicine companies paid doctors to approve the prescriptions. 

Van Vleet then directed the prescriptions to pharmacies, including Apogee Bio-Pharm LLC, located in Edison, New Jersey, with which Hype Med had a kickback arrangement. The pharmacies filled the prescriptions and sought reimbursement from federal health care benefit programs, including Medicare. The pharmacies, including Apogee, then paid a portion of each reimbursement to Hype Med as a kickback. Van Vleet and Hype Med received at least $343,684 in kickback payments from the owners of Apogee. The principals of Apogee – William Welwart, Ethan Welwart, and Gary Kaczka – are charged with health care fraud and related offenses in a separate indictment. Elan Yaish, former president of Apogee, previously pleaded guilty to an information charging conspiracy to violate the federal anti-kickback statute.

The health care fraud and wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison; the health care fraud charges carry a maximum potential penalty of 10 years in prison; the charge of conspiracy to violate the Anti-Kickback Statute carries a maximum potential penalty of five years in prison; and the charges of payment of illegal kickbacks are punishable by 10 years in prison. All of the counts are also punishable by a fine of $250,000, or twice the gain or loss from the offense, whichever is greatest.

Attorney for the United States Khanna credited special agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz, the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Patrick J. Hegarty, and the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation.

The government is represented by Assistant U.S. Attorney Katherine M. Romano of the Health Care Fraud Unit in Newark.

The charges and allegations contained in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.