Four Individuals Indicted For Health Care Fraud

SAN JUAN, P.R. – On March 14, 2013, a Federal grand jury returned a fourteen count-indictment against four individuals for conspiracy to commit health care fraud, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The investigation was led by the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI).

According to the indictment, from on or about January 2007, until on or about March 2010, Olympic Medical Equipment (OME), a Durable Medical Equipment (DME) company authorized to do business in Arecibo, Puerto Rico, submitted and/or caused to be submitted at least one thousand one hundred and forty nine (1,149) false and fraudulent claims to Medicare totaling approximately one million three hundred thirty seven-thousand twenty eight dollars and ninety eight cents ($1,337,028.98) for DME that was not medically necessary, causing Medicare to disburse approximately seven hundred forty seven thousand four hundred sixty one dollars and 31 cents ($747,461.31) for such claims.

Defendant Jaime Sepúlveda-Concepción was the president of Olympic Medical Equipment. He owned and managed OME controlling the business activities to include submitting DME claims to Medicare on behalf of OME. He controlled Medicare payments received by OME and paid kickbacks to defendant Mario Reyes-Cruz based on the type of equipment ordered in the prescriptions and/or medical orders.  Defendant Reyes-Cruz was an independent sales coordinator that brought to Sepúlveda-Concepción DME orders for Medicare beneficiaries.  Defendant Edgar Cancel-Zapata was a physician licensed to practice medicine in Puerto Rico.   Cancel-Zapata signed and completed for OME false: progress notes, prescriptions and/or medical orders, CMNs, and/or Statements of Ordering Physician, for Medicare beneficiaries that were billed by OME.   Cancel-Zapata was paid kickbacks by Reyes-Cruz on behalf of OME, in exchange for signing and completing the false: progress notes, prescriptions and/or medical orders, CMNs, and/or Statements of Ordering Physician for OME.

Defendant Sonia Guzmàn-Silvagnoli was a physician licensed to practice medicine in Puerto Rico.  Guzmàn-Silvagnoli signed and completed for OME false: progress notes, prescriptions and/or medical orders, CMNs, and/or Statements of Ordering Physician, for Medicare beneficiaries that were billed by OME.   She was paid kickbacks by Reyes-Cruz on behalf of OME, in exchange for signing and completing the false: progress notes, prescriptions and/or medical orders, CMNs, and/or Statements of Ordering Physician for OME.

The object of the unlawful conspiracy was that defendants Jaime Sepúlveda-Concepción, Mario Reyes-Cruz, and Edgar Cancel-Zapata unlawfully enriched themselves submitting and/or causing to be submitted false and fraudulent claims to Medicare and/or by falsely and fraudulently representing that the medical conditions of the Medicare beneficiaries were such that DME, including spinal orthosis: TLSO and LSO; wheelchair options/accessories; therapeutic shoes for persons with diabetes; hospital beds and accessories; pressure reducing support surfaces-group 1; wheelchair seating; knee orthosis; power mobility devices; heating pads and heat lamps; powered pressure-reducing air mattress; separate seat lift mechanism; and elbow orthosis, were medically necessary when in fact the defendants well knew the beneficiaries were never examined and did not suffer from such medical conditions and did not qualify to receive the DME.

“As part of the nation’s health care system, Medicare serves vulnerable populations,” said United States Attorney, Rosa Emilia Rodríguez-Vélez.  “Today’s arrests by HHS-OIG agents and our law enforcement partners show that we will not tolerate criminals who engage in fraudulent schemes which deplete the Medicare program of funds which are destined for our elderly population, in order to enrich themselves.”

 “We are proud to be a part of the federal team that brought these defendants to justice for defrauding the Medicare program and exploiting the elderly," said Thomas O'Donnell, Special Agent in Charge of the Office of Inspector General's New York Regional Office which also covers Puerto Rico. "Arresting owners and providers, freezing their assets and prosecuting them to the fullest extent possible, are some of the tools that the federal government has available, and will be utilized to remove these individuals from participating in the Medicare program.”

“Health Care fraud is a priority for the FBI and we will continue to attack it vigorously, in partnership with the Office of Inspector General (OIG) U.S. Department of Health and Human Services (HHS), and the United States Attorney's Office (USAO), District of Puerto Rico. Consequences of Health Care Fraud include higher health insurance costs paid for by the taxpayers,” stated Carlos Cases, Special Agent in Charge of the Federal Bureau of Investigation, San Juan Field Office.

The case is being prosecuted by Assistant U.S. Attorney Héctor Ramírez-Carbó, Health Care Fraud Coordinator and Special Assistant U.S. Attorney Wallace A. Bustelo.  If found guilty, the defendants could face a possible sentence of (10) years in prison for the Health Care Fraud offense and a fine of up to $250,000.   A criminal indictment contains only charges and is not evidence of guilt.  Defendants are presumed to be innocent unless and until proven guilty.