After a 24-day trial, a federal jury in the Central District of Florida has convicted two people for their role in a conspiracy that fraudulently billed an estimated $1.4 billion for lab testing services under a scheme sophisticated pass-through billing involving rural hospitals.
After a 24-day trial, a federal jury of the The Middle District of Florida has convicted two people of participating in an organization that defrauded rural hospitals of approximately $1.4 billion by paying for lab testing services in a sophisticated billing system.
Jorge Perez, 62, and Ricardo Perez, 59, both of Miami, Florida, allegedly conspired with others to illegally charge approximately $1.4 billion for medically unnecessary lab testing services.
They also deceptively used rural hospitals as billing fronts to submit claims for the majority of services, which were performed at outside labs, according to court documents and evidence presented at trial.
Additionally, Jorge Perez and Ricardo Perez conspired to launder the funds of this fraudulent plan after committing healthcare fraud five times.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division said, “These defendants have attacked and exploited vulnerable people – vulnerable hospitals, vulnerable underserved communities, and vulnerable patients seeking treatment. against drug addiction – to line their pockets. .”
“We will continue to work tirelessly to hold accountable those who compromise healthcare ethics for financial gain.”
According to U.S. Attorney for the Central District of Florida, Roger Handberg, the defendants in this case “engaged in an extensive scheme to prey on struggling medical facilities in numerous states and to defraud private insurance.”
“Today’s verdict amply reflects our vigilance in prosecuting individuals who break the law for financial gain,” the judge said.
According to Deputy Director Luis Quesada of the FBI’s Criminal Investigations Division, “defendants in today’s case allegedly conspired to set up an expansive billing system that took advantage of weak hospitals and rural populations who depended”.
“The FBI and our law enforcement partners are committed to protecting the healthcare system and bringing to justice shell companies that engage in false billing.”
The evidence established that the defendants sought out and purchased the property of rural hospitals in financial difficulty.
to private insurance contracts that stipulated higher reimbursement rates for laboratory tests – a standard feature of rural hospital contracts aimed at ensuring hospitals’ ability to survive and provide much-needed health care to rural communities – the defendants sought to take control of these rural hospitals.
In an elaborate and protracted “pass-through” billing scheme, defendants billed for bogus lab tests totaling hundreds of millions of dollars while promising to prevent these small-town hospitals from disappearing by converting them into medical facilities. test.
In most cases, lab tests were carried out by testing facilities under the authority of specific defendants, but the plan gave the impression that rural hospitals were carrying out lab tests themselves.
The evidence also revealed that a large portion of the lab tests billed through these small town hospitals involved urine drug testing for unreliable patients undergoing drug treatment.
These tests were frequently obtained through bribes paid to providers and recruiters, often at sober houses or drug rehabilitation centers.
Defendants frequently billed for tests that were not medically necessary. The defendants would move on to another rural hospital if private insurance companies began to question their bills, leaving the small hospitals they took over in the same financial situation or worse than before.
Shortly after the defendants were transferred to another small hospital, three of the four rural hospitals closed. The defendants allegedly planned a series of large financial transfers to be used as a means of laundering the proceeds of their scam.
Jorge and Ricardo Perez were found guilty of conspiracy to commit wire fraud and healthcare fraud, five counts of healthcare fraud and conspiracy to launder more than $10,000 illicit gains.
The maximum sentence for each case of health care fraud, wire fraud conspiracy and money laundering conspiracy against the defendants is 20 years, and each substantive count of health care fraud health is punishable by a maximum sentence of 10 years.
After considering the US Sentencing Guidelines and other legal considerations, a federal district court judge will decide the sentences.
Rural hospitals involved in the case included the 25-bed Campbellton-Graceville Hospital (CGH) in Graceville, Florida; the 40-bed Williston Regional General Hospital in Williston, Florida; the 49-bed Chestatee Regional Hospital in Dahlonega, Georgia; and the 25-bed Putnam County Memorial Hospital in Unionville, Missouri.
The investigation was conducted by the FBI Field Office in Jacksonville, Office of the Inspector General of the Department of Labor (DOL-OIG), Office of the Inspector General of the Office of Personnel Management (OPM-OIG ) and the Office of the Inspector General of Amtrak.
The case is being prosecuted by Senior Litigation Counsel Jim Hayes, Attorney General Gary Winters and Assistant U.S. Attorney Tysen Duva for the Central District of Florida.