August 7, 09

NEWS / Federal Judge Sentences Defendants Who Perpetrated $10.9 Million Medicare Fraud HIV Infusion Scheme

Miami physician Keith Russell, 65, and physician’s assistant Jorge Luis Pacheco, 50, were each sentenced to 97 months in prison, and physician’s assistant Eda Marietta Milanes, 43, was sentenced to 63 months in prison, for their roles in fraud schemes that involved billing Medicare for $10,903,509 worth of unnecessary HIV infusion treatments.

Russell, Pacheco and Milanes were also ordered to pay more than $3.1 million in restitution to the Medicare program during their sentencing hearings before U.S. District Judge Ursula Ungaro.

Russell, Pacheco and Milanes were convicted by a jury of conspiracy to commit health care fraud and multiple counts of health care fraud on March 17, 2009, after a two-week trial in Miami.


"Medical professionals serve as the gatekeepers of the Medicare system, and their single most important duty is to determine the best care for their patients," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Physicians and their assistants who choose instead to abuse the public trust and enrich themselves by gaming Medicare will be vigorously prosecuted, and we will continue to expand our strike force operations to stamp out this kind of blatant fraud."


"The infusion clinic in this case was established for the sole purpose of defrauding Medicare – these doctors saw no patients, administered no legitimate medical services, and paid a cash kickback to patients for each visit," said Acting U.S. Attorney Jeffrey H. Sloman of the Southern District of Florida. "In this way, the defendants bilked Medicare out of millions of dollars in false claims. The U.S. Attorney’s Office in South Florida is committed to prosecuting these frauds, in the hopes of helping to restore the integrity of our health care system."

"This case illustrates the profound consequences to the Medicare program and its beneficiaries when trusted health care professionals conspire to defraud the program by participating in sham medical operations," said HHS Inspector General Daniel R. Levinson. "Our agents are working tirelessly with our Strike Force partners to investigate these spurious operations, bring perpetrators to justice, and recover stolen funds for the Medicare program."

Trial evidence established that Russell, Pacheco and Milanes served as the medical staff for M&P Group of South Florida Inc. (M&P Group) and Tendercare Medical Center Inc. (Tendercare), which purported to specialize in the treatment of Human Immunodeficiency Virus (HIV).

Russell was the medical director for both M&P Group and Tendercare during their operations. Pacheco and Milanes worked as medical assistants for Russell at both clinics. One of the owners of the clinics, Tony Marrero, testified at trial that the clinics were established for the sole purpose of defrauding Medicare. Marrero testified that the scheme was to submit claims for medically unnecessary HIV infusion and injection treatments.

Evidence at trial showed that the conspirators billed Medicare for $10,903,509 and were paid in excess of $3.1 during approximately two years of operations. Trial witnesses testified that the unnecessary medicines were not administered, and that the clinics were only operated to create the appearance of legitimacy. Marrero stated that he had an arrangement with a pharmaceutical wholesale company, Lifecare Medical, to buy invoices showing the purchase of large amounts of medications, when only minor amounts were actually bought.

Marrero also testified that he paid Milanes and the M&P group extra money to manipulate patients’ blood samples so the lab results would appear to support the fraudulent claims. Another physician’s assistant, Luz Borrego, testified how those samples were manipulated, and Borrego also stated that she would not give the medications because she knew the medications could hurt HIV patients if actually provided.

Trial testimony established that every patient who went to the clinics was paid a cash kickback of up to $200 per visit. Four patients testified at trial that they took bribes and never received medication at the clinics. One patient testified that he used his payments from the clinics to support his cocaine addiction. Another patient testified that he did not even have HIV, notwithstanding clinic documents showing he was being infused with medication to treat HIV.

Trial evidence established that Russell, Pacheco and Milanes worked at Tendercare and M&P Group at the same time. Further, patients testified at trial that they would received cash and bogus treatments from both clinics.

At sentencing, Milanes acknowledged that she was paid extra by Marrero to manipulate blood samples to justify the false claims. Marrero testified that Pacheco worked directly for him to determine what drugs would be falsely billed to Medicare.

On March 14, 2009, prior to the jury verdict and while trial was ongoing, Pacheco attempted to flee the United States, according to evidence presented in court. He was apprehended heading south on Krome Ave. in Miami-Dade County with $12,600 in cash and a false Florida driver’s license in the name of Jose Luis Falcon. Evidence presented to the court proved that prior to his apprehension, Pacheco cut off his ankle monitor in violation of the terms of his pre-trial release. Documents seized from Pacheco at the time of his apprehension contained multiple contacts in the Dominican Republic. According to evidence presented at court, Pacheco stated to officers that he was "going fishing." Pacheco was a licensed physician in Cuba before coming to the United States.

This case was investigated by the Department of Health and Human Services, Office of Inspector General, Office of Investigations (HHS-OIG) and the FBI . The work of the Homestead, Fla., Police Department was instrumental in the apprehension of Pacheco when he attempted to flee during trial.

The case was tried by Kirk Ogrosky, John S. (Jay) Darden and Charles D. Reed of the Criminal Division’s Fraud Section, with the investigative assistance of HHS-OIG and the FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida,

Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), and Houston (Phase Four) – the Strike Force has obtained indictments of more than 293 individuals and organizations that collectively have billed the Medicare program for more than $680 million. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

http://www.usdoj.gov/opa/pr/2009/August/09-crm-782.html

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