Justice Department charges 78 people with $2.5 billion in health-care fraud

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The Department of Justice announced Wednesday that it has recently charged 78 people with $2.5 billion in separate health-care fraud and opioid abuse schemes.

The defendants allegedly defrauded programs used to take care of elderly and disabled people, and in some cases used the ill-gotten money to buy exotic cars, jewelry, and yachts, the DOJ said.

Among those charged are 11 defendants accused of submitting $2 billion in fraudulent claims through telemedicine, as well as 10 defendants charged in connection with fraudulent prescription drug claims.

In all, prosecutors filed charges against people in 16 states in cases that were lodged or unsealed in the past two weeks as part of the coordinated crackdown.

The defendants include “physicians and other licensed medical professionals who lined their own pockets, including doctors who allegedly put their patients at risk by illegally providing them with opioids they did not need,” the DOJ said in a press release.

Attorney General Merrick Garland in a statement said, “These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it.”

In the scheme cited by Garland, executives of supposed software and services companies submitted $1.9 billion in fraudulent claims to Medicare for items that were not eligible for reimbursement, according to the DOJ.

The defendants in that case include Brett Blackman and Gregory Schreck of Johnson County, Kansas and Gary Cox of Maricopa County, Arizona, who allegedly used mass telemarketing operations to sell the elderly and disabled unnecessary medical equipment and prescriptions, according to an indictment in U.S. District Court for the Southern District of Florida.

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The trio allegedly operated a software platform called DMERx that generated fake and fraudulent doctors’ orders in exchange for illegal kickbacks and bribes.

Blackman was CEO of the company that operated the software and Schreck was vice president of business development. Cox was CEO of the company that previously ran the platform before a corporate acquisition.

This is a developing story. Please check back for updates.

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