Feds charge 24 in $1.2B telemedicine fraud scheme

Feds US Attorney uncovers nearly $1 billion Medicare fraud scheme dubbed ‘Operation Brace Yourself

Feds US Attorney uncovers nearly $1 billion Medicare fraud scheme dubbed ‘Operation Brace Yourself

Federal prosecutors said they dismantled one of the largest health care fraud schemes ever investigated by the FBI Tuesday, charging 24 people in a $1.2 billion alleged scam involving telemedicine and durable medical equipment (DME) companies.

The scheme, entitled "Operation Brace Yourself", has more than 80 search warrants in 17 federal districts and originated in Charleston.

In addition, the Centers for Medicare & Medicaid Services suspended payments to another 130 equipment providers the agency says could prevent billions in additional losses. The companies billed the program a total of $1.7 billion, but not all of it was paid out.

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Prosecutors charged residents of several states, including Florida, New Jersey, Texas, North Carolina, South Carolina, California and NY.

The Justice Department announced charges Tuesday against 24 people in the US, including doctors accused of writing bogus prescriptions for unneeded back, shoulder, wrist and knee braces.

"Today, one of the largest health care fraud schemes in USA history came to an end thanks to close collaboration and coordination between the FBI and partners including HHS-OIG and IRS-CI", FBI Assistant Director Robert Johnson said in a statement.

"The conspiracy described in this indictment was not perpetrated by one individual".

The case produced by the government "details broad corruption, massive amounts of greed, and systemic flaws in our healthcare system that were exploited by the defendants", IRS-CI Chief Don Fort added.

Telemarketers would reach out to seniors offering "free" orthopedic braces, also touted through television and radio ads.

Equipment companies would receive about $500 to $900 for each brace from Medicare and paid kickbacks of nearly $300 per brace, according to the Associated Press.

Some of the defendants allegedly controlled an global telemarketing network that lured over hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America, prosecutors said.

Profits from the scheme were laundered through offshore shell companies and then used to buy high-end cars, yachts and luxury homes here and overseas, officials said. The telemedicine companies then allegedly paid physicians to write medically unnecessary DME orders.

"The telemedicine we are talking about is basically a tele-scam", said Gary Cantrell, who oversees fraud investigations for the HHS inspector general's office.

"White collar crime is not victimless", U.S. Attorney Sherri Lydon of the District of SC said in a statement. "Ultimately, it is the taxpayer who will be left with paying higher healthcare premiums and out-of-pocket cost that will result because of fraud in the Medicare system".

"Today, one of the largest healthcare fraud schemes in United States history came to an end", said Robert Johnson, assistant director of the Federal Bureau of Investigation, one of several agencies involved.