Federal authorities in Los Angeles arrested 20 people, including several members of an Orange County, Calif., street gang, on charges of bilking Medicare through phony billings for power wheelchairs, hospital beds and orthotic devices.
In all, the defendants are accused of fraudulently receiving $26 million from the federal health program.
According to authorities, the alleged ring-leader of one of the schemes, Michael Martinez, recruited friends and relatives to act as straw owners of medical supply companies, concealing the identity of the real owners who processed faked prescriptions and sought reimbursement from Medicare for non-existent medical equipment. In several instances, the government said, the purported beneficiaries were dead while others did not need mobility equipment.
The arrests were part of ongoing efforts by the Medicare Fraud Strike Force, a federal program operated by the U.S. Justice Dept. through its Criminal Division’s Fraud Section.
Martinez, 30, and six others were arrested Oct. 21; seven other defendants were taken into custody last week. Authorities last week also arrested the owners of four companies connected with the schemes along with two of their employees after indictments handed up by a federal grand jury earlier this month were unsealed.
Martinez, of Long Beach, Calif., is charged with conspiracy to commit health care fraud and for making false statements to the government. He could be sentenced to 75 years in federal prison if convicted on all charges. Six individuals who allegedly received $5,000 each to stand in as company owners could be sentenced up to 15 years.
The actual owners and employees of those companies were charged with multiple counts of Medicare fraud after allegedly submiting false claims totaling $11.2 million.
Owners of four additional Los Angeles-area medical equipment suppliers along with two of their employees also were arrested this month as part of the Strike Force sweep, accused of frauds totaling $12.1 million for faked wheelchair claims. A trial in their case is slated to begin Nov. 28.
If convicted, the six defendants could serve maximum possible sentences of between 50 years to 180 years.
Charges also were entered on Wednesday against the owners of four equipment for their roles in separate Medicare frauds. One of the owners also is accused of paying kickbacks to healthcare providers for Medicare referrals.
Agencies assisting in the fraud investigations and arrests were the FBI, the Inspector General of the U.S. Department of Health and Human Services and the California Department of Justice, Bureau of Medical Fraud and Elder Abuse.
Since its launch in February 2007, investigations by the Medicare Fraud Strike Force have results in indictment for 331 individuals accused of falsely billing Medicare more than $720 million.