Lakewood Man Admits Role In $21.7M Medical Equipment Fraud Scheme

TRENTON, NJ — A Lakewood man has pleaded guilty to his role in a durable medical equipment kickback scheme that cost Medicare and other health care benefit programs $21.7 million, U.S. Attorney Philip R. Sellinger announced Friday.

Alexander Schleider, 57, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to one count of conspiracy to commit health care fraud and one count of wire fraud, Sellinger said.

Schleider owned and operated durable medical equipment companies in New Jersey that provided orthotic braces to beneficiaries of Medicare and other federal and private health care benefit programs without regard to medical necessity, the U.S. Attorney's Office said. Schleider and his conspirators obtained prescriptions for the DME braces through the payment of kickbacks and bribes to individuals operating marketing call centers, who in turn utilized the service of telemedicine companies to obtain prescriptions for the DME. Schleider caused losses to Medicare and other health care benefit programs of $21.7 million, Sellinger said.

Schleider also committed wire fraud in connection with funds made available in response to the COVID-19 pandemic, authorities said.

After one of his DME companies received $322,237 from the Department of Health and Human Services’ Health Resources and Services Administration Provider Relief Fund, Schleider submitted a fraudulent attestation in which he claimed that the DME company provided diagnoses, testing, and care for individuals with possible or actual cases of COVID-19 after Jan. 31, 2020. In reality, the DME company had ceased billing for any services in April 2019, authorities said.

The attestation also falsely claimed the payment would only be used to prevent, prepare for, and respond to coronavirus, and that the payment would reimburse the recipient only for health care-related expenses or lost revenues attributable to coronavirus. Schleider did not use the funds for those purposes, but transferred them into other accounts and subsequently used them to purchase real estate and vehicles, among other things, authorities said.

Schleider faces up to 10 years in prison on the conspiracy charge and up to 20 years on the wire fraud charge, along with fines. He is scheduled to be sentenced on Nov. 8.