Marlboro, Englishtown Residents Arrested In Medicare Fraud Sweep

MARLBORO, NJ — Marlboro and Englishtown residents who co-owned medical equipment companies were arrested this week in one of the largest health care fraud schemes ever investigated by the FBI and the U.S. Department of Health and Human Services Office.

Seven people in New Jersey – and 24 overall – were charged in the massive Medicare fraud sweep, federal authorities announced Tuesday. The scheme involved peddling orthopedic braces to hundreds of thousands of senior citizens via foreign call centers. The probe targeted executives of telemedicine and durable medical equipment companies and doctors who wrote bogus prescriptions for unnecessary orthopedic braces, the Justice Department said.

The U.S. Attorney's Office brought charges against Neal Williamsky 59, of Marlboro and Nadia Levit, 39, of Englishtown. Williamsky and Levit co-own approximately 25 medical equipment companies and they were charged with participating in the $150 million scheme that involved kickbacks and bribes. A Toms River doctor, Joseph DeCoroso, M.D., 62, was also charged.

Under the scheme, telemarketers reached out to senior citizens with offers for "free" orthopedic braces, and those who seemed interested were patched through to an "international telemarketing network" with call centers in the Philippines and throughout Latin America. After their Medicare coverage was verified, the seniors were transferred to telemedicine companies for consultations with doctors, who then wrote prescriptions, according to federal officials.

Those prescriptions were then sold to medical equipment companies that would ship the braces to patients and bill Medicare. The medical companies got Medicare payments of $500 to $900 per brace from Medicare, and would pay kickbacks of nearly $300 per brace, officials said.

The proceeds of the fraudulent scheme were laundered through international shell corporations and were used to purchase luxury automobiles, yachts and real estate in the United States and abroad, the government said.

The Medicare Fraud Strike Force began investigating the scheme last summer after multiple complaints from senior citizens began pouring into the fraud hotline. The true extent of the alleged scheme is unknown, and some cases involve gray areas of complex payment policies.

Experts say part of the problem is that Medicare is required to pay medical bills promptly, which means money often goes out before potential frauds get flagged. Investigators call that "pay and chase."

In recent years, Medicare has tried to adapt techniques used by credit card companies to head off fraud. Law enforcement coordination has grown, with strike forces of federal prosecutors and agents, along with state counterparts, specializing in health care investigations.

The Medicare beneficiaries drawn into the orthopedic braces scam didn't have to pay anything up front, but Cantrell said they have been harmed as well: A beneficiary's private information, once in the hands of fraudsters, can be resold for many illegal purposes.

Additionally, if a beneficiary whose information was misused ever does need an orthopedic brace, he or she may encounter waiting periods from Medicare. The program limits how often it pays for certain supplies and equipment.

"It can be very attractive to receive equipment," Cantrell said. "But after giving out your identifying information, it could be compromised to perpetuate additional fraud. There is no fraud without the ID number of a Medicare beneficiary."

In New Jersey, attorneys also brought charges against Creaghan Harry, 51, of Highland Beach, Fla; Lester Stockett, 51, of Deerfield Beach, Fla.; and Elliot Loewenstern, 56, of Boca Raton, Fla. The latter two were owner, CEO and VP of marketing, respectively, of purported call centers and telemedicine companies. They were charged with participating in $454 million worth of the illegal health care kickbacks and international money laundering, according to the release.

Albert Davydov, 26, of Rego Park, NY, was also charged for his alleged participation in a $35 million scheme related to kickbacks and bribes.

In addition, administrative action was taken against 130 companies that had submitted over $1.7 billion in claims and were paid over $900 million, according to the release.

The Associated Press, Karen Wall and Beth Dalbey contributed reporting.