Toms River Doctor Among 24 Charged In $1.2B Medicare Fraud Scam

NEWARK, NJ — A Toms River doctor is one of 24 people charged in a massive Medicare fraud sweep that cost the federal government more than $1.2 billion in losses, federal authorities announced Tuesday.

Joseph DeCoroso, M.D., 62, of Toms River, was charged in a $13 million conspiracy to commit health care fraud and separate charges of health care fraud for writing medically unnecessary orders for durable medical equipment, a news release from the Department of Justice said.

Federal authorities called it one of the largest health care fraud schemes investigated by the FBI and the US Department of Health and Human Services. More than 80 search warrants were executed in 17 federal districts in connection with the alleged health care fraud schemes.

DeCoroso is one of seven people charged in the District of New Jersey, U.S. Attorney Craig Carpenito said. Among the people charged were the CEOs, COOs and others associated with five telemedicine companies, the owners of dozens of durable medical equipment companies and three licensed medical professionals, the Justice Department said.

In addition to the criminal charges, the Center for Medicare Services, Center for Program Integrity took action against 130 durable medical equipment companies that had submitted more than $1.7 billion in claims and were paid more than $900 million.

DeCoroso is accused of prescribing durable medical equipment, in many instances without ever speaking to the patients, while working for two telemedicine companies, the news release said.

Authorities allege the scheme involved the payment of illegal kickbacks and bribes by durable medical equipment companies in exchange for referrals of Medicare beneficiaries for back, shoulder, wrist and knee braces that are medically unnecessary. The referrals allegedly were made by medical professionals working with fraudulent telemedicine companies, the news release said.

The defendants allegedly paid doctors to prescribe unneeded equipment either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. The proceeds of the fraudulent scheme were allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts and luxury real estate in the United States and abroad.

Some of the defendants allegedly controlled an international telemarketing network that lured 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.

According to allegations in court documents, some of the defendants obtained patients for the scheme by using an international call center that advertised to Medicare beneficiaries and "up-sold" the beneficiaries to get them to accept numerous "free or low-cost" DME braces, regardless of medical necessity.

The international call center allegedly paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these Medicare beneficiaries. The telemedicine companies then allegedly paid physicians to write medically unnecessary DME orders. Finally, the international call center sold the DME orders that it obtained from the telemedicine companies to DME companies, which fraudulently billed Medicare.

Collectively, the CEOs, COOs, executives, business owners and medical professionals involved in the conspiracy are accused of causing over $1 billion in loss, federal authorities said.

"The indictments we are unsealing today charge the defendants with running a complex, multilayered scheme to defraud our Medicare system and avoid detection by government regulators," Carpenito said. "The defendants took advantage of unwitting patients who were simply trying to get relief from their health concerns. Instead, the defendants preyed upon their weakened state and pushed millions of dollars' worth of unnecessary medical devices, which Medicare paid for, and then set up an elaborate system for laundering their ill-gotten proceeds. We are proud to join our law enforcement partners in New Jersey and around the country to put a stop to this unscrupulous criminal activity."

"Health care fraud causes billions of dollars in losses, it deprives real patients of the critical health care services they need, and it can endanger the lives of real patients so individuals like those arrested today can profit from their criminal activity," said FBI Assistant Director Robert Johnson. "Through today’s coordinated national effort, we put an end to this egregious and costly health care fraud scheme, and the public can rest assured the FBI will continue to make health care fraud investigations a top priority."

In the District of New Jersey, Strike Force Attorneys brought charges against Creaghan Harry, 51, of Highland Beach, Florida; Lester Stockett, 51, of Deefield Beach, Florida; and Elliot Loewenstern, 56, of Boca Raton, Florida, who were the owner, CEO and VP of marketing, respectively, of purported call centers and telemedicine companies, for alleged participation in $454 million worth of the illegal health care kickbacks and international money laundering.

In addition to the Strike Force Prosecutions, Carpenito's office charged Neal Williamsky 59, of Marlboro, and Nadia Levit, 39, of Englishtown, who own about 25 DME companies, for their alleged participation in $150 million worth in the payment of kickbacks and bribes in exchange for medically unnecessary DME orders.

Albert Davydov, 26, of Rego Park, NY, was charged for his alleged participation in $35 million related to the payment of kickbacks and bribes in exchange for medically unnecessary DME orders.

The enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF), as well as the U.S. Attorney’s Offices for the Districts of New Jersey, South Carolina and the Middle District of Florida. The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, IRS - Criminal Investigation and other federal law enforcement agencies participated in the operation.

Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine and DME marketing schemes – including Video Doctor USA, AffordADoc, Web Doctors Plus, Integrated Support Plus and First Care MD – should call to report this conduct to the FBI hotline at 1-800-CALL-FBI.

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