DOJ Charges 78 People for $7.8 Billion in Health Care Fraud


The Department of Justice on Wednesday announced criminal charges against 78 people across 16 U.S. states for alleged health care fraud and opioid abuse schemes that resulted in $2.5 billion in alleged fraudulent claims.

According to the department, the elderly and disabled, as well as HIV patients, were among those targeted by the schemes.

Of the $2.5 billion in alleged fraudulent claims, about $1.1 billion was paid out, officials said. The claims were made to Medicare, state Medicaid programs, and supplemental Medicare insurance programs provided by private insurers.

As part of the enforcement actions, the Department of Justice “seized or restrained millions of dollars in cash, automobiles, and real estate.”

Attorney General Merrick Garland said in a statement the law enforcement actions involved “one of the largest health care fraud schemes ever prosecuted by the Justice Department.” He also said the department “will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”

The charges, filed or unsealed from June 12 through to June 28, involve a series of cases with similar schemes.

Among those charged are 11 defendants accused of submitting over $2 billion in fraudulent claims via telemedicine.

Of these charges, one of the cases involved an online platform called DMERx involved in a scheme that resulted in $1.9 billion worth of fraudulent claims to Medicare and other government insurers. The case was filed in the Southern District of Florida.

In another case, a licensed physician in Washington state—David Antonio Becerril—allegedly signed over 2,800 fraudulent orders for orthotic braces, including ankle braces for a patient whose leg had been amputated years before. Becerril is alleged to have taken less than 40 seconds to review and sign each fraudulent order.

Prescription Drugs

The law enforcement actions also involved 10 people charged for allegedly having collectively submitted over $370 million in fraudulent claims related to prescription drugs.

Of these charges, one case involved a pharmaceutical wholesale distribution company accused of facilitating a $150 million fraud scheme. Steven Diamantstein, the owner of Scripts Wholesale Inc., is accused of having illegally diverted prescription HIV medication and then reselling the medication after making it appear legitimate.

“The defendant allegedly purchased the diverted medication at a substantial discount from individuals who obtained the drugs primarily through illegal ‘buyback’ schemes in which they paid HIV patients cash for their expensive HIV medication and repackaged those pills for resale,” according to the Department of Justice.

Diamantstein’s defense attorney, Zach Intrater, told The Associated Press that Diamantstein has pleaded not guilty to the charges and “looks forward to contesting them in court.”

Opioid Distribution

The charges against the 78 people also included over $150 million in fraudulent claims related to other types of health care fraud.

The department said it includes charges against 24 doctors and medical professionals “who lined their own pockets.” Among them were doctors who allegedly illegally prescribed opioids to patients who did not need them.

The charges also include cases in which healthcare companies and other providers paid cash to obtain patient information from patient recruiters and beneficiaries. This enabled the providers to file fraudulent claims to Medicare.