“Telemedicine” refers to the dissemination of health-related services and information over the phone or internet. It allows for long-distance patient and doctor contact. As you can imagine, the concept of telemedicine, which is also known as “telehealth”, has risen as a go-to source of medical information in the wake of the pandemic. Telemedicine is also at the center of one of the largest Medicare fraud schemes ever charged by the United States Department of Justice.
As the DoJ reported yesterday, a federal grand jury in Newark, New Jersey has charged 53 year-old, Creaghan Harry with superseding an indictment for a $784 million health care scheme. The Highland Beach, Florida-based defendant owns several telemedicine companies. He is accused of orchestrating a health care fraud and illegal kickback scheme. It involved the submission of over $784 million in false and fraudulent claims to Medicare.
This charge is one of the largest Medicare fraud schemes ever.
According to the DoJ report, the superseding indictment also charges Harry with concealing and disguising the proceeds of the scheme in order to avoid paying income taxes. Officially, he is charged with one count of conspiracy to commit health care fraud and wire fraud, and four counts of income tax evasion. The defendant was previously charged in an indictment along with co-conspirators, Lester Stockett and Elliot Loewenstern.
The trio was charged with one count of conspiracy to defraud the United States and to pay and receive kickbacks. They were also charged with four counts of receipt of kickbacks and one count of conspiracy to commit money laundering. Stockett and Loewenstern previously pleaded guilty to those charges.
According to allegations, “Harry and his co-conspirators solicited illegal kickbacks and bribes from durable medical equipment (DME) suppliers and marketers in exchange for orders for DME braces and medications,” reports the DoJ, “Harry’s telemedicine companies then allegedly paid physicians to write medically unnecessary orders for these braces and medications. Harry’s telemedicine companies provided orders to DME suppliers that fraudulently billed Medicare over $784 million. Medicare ended up paying over $247 million.”
Harry worked to conceal and disguise the health care fraud and illegal kickback scheme.
To do so, he directed DME suppliers and marketers to not directly pay his telemedicine companies. Instead, they were to pay shell companies that had been opened in the names of straw owners in both the United States and other countries like the Dominican Republic. Harry then transferred the funds from the shell companies to his telemedicine companies. That way, he could pay physicians to write the unnecessary orders.
It is also alleged that Harry falsely claimed to prospective investors, lawyers and others that his telemedicine companies had not received any kickbacks. He falsely represented that the telemedicine companies had been receiving revenue of “about $10 million per year”. The revenue, he maintained, came from fees paid by patients to receive telemedicine services. In fact, the earnings were derived from illegal kickbacks and bribes.
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