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78 people face charges for $2.5 billion in attempted health care fraud, DOJ says

The Justice Department announced charges against 78 people related to health care fraud schemes.
Samuel Corum
Getty Images
The Justice Department announced charges against 78 people related to health care fraud schemes.

Federal and state law enforcement offices brought criminal charges across 16 states against 78 people for their roles in $2.5 billion in attempted health care fraud and opioid abuse schemes targeting the elderly, pregnant women and HIV patients.

At least $1.1 billion was actually paid out in these cases, agency officials said.

In total, 24 doctors, nurses and other medical professional as well as executives for a pharmaceutical wholesale distribution company and telemedicine businesses were among those charged, the Justice Department announced Wednesday.

A case out of the Southern District of Florida was among one of the largest health care fraud schemes ever prosecuted, agency officials said. The indictment alleges Brett Blackman and Gregory Schreck of Kansas, and Gary Cox of Arizona submitted more than $1.9 billion in false and fraudulent claims to Medicare and other government insurers for medically unnecessary items.

The three were executives of DMERx, an online platform that created and sold templates of doctors' orders. They allegedly used that platform to create fraudulent orders for products like orthotic braces and skin creams in exchange for kickbacks and bribes. The items were also ultimately not reimbursable with Medicare.

In a separate case, Lazaro Hernandez of Miami pleaded guilty and was sentenced to 15 years in prison for illegally reselling more than $230 million in medications, including HIV drugs. Hernandez and his co-conspirators illegally received huge quantities of leftover prescription drugs from patients who didn't use the medication. They included HIV patients who resold their drugs on the street to him, according to court documents.

Hernandez and others then resold those medications to pharmacies across the nation, usually hiding the origins of the drugs. In multiple occasions, Hernandez sold bottles filled with the wrong medicine, broken pills or even pebbles.

Agency officials say $10.3 million in assets were ultimately seized in these cases, which included cars, boats and real estate.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

Jaclyn Diaz is a reporter on Newshub.
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