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Assistant U. S. Attorney Valerie Chu (619) 546-6750

NEWS RELEASE SUMMARY – September 30, 2020

SAN DIEGO – Federal officials today announced a historic nationwide enforcement action involving 345 charged defendants across 51 federal districts, including more than 100 doctors, nurses and other licensed medical professionals located in San Diego and across the country.

These defendants have been charged with submitting more than $6 billion in false and fraudulent claims to federal health care programs and private insurers, including more than $4.5 billion connected to telemedicine, more than $845 million connected to substance abuse treatment facilities, or “sober homes,” and more than $806 million connected to other health care fraud and illegal opioid distribution schemes across the country.

In San Diego, the U.S. Attorney’s Office announced charges against defendants in several unrelated cases who collectively attempted to defraud Medicare of nearly $1 billion and Tricare of over $70 million. In addition, some defendants were charged with distributing fentanyl causing deaths in San Diego County.

“These frauds represent a staggering amount of theft to federal health programs, and ultimately the victims are every patient,” said U.S. Attorney Robert Brewer. “We will continue to investigate and prosecute these selfish criminals whose deplorable schemes drive healthcare costs sky high for everyone.” Brewer praised the federal agents and prosecutors who endeavor to expose these fraudsters and protect patients. Prosecutors who worked on these cases include Blanca Quintero, Valerie H. Chu, Mark Pletcher, Kevin Larsen, Josh Green, Drew Galvin, Paul Starita, Dylan Aste and Larry Casper.

“These cases demonstrate our commitment to pursuing medical providers, suppliers and others who insist on placing profits before patients,” said Timothy B. DeFrancesca, Special Agent in Charge, Office of the Inspector General for the U.S. Department of Health and Human Services. “We will continue to root out fraud, waste, and abuse in federal healthcare programs and hold accountable people who brazenly steal from the vital programs.”

“The FBI, together with our federal, state, and local partners, remains steadfast in our commitment to uncover and investigate health care fraud, no matter what form it takes,” said Suzanne Turner, Special Agent in Charge of the FBI’s San Diego Field Office.  “Our agents will continue this important work to ensure public and private health care dollars are used as intended, to promote the health and safety of all Americans and safeguard continued access to critical health care services.”

U.S. Attorney Brewer announced the following charges in San Diego as part of the national takedown:

  • United States v. Burruss, et. al.  On September 29, 2020, Charles A. Burruss and Ardalaan “Armani” Adams were charged with conspiracy to commit wire fraud for participating in a massive scheme to pay kickbacks for referrals of Medicare patients, then bill Medicare for Durable Medical Equipment (“DME”) sent to those patients, who had not been examined by a physician, and who generally did not need, and many times did not want, the equipment.  According to the charging documents, the defendants created a network of over 30 DME companies in the names of straw and nominee owners, to increase their profits and avoid scrutiny and audits from Medicare that could occur if the same companies submitted hundreds or thousands of bills for similar DME products in a short period of time.  The United States alleges that the Medicare beneficiaries were often harassed by telemarketers through multiple phone calls per day, to accept back, knee, wrist, and other braces covered by Medicare.  Because they were paid by the brace, the telemarketers used fast-talking, high-pressure tactics to “upsell” patients (although the patients actually paid nothing for the braces, not even the required co-pays) to consent to receiving multiple products, up to a goal of what was called the “iron man kit” – back brace, neck brace, shoulder brace, two knee braces, two ankle braces, and two wrist braces.  Marketing companies purchased those patient names, then paid telemedicine doctors to sign prescriptions and issue cut-and-paste justifications for patients they hadn’t examined and had rarely spoken with.  The DME companies owned or managed by Burruss and Adams paid for the referral of these Medicare patients, generally between $250 and $380 for each referral of brace for a Medicare patient, in violation of the Anti-Kickback Statute.  All told, Burruss and Adams, through their more than 30 different DME companies, submitted bills topping $871 million, and received a whopping $424,648,137 in payment for supplying the mostly-unneeded braces.  While Medicare was the primary target of the fraud, bills were submitted to Tricare, Civilian Health and Medical Program of the Department of Veterans Affairs (“CHAMPVA”), and Medi-Cal as well. DME companies associated with Burruss and Adams submitted claims for over 181,218 Medicare beneficiaries nationwide, including 11,312 elderly or disabled residents of California.  The defendants have also been charged in the District of New Jersey and the Middle District of Florida for related conduct. 
     
  • United States v. Bell, et al.  On September 18, 2020, father-and-son duo Anthony Duane Bell Sr. and Anthony Duane Bell Jr. were indicted for conspiracy to commit wire fraud for participating in a huge scheme to pay kickbacks for referrals of Medicare patients, then bill Medicare for Durable Medical Equipment (“DME”) sent to those patients, who had not been examined by a physician, and who generally did not need, and many times did not want, the equipment.   Through their companies, Universal Medical Solutions, the Bells paid between $250 and $380 for each referral of brace for a Medicare patient, in violation of the Anti-Kickback Statute, in order to submit thousands of dollars in bills for the DME to Medicare, in violation of the health care fraud statutes, according to the indictment. Through just their single company, the Bells submitted over $49 million in bills to Medicare in less than two years. They also perpetuated their business model to increase their own profits by providing funds and the necessary contacts and introductions to set up other DME companies, and encouraging those DME companies to pay unlawful kickbacks by purchasing completed doctors’ orders – all so that they could obtain a “revenue share” (that is, a portion of the payments that those other DME companies received from Medicare).  As a further deceptive aspect of their scheme, the defendants lied to Medicare about the ownership and control over their company, and Bell Jr. told multiple lies to the FBI when interviewed about the company in April 2019. 
  •  
  • United States v. Collins, et. al.  On June 9, 2020, Jimmy Collins, Ashley Collins, Kyle Adams, Daniel Castro, and Jeremy Syto were indicted for health care fraud and paying and receiving kickbacks for Tricare referrals for their efforts to supply expensive compound medications to beneficiaries covered by Tricare, the health care benefit program for military service members and their dependents. Jimmy and Ashley Collins, a husband-and-wife team, allegedly created a multi-level-marketing network, paying marketing representatives to recruit Tricare beneficiaries at military bases such as Twenty-nine Palms and Miramar by paying them hundreds of dollars to sign up to receive the worthless compound creams. If those service members recruited additional Tricare beneficiaries, they received a portion of the TRICARE reimbursement that resulted. Doctors in Tennessee, who had never examined nor spoken with their purported patients, issued hundreds of prescriptions for these pharmaceuticals to the San Diego soldiers and sailors. The average price of these compounded drugs was $14,510.33 apiece. The conspiring pharmacies submitted over $65 million in bills to Tricare for these drugs, which most beneficiaries did not need and which many simply threw into the trash.  With their ill-gotten gains, Jimmy and Ashley Collins purchased an $8 million yacht and farm equipment, which has been forfeited.  Former U.S. Marines Adams and Castro, and U.S. Navy service member Syto, have pleaded guilty, admitting their participation in the Tricare fraud and kickback scheme. Each admitted to having received over $100,000 in kickbacks for receiving the worthless creams and for recruiting other service members into the scheme.
     
  • United States v. Green, et. al.  On June 29, 2020, Melinda Green and Ron Green were indicted for health care fraud and paying kickbacks for Tricare referrals for their efforts to supply expensive compound creams to beneficiaries covered by Tricare, the health care benefit program for military service members and their dependents. Though neither defendant is a pharmacist, they concocted compounds with the highest-priced ingredients in order to maximize the reimbursement from Tricare, then pushed their marketing representatives to pay doctors and clinics to prescribe these compounds that were supposedly customized for a patient’s individual needs.  Through their companies, NHS Pharma and NHS Pharma Sales, they submitted over $4.5 million in bills to Tricare for these compounds, which beneficiaries did not need.  The defendants are next due in court on January 8, 2020.
     

The following cases were included in today’s takedown figures, but have been previously announced by this office:

  • United States v. Matthews. On August 24, 2020, Donald Joseph Matthews, the former Vice President of Market Development for local genetics company Proove Biosciences, Inc., pleaded guilty to participating in a conspiracy to pay kickbacks to doctors for referring Medicare patients to Proove for genetic tests.  To paper-over the illegal kickback scheme, the payments were disguised as compensation to doctors for participating in a clinical research study, although no study existed and doctors were told to fabricate the number of “hours” they worked on the study, when in reality they were being paid for each patient referred to Proove.  Proove submitted more than $45 million in claims to Medicare for tests procured by the unlawful kickbacks and received approximately $21 million in unlawful payments.
     
    https://www.justice.gov/usao-sdca/pr/vp-genetics-company-pleads-guilty-paying-physicians-sham-clinical-research-fees-part-21
     
  • In re Progenity.  On July 21, 2020, the United States reached a settlement with San Diego-based research laboratory Progenity, Inc., in which the company agreed to pay $49 million to resolve claims that it had defrauded Tricare, Medicare, and state health care benefit programs by knowingly using the incorrect code to bill for genetic testing that would otherwise not have been covered by those programs. 
     
    https://www.justice.gov/usao-sdca/pr/san-diego-laboratory-admits-fraudulent-tricare-billing-agrees-pay-49-million
     
  • Dr. Prakash Bhatia.  On April 30, 2020, local psychiatrist Dr. Prakash Bhatia agreed to pay $145,000 to resolve allegations that he overprescribed opioids, including fentanyl, hydromorphone, morphine, methadone, oxycodone, and oxymorphone, in violation of the civil provisions of the Controlled Substance Act.  The United States’ allegations included that Dr. Bhatia inappropriately prescribed opioids along with benzodiazepines and/or muscle relaxants to the same patients, combinations known to increase the risk of abuse, addiction, and overdose.           

https://www.justice.gov/usao-sdca/pr/san-diego-psychiatrist-pays-145000-resolve-opioid-overprescribing-investigation

In addition, in light of the ongoing opioid epidemic and an alarming increase in fentanyl overdose deaths within the Southern District, the U.S. Attorney’s Office continues to aggressively prosecute those responsible for illegally distributing fentanyl and other opioids that cause death irrespective of the defendant’s place in the chain of distribution of such deadly drugs. 

  • United States v. Garcia.  On May 20, 2020, Lorenzo Anthony Garcia was indicted for distributing fentanyl that resulted in the death of a 15-year old high school junior who was a member of his school varsity football team. https://www.justice.gov/usao-sdca/pr/law-enforcement-issues-public-safety-warning-about-extreme-danger-fentanyl
     
  • United States v. Davis.  On August 18, 2020, Perry Edward Davis was indicted for distributing fentanyl and cocaine resulting the death of a 25-year old victim. The charges followed after three people overdosed and collapsed within minutes of each other outside of a local cocktail bar.  Two females were revived by paramedics but the male victim did not survive.
     

Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit, in conjunction with its Health Care Fraud and Appalachian Regional Prescription Opioid (ARPO) Strike Force program, and its core partners, the U.S. Attorneys’ Offices, HHS-OIG, FBI, and DEA, as part of the department’s ongoing efforts to combat the devastating effects of health care fraud and the opioid epidemic.  The cases announced today are being prosecuted by Health Care Fraud and ARPO Strike Force teams from the Criminal Division’s Fraud Section, along with 43 U.S. Attorneys’ Offices nationwide, and agents from HHS-OIG, FBI, DEA, and other various federal and state law enforcement agencies.

Some of the cases listed above are part of the joint FBI and HHS Operation Rubber Stamp and the 2020 Telemedicine takedown, which was coordinated by The National Rapid Response Strikeforce of the Health Care Fraud Unit of the Criminal Division Fraud Section. The Telemedicine takedown involves charges and guilty pleas in connection with widespread telemedicine schemes involving over $4 billion in false billing. The focus on telemedicine fraud builds on the 2019 telemedicine and durable medical equipment takedown (“Operation Brace Yourself”), which resulted in an estimated cost avoidance of over $1.5 billion in the amount paid by Medicare for orthotic braces in the seventeen months since the takedown, preserving the Medicare trust fund for legitimate medical care. In addition, CMS/CPI separately announced today that it took the largest number of adverse administrative actions resulting from a single administrative health care fraud investigative initiative in history in revoking the Medicare billing privileges of 256 additional medical professionals for their involvement in telemedicine schemes. 

For further information about the national takedown, see https://www.justice.gov/opa/pr/national-health-care-fraud-and-opioid-takedown-results-charges-against-345-defendants.

DEFENDANTS                                            Case Number 202980-WQH

Charles A. Burruss, 51, San Diego, CA

Ardalaan “Armani” Adams, 33, San Diego, CA                   

SUMMARY OF CHARGES

Conspiracy to Commit Wire Fraud – Title 18, U.S.C., 1349

Maximum penalty: Twenty years in prison and $500,000 fine, or twice the pecuniary gain / loss

AGENCIES

Federal Bureau of Investigation

US. Department of Health and Human Services, Office of Inspector General

DEFENDANTS                                            Case Number 202887-WQH

Anthony Duane Bell Sr., 52, El Cajon, CA

Anthony Duane Bell Jr., 30, Los Angeles, CA

SUMMARY OF CHARGES

Conspiracy to Commit Health Care Fraud and Pay Kickbacks – Title 18, U.S.C., 371

Maximum penalty: Five years in prison and $500,000 fine

Health Care Fraud – Title 18, U.S.C., 1347

Maximum penalty: Ten years in prison and $500,000 fine, or twice the pecuniary gain / loss

Unlawful Remuneration – Title 42, U.S.C., 1320d-7b(b)

Maximum penalty: Four years in prison and $500,000 fine, or twice the pecuniary gain / loss

False statement to Government – Title 18, U.S.C., 1001

Maximum Penalty: Five years in prison and $250,000 fine

AGENCIES

Federal Bureau of Investigation

US. Department of Health and Human Services, Office of Inspector General

DEFENDANTS                                            Case Number 18CR432-JLS

Jimmy Collins, 56, Tennessee

Ashley Collins, 34, Tennessee

Kyle Adams, 33, Texas

Daniel Casto, 32, Illinois

Jeremy Syto, 27, California

SUMMARY OF CHARGES

Conspiracy to Commit Health Care Fraud – Title 18, U.S.C., 1349

Maximum penalty: Ten years in prison and $500,000 fine

Conspiracy to Pay and Receive Illegal Remunerations – Title 18, U.S.C., 371

Maximum penalty: Five years in prison and $500,000 fine

Receive Illegal Remunerations – Title 42, U.S.C., 1320a-7b(b)(1)

Maximum penalty: Four years in prison and $500,000 fine

Pay Illegal Remunerations – Title 42, U.S.C., 1320a-7b(b)(2)

Maximum penalty: Four years in prison and $500,000 fine

AGENCIES

Defense Criminal Investigative Service

Federal Bureau of Investigation

DEFENDANTS                                            Case Number 18CR432-JLS

Melinda Green, 59, Escondido, CA and Windermere, FL

Ronald Green, 66, Escondido, CA and Windermere, FL

SUMMARY OF CHARGES

Conspiracy to Commit Health Care Fraud and Pay Kickbacks – Title 18, U.S.C., 371

Maximum penalty: Five years in prison and $500,000 fine

Unlawful Remuneration – Title 42, U.S.C., 1320d-7b(b)

Maximum Penalty: Four years in prison and $500,000 fine, or twice the pecuniary gain / loss

AGENCY

Defense Criminal Investigative Service

DEFENDANT                                               Case Number 20CR1222-GPC

Lorenzo Anthony Garcia, 21, Brawley, CA

SUMMARY OF CHARGES

Manufacture, distribute, or possess with intent to manufacture, distribute, or dispense a controlled substance resulting in death or serious bodily injury  – Title 21, U.S.C., Section 841(a)(1), (b)(1)(C)

Maximum Penalty: Mandatory minimum 20 years in prison, Maximum life in prison

AGENCY

Drug Enforcement Administration

DEFENDANT                                               Case Number 20CR2500-LAB

Perry Edward Davis, 44, San Diego, CA

SUMMARY OF CHARGES

Manufacture, distribute, or possess with intent to manufacture, distribute, or dispense a controlled substance resulting in death or serious bodily injury  – Title 21, U.S.C., Section 841(a)(1), (b)(1)(C)

Maximum Penalty: Mandatory minimum 20 years in prison, Maximum life in prison

AGENCIES

Drug Enforcement Administration

El Cajon Police Department

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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