$200 Million Medicaid Fraud Scheme Sends Patient Broker to Prison

Jean-Luc Veraguas, a patient broker from the Miami area, has been sentenced to 18 months in prison for his role in a $200 million Medicare fraud scheme. Mr. Veraguas has also been ordered to pay restitution amounting to $1.8 million, jointly and severally with his co-conspirators.

Patient Broker Defrauded Medicare By Recruiting Medicare Beneficiaries.

In May 2012, Mr. Veraguas pleaded guilty to conspiracy to commit health care fraud and admitted to acting as a patient broker for a number of healthcare agencies, including American Therapeutic Corporation (ATC).

According to the Justice Department, Mr. Veraguas recruited Medicare beneficiaries for Partial Hospitalization Programs (PHP) purported operated by ATC and other healthcare providers. A PHP is a type of intensive treatment for patients with severe mental illness. In exchange for referring these patients, Mr. Veraguas received illegal kickbacks. By his own admission, Mr. Veraguas’s actions resulted in the submission of $3.8 million in false claims against Medicare. Mr. Veraguas confessed that he was aware that many of the Medicare beneficiaries he recruited did not need PHP and that the referrals were made solely to facilitate the Medicare fraud scheme.

It appears that the owners and operators of ATC paid millions to patient brokers, halfway houses and assisted living facilities as kickbacks for the referral of Medicare recipients to ATC. Co-conspirators falsified patient files to conceal the fact that these patients did not qualify for treatment and/or did not actually receive the treatment for which Medicare was billed.

The investigation into this massive Medicare fraud scheme has already resulted in convictions or guilty pleas by ATC, Medlink and over 20 individual defendants.

Whistleblowers Can Catch Medicare Fraud Earlier.

There are many reasons that the assistance of a whistleblower is extremely valuable to federal authorities. This case suggests that a whistleblower could help minimize the costs of Medicare fraud by coming forward with information about the fraud in the earlier stages. The government on its own was unable to stop this Medicare fraud scheme until it had already reached $200 million in false claims. A whistleblower with information about the fraud could act much sooner and perhaps mitigate some of the harm.

Because a whistleblower can act quickly and efficiently to stop fraud, even when the government may not be prepared to act, the False Claims Act provides that a whistleblower can file a qui tam lawsuit against those engaged in fraud and share with the government in any recovery.

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