Florida Man Sentenced to 30 Months in Prison; Four Defendants Previously Sentenced; Two Defendants Plead Guilty in $126 Million Health Fraud Scheme

Tuesday, November 17, 2015
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

A federal judge decided that a Florida man convicted of conspiracy to commit health fraud will spend the next 30 months behind bars.  Humberto Martinez Rodriguez was the nominee owner of two clinics involved in an elaborate fraud scheme to submit $126 million in false health care claims to private insurers.  A "nominee owner" is someone who is given limited authority to act on behalf of an entity and often for a limited period of time.  The "nominee" is usually only appointed during the formation of the entity and differs from the "responsible party" according to the Internal Revenue Service (IRS).  Click here to learn more about nominee owners.    

Rodriguez was sentenced on Thursday, November 12, 2015, by Judge Robert N. Scola Jr., U.S. District Judge for the Southern District of Florida.  

Rodriguez was just one among 18 defendants (all Miami-Dade County residents) charged for their alleged participation in the scheme.  Two other defendants pled guilty in September, agreeing to forfeit ten properties in the Miami area, two Cadillacs and about $200,000 from seized bank accounts as well as the entry of a forfeiture judgment for $13.8 million in damages for which they pled guilty.  Four additional defendants were sentenced to prison terms with subsequent supervised release and ordered to pay hefty restitution amounts in late October following guilty pleas.

Currently, 15 people have pled guilty to charges related to the overall scheme.

To read the press release issued by the Federal Bureau of Investigation (FBI), click here


The Alleged Health Fraud Scheme.


The complex scheme allegedly orchestrated to defraud several leading private insurers out of millions in false health care claims involved plans located with notable companies and organizations to include, the city of Miami, Miami-Dade County Public Schools, PepsiCo. Inc, BJ's Wholesale Club Inc., RadioShack Corp., Nextera Energy Inc. and Macy's Inc.  

Authorities reported that the scheme specifically targeted employers offering Administrative Services Only (ASO) insurance plans to employees.  The ASO plans reimbursed Cigna, Blue Cross Blue Shield and UnitedHealthcare for the money that the insurers paid out for the employees' health benefits.  This arrangement essentially establishes the employers as self-insured and thereby responsible for all claim payments to their employees.  

The indictment alleged the defendants involved in the scheme used medical director staffing companies to misappropriate doctors' licensing information in order to submit the $126 million in false claims to the insurers.  Claims submitted were for medical services such as injection treatments and physical therapy never actually ordered or provided by a physician.  Three insurers paid out more than $13.8 million in response to the alleged false claims submissions.  

To read the press release issued by the U.S. Department of Justice (DOJ), click here


The Creation of a Real Estate Company With Alleged Health Fraud Funds.


Defendant, Lisbet Castillo Batista, and co-defendants, Reynaldo Castillo and Hendris Castillo, were alleged to have formed a real estate company named, Investors Group of Florida Corp., in order to receive funds from the reported health fraud scheme.  These funds were then used to invest in real estate properties and the defendants allegedly acted as leasing agents for the fraudulently acquired realty.  

Castillo Batista and Dania Chavez, who was charged with allowing the fraud to take place and for the alleged conspirators to open companies and bank accounts in her name to deposit checks from the insurers in exchange for a fee, are among those who have already pled guilty.  
The guilty pleas resulted in the forfeiture of the counterfeit properties as well as a lifetime prohibition of conducting business with any federal health care program. 


Begging for the Mercy of the Court.


As a first-time offender with no prior criminal history, Rodriguez objected to an increase in his recommended sentence.  He argued that his brief ownership of the clinics and nominal payment received from the fraudulent claims did not qualify him for an increase based on the intricate nature of the scheme.  The 30 months Rodriguez received is actually less than the 41 to 51 months Rodriguez requested his sentence not exceed.  

Yet another clinic owner, Rudy Dominguez, who pled guilty to one count of conspiracy to commit health care fraud and wire fraud, is also begging for the mercy of the court.  Dominguez allegedly received $6,000 from his girlfriend's father, Reynaldo Castillo, in exchange for opening accounts in order to cash checks from insurers and acting as nominee owner of two clinics.  Castillo is currently a fugitive according to authorities.  Dominguez asserts that he was unaware of any illegal activity.


Comments?

Do you suspect you may be involved in a health care fraud scheme?  Have you been indicted for conspiracy to commit health fraud?


Contact an Experienced Health Care Attorney.


The Health Law Firm routinely represents pharmacists, pharmacies, physicians, nurses and other health providers in investigations, regulatory matters, licensing issues, litigation, denials and demands for repayment from insurance companies, inspections and audits involving the Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Department of Health (DOH) and other law enforcement agencies. Its attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm, please call (407) 331-6620 and visit our website at www.TheHealthLawFirm.com.


Sources:


Hale. Nathan.  "Two Plead Guilty in $126M Miami-Area Health Care Fraud."  Law360.  Portfolio Media, Inc.: 3 Sept. 2015.  Web.  5 Nov. 2015.

Hale, Nathan.  "4 Sentenced for Roles in $126M Fla. Health Care Fraud."  Law360.  Portfolio Media, Inc.: 30 Oct. 2015.  Web.  5 Nov. 2015.

Kass, Dani.  "Clinic Owner in Fla. Fraud Scheme Says He's 'Least Culpable.'"  Law360.  Portfolio Media, Inc.: 4 Nov. 2015.  Web.  16 Nov. 2015.  

Kennedy, John.  "Fla. Man Gets 30 Months for Role in $126M Health Fraud."  Law360.  Portfolio Media, Inc.: 12 Nov. 2015.  Web.  13 Nov. 2015.


About the Author:
George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area.  www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.



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11/17/2015

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