MCALLEN, TX—The owner of a now-defunct McAllen-area durable medical equipment (DME) business, his wife, and two former employees have been charged in a 22-count indictment for their alleged roles in a scheme to defraud Medicare and Medicaid through fraudulent billings, United States Attorney Kenneth Magidson and Texas Attorney General Greg Abbott announced today.
Those charged and arrested include Marcello Herrera, 39, the owner of RGV DME, and his wife Carla Cantu Herrera, 31, both of Mission, Texas; Ramon De La Garza, 51, also of Mission; and Beatriz Ramos, 27, of Edinburg, Texas. The sealed indictment, returned Tuesday, June 26, 2012, was unsealed upon their respective arrests this morning. The charges include one count of conspiracy to commit health care fraud, six counts of health care fraud, five counts of wire fraud, and 10 counts of aggravated identity theft. They could make their initial appearances as early as 10:30 a.m. today before U.S. Magistrate Judge Peter Ormsby. Otherwise, they will appear in federal court tomorrow.
From early 2004 through early 2010, Marcello Herrera, who did business as RGV DME in the McAllen area, allegedly engaged in and directed a scheme to submit fraudulent claims to Medicare and Texas Medicaid for power wheelchairs, incontinence supplies, hospital beds, and mattresses, as well as other DME supplies. The indictment alleges that Carla Cantu Herrera, De La Garza, and Ramos participated in the conspiracy and aided Marcello Herrera and each other in the submission of fraudulent billings, wire fraud, and theft of the identities of beneficiaries and doctors.
According to allegations contained in the indictment, RGV DME submitted approximately 25,000 claims totaling approximately $11 million to Medicare and Texas Medicaid for DME allegedly provided to Medicare and Medicaid beneficiaries and was paid more than $7.1 million. The indictment alleges that 80 to 90 percent of the billings were fraudulent and that the fraudulent claims to Medicare were sent by wire transmissions in interstate commerce.
The indictment also alleges the defendants illegally paid “marketers” to obtain Medicare and Medicaid identification numbers and other information from beneficiaries and then used those numbers and information to fraudulently bill Medicare and Medicaid for expensive power wheelchairs, hospital beds and mattresses, incontinence supplies, and other DME. The defendants allegedly billed for DME that was never prescribed, was never delivered, was not needed, and in some cases was claimed to have been delivered to persons who were deceased at the time of the alleged delivery. To conceal the fraud, the indictment alleges the defendants forged documents and illegally used the identities of beneficiaries and doctors on their unlawful billings.
Conspiracy to commit health care fraud and each of the six counts of health care fraud carry a maximum punishment of 10 years in federal prison without parole and a $250,000 fine upon conviction. Each of the five counts of wire fraud carries a maximum punishment of 20 years in federal prison without parole and a $250,000 fine upon conviction. Each of the 10 counts of aggravated identity theft carries a mandatory two-year additional prison term, which must be served consecutive to any other prison sentence imposed for conviction on any of the other crimes charged.
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