On March 27, 2009, Alexander Puig of Miami was sentenced to 90 months in prison, followed by three years of supervised release. U.S. District Judge William J. Zloch of the Southern District of Florida also ordered Mr. Puig to pay in restitution in the amount of $1,435,840.
According to the Indictment and the factual proffer, Mr. Puig was one of the "actual" owners of Baez Medical Equipment Corp. a durable medical equipment (DME) company purportedly doing business in Miami-Dade County. From November 9, 2005, through May 24, 2006, Baez Medical submitted approximately $4,322,216 in claims to Medicare, resulting in the payment by Medicare of approximately $1,435,840.
During the investigation, agents interviewed the top four referring physicians of Baez Medical. Each doctor stated that he/she had not treated any of the patients for which Baez Medical billed Medicare. Subsequently, at least 10 Medicare beneficiaries complained to Medicare when they realized that their Medicare numbers were being used to submit claims for services that were not, in fact, rendered to them.
The investigation revealed that Mr. Puig was one of the individuals who controlled Baez Medical, instructing the "nominee owner" to incorporate the business, apply for and obtain a Medicare provider number, and open three separate corporate bank accounts for Baez Medical. Once Medicare began paying the fraudulent claims, Mr. Puig laundered the fraud proceeds through Yerri Consulting Company and Pepin Consulting Inc., two companies which were set up by hm and his co-conspirators solely for the purposes of laundering the fraud proceeds from Baez Medical.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.
Attorney Comments: There are two immediate thoughts. First, the government in this case prosecuted the "actual" owner who was not on the Medicare application or the corporate paperwork. This case appears to be more of a pure fraud case. For practitioners and health care providers, the lesson to learn here is that there are companies who are controlled by others than those listed on the corporate paperwork. The government is seeking to go behind the paperwork and charge de facto owners. It is far too easy for providers to become suspects when they are not dealing with well-respected companies. The "referring physicians" were probably treated as suspects before it was discovered that they did not write the orders. What happens to the physician who writes a prescription for DME to the provider where there is then overbilling or failure to provide services? Know the providers you refer to and work with established companies if possible.
Second, for a plea agreement, the 90 month sentence in this case is long compared to sentences seen years ago. This is a trend in handing out more draconian sentences in white collar cases. With the economy, the Madoff case and the atmosphere in general towards fraud -- we can expect these increased sentences to continue. For health care fraud, the government views fraud or overbilling as damaging the fiscal integrity of the programs and making health care not available to the elderly and truly elderly. Given the lack of prosecutions and light sentences for health care fraud in the past -- it is viewed that these long sentences will act as a deterrence. Especially when they are as long as those sentences handed out for violent crime.
This trend makes it all the more important to handle investigations and legal defense early on in a thorough and professional manner. Consulting experienced legal counsel at the earliest stage possible can help assess the case and determine how best to proceed in a realistic and intelligent way.
Any questions or comments should be directed to: email@example.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers.