Mr.
Melendez plead guilty in a plea agreement to conspiracy to pay and receive health
care kickbacks and defraud in violation of 18, U.S.C. Section 371 in which the
maximum penalty is five years in custody; $250,000 fine; 3 year of supervised
release; and mandatory restitution.
Thus, a sentence of 18 months indicates a reduction in the potential
sentence.
This
case involved the sale of power wheelchair prescriptions in order to obtain Medicare
reimbursement for power wheelchairs that the patients allegedly did not need and,
in some cases, the patients said they did not want. It was alleged that two of Mr.
Melendez’s co-defendants and alleged co-conspirators, Dr. Irving Schwartz and Gloria
Hernandez, traveled to El Centro, California in search of elderly Medicare patients.
Dr.
Schwartz allegedly wrote fraudulent prescriptions for the patients to obtain power
wheelchairs, even though the patients did not need the equipment and could walk
without assistance, and collected a $300 cash kickback in exchange for each power wheelchair
prescription. Ms. Hernandez then sold
the fraudulent power wheelchair
prescriptions to Mr. Melendez, charging him $1,000 per fraudulent prescription.
Mr.
Melendez, in turn, sold some of the power wheelchair prescriptions to others,
charging an additional mark-up on each prescription. As the last step, Mr. Melendez
and others submitted the fraudulent prescriptions to Medicare
for reimbursement, billing up to $5,865
for each power wheelchair.
According
to the plea, Dr. Schwartz wrote at least 186 power wheelchair prescriptions for
Medicare beneficiaries in exchange for more than $55,000 in bribes and kickbacks.
Mr. Melendez, the owner and operator of Oceanside Medical Services, purchased these
186 fraudulent prescriptions and used them to submit over $830,000 in false claims
to Medicare.
Ms.
Hernandez was sentenced to 6 months home confinement, and ordered to pay
$160,000 in restitution to Medicare.
Dr.
Schwartz is scheduled to be sentenced on August 19, 2013, before Judge Huff.
In
a separate and related case, Aristeo and Laura Tavares, who were charged in a separate
case, submitted more than $250,000 in false Medicare claims based on Dr. Schwartz’s
fraudulent prescriptions. On March 27, 2013,
Aristeo and Laura Tavares were sentenced to time served (1 day in custody), and
ordered to pay $182,860.77 in restitution to the Medicare trust fund.
Posted by Tracy Green, Esq.
Contact: 213-233-2260
Email: tgreen@greenassoc.com
