NYC Doctor Gets Prison Term for Posing as Clinic Owner in $30 Million Fraud Scheme

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

On August 22, 2018, a doctor received a sentence of one year and a day in prison from a New York federal court for his part in a $30 million scheme to defraud Medicare and the state Medicaid program. The doctor admitted to posing as the owner of a medical clinic and falsely claiming to have seen hundreds of patients. He pled guilty on January 11, 2018, to health care fraud and conspiracy to commit health care fraud, mail fraud and wire fraud, the U.S. Attorney’s Office said.

Lies and Cover-ups.

The New York City doctor accepted responsibility for falsely posing as the owner of two medical clinics that were actually owned by a corrupt businessman, according to the U.S. Attorney’s Office for the Southern District of New York. Under New York state law, medical clinics must be owned and operated by a medical professional. The businessman was able to evade the requirements of the law by hiring doctors to pose as the owners of each clinic.

The corrupt businessman owned and operated six medical clinics in Brooklyn between 2007 and 2013 that fraudulently billed Medicare and Medicaid. Approximately $30 million was billed for services and supplies that were not provided, according to the indictment and other documents filed in federal court, as well as statements made during the doctor’s plea proceeding and sentencing.

Additionally, the doctor fabricated false medical records to support the fraudulent reimbursement claims and wrote prescriptions and referrals for medically unnecessary tests and supplies, the U.S. attorney’s office said.

The Punishment.

U.S. District Judge Lorna G. Schofield sentenced the doctor to three years of supervised release in addition to the prison term for his role in the scheme. He was also ordered to pay restitution of approximately $1.83 million and to forfeit $269,412 in unlawful gains. The three other defendants involved in this case, a doctor, a physical therapist and an occupational therapist, are scheduled to go to trial at a later date. Click here to learn more.

“The Medicare and Medicaid programs are intended to provide essential medical services to the elderly and the needy, not to enrich corrupt doctors and other fraudsters,” U.S. Attorney Geoffrey S. Berman said in a statement. “Today’s sentence sends a strong message that those who cheat Medicare and Medicaid, including physicians who abuse their licenses and professional oaths, will be held accountable.” You can view the U.S. Attorney’s press release here.

To read about a similar case of fraud, click here to read one of my prior blogs.

This is a Dangerous Pitfall of Which all Doctors and Dentists Must Be Aware.

This is the type of situation we often see in which a doctor or dentist is victimized by dishonest and corrupt scofflaws, especially here in Florida. Most often an older physician who is retired or semi-retired is asked to become the “medical director” or “dental director” of a clinic that is owned in whole or in part by someone else. The physician may not even know who its true owners are. Later the physician or dentist is asked to serve as the “president” or as a “director” of the company and his/her name is placed on all the corporate papers. The trouble really begins, however, when the true owner(s) places the physician’s or dentist’s name on corporate papers and licensing papers as an “owner,” “shareholder” or “member” of the business, when the physician has paid nothing for the business and is not truly the owner.

If a physician or dentist becomes aware of such a scheme and gets out of it as soon as she or her finds out, the physician or dentist may be able to avoid prosecution or liability. However, if the physician or dentist continues to do business with the true owners as an “owner on paper,” “shell owner,” or “sham owner,” (they all mean the same thing, “fraudulent owner”) then he or she can be in for some serious civil and criminal liability.

There can be serious criminal penalties, such as the one reported on in this blog. For example, in Florida, it is a felony for a non-dentist (meaning a dentist not licensed in Florida) to own or control a dental clinic in Florida. It is also a criminal offense for a layperson (or a business entity owned by lay persons), to own or control a medical clinic, unless it goes through the strict health care clinic license requirements that Florida law requires. If the clinic is owned or operated illegally (even if it’s “just on paper”), then all of the bills it issue are also illegal.

Contact Health Law Attorneys Experienced in Handling Medicare and Medicaid Fraud Cases.

The Health Law Firm’s attorneys routinely represent physicians, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicare and Medicaid investigations, audits and recovery actions. They also represent them in preparing and submitting corrective action plans (CAPs), requests for reconsideration, and appeal hearings, including Medicare administrative hearings before an administrative law judge.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at


Hanson, Joyce. “Doc Gets Year In Prison For Role In $30M Medicare Fraud.” Law360. (August 22, 2018). Web.

“NYC Doctor Gets Prison Term for Role in $30M Fraud Scam.” Bloomberg Law. (August 22, 2018). Web.

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. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: Medicare and Medicaid fraud representation, false claims attorney, false claims representation, representation for overbilling, representation for DOJ investigations, fraud defense attorney, representation for medicare issues, representation for Medicaid issues, Medicare lawyer, Medicaid lawyer, health care fraud investigation representation, health care fraud defense representation, Medicare fraud representation, health care professional representation, representation for physicians, representation for physician reimbursement, licensure defense attorney, professional license representation, licensure defense representation, representation for health care professionals, The Health Law Firm reviews, reviews of The Health Law Firm attorneys, Florida health law defense lawyer, owner on paper, shell owner, or sham owner, paper owner, Florida dental clinic ownership, health care clinic license

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.


The Affordable Care Act Offers the Government New Tools to Fight Healthcare Fraud

By Catherine T. Hollis, J.D., The Health Law Firm

In 2013, the government reported recovery of a record-breaking $10.7 billion in healthcare fraud in the past three years, according to the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ). The HHS credits the Affordable Care Act’s tough stance on fraud for improving the efforts to fight Medicare fraud.

The increase in fraud recovery is attributed in part to the Act’s proactive approach to preventing fraud. The Act contains several initiatives that address Medicare fraud, resulting in increased fraud-fighting tools available to the government. The joint effort between the HHS, the DOJ and the Health Care Fraud Prevention and Enforcement Action Team has been a primary driving force in seeking out fraud and securing recoveries. The HHS and DOJ’s website highlights some of the Act’s “powerful steps” toward fighting fraud, waste and abuse. Click here to read more from

Tougher Punishment.

The Act increases federal sentencing guidelines for healthcare fraud by twenty percent (20%) to fifty percent (50%) for crimes that involve more than $1 million in losses. The Act also establishes penalties for obstructing a fraud investigation or an audit.

Stricter Screening for Enrollment and Revalidation.

According to the HHS, the new screening procedures include licensure checks and site visits for all providers and suppliers. In addition, the Act imposes higher scrutiny on providers and suppliers who may pose a higher risk of fraud or abuse. High risk providers and suppliers can be subject to unscheduled site visits and fingerprint-based criminal background checks.

The Center for Medicare & Medicaid Services (CMS) has started to revalidate the enrollment of all 1.5 million existing Medicare providers and suppliers, using the new screening requirements set forth by the Act. Thousands of enrollments have already been deactivated or revoked as the result of this effort. There is a blog on our website about the devastating and far reaching effects of being excluded from the Medicare program. Click here to read that blog.

New Detection Technology.

CMS is using the Fraud Prevention System to screen all fee-for-service Medicare claims. This system uses advanced predictive technology, similar to that used by credit card companies, to analyze claims prior to payment. It also scans for suspicious billing patterns. Claims identified by the Fraud Prevention System as suspect are reviewed by CMS for possible fraud.

Increased Resources.

The Act provides an additional $350 million over ten years (2011 through 2020) through the Health Care Fraud and Abuse Control Account.

These steps represent a more proactive approach to Medicare fraud. The government is focusing on preventing fraud before it happens, rather than paying fraudulent claims and seeking reimbursement after the fact. The tools contained in the Act, as implemented by CMS and HHS, further the goal of the Act to reduce fraud, waste and abuse in the Medicare system. To read a summary of the anti-fraud provisions in the Affordable Care Act, click here.

Anti-Fraud Provisions At Work.

On May 14, 2013, the HHS and DOJ announced the arrest of 89 people, including doctors, nurses and other medical professionals, in eight cities. These people are allegedly charged in separate Medicare fraud schemes. According to the DOJ, the scans involve approximately $223 million in false billing. Click here to read a blog on these arrests. To read more blogs on Medicare and Medicaid fraud, visit our website.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at or call (407) 331-6620 or (850) 439-1001.


Do you think the Affordable Care Act will help cut down on healthcare fraud? Why or why not? Please leave any thoughtful comments below.


Sjoerdsma, Donald. “The Affordable Care Act Bolstered, Didn’t Drive Medicare Anti-Fraud Efforts.” The Medicare Newsgroup. (March 22, 2013). From:

“The Affordable Care Act and Fighting Fraud.” U.S. Department of Health & Human Services and U.S. Department of Justice. From:


Health Benefits ABCs. “Summary of Anti-Fraud Provisions in the Affordable Care Act.” U.S. Administration on Aging, Department of Health and Human Services. From:

“New Tools to Fight Fraud, Strengthen Federal and Private Health Programs, and Protect Consumer and Taxpayer Dollars.” U.S. Department of Health & Human Services. (March 15, 2011). From:

About the Author: Catherine T. Hollis is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.


“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

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