Back in February, the Department of Justice’s Criminal Division Fraud Section released its annual review. Of the Fraud Section’s three litigation divisions, Health Care Fraud, Market Integrity and Major Frauds and Foreign Corrupt Practices Act, Health Care Fraud is the largest with nearly twice as many trial attorneys and the most active unit.

In addition to the usual statistics about the number of attorneys, defendants charged and number of trials, the report also announced a change in how their trial attorneys are assigned in the field. Previously, trial attorneys were assigned to strike force cities in 24 judicial districts. Under the new deployment, the cities are grouped into regions allowing a broader approach and sharing of resources in wider areas.

The report noted that enforcement actions were prioritized in areas involving pharmaceuticals, telemedicine, laboratory testing and durable medical equipment. There is also an emphasis on vulnerable populations, such as the elderly or addicted patients.

DOF continues to utilize its analytics unit to identify suspicious healthcare billing patterns and geographic hot spots for fraudulent activities. The analytics unit, formed in 2018, provides proactive referrals based on the data analysis.

Over the past 10 years the Department of Justice and U.S. Attorneys’ Offices around the country have focused their investigative efforts on the billions of dollars that have been fraudulently billed to federal and private health insurers. Medicare, Tricare, Medicaid and private insurance companies have been the victims of numerous fraudulent schemes, most notably medically unnecessary prescriptions and testing for compound medicines, durable medical equipment, genetic cancer screening and blood testing. These various schemes often involve corrupt physicians, lab owners, pharmacists, marketers and patients paid to receive these tests and prescriptions.

While DOJ has been widely successful in investigating and prosecuting these schemes, with billions of dollars ordered in forfeiture and restitution payments, as well as lengthy prison sentences, seemingly as one type of health care fraud scheme has run its course, others come to light. DOJ has even formed task forces in several areas of the country that partner with the local U.S. Attorney’s Office and FBI, IRS, HHS-OIG agents to investigate.

Recognizing the continuing seriousness of health care fraud, just this week DOJ announced that it will focus its health care fraud investigations on Medicare Part C and COVID-19 testing scams. Investigations will be ramped up into providers that submit fraudulent paperwork to increase their reimbursement from Medicare Part C plans, known as Medicare Advantage. Since half of all Medicare beneficiaries participate in Medicare Advantage plans, it is a large pool of beneficiaries to target for fraud.

In addition, DOJ continues to target pandemic-related schemes such as providers that ordered COVID-19 testing for groups of patients along with unrelated and unnecessary tests such as genetic cancer screening CGx tests. A number of these schemes involved COVID-19 testing at health fairs and senior citizen facilities that also provided “free” genetic cancer screening based on family history. The Medicare or privately insured patients had no idea that there providers would be billed thousands of dollars for these tests with little or no follow up by a physician or genetic counselor.

Federal healthcare laws and regulations are complex. There are countless ways for physicians, pharmacists, lab owners and marketers to violate these laws. Stahl Criminal Defense Lawyers have extensive experience representing individuals and corporations accused of healthcare fraud. We have represented dozens of physicians, lab owners, pharmacists, marketers and DME companies in federal courts. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

Earlier this month, the U.S. Department of Health and Human Services, Office of Inspector General (HHS, OIG) issued a special fraud alert advising healthcare providers to exercise caution when contracting with telemedicine companies. Such alerts are significant as they put providers on notice that OIG intends to investigate and prosecute potential fraud regarding telemedicine/. Such notices provide the opportunity for healthcare providers to review their practices and compliance, as well as list examples of suspect practices in the industry.

Historically, federal regulations limited the use and scope of telemedicine. It became widely available, however, during the COVID crisis that necessitated the loosening of government regulations. While a relaxation of regulations and restrictions offered patients greater access to physicians, it also opened the door to fraudulent conduct. In previous articles, we explored schemes involving compound medicines, genetic cancer screening (CGx and PGx tests) and durable medical equipment (DME) such as orthotic braces.

This latest fraud alert confirms that OIG is still aggressively targeting DME companies, laboratories and pharmacies using telehealth services. The OIG alert offers a non-comprehensive list of factors that they examine in potential fraud cases, including:

1. Patients that are referred to a practitioner through a telemedicine company, telemarketing, recruiter, call center, health fair or internet;
2. Practitioner has only limited access or contact with the alleged patient to meaningfully access the medical necessity of the services solicited;
3. Telemedicine company compensates the practitioner based on the volume of prescriptions and services;
4. Telemedicine company only provides services to federal health care program beneficiaries, and does not accept private insurance;
5. Telemedicine company only provides a single class of products such as braces, genetic testing, compound medicines – pain, scar and vitamin creams – thus limiting a practitioner’s treatment options; and
6. Telemedicine company does not expect its physicians to follow up with the patients regarding their prescriptions or services.

This alert expressly notes that proactive marketing that advertises free or low cost items or services covered by federal healthcare programs and exclusively marketed to such beneficiaries is “suspect”. Additionally, any program that limits a practitioner from contacting a patient to follow up or offer other medical services is suspect.

While HHS, OIG alerts provide valuable guidance for practitioners and other healthcare professionals, they also provide federal prosecutors the opportunity to argue that a provider’s good faith defense is limited after such an alert has been issued, i.e. that providers are on notice that such practices as suspect.

Stahl Gasiorowski Criminal Defense Attorneys have represented dozens of physicians, marketers, telehealth companies and pharmacists in federal healthcare fraud investigations. We proactively and aggressively protect our clients’ rights. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

In many types of criminal cases, the right expert can be invaluable. Whether it is a forensic accountant in a complex fraud or tax investigation; a medical or billing expert in a healthcare fraud investigation; a forensic psychiatrist for a sex abuse or child pornography case; a computer expert for a computer crimes matter or to download and organize a searchable database for millions of documents in discovery; or a drug or gang expert in a serious drug case, the proper expert retained early in the investigation can assist the client’s criminal defense attorney in their efforts to prevent the charges from being filed, or to assist in developing a defense to aid in plea negotiations or to prevail at trial.

Often the government employs or hires its own experts to analyze a wide variety of data, information or documents. These government “experts” may be recognized in their fields, or they may be opining on evidence in fields in which they are not truly qualified. It is critical in such cases, that the defense attorney have at his disposal the best possible expert in the relevant field of inquiry to conduct their own review and analysis of the evidence and to potentially refute the conclusion of the government expert.

In recent years, there have been notable cases that have demonstrated that government “experts” have either overreached or provided false reports and testimony. For instance, state drug labs around the country have discovered state laboratory technicians that have failed to conduct drug tests on tens of thousands of drug seizures and simply falsified their reports. Other so-called experts have opined on subjects that do not meet generally accepted scientific standards, including hair and fiber analysis, bite marks and lead analysis of bullets. Too often the testimony by these alleged experts have resulted in convictions based on false or unsound results.
Experts can be used to analyze the evidence and discover the weaknesses or fallacies in the government’s theory of the case. The ability to independently review and analyze varied and complex financial transactions, computer code, thousands of emails and attachments, billing records or scientific results can mean the difference between a conviction and acquittal. In addition, most fraud cases and potential sentences are driven by the loss amount. Experts can provide valuable analysis that reduces the loss amount and the potential sentencing ranges.

Aggressive, experienced defense attorneys use experts as early in the process as possible. There are certain procedures that must be followed to protect and preserve the attorney-client and work-product privileges. To do so, the law firm retains the expert to work under the firm’s supervision and direction. While the client is responsible for the fees and expenses, the expert communicates with the law firm rather than with the client so that the expert cannot be cross-examined by the government about any statements or information provided by the client.

Stahl Gasiorowski Criminal Defense Lawyers have extensive experience using experts in their representation of individuals charged with federal and state felonies. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

The Department of Justice just announced charges against 21 individuals in a nationwide crackdown of COVID-19 related prosecutions that resulted in $150 million worth of fraud. The schemes were varied and involved medical doctors, medical labs, marketers and others in the healthcare field.

For instance, two owners of a lab in California allegedly billed more than $125 million in fraudulent claims. In Maryland and New York drive through test site operators are accused of using confidential patient information to bill for lengthy office visits that never occurred. In New Jersey, five individuals were accused of paying or receiving kickbacks for referring COVID tests to a particular lab. Even though the tests were medically necessary, and the lab only billed the allowable rate to the government program, the lab was accused of violating the anti-kickback statute that prohibits paying individuals or companies to refer tests.

The Maryland case charged a physician with submitting false claims to Medicare and private insurers. The defendant owned drive through COVID testing sites. Employees gathered patient information at the sites and later submitted false claims for complex in office visits for other healthcare procedures that never occurred.

In Florida, a registered nurse was charged with signing huge numbers of medically unnecessary doctor’s orders in exchange for sham telemedicine consulting fees. Another case in Florida charged individuals with fraudulent Medicare billing for medical equipment that was obtained by paying kickbacks to marketing companies that solicited patients for equipment they didn’t need.

In other schemes, defendants in California were charged with allegedly counterfeiting vaccine cards. Another case involved a hospital pharmacy director who obtained authentic Moderna dose lot numbers and used them to falsify vaccine ecards.

In New Jersey, one of the District’s first healthcare fraud trials just resulted in a guilty verdict against a medical sales representative of a diagnostic lab who paid kickbacks to a physician for referring tests to the lab. In an effort to disguise the kickbacks, the marketer placed the physician’s medical assistant on the lab’s payroll. In a related scheme, the marketer was paid for promoting medically unnecessary compound medicines that certain insurance plans covered. The defendant and others paid kickbacks to doctors to prescribe the unnecessary compounds without even examining the patients.

Other cases have charged individuals with fraudulently obtaining relief funds from the Coronavirus Aid, Relief and Economic Security Act. A 2020 bill that provided billion in emergency financial assistance.

These and scores of other cases highlight federal authorities continuing investigations and DOJ’s aggressive prosecution of a variety of healthcare fraud schemes. These schemes involve medically unnecessary compound medicines, genetic cancer tests, kickbacks on prescriptions for DME – durable medical equipment – such as braces, as well as COVID-19 tests.

Federal healthcare laws and regulations are complex. There are countless ways for doctors, pharmacists, lab owners and marketers to violate these laws. Stahl Gasiorowski Criminal Defense Lawyers have extensive experience representing individuals and corporations accused of healthcare fraud. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@sgdefenselaw.com.

U.S. Attorney General Merrick Garland announced that the Department of Justice (DOJ) is planning a hiring spree to investigate and prosecute pandemic related fraud and traditional white collar crimes. President Biden’s budget seeks $3.5 million to hire an additional 120 prosecutors to focus on pandemic related fraud and $325 million for 900 additional FBI agents to investigate white collar crimes.

Speaking at the ABA’s annual white collar crime conference, Garland said that DOJ’s interest in white collar crimes is once again being prioritized. DOJ is placing renewed emphasis on serving victims of white collar crime with an approach similar to that in violent crimes. What this means is that DOJ will place a greater emphasis on victims’ rights and economic losses. There will be a renewed effort on criminally prosecuting responsible corporate officers, rather than merely accepting big-dollar corporate pleas or civil resolutions with large financial penalties.

This announcement comes on the heels of DOJ’s new hires for the Criminal Division’s Fraud Section late last year, as well as its renewed efforts in prosecuting environmental and antitrust matters. In addition to the new funds and hires, DOJ will use what the AG calls “force multipliers” to uncover fraud – partnerships with government agencies in the U.S. and abroad and new data analytics. Embedded in the Fraud Section are FBI data experts that model their assessments of payment anomalies and other activity patterns first developed in investigations of health care fraud.

A.G. Garland also announced the formation of KleptoCapture, its new Russian sanctions task force headed by former SDNY AUSA Andrew Adams. With more than a dozen prosecutors, the task force is designed to quickly and aggressively enforce sanctions here, and those coordinated with other countries, to punish the Kremlin and certain oligarchs for the invasion of Ukraine.

Stahl Gasiorowski Criminal Defense Attorneys actively and aggressively defend clients being investigated and prosecuted for white-collar fraud. We have successfully defended cases involving health care fraud, tax fraud, crypto currency, international money transfers and money laundering, import duties and taxes, and other types of sophisticated fraudulent schemes. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rstahl@stahlesq.com.

In addition to the 93 U.S. Attorney’s Offices around the country that investigate and prosecute health care fraud, the Fraud Section of the Department of Justice’s Criminal Division based in Washington D.C. has approximately 76 federal prosecutors devoted to such prosecutions. This DOJ Unit targets complex health care fraud involving illegal prescription, distribution and diversion of opioids; telemedicine fraud; and fraud related to COVID, including counterfeit vaccine cards.

The just released year-end report for 2021 reveals the total cases prosecuted and significant cases of note. The unit charged 202 individuals involved in $1.75 billion in alleged losses, with a significant number of guilty pleas, as well as convictions at trial.

Just in September 2021 alone, DOJ announced charges against 138 defendants, including 42 medical professionals, in connection with a national health care fraud enforcement action.

The Unit is assisted by a data analytics team that identifies suspicious health care billing patterns and likely geographic hotspots for fraud and illegal opioid distribution. In 2021, this data analytics team made 385 proactive investigative referrals to various federal law enforcement agencies.

In addition to the illegal prescription and distribution of opioids, the Unit has aggressively targeted laboratories, telemedicine doctors and nurse practitioners, marketers and pharmacies engaging in illegal kickback schemes. These schemes are designed to induce medical professionals to order medically unnecessary compound medicines, such as pain creams, scar creams, vitamins and migraine medication; or orders for unnecessary laboratory tests for genetic cancer screenings. The payments include money based on a per prescription basis, whether in the form of direct payments, payments to the physician’s spouse, or disguised as lease payments or alleged ownership interest payments for a physician-owned lab.

Stahl Gasiorowski Criminal Defense Attorneys actively and aggressively defend clients being investigated and prosecuted for health care fraud. Over the past five years we have defended numerous physicians, pharmacists, marketers and lab owners accused of health care fraud. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

Each new administration, through its Attorney General, set policy as to the Department of Justice’s enforcement priorities. As the Assistant Attorney General in charge of the Criminal Division, Kenneth Polite recently outlined those priorities. In general, those areas include foreign corruption, computer crimes and money laundering/.

Polite announced that his office will be unveiling a new National Cryptocurrency Enforcement Team comprised of lawyers from the Division’s Computer Crime and Money Laundering Sections together with experienced AUSAs from around the country. This new initiative reflects the ongoing concern over the lack of regulations and enforcement of cryptocurrency and its use by cyber criminals, drug cartels and other money launderers around the world.

Continued emphasis will be placed on efforts to combat cyber-attacks and ransom demands from organized groups and state backed hackers from China, Russia and other countries. These ransomware attackers often demand payment in cryptocurrency as it is less traceable than traditional currency.

Other areas of enforcement will include healthcare fraud, opioid distribution, corporate compliance, and human trafficking. DOJ will bring together prosecutors from around the country, as well as agents from various federal law enforcement agencies and other partner agencies like the Commodities Trading Commission, SEC and FINCEN.

An adjunct to DOJ’s increased money laundering enforcement efforts is the Financial Crimes Enforcement Network (FINCEN) recent rule-making notice that it intends to draft “nationwide record keeping and reporting requirements” for certain participants in the non-financed real estate transactions that are made without mortgages or other lender provided credit. The purpose is to uncover money laundering activities in the approximately $460 billion annual cash real estate purchases in the United States. Presently, only banks and mortgage lenders have programs in place to report suspicious activities. FINCEN is considering how feasible it would be to add reporting requirements for title insurers, escrow companies, real estate attorneys and closing agents.

We have represented many doctors, pharmacists and marketing companies charged with healthcare fraud, and money laundering in federal court, as well as cryptocurrency and unregistered money transfer businesses. Stahl Gasiorowski Criminal Defense is here for all your criminal legal needs. We are experienced in all types of complex criminal matters involving many types of electronic evidence. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@sgdefenselaw.com.

For years there have been articles about the advantages of telehealth to ease costs, time and travel for patients in rural and underserved areas, and those who may have difficulty getting to their physician’s office. The CARES Act of March 2020 (Coronavirus Aid, Relief and Economic Security Act), greatly expanded the availability of telemedicine by requiring Medicare to cover and reimburse doctors at the same rates as in-person services. This resulted in many more patients having access to telehealth services for many more types of medical issues, as well as expanding the base of physicians willing to employ remote services because of the parity of reimbursement. In addition, the CARES Act lessened requirements that the telemedicine physician have a preexisting relationship with the patient, handle only certain types of diagnoses and be limited to certain geographic areas.

As is the case in many areas of highly regulated activities, beneficial changes to health care to meet certain health challenges often result in increased opportunities for fraud. Over the past year, the Department of Justice announced scores of criminal cases against telemedicine doctors, marketers, and pharmacies for abusing the system resulting in more than $1 billion in losses. Closed door pharmacies and marketers paid telemedicine doctors and nurse practitioners kickbacks (fees for “completed doctor’s orders” – scripts that were reimbursed by Medicare) for prescribing unnecessary pain, testosterone and scar creams; durable medical equipment such as braces; and genetic testing for cancer without speaking with the patient, or having only a very brief interaction. Many such orders were prescribed using pre-filled prescription forms provided by the marketers or pharmacies.

Whether unwittingly, or purposely, scores of professionals and marketers jumped on the opportunity to take advantage of the expanded telemedicine opportunities afforded by the CARES Act and various state laws that were expanded to help the millions of people suffering from Covid.

The anti-kickback statute (AKS) criminalizes the knowing and willful solicitation or receipt of any remuneration

1. in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
2. in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.42 U.S.C. § 1320a-7b(b)(1)(A)-(B).

Likewise, the AKS forbids offering or paying any remuneration to a person to induce them

1. to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
2. to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.42 U.S.C. § 1320a-7b(b)(2)(A)-(B)

While there are limited safe harbor exceptions, generally physicians, pharmacists, marketers or anyone else involved in the providing of medical equipment, drugs or services cannot be paid for the referral on a per patient basis – meaning that marketers cannot be paid for referring patients to a DME company or pharmacy where the marketer’s fee is based on a percentage or flat fee of what is collected from Medicare. Similarly, doctors cannot be paid based on a completed doctor’s order (prescription that has been reimbursed) by a healthcare provider. And pharmacies cannot pay marketers to refer prescriptions to them based on a percentage or flat fee per reimbursed script. In addition, such activities can also be charged as healthcare fraud since they are often medically unnecessary.

We have represented many doctors, pharmacists and marketing companies charged with healthcare fraud in federal court. Stahl Gasiorowski Criminal Defense is here for all your criminal legal needs. We are experienced in all types of complex criminal matters involving a many types of electronic evidence. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

With Covid-19 still surging throughout the United States, telemedicine has expanded as a viable option for patients seeking to limit their exposure to doctors’ offices. To meet this need, Federal and State regulators have both implemented and increased a number of measures allowing telemedicine to reach more people, as well as cover more areas of practice.

With any expansion of services, combined with a global health pandemic, the government expects that there will be individuals who abuse the system for their own financial gain. The Department of Justice (DOJ) and the U.S. Department of Health and Human Services, Office Inspector General (HHS-OIG), have targeted many such abuses. Federal law enforcement have netted scores of arrests involving telemedicine operations around the country.

Recent announcements by U.S. Attorney’s Offices and DOJ in New Jersey, Florida, Pennsylvania, Georgia, South Carolina, and New York reveal some

common patterns of fraud. Many schemes involve telemedicine companies pushing Durable Medical Goods (DME), such as braces for wrists, elbows, knees and backs, in addition to genetic tests for cancer and other diseases, to Medicare recipients. These companies employ or contract with marketing companies to locate potential beneficiaries and push as many products as possible on an often vulnerable population of patients. The telemed companies employ physicians that have little to no contact with the patient, prescribe medically unnecessary tests or DME, and are paid on a “per patient,” or prescription basis. A number of telemed-company executives have been charged with soliciting illegal kickbacks and bribes in exchange for unnecessary orders of DME and genetic cancer tests. Charges to date allege more than $4.5 billion in fraud to Medicare and other providers. Healthcare fraud continues to be a major federal and state prosecution initiative around the country.

Stahl Gasiorowski Criminal Defense Lawyers have successfully represented dozens of telemedicine companies, physicians, sales and marketing employees, as well as laboratory owners charged with healthcare fraud. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@sgdefenselaw.com.

The Defense Production Act and 2020 Executive Orders provide the framework for these cases. It can be a criminal fraud to hoard or charge excessive prices for various PPE (personal protective equipment), such as N-95 face masks, surgical gowns, gloves, and disinfectant products. There are currently hundreds of investigations around the country.

Criminal fraud charges in this context require willful violations of the DPA and the orders and regulations issued thereunder. Hoarding must have occurred after March 25, 2020, when an Executive Order delegated powers to DHS to designate 15 categories of health and medical resources as scarce. Price gouging requires prices “in excess of prevailing market prices,” rather than a specific percentage markup. To date, no court has issued an opinion interpreting the meaning of “excessive” in this context.

Notable cases are ongoing in the District of New Jersey and the Eastern District of New York. They involve the importation of supposed FDA-approved N-95 masks from China. As alleged in the Complaints, it was later discovered that the masks were in fact not tested, nor were they approved. The government has charged the Chinese manufacturers and is currently investigating the individuals and companies involved in purchase and sale both here and abroad.

A number of high-profile price gouging cases have been brought in the Southern and Eastern Districts of New York against companies and individuals charging between 50 – 1300% mark-ups on masks. Several prosecutions allege outright fraud, where orders were placed and fees paid to individuals who had no ability to acquire or deliver the PPE. Some of these cases involved orders worth hundreds of millions of dollars.

Federal, state, and local governments, too, have been defrauded in their rush to acquire desperately needed PPE. Many public entities cannot compete with private companies – and even other countries – when purchasing PPE from Chinese manufacturers because of the oft-required 50-100% payment upfront. Government contracts rarely permit payment of more than 10% of the purchase price upfront. In order to secure the contracts, middlemen and layers of companies have been used. These situations lend themselves to fraud and price gouging by adding costly layers of people between the purchaser/end user and the manufacturer.

United States citizens and companies must be particularly vigilant in purchasing and importing PPE from overseas manufacturers. Registration and approvals must be legitimate and precede the importation. The items must meet FDA standards and the prices charged must not be excessive. A failure to comply with these requirements risks scrutiny and potential charges by federal law enforcement.

Our attorneys and staff are actively and aggressively defending clients being investigated for PPE fraud. We are also available to meet with new clients. Being mindful of the importance of self-distancing, we at times work remotely but are available to meet new clients either in person or through video conferencing, and have the capability to offer initial consultations by phone. Challenging times demand innovation and accommodation to our clients’ needs. Stahl Gasiorowski Criminal Defense is here for all of your criminal legal needs during this time. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

One of the largest issues hampering the re-opening of the American economy is that there are many asymptomatic yet contagious carriers of COVID-19. Rational leaders, medical experts, and scientists agree that widespread testing is essential to prevent further hotspots and determine which areas of the country may start to open again. Tests to determine whether a person is currently infected, as well as antibody tests to determine whether a person has been exposed and may have some immunity to the virus, will soon be widely available from many new sources. Companies cannot make informed decisions about when and how to re-open without knowing if their employees are healthy. State and local governments cannot determine how to move forward without this critical information. The federal government has assisted testing companies and labs by removing some of the FDA safeguards and time periods normally in place to ensure quality standards and safety.

With desperate need for widespread testing comes the opportunity for various fraudulent schemes and violations of a number of healthcare laws. One of the more recently enacted laws – the Eliminating Kickbacks in Recovery Act (EKRA) – makes it a federal crime “to solicit or receive payment in exchange for referring a patient to a . . . laboratory”, to “pay or offer any payment to induce someone to make” such a referral or to pay “in exchange for an individual using” a lab. The statute extended criminalization of such schemes beyond Medicare/Medicaid reimbursements to private insurance. .

Thus, under EKRA, a lab may not pay commissions to sales or marketing groups or employees based upon the number of tests received or reimbursed. Even if the person is a W-2 employee of the lab, payments to the employee on a commission basis may violate EKRA.

Individuals and companies in the healthcare industry must be aware of these very stringent regulations. In a desire to help the community, and to make a profit during these difficult times, it is incumbent on those involved to fully understand the financial arrangements and seek experienced counsel as to the legality of the contract/payment. Likewise, individuals seeking such tests must do their due diligence to help ensure that the company and tests offered are legitimate, accurate, and effective.

Our attorneys and staff are actively and aggressively defending our existing clients’ cases. We are also available to meet with new clients. Being mindful of the importance of self-distancing, we at times work remotely but are available to meet new clients either in person or through video conferencing, and have the capability to offer initial consultations by phone. Challenging times demand innovation and accommodation to our clients’ needs. Stahl Gasiorowski Criminal Defense is here for all of your criminal legal needs during this time. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rstahl@stahlesq.com.

The Department of Justice (DOJ) and various state agencies have announced that they will aggressively pursue fraudulent schemes related to COVID-19. On March 16, Attorney General William Barr directed all U.S. Attorney’s Offices to prioritize the detection, investigation, and prosecution of all criminal conduct related to the Coronavirus pandemic. Each office was directed to appoint a COVID-19 fraud coordinator to serve as the liaison between the local Department of Justice and their state and local counterparts.

Based upon that directive, the U.S. Attorney for New Jersey and the New Jersey Attorney General just announced the formation of a joint federal-state task force to investigate and prosecute a wide range of misconduct arising from the COVID-19 pandemic, including the unlawful hoarding of medical supplies, price gouging, charity scams, procurement fraud, insurance fraud, phishing schemes, and false and misleading investment opportunities.

On March 21, the first enforcement action was filed in the Western District of Texas against the operators of a website purporting to sell World Health Organization vaccine kits. Those kits are alleged to be fake. In this instance, the Department of Justice filed a civil injunction to immediately block public access to the website and restrained the operators from selling the allegedly false kits. A criminal investigation will likely follow the civil injunction.

On March 30, the U.S. Attorney in the District of New Jersey filed criminal charges against a Georgia man for his alleged role in a Coronavirus-related healthcare scheme. Specifically, it is alleged he and others defrauded health care benefit programs by submitting fraudulent testing claims for COVID-19 and genetic cancer screenings. The complaint alleges that the defendant offered kickbacks in exchange for medically unnecessary tests, including hard-to-obtain COVID-19 tests, coupled with a much more expensive respiratory pathogen panel test (RPP) that does not identify or treat COVID-19.

These are just the beginning of what will likely be a wave of federal and state prosecutions for fraudulent schemes that prey on people’s fears of this pandemic. The Department of Justice announced that it will be investigating price gouging for masks, hand sanitizer, and other personal protective items; phone scams by those pretending to be doctors or hospitals claiming to have treated family members and seeking payment; robocalls offering fake treatments; fake charities seeking donations; cyber crimes like malicious websites and apps that claim to share COVID-19 information, but in reality seek and steal user information; and health care fraud, such as the schemes detailed above.

Heath care fraud is a Department of Justice priority even during “normal” times. Now, with the pandemic, new investigations and prosecutions will rapidly expand as people look to take advantage of the public health crisis.

Stahl Gasiorowski Criminal Defense Lawyers

Our attorneys and staff are actively and aggressively defending our existing clients’ cases. We are also available to meet with new clients. Being mindful of the importance of self-distancing, we at times work remotely but are available to meet new clients either in person or through video conferencing, and have the capability to offer initial consultations by phone. Challenging times demand innovation and accommodation to our clients’ needs. Stahl Gasiorowski Criminal Defense is here for all of your criminal legal needs during this time.

Investigating and prosecuting healthcare fraud remains one of the top priorities of the Department of Justice. Nationwide crackdowns and arrests have demonstrated that the government’s war on crime goes beyond drugs, guns, and gangs. While those are certainly a priority of DOJ and an easy way to boost prosecution numbers nationwide, they are by no means the only priority.

Recently we have seen national operations targeting physicians, labs, and marketers. These investigations have swept up groups pushing genetic tests for cancer and other genetic markers; those telemarketing durable medical equipment (DME) such as knee, wrist, and shoulder braces for senior citizens; U.S. Department of Veterans Affairs Medical Centers employees and vendors, alleging that they participated in a kickback scheme that inflated prices charged to the government for medical supplies and services; and 10 former NFL players for defrauding the NFL health plan by falsifying letters and prescriptions to pay for expensive devices that were never needed or ordered.

Here in the District of New Jersey there are pending prosecutions for fraudulent marketing of compound medicines; telemarketing of braces targeting senior citizens, who believed that the devices were free; and for telemarketing and telemedicine pushing genetic testing for cancer without regard for whether such tests are medically necessary. In general, these schemes target certain populations – whether it is by age; private health insurance that covers such compounds, devices or tests; or Medicare/Medicaid programs. If a person’s treating physician is not ordering the prescribed medicine, test, or device – or mass marketing is involved, targeting a specific group – there is a serious risk that numerous federal laws and regulations will be violated.

One such law is the federal healthcare Anti–Kickback Act, 42 U.S.C. § 1320a–7(b) (7). The statute specifically forbids any person or entity making or receiving payment in return for a medical referral for an item or service that is paid for under a federally-funded healthcare program. Thus, marketing groups who are paid on a percentage of the federal health care funds collected are in violation. Any payments or “gifts” that are in any way based upon the number of tests or devices ordered, or the amount of funds received are prohibited.

The Eliminating Kickbacks in Recovery Act of 2018 (EKRA), effective October 24, 2018, addresses kickbacks for patient referrals to labs and rehabilitation facilities where patients have private insurance. EKRA prohibits knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in return for the referral of a patient to, or in exchange for an individual using the services of, a recovery home, clinical treatment facility, or laboratory if the services are covered by a health care benefit program. This includes referrals of patients for genetic testing and other blood or DNA analysis.

Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

The United States is slowly moving to catch up with medical practices in some European and Asian countries in using technology to avoid an in-person doctor’s appointment. Without having to schedule and wait for an appointment, take time off from work, or leave home, a person can have common aliments diagnosed using their smartphone. Telemedicine is the use of telecommunication and technology to provide clinical healthcare at a distance.
Ailments such as the flu, bronchitis, sinus infections, sore throats, rashes, and stomach aches can often be effectively diagnosed without an in-person doctor’s visit. The increase in healthcare costs has led to the use of technology to treat more patients at less cost. Recently CVS announced that it started a nationwide telemedicine service that allows customers to use their smartphone video capabilities to “see” a doctor for conditions such as colds, skin issues, and other general wellness issues. The service will cost $59 and may eventually be covered by insurance once CVS acquires Aetna.

Medicaid, the government’s healthcare coverage for low-income individuals, has cautiously started to embrace the use of technology for limited remote patient care. Medicaid permits the use of phones, faxes, email and remote patient monitoring devices to collect and transmit patient data for monitoring and diagnosis. However, the program is closely monitored for fraudulent billings and abuse.

Each state has its own requirements and rules in using telemedicine. Some states require physicians to be licensed in the state where the patient is located, rather than simply where the physician performs her analysis. This can be easily violated when patients are in bordering states and seeking medical diagnosis and treatment through their smartphone or the internet. Record keeping is also extremely important, as all Medicaid providers are required to retain records to substantiate their billings. The use of the correct billing codes for telemedicine is paramount. If an office visit is billed for a telemedicine event, the physician may be investigated for false or fraudulent billing.

The U.S. Department of Health and Human Services Office of Inspector General and the Department of Justice devote substantial resources investigating and prosecuting healthcare fraud and abuse. The U.S. Attorney’s Offices in the DNJ, SDNY and EDNY are very active in policing medical providers’ billing and prescribing practices. Informed and experienced legal counsel is a must to advise medical providers and medical billing services in this ever-expanding use of technology and medicine.

For questions regarding health care, Medicaid or Medicare fraud, contact Stahl Gasiorowski Criminal Defense Lawyers. Our offices are located in Mountainside, New Jersey, and New York City. Contact us online or call us at 908-301-9001.

Federal and state prosecutors are increasingly aggressive in their investigation and prosecution of healthcare fraud. Given the vast amounts of government or private insurance monies that can be exploited, the penalties have increased for healthcare professionals and others who engage in fraudulent activities. Sentences of 10 years or more, in addition to forfeitures, restitution and fines in the millions of dollars, are becoming commonplace.

So, what do investigators look for when investigating fraud? They examine what has become known as the “badges of fraud”, meaning the red flags that investigators target.

First, healthcare fraud referrals often come from insurance companies who have noticed discrepancies in a provider’s billing practices. These could include:

• An unusually high number of procedures compared with similar practitioners
• Indicia of “upcoding” – billing a simple procedure at a code for a more time consuming, complex procedure that results in greater reimbursement by the insurer
• Submitting a large number of bills all at once shortly before the period for reimbursement expires
• An excessive number of patient visits in a given time period, or
• An unusually high number of out-of-network procedures

Second, investigators key in on certain types of practices that historically are ripe for abuse. Any practitioner who prescribes opioids will receive heightened scrutiny. The physician’s practice, the number of repeat patients for opioids, the geographic areas the patients are coming from, the amount of prescriptions, and the histories of the patients all provide avenues of investigation and potential red flags. In addition, Prescription Drug Monitoring Programs alert authorities to patients that fill prescriptions for certain drugs from multiple physicians.

Third, the government has recently charged scores of doctors and individuals involved in compounded medicines, such as pain cremes, vitamins and scar creams. The medications, which the government deems medically unnecessary, are extremely expensive, often costing thousands of dollars for a tube of ointment. The patient population targeted by marketers was simply based on whether their insurance reimbursed for these medications, rather than a true medical need for the compounded medicine.

Fourth, investigators examine certain types of practices that use unqualified or unlicensed workers that are billed at qualified professional rates for procedures or require supervision by medical professionals who are not present for the treatments. The insurers are defrauded when these practices submit bills for procedures that are supposed to be preformed or supervised by licensed healthcare professionals at a higher rate, but are actually performed by others to increase the volume of insured procedures.

Experienced Defense Halthcare Fraud Attorneys

For questions regarding health care, Medicaid or Medicare fraud, contact Stahl Gasiorowski Criminal Defense Lawyers. Our offices are located in Mountainside, New Jersey, and New York City. Contact us online or call us at 908-301-9001.

Our goal is to prevent you from being charged once an investigation begins. If you are the target of an investigation, we can work effectively with the goal of averting charges, reducing charges or winning full acquittal in court.

The seeming pervasiveness of fraudulent activity on the part of both providers and recipients of federally-funded healthcare programs has led to more determined efforts by the federal government to identify such activity and to prosecute it. A search for examples of Medicare and Medicaid abuse also quickly reveals a federal government initiatives to combat healthcare fraud. the Health Care Fraud Prevention and Enforcement Action Team Task Force and the Medicare Fraud Strike Force being two examples.

Examination of the many examples of federal prosecutions trumpeted by the Office of the Inspector General of the Department of Health and Human Services shows two things: first, many of these alleged and actual crimes involve large sums of money, frequently running into the millions of dollars; and second, the harsh penalties that result upon convictions.

Those finding themselves in the crosshairs of a federal investigation for Medicare or Medicaid fraud need to understand that federal prosecutors will be determined to make an example out of them, if for no other reason than to deter others. Defense counsel who are not prepared to deal with an aggressive prosecution will quickly find themselves hard pressed to adequately protect their clients.

The Law Offices of Robert G. Stahl has attorneys with extensive litigation experience defending clients in federal court, including against charges of Medicare and Medicaid fraud. Our experience gives us the ability to know how federal prosecutors handle such cases. We understand that for our clients their personal and professional lives and reputations are at stake: the loss of liberty, devastating fines, loss of professional licenses that took years to qualify for and loss of businesses are all possible, and we prepare the best possible defense for our clients to avoid or mitigate these consequences.

When everything is on the line, you cannot afford to short-change yourself in choosing your legal defense team. Contact us to arrange for a free initial consultation to discuss your case.

Violations of any number of federal statutes have the potential to jeopardize a business and can, in many cases, result in individuals going to prison. In addition, restitution and forfeiture may be applicable. Below, we delve into some of the most commonly encountered federal business fraud statutes.

The Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act applies to any company that must file a report with the SEC, including companies based in the United States, their subsidiaries and those listed on the stock exchanges. This Act bars payments to foreign governments or officials to obtain a competitive advantage.

Wire Fraud and Mail Fraud

Mail fraud and wire fraud are used extensively by federal authorities. Mail fraud involves the use of the mail in a scheme to defraud another person or entity. This broad-based statute includes any mailing of a document that contains a materially false statement. “Mail” is defined as documents sent via public or private carriers. The document is not required to cross state lines to qualify as mail fraud. Wire fraud is similar to mail fraud except it includes just about all forms of media including e-mail, telephone, TV, radio, Internet, telex and facsimile.

Bankruptcy Fraud

This type of business fraud involves defrauding through a document, petition or representation tied to a bankruptcy proceeding. It includes material misrepresentations as to assets and ownership interests in assets.

Health Care Fraud

Health care fraud is the defrauding of any private or public health care benefit program. The definition encompasses the payment for/delivery of services. This a very active area of investigation for federal and state authorities. It includes paying others for patient referrals, upcoding, over billing, ordering unnecessary tests or procedures and submitting false claims. False statements made to procure payment from a federal health care program also qualifies as health care fraud.

Securities Fraud

This type of fraud refers to the sale or purchase of an investment where the return is based on the effort of a third party. An example of such an offense is the trading of stocks with insider information. The fraudulent marking of prices or material false statements in the prospectus are also forms of securities fraud.

The False Claims Act

Those who knowingly make or conspire to produce erroneous financial claims to the government can be found guilty of this type of fraud. It commonly applies to Medicaid and Medicare. False statements made on a bill can qualify as separate offenses. The operative word in this statute’s definition is “knowingly”. “Knowingly” is defined as actual knowledge, intentional ignorance or a “reckless” disregard for what is true. Examples of false claims include false affirmative certifications of compliance with federal regulations, billing and claims that stand for compliance with regulations, statutes or contract terms.

Material False Statements

An individual who makes a materially false statement to an official of the federal government or makes a false record of entry is committing a criminal offense. Though individuals certainly have the right to remain silent, they do not have the right to lie.

The Dodd-Frank Act of 2010

Passed into law as a result of the last recession, this Act is meant to spur improved transparency and accountability on Wall Street, protect investors and reform mortgages. However, its Constitutionality is currently being challenged in federal court. Stay tuned for developments.

Bank Fraud

Bank fraud is an attempt (or the actual execution) to defraud a federally insured financial institution. Bank fraud encompasses securities, funds and property owned or possessed by the institution that has been victimized. Bank fraud can still apply even if the institution does not suffer an actual loss. It also includes submitting materially false statements on loan applications, whether the loan is for a car, car lease, home mortgage, or revolving line of credit.

Uniform Fraudulent Transfer Act

Fraudulent conveyances that occur in various contexts, such as bankruptcy, have tripped up numerous individuals and businesses in the past. The language of these statutes is broad enough to include activity that is meant to defraud, delay or disrupt a creditor. Courts can go back as far as six years to uncover evidence of this style of fraud. An example in the context of the private sector is a leveraged buyout in which a company borrows against its assets and acquires stock. Such an action can be scrutinized as a fraudulent conveyance.

The Computer Fraud and Abuse Act

This Act bars the procurement of national security information, infiltrating confidential information stored on computers, password trafficking, damaging transmissions/access and any extortion involving threats to damage computing devices. It is worth noting that cell phones qualify as “computing devices”.

Immigration Fraud

Those who fraudulently use immigration documents such as border crossing cards, permits and visas can be found guilty of immigration fraud.

The Sarbanes-Oxley Act of 2002

This Act has eleven unique “Titles”, each with a section that has been written in response to corporate wrong-doings. Its purpose is to prevent future corporate scandals by requiring in-depth financial disclosures and auditor independence.

The experienced attorneys at Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact us to discuss your case, call 908.301.9001 for our NJ office and 212.755.3300 for our NYC office or email us at rgs@sgdefenselaw.com.