On Tuesday a superseding indictment was issued in United States v. Creaghan Harry, a case regarding what is alleged to be one of the largest schemes to defraud Medicare ever charged. The new indictment charges the defendant with one count of conspiracy to commit health care fraud and wire fraud, and four counts of income tax evasion.
The defendant was originally charged in an indictment along with co-conspirators Lester Stockett and Elliot Loewenstern with one count of conspiracy to defraud the United States and to pay and receive kickbacks, four counts of receipt of kickbacks, and one count of conspiracy to commit money laundering.
The defendant is the owner of a telemedicine company in Florida. According to allegations in the superseding indictment, Harry and his co-conspirators solicited illegal kickbacks and bribes from durable medical equipment (DME) suppliers and marketers in exchange for orders for DME braces and medications. Harry’s telemedicine companies then allegedly paid physicians to write medically unnecessary orders for these braces and medications. Harry’s telemedicine companies provided orders to DME suppliers that fraudulently billed Medicare over $784 million. Medicare ended up paying over $247 million of the charges, according to court documents.
In order to conceal the kickbacks, the defendants allegedly directed DME suppliers and marketers not to directly pay his telemedicine companies and instead to pay shell companies that had been opened in the names of straw owners in the United States and foreign countries, such as the Dominican Republic. The defendant then purportedly transferred the funds from the shell companies to his telemedicine companies in order to pay physicians to write the unnecessary orders.
The defendant also allegedly claimed that the telemedicine company was directly profitable from its services when in reality the majority of its receivables were from the illegal kickbacks. This also caused the alleged tax evasion as the defendant failed to report the income to the shell companies as income in filings to IRS.
The defendant is being represented by Hunt, Hamlin & Ridley and Lowenstein Sandler.