Eight Miami-Area Residents Charged in $22 Million Medicare Fraud Scheme Involving Home Health Care Agencies

WASHINGTON – Eight Miami-Dade County, Fla., residents have been indicted in connection with an alleged $22 million Medicare fraud scheme operated out of Miami businesses purporting to specialize in home health care services, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Acting U.S. Attorney Jeffrey H. Sloman of the Southern District of Florida, and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS). A temporary restraining order freezing assets of the indicted defendants and their companies was also filed.

Gladys Zambrana, Javier Zambrana, Enrique Perez, Alejandro Hernandez Quiros aka Alex Hernandez, Vanessa Estrada, Vicenta Tellechea, Modesto Hidalgo and Carlos Castaneda were charged in an indictment unsealed today in Miami with conspiracy to commit health care fraud. Gladys Zambrana was also charged with four counts of health care fraud. Gladys Zambrana and Hernandez Quiros were charged with three counts each of paying health care kickbacks, while Perez, Hidalgo and Tellechea were charged with one count each of paying health care kickbacks. Gladys Zambrana, Perez, Alejandro Quiros, Tellechea and Castaneda were also charged with conspiracy to launder health care fraud proceeds.

According to the indictment, Gladys Zambrana, Perez and Hernandez Quiros operated ABC Home Health Care Inc. (ABC), listing Javier Zambrana as the owner; and Gladys Zambrana and Castaneda operated Florida Home Health Care Providers Inc. (Florida Home Health), listing Tellechea as the owner. Both ABC and Florida Home Health purported to be home health agencies that catered to Medicare beneficiaries. The indictment alleges that at both agencies, beneficiaries were recruited and paid kickbacks and bribes to arrange for their Medicare beneficiary numbers to be used by their co-conspirators to file claims with Medicare for purported home health care services. The indictment alleges that the services were not provided and were not medically necessary.

The indictment alleges that in addition to exerting ownership and control of the home health agencies, Hernandez Quiros and Castaneda acted as Medicare beneficiary recruiters for ABC and Florida Home Health, respectively; and Hidalgo, a medical assistant, falsified medical tests and records to make it appear that the services were needed. The indictment alleges that ABC billed more than $17 million to the Medicare program for services provided from January 2006 through December 2008 that were medically unnecessary and were not actually provided. During that time frame, Medicare paid more than $11 million on those fraudulent claims submitted by ABC. The indictment also alleges that from October 2007 through March 2009, Florida Home Health billed more than $5 million to the Medicare program for services that were medically unnecessary and not actually provided. During that time frame, Medicare paid more than $4 million on those fraudulent claims submitted by Florida Home Health.

The charge of conspiracy to commit health care fraud carries a maximum prison sentence of 10 years. Each charged count of health care fraud carries a maximum prison sentence of 10 years and each count of paying health care kickbacks carries a maximum prison sentence of five years. Conspiracy to launder health care fraud proceeds carries a maximum prison sentence of 10 years per count.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

In conjunction with the criminal case, on June 24, 2009, the U.S. Attorney’s Office filed a civil complaint for injunctive relief under the fraud injunction statute and obtained a temporary restraining order freezing the assets of ABC, Florida Home Health, Gladys Zambrana, Javier Zambrana, Perez, Hernandez Quiros, Castaneda and Tellechea. In addition, that temporary restraining order also freezes certain financial assets of four other companies the defendants owned or controlled and allegedly used to launder money fraudulently obtained from Medicare. The temporary restraining order is intended to preserve the remaining proceeds of the fraud for recovery by the United States as part of the criminal case and any related civil proceedings.

“This indictment is a powerful example of the ongoing impact of the Medicare Fraud Strike Force,” said Assistant Attorney General Lanny A. Breuer. “Through real-time data analysis, the Strike Force is at the forefront of stopping health care fraudsters in their tracks.”

“Health care fraud schemes in South Florida range from simple billing schemes and fly-by-night durable medical equipment providers, to more sophisticated frauds, including infusion fraud, fraud on the Medicare Advantage Program, and now fraud in the delivery of home health services,” said Acting U.S. Attorney Jeffrey H. Sloman. “Today’s coordinated criminal and civil action delivers an effective one-two punch to health care fraudsters: they were not only caught and criminally charged, but they are also being stripped of their illegal proceeds.”

“Today’s arrests demonstrate our vigilance in combating home health fraud by bringing to bear enforcement resources from across government,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “These kickback schemes involving conspiracies between suppliers and beneficiaries divert millions of dollars away from the Medicare beneficiaries who truly need these critical services.”

The criminal case is being prosecuted by Trial Attorney N. Nathan Dimock and Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section. The civil case is being handled by Assistant U.S. Attorney Ted L. Radway of the U.S. Attorney’s Office for the Southern District of Florida. The case was investigated by the FBI and the HHS Office of Inspector General.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida. Since strike force operations began in March 2007, 115 cases including 257 defendants have been indicted. Collectively, these defendants are alleged to have fraudulently billed the Medicare program for more than $600 million.