It seems as if the Department of Justice, Department of Health and Human Services, and other federal agencies are announcing historic telehealth fraud busts every other week. As soon as one bust breaks the previous money record, the next record-setting apprehension is just around the corner. One of the major catalysts for the telehealth fraud explosion is, of course, the ongoing COVID-19 pandemic.
A recent poster child for telehealth fraud, Creaghan Harry, was charged by a federal grand jury with a litany of healthcare-related fraud. The defendant, who owned multiple telehealth providers, allegedly oversaw fraudulent Medicare billing that totaled $784 million. Harry’s alleged accomplices previously pleaded guilty to charges including conspiracy to pay and receive health care kickbacks and conspiracy to commit money laundering.
Creaghan Harry, Lester Stockett, and Elliot Loewenstern sent up red flags to federal investigators by purchasing yachts, luxury vehicles, and other hallmarks of lavish lifestyles. These luxury assets also raised the DOJ’s antennae for tax evasion. Creaghan Harry was ultimately charged with four counts of income tax evasion along with the alleged health care and wire fraud.
Shell companies, many of them registered in Caribbean countries with lenient tax and reporting rules, allegedly helped shuttle the ill-gotten cash to the defendants’ telehealth companies headquartered in the States. Prosecutors allege that Creaghan Harry and his accomplices operated these schemes across the globe, including Latin America and the Philippines. By misrepresenting the annual income of these telehealth companies, federal prosecutors also allege that the defendants defrauded investors, attorneys, and federal agents.
The victims overwhelmingly skewed elderly, which opened the door for countless fraudulent Medicare claims. The Centers for Medicare & Medicaid Services (CMS) ultimately paid out an estimated $247 million to Creaghan Harry and his colleagues.
The viability and proliferation of telehealth arrangements is only expected to increase. The same can be said for federal oversight, investigations, enforcement, and prosecutions related to telehealth.
As these virtual care arrangements get more complex, providers and physicians should take extra care to ensure each party operates under the applicable federal and state health care statutes. Illegal kickbacks that might appear to be proper in non-healthcare professional relationships should be closely monitored and ceased if deemed to be improper.
An attorney with deep knowledge of and experience in Medicare fraud and related federal crimes is the best resource when faced with these charges. Barry M. Wax has decades of experience guiding clients through disposition of Medicare fraud and health care fraud.
As prosecutions for telehealth and telemedicine fraud continue to increase, our team is here to help provide a premium defense and protect your rights. Contact the firm to schedule your free one-hour consultation.