Florida fraudsters' scheme to defraud Detroiters lands them in jail

In the early 2000s, Florida saw a significant increase in health care fraud schemes. The state’s many Medicare members were seen as tempting targets by fraudsters. After a few years, these criminals saw the metro Detroit area as an opportunity for expansion.

One scheme involved a group of associates, including family members, who took advantage of drug seekers to enrich themselves. The group moved in early 2008 from Miami to metro-Detroit and opened a medical clinic. They hired an elderly, semi-retired doctor to serve as their medical director. 

The group began recruiting patients from senior centers, senior apartment complexes and soup kitchens. They'd give the patients cash if they agreed to come to the clinic and get tests done.  

The clinic doctor would order nerve conduction tests and breathing tests for most patients, even when they weren't necessary. The patients would also get prescriptions for a narcotic like Oxycontin, an addictive pain medicine. The patients could keep the prescriptions or receive another cash payment if they returned the prescription to the clinic. Someone from the group would then fill the prescription and sell the drugs on the streets.

In 2009, the family opened a second medical clinic and hired another elderly, semi-retired doctor to serve as the medical director. Having two clinics allowed them to bill medical tests under one doctor’s name and provide prescriptions to the recruited patients under the other doctor’s name.      

Despite the conspirators’ efforts to stay under the radar, their excessive billing caught the attention of law enforcement and our Corporate and Financial Investigations department. The scheme targeted Medicare members, but we were affected through Medigap policies and pharmacy claims.

In 2011, eight individuals were charged with crimes, including conspiracy, health care fraud and distribution of controlled substances. Both doctors were charged with participating in the scheme.

In 2012, the defendants pled guilty to the crimes. One doctor was determined to be suffering from dementia and, therefore, was incompetent to proceed. To date, five of the defendants have been sentenced; the primary players received up to 10 years in jail. Blue Cross Blue Shield of Michigan has been granted $197,229 to compensate for the unnecessary tests and prescription drugs.

Members who suspect health care fraud should call our Anti-Fraud Hotline at 1-800-482-3787, or report fraud through our website.