Three Defendants Plead Guilty to Their Roles in $6.5 Million Medicare Fraud Scheme

Alfredo Rasco, 51, and Niurka Rasco, 49, both from Miami, Florida, and Iris Oswald, 54, from St. Simons Island, Georgia, pleaded guilty earlier this week before United States District Court Judge William T. Moore, Jr. to their roles in a scheme to defraud Medicare of $6.5 million. Seconds before the scheduled start of the government’s evidence in the trial, the defendants pled guilty.

United States Attorney Edward J. Tarver stated, "Health care fraud is one of our most urgent and widespread national challenges. Offenders who steal from Medicare will be caught, sentenced to long prison sentences and their ill-gotten gains will be forfeited. The United States Attorney’s Office is committed to strengthening the Medicare program through the vigorous prosecution of those who defraud the American people."

Evidence during the guilty pleas showed that from December of 2005 through March of 2008, Alfredo Rasco, Niurka Rasco, Iris Oswald, and others operated United Therapy, a phony medical clinic located in downtown Savannah. The defendants and others lured Medicare beneficiaries to United Therapy with free food, transportation, and gift cards. Many of the Medicare beneficiaries targeted by the scheme were afflicted with HIV or AIDS and lived in local homeless shelters and Section VIII housing. Once at United Therapy, the Defendants used the patients’ Medicare information to submit $6.5 million worth of phony bills to Medicare for infusion services that were not provided to those patients. Before law enforcement put a stop to this fraud, the defendants stole over $4 million from Medicare.

For his role in the scheme, Alfredo Rasco faces a maximum statutory penalty of up to 12 years in prison, fines up to $500,000, and three years of supervised release. Niurka Rasco faces a maximum statutory penalty of up to six months in prison, a fine up to $2,000, and one year of supervised release. The Rascos also forfeited proceeds of the scheme, including $1.3 million seized from their bank accounts and a 42' powerboat they named "Thank You, God." For her role in the scheme, Iris Oswald faces a maximum statutory penalty of five years in prison, a fine up to $250,000 and three years of supervised release. Ms. Oswald also agreed to forfeit a home she purchased on St. Simons Island with proceeds of the fraud scheme.

All three defendants remain on bond pending sentence, which will be held upon the completion of a pre-sentence investigation and report.

Mr. Tarver praised the hard work and dedication of Special Agents Tony Alig and Josh Hayes of the Federal Bureau of Investigation, along with Special Agent David Graupner of the Office of Inspector General for HHS, who led the investigation of this case. Tarver noted that the indictment against these defendants arose out of Operation Redex Infuscam, a major investigation led by the Federal Bureau of Investigation (FBI) and the Office of Health and Human Services (HHS) into fraudulent infusion billings to Medicare in and around the Southern District of Georgia. Tarver also recognized the extensive efforts provided by investigator Kim Reinken and auditor Karen Hartley of the United States Attorney’s Office for their contributions to a successful prosecution.

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Conspirator in $12 Million Medicare Fraud Ring Sentenced to Prison

ALAIN AMADOR, 31, of Miami, Florida, was sentenced today by Senior United States District Judge Jack T. Camp to serve over 4 years in prison on a charge of conspiracy to commit health care fraud.

United States Attorney David E. Nahmias said, “This was a bold crime in which the defendant and his conspirators made up phony medical companies and billed Medicare for millions of dollars of fake medical services. This defendant, who was a key part of the scheme, will now spend several years in federal prison. The good news is that most of the money the conspirators attempted to get was either not paid or was seized by law enforcement. The crime was identified early because several Medicare patients carefully reviewed and reported discrepancies in the paperwork they received. We thank those citizens, who with many others are on the front lines in our battle against health care fraud.”

“We are proud to be part of the Federal team that brought AMADOR to justice," said Melody Jackson, Special Agent in Charge of the Office of Inspector General's Atlanta Regional Office, who also warned, “Criminals can rest assured that if they attempt to defraud federal health care programs and their patients, they will be held accountable.”

AMADOR was sentenced to 4 years, 3 months in prison to be followed by 3 years of supervised release, ordered to pay restitution in the amount of $3.9 million, and ordered to perform 200 hours of community service. AMADOR pleaded guilty to the charges on March 3, 2009.

According to United States Attorney Nahmias and the information presented in court: AMADOR and his conspirators set up a series of fake medical clinics in the Atlanta area. They leased space in the names of the companies, opened bank accounts, filed corporate documents in the names of the companies, and ultimately applied for and received Medicare billing numbers. However, the companies existed in name only. They maintained no operations, employees, or equipment. Using improperly obtained identity information of actual doctors and Medicare patients, the conspirators filed more than $12 million in Medicare claims for phony services in less than a year.

Of the amount billed, Medicare paid approximately $3 million before the scheme was uncovered and the payments were halted. As part of this criminal case, the United States seized approximately $2 million of this money, some of which was still present in bank accounts when the scheme was identified, and some of which was in the form of checks that were sitting in the fake offices waiting to be picked up and deposited. Most of the remainder of the money was transferred to or deposited in foreign bank accounts.

AMADOR, who has a nursing degree, helped set up and maintain the fake companies. He assisted in incorporating the companies and opening the bank accounts. He periodically traveled from Miami, where most of the conspirators were based, to Atlanta, to keep up appearances at the office space, check the mail (including picking up outstanding Medicare checks), and pay rent.

The investigation is still ongoing. One named co-defendant remains a fugitive. JESUS LLOSA, a Cuban national, was last known to live in Miami, Florida. This case was investigated by Special Agents of the Federal Bureau of Investigation and the Department of Health and Human Services, Office of the Inspector General.

Assistant United States Attorneys Justin S. Anand and Gerald S. Sachs prosecuted the case.

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Medical Supply Executive Imprisoned for Defrauding Medicare

ANGELA D. ISLEY, 44, of Atlanta, Georgia, was sentenced today by United States District Judge Charles A. Pannell, Jr. to serve more than 5 years in prison on charges of health care fraud, mail fraud, and money laundering. ISLEY was convicted of these charges on April 28, 2008, following a two week jury trial.

United States Attorney David E. Nahmias said, “The defendant submitted false claims to Medicare with a total value of more than $600,000, resulting in a loss to Medicare of $219,000. She also used her position at Orthoscript, Inc. to steal more than $360,000 from that company. Every dollar the defendant stole from the Medicare program was a dollar taken from the elderly and disabled Americans who depend on Medicare for their health care needs, and from the taxpayers who fund the program. The prison sentence imposed today reinforces the message that health care fraud is a serious crime with serious penalties.”

OIG Special Agent in Charge Melody Jackson said, “Today's action sends a message to those who corruptly take advantage of the Medicare system. The Office of Inspector General, Atlanta Regional Office will continue to work aggressively to eliminate this type of corruption in our health care system.”

ISLEY was sentenced to five years, ten months in federal prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $703,814. Judge Pannell said from the bench at today’s hearing that, partly because of extra costs incurred by the government retrieving hundreds of documents demanded by ISLEY during discovery that he is also ordering her to pay a fine of $125,000.

According to United States Attorney Nahmias and the information presented in court: Between January 2001 and December 2003, ISLEY knowingly assigned incorrect “product codes” to certain wrist braces and walking boots in Orthoscript Incorporated’s inventory in order to generate higher reimbursements from Medicare. ISLEY instructed company employees, often over their objections, to file claims with Medicare listing fraudulent product codes which are to be specifically used for custom-fabricated wrist braces, when all Orthoscript actually supplied were cheaper, prefabricated, off-the-shelf items. As a result of the health care fraud scheme, ISLEY caused Orthoscript to fraudulently bill the Medicare program for more than $600,000.

ISLEY's responsibilities at Orthoscript also included handling and accounting for ordinary business expenses, such as writing checks to vendors. Between April 2001 and April 2004, ISLEY wrote Orthoscript company checks to pay her and her partner's personal Capital One credit card bills, and used her sole control over Orthoscript's books to cause these payments, totaling more than $360,000, to be falsely recorded as legitimate business expenses. Orthoscript's officers and shareholders never authorized ISLEY to obtain reimbursement for these personal expenses.

A defendant in a related case, ARCH NELSON, 46, of Alpharetta, Georgia, who was a partner in Orthoscript, was sentenced late this afternoon to 5 years of probation, and ordered to perform 250 hours of community service, on a charge of misprision of felony, in knowing about and not reporting ISLEY’s crimes. NELSON had pleaded guilty to the charge in October 2006 and testified against ISLEY at her trial.

This case was investigated by Special Agents of the Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.

Assistant United States Attorneys Glenn D. Baker and John Horn prosecuted the case.

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