Source: United States Department of Justice Criminal Division
An indictment was unsealed in the Middle District of Florida today charging an Oklahoma chiropractor and medical supply company owner for his role in a conspiracy to submit fraudulent claims to multiple federal health care programs for orthotic braces and other durable medical equipment (DME), and for the theft of government funds intended to support health care providers during the COVID-19 pandemic.
According to the indictment, Mark Loftis, 38, of Cushing, Oklahoma, was the owner of a medical supply company called Back Pain Home Supplies LLC, which did business as EZ Medical Supply. As alleged, Loftis paid illegal kickbacks to marketers in exchange for the referral of Medicare patients, and to marketers and telemedicine companies in exchange for signed doctors’ orders that could be used to support claims to health care benefit programs. The telemedicine providers did not engage in meaningful evaluation of the patients before signing the orders. Loftis allegedly caused Back Pain to bill Medicare, TRICARE (the health care benefit program for U.S. service members and their families), and CHAMPVA (the health care benefit program for spouses and children of permanently disabled veterans) for DME that was medically unnecessary, obtained through the payment of illegal kickbacks, and not provided as billed. In total, Back Pain submitted approximately $30 million in false and fraudulent claims, for which the three health care programs paid approximately $8 million.
As further alleged, Loftis converted for his own use and the use of others money he received from the Provider Relief Fund (PRF) pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act. PRF funds were appropriated to help health care providers that were financially impacted by the COVID-19 pandemic, as well as to provide care to patients who were suffering from COVID-19 and compensate providers for the cost of that care. As alleged, Loftis received more than $133,000 in PRF funds and then falsely attested to a series of conditions to retain the funds, including that he would use the funds for health care expenses and to replace revenue lost due to the pandemic. In reality, Loftis used a portion of the funds to further the DME fraud scheme and for a variety of personal expenses.
Loftis is charged with one count of conspiracy to commit health care fraud and wire fraud, one count of conspiracy to defraud the United States and to offer, pay, solicit, and receive kickbacks, and two counts of theft of government property. If convicted, he faces a maximum penalty of 20 years in prison on the health care and wire fraud conspiracy count, five years in prison on the conspiracy and kickback count, and 10 years in prison on each of the theft of government property counts. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division; U.S. Attorney Gregory W. Kehoe for the Middle District of Florida; Special Agent in Charge Matthew Fodor of the FBI’s Tampa Field Office; Deputy Inspector General for Investigations Christian J. Schrank of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); Special Agent in Charge Jason Sargenski of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service (DCIS) Southeast Field Office; and Special Agent in Charge David Spilker of the Department of Veterans Affairs Office of Inspector General (VA-OIG) Southeast Field Office made the announcement.
FBI, HHS-OIG, DCIS, and VA-OIG are investigating the case.
Acting Assistant Chief Catherine Wagner of the Justice Department’s Fraud Section is prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,800 defendants who collectively have billed federal health care programs and private insurers more than $30 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.