Richard G. Frohling, Acting United States Attorney for the Eastern District of Wisconsin, announced that on May 29, 2025, US District Judge Joseph P. Stadtmueller sentenced a Florida man to 22 months in federal prison for conspiracy to pay and receive healthcare kickbacks, in violation of the Anti-Kickback Statute. The individual was also ordered to pay over $2 million in restitution to Medicare.
According to court records, the man and a co-conspirator owned a company that supplied durable medical equipment, including orthotic devices such as braces for ankles, knees, backs, and shoulders. Beginning in August 2019, he began supplying “leads” or signed doctors’ orders to the company in exchange for kickback payments funneled through two businesses under his control.
In approximately February 2020, he became a fifty-percent owner of the durable medical equipment company and continued to offer and pay kickbacks for signed doctors’ orders. To conceal the illegal payments, the parties disguised the kickbacks as compensation for marketing services. As a result of the conspiracy, Medicare paid more than $2 million to the company. The defendant personally received hundreds of thousands of dollars during 2019 and 2020.
“The conduct in this investigation highlights a scheme whereby the defendant prioritized profits over patient care, in violation of the Anti-Kickback Statute.” said Special Agent in Charge Mario M. Pinto of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working together with our law enforcement partners, HHS-OIG will continue to protect the integrity of federal healthcare programs.”
The FBI and HHS-OIG investigated the case, which Assistant US Attorney John Scully prosecuted.
Compliance Perspective
Issue
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving any form of remuneration to induce referrals for items or services covered by Medicare, Medicaid, or other federally funded healthcare programs. This prohibition applies equally to individuals or entities that offer kickbacks and those that receive them. The law is designed to ensure that medical providers’ decisions are based on the best interests of patients, not influenced by improper financial incentives. Kickbacks can take many forms, including bribes, rebates, or other types of compensation, whether in cash or in kind. Failure to promptly report suspected kickback activity can result in lawsuits, financial penalties, and other sanctions.
Discussion Points
- Review your policies and procedures related to anti-kickback compliance to ensure they align with current federal and state regulations. Update if necessary.
- Provide comprehensive training to all employees on what constitutes a kickback under federal and state laws, emphasizing the importance of prompt reporting and the procedures for doing so. Document all training sessions.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*