On July 25, 2025, the US Attorney’s Office for the Middle District of Florida announced the sentencing of a 59-year-old man to 17 years and 6 months in federal prison. He was also ordered to pay over $5.6 million in restitution for his role in a Medicare fraud scheme.
The defendant and his co-conspirators submitted more than $10.8 million in fraudulent claims for durable medical equipment (DME) that Medicare beneficiaries did not want or need. These items were obtained through the payment of kickbacks.
According to court documents and testimony, from October 2018 to April 2019, the defendant conspired with others to steal millions from Medicare by creating sham companies that shipped braces to beneficiaries. Some beneficiaries were identified through telemarketing, while others’ personal information was stolen to submit fraudulent claims. The conspirators paid kickbacks to other companies in exchange for signed doctors’ orders. These companies used overseas call centers to solicit patients and fraudulent telemedicine services to obtain fake prescriptions for braces.
The defendant, a licensed broker, also filed false records with his employer and a private regulatory organization to conceal his involvement in the DME companies.
On April 9, 2019, multiple federal agencies conducted a nationwide operation called “Operation Brace Yourself.” This operation targeted schemes like the defendant’s, in which companies paid illegal bribes to secure signed physician orders for DME braces used to support fraudulent claims. In the Middle District of Florida, the operation included executing search warrants at numerous DME storefronts and civil actions.
Before the operation, the defendant was attempting to establish six more DME companies, which were stopped by law enforcement. To hide their profits, the defendant and his co-conspirators laundered the Medicare proceeds.
Compliance Perspective
Issue
DME billed to Medicare must meet strict medical necessity requirements. Medicare only covers DME that is prescribed by a licensed provider for the diagnosis or treatment of a legitimate medical condition. Submitting claims for items that are not medically necessary—or obtained through improper means—may constitute fraud under the False Claims Act and lead to significant penalties, including fines and imprisonment. Federal law also prohibits offering or receiving anything of value in exchange for referrals of Medicare-reimbursable items. This includes arrangements with marketing firms, telemedicine providers, and DME suppliers. Such kickback arrangements, whether involving money, commissions, or other incentives, are illegal and must be reported through appropriate compliance channels.
Discussion Points
- Review and update your organization’s policies and procedures related to ordering and billing for DME. Ensure all practices comply with Medicare’s medical necessity requirements and federal fraud and abuse laws. Confirm that all third-party relationships, including those with marketing companies, telemedicine providers, and DME suppliers, meet legal standards and do not involve payment structures based on referrals or reimbursement volume.
- Train staff to verify medical necessity before ordering or billing for any service or item. If necessity is unclear, seek clarification or consult with the medical director. Educate staff on the Anti-Kickback Statute and what constitutes a kickback or false claim. Reinforce the importance of internal reporting procedures, timely reporting, and protections against retaliation.
- Conduct regular audits to verify that billed items and services meet medical necessity criteria and that claims are accurate. Review vendor and referral source relationships to detect compliance risks. Survey staff to assess their understanding of medical necessity and their ability to recognize and report potential false claims or improper referrals.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*