The owner of two telemedicine companies was sentenced on February 26, 2026, to 7 years in prison and ordered to pay $27.9 million in restitution for his role in a scheme to fraudulently bill Medicare for unnecessary durable medical equipment (DME).
According to court documents and statements made in court, the defendant, 57, formerly of Richmond Hill, Georgia, owned and operated two telemedicine companies located in Bayonne, New Jersey, between 2017 and 2019. Through these companies, he and others paid illegal kickbacks to medical providers to sign orders for orthotic braces for Medicare beneficiaries, even though the beneficiaries did not need the braces. The defendant and others illegally sold the signed orders to purported marketing companies that often re-sold the orders to brace companies, which in turn submitted claims for the unnecessary braces to Medicare.
The defendant and his co-conspirators at marketing companies induced beneficiaries to accept as many braces as possible. Providers working for the defendant’s telemedicine companies signed orders for four or more orthotics per beneficiary for over 3,000 beneficiaries, and more than 40 beneficiaries received orders for 10 or more orthotics.
The defendant also attempted to conceal his crimes by creating a new telemedicine company and convincing a member of his church that it was an investment opportunity. He obtained $20,000 from the member and directed her to establish the company and associated bank accounts in her name, which he then controlled.
During the conspiracy, the defendant and others submitted over $56 million in false and fraudulent claims to Medicare, of which Medicare paid over $27.9 million.
The FBI, IRS Criminal Investigation (IRS-CI), and the US Department of Health and Human Services Office of Inspector General (HHS-OIG) investigated the case.
Compliance Perspective
Issue
Telemedicine has become an increasingly common method of delivering healthcare services, including the ordering of DME. Federal law prohibits offering, paying, soliciting, or receiving remuneration in exchange for referrals or orders for items or services reimbursable by federal healthcare programs. Claims submitted for items that are not medically necessary or not supported by appropriate documentation may result in liability under the Anti-Kickback Statute, False Claims Act, and other federal fraud and abuse laws. Healthcare organizations are responsible for ensuring that telemedicine services and related billing practices comply with applicable legal and regulatory requirements.
Discussion Points
- Review policies and procedures governing telemedicine services, vendor relationships, and DME ordering practices to ensure they clearly prohibit kickbacks and other improper financial arrangements. Policies should require documented medical necessity, independent clinical judgment, and appropriate review of third-party marketing or referral sources. Organizations may consider working with a qualified compliance or regulatory consultant to evaluate existing protocols, strengthen internal controls, and address any identified vulnerabilities in contracting or billing practices.
- Provide regular education to clinical, administrative, and billing staff regarding vendor relationships, Medicare billing requirements, and federal fraud and abuse laws. Training should reinforce adherence to company contracting policies, proper documentation standards, and the importance of independent clinical decision-making. Med-Net Academy offers the course Module 10 – Vendor Contracts and Services, which addresses adherence to vendor contracting policies, key elements of Medicare Part B consolidated billing, and foundational components of federal government contracting.
- Conduct periodic audits of telemedicine services, DME orders, and related billing to confirm that services are medically necessary and properly documented. Audits should also evaluate financial relationships with vendors, marketing entities, and referral sources to ensure compliance with federal law. Some organizations engage an external reviewer to perform mock surveys or focused compliance assessments to proactively identify risk areas, recommend corrective actions, and support ongoing regulatory compliance efforts.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*