Headlines that Matter for Companies and Executives in Regulated Industries

Owner of Telemedicine Companies Settles $110 Million Health Care Fraud Claim

Steven Richardson, the owner of telemedicine companies Expansion Media, LLC and Hybrid Management Group LLC, agreed to settle allegations that he was involved in a $110 million fraudulent scheme involving medically unnecessary durable medical equipment (DME).

According to the government, between March 2016 and January 2023, Richardson, through his companies, entered into business relationships with telemarketing companies to target Medicare beneficiaries. The telemarketers allegedly paid Richardson’s companies to generate orders for DME that were not medically necessary and based on false information. The government further alleged that Richardson worked with medical staffing companies to find and pay doctors and nurses who were willing to review and sign the false orders, which were designed to make it appear as if they had personally examined and treated the Medicare beneficiaries. Richardson is alleged to have provided the signed orders to the telemarking companies, which, in turn, sold the orders to the DME suppliers. The DME suppliers allegedly submitted approximately $110 million in false and fraudulent claims to Medicare.

Richardson pled guilty to conspiracy to commit health care fraud. As a part of his plea agreement, Richardson admitted that $15,721,854.75, the amount of proceeds that his companies received as a result of the fraudulent scheme, is subject to forfeiture.

The US Department of Justice (DOJ) press release can be found here.

Jury Convicts Doctor of $2.8 Million Medicare Fraud

On February 15, a federal jury in the Central District of California found Dr. John Thropay guilty for his involvement in a scheme to defraud Medicare by billing $2.8 million for unnecessary hospice services.

Dr. Thropay was the medical director of several California hospice companies, including Blue Sky Hospice Inc. According to the government, from October 2014 through March 2016, Thropay fraudulently certified Medicare patients as having terminal illnesses that the patients did not actually have so that Blue Sky could bill Medicare for hospice services. According to the indictment, between October 2014 and October 2016 alone, Blue Sky submitted over $3 million in claims for hospice services provided to beneficiaries where Thropay was listed as the referring or attending physician. The indictment also alleges that owners of Blue Sky paid recruiters illegal kickbacks in exchange for referring beneficiaries to Blue Sky.

The federal jury found Thropay guilty of four counts of health care fraud and one count of conspiracy to commit health care fraud. Thropay is scheduled to be sentenced on May 28and faces a maximum penalty of 10 years in prison on each count.

The DOJ press release can be found here.

NY Attorney Sentenced to 78 Months in Prison for Role in $18.8 Million Ponzi Scheme and Health Care Fraud

US District Judge Paul G. Gardephe sentenced Robert Wisnicki to 78 months in prison for operating an $18.8 million Ponzi scheme run through his New York-based law firms, Wisnicki & Associates LLP and Wisnicki Neuhauser LLP, and a separate conspiracy to commit money laundering to conceal a health care fraud scheme.

Wisnicki ran a real estate investment business using his law firms. According to the government, as a part of this business, Wisnicki’s clients allegedly asked him to identify potential real estate investment opportunities for them. The clients either transferred funds to Wisnicki or asked him to retain the funds that were already held in the law firms’ Interest Only Lawyers Accounts (IOLA). According to the government, when the clients began to suffer losses from these investments, rather than notify them, Wisnicki masked the losses by transferring funds from the accounts of his firms’ clients who did not participate in the investments to the accounts of the clients who did.

According to the government, beginning in 2014, Wisnicki, along with several conspirators, also defrauded automobile insurance companies by billing insurance companies for unnecessary, harmful, and excessive medical treatments. The government alleged that Wisnicki deposited funds from the health care fraud into the firms’ IOLA accounts under the false pretense that they were payments for legal services, and Wisnicki used these proceeds to pay for real estate.

In September 2023, Wisnicki pled guilty to his participation in the Ponzi scheme and conspiracy to commit money laundering. In addition to the 78-month prison term, the court sentenced Wisnicki to three years of supervised release and ordered him to forfeit a money judgment of $19,010,548.06 and to pay $18,800,000 in restitution.

The DOJ press release can be found here.

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