Podiatrists In Massive Medicare Health Care Fraud – US Attorney- New York

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PREET BHARARA, the United States Attorney for the
Southern District of New York, RONALD J. VERROCHIO,
Inspector-in-Charge of the New York Division of the United States
Postal Inspection Service (“USPIS”), and TOM O’DONNELL, the
Special Agent-in-Charge of the New York Regional Office of the
United States Department of Health and Human Services Office of
Inspector General (“HHS-OIG”) announced today the prison
sentences of nine doctors of podiatry for their participation in
a large-scale Medicare and health care fraud scheme at podiatry
clinics located throughout New York City.
Today, United States District Judge KIMBA M. WOOD of
Manhattan Federal Court sentenced HENRY BORRELLI, Doctor of
Podiatric Medicine, to a term of 18 months in prison on charges
of conspiracy to commit mail fraud, health care fraud, and false
statements; health care fraud; and conspiring to violate the
Medicare statute. BORRELLI pleaded guilty to the charges on
April 9, 2002. After a jury trial before Judge WOOD, BORRELLI’s
co-defendants ALBERT KALAJIAN and NICOLAS ERRICO were found
guilty of all charges on June 27, 2002. KALAJIAN was sentenced
on October 1, 2009, to a term of 37 months in prison, and ERRICO
was sentenced by Judge Wood on October 15, 2009 to a term of 30
months in prison.
Judge WOOD previously sentenced six other podiatrists
to prison terms, ranging from six months to just over five years,
for their participation in the same scheme. The dates and terms
of the sentences are set forth below:
Date Defendant Term
January 12, 2007 MICHAEL BRUMER, DPM, 63 months
January 12, 2007 LAWRENCE KLEIN, DPM 63 months
February 27, 2004 ALAN KATZ, DPM 12 months
December 17, 2008 ARTHUR MINKOFF, DPM 10 months
April 27, 2005 PAUL ROHE, DPM 8 ½ months
April 22, 2004 MITCHELL PEARCE, DPM 6 months
According to the Indictment, other documents filed in
the case, and statements made during court proceedings including
the trial of ERRICO and KALAJIAN:
At various times during the course of the scheme,
BRUMER and KLEIN, who were themselves doctors of podiatric
medicine, employed BORRELLI and ten other podiatrists at a number
of affiliated foot-care clinics located in Manhattan, the Bronx,
Queens, and Brooklyn (the “Citywide Clinics”). Through the
Citywide Clinics, the defendants orchestrated a scheme to cheat
Medicare and private insurance companies by several means,
including soliciting patients off the street with flyers offering
“free treatment,” when in fact the treatment was “free” only
because the defendants purposely ignored Medicare’s requirement
that patients be responsible for the 20 percent co-payment;
falsifying the nature of their patients’ medical conditions in
order to obtain reimbursement from Medicare and private health
care insurance companies for routine foot care services which
otherwise would have been non-reimbursable; falsifying the nature
of the services provided, i.e., “up-coding,” in order to obtain
reimbursement from Medicare and private health care insurance
companies for otherwise non-reimbursable services; directing the
podiatrists at the Citywide Clinics to perform unnecessary
medical procedures on their elderly patients; and falsely
representing in Medicare claims that procedures were performed in
Manhattan, which enabled the defendants to receive higher
reimbursements from Medicare.
To date, 17 former employees of the Citywide Clinics
have been convicted of charges relating to the scheme, including
four other podiatrists — IRA BELL, of Jericho, New York;
DARRICKA CARTER, of Virginia; WILLIAM GRUBESSI, of Westbury, New
York; and DOUGLAS HERZLICH, of Manhattan — and four employees of
the Citywide Clinics’ billing or administrative staff.
In sentencing BORRELLI, 51, of Little Falls, New
Jersey, Judge WOOD stated: “Dr. Borelli spent at least four years
lying to Medicare about the services being billed for his
patients and during that time he took no steps to report or stop
the crimes.”
Previously, in imposing ERRICO’s sentence, Judge WOOD
stated that “Medicare fraud is a blight on our society and
increases costs to the point where some people may not be able to
receive the services they need.”
PREET BHARARA, United States Attorney for the Southern
District of New York stated: “The defendants in this case are
medical professionals who abused their patients’ trust and stole
taxpayer money from the Medicare program. This was money that
could have been used to treat patients actually in need of
medical care, but instead the defendants used it to line their
pockets. We will continue to work vigorously with our law
enforcement partners at the USPIS and HHS-OIG to investigate and
prosecute health care and Medicare fraud cases, one of the top
priorities of the Department of Justice.”
“With the cost of medical care rising for all
Americans, the Postal Inspectors will identify those who defraud
the system for their riches and bring them to justice,” said
RONALD J. VERROCHIO, the Inspector-In-Charge of the New York
Division of the USPIS.
“Today’s action sends a message to those who corruptly
take advantage of the Medicare system. The Office of Inspector
General, New York Regional Office, will continue to aggressively
protect the Medicare system and the taxpayers from fraud and
abuse,” said TOM O’DONNELL, the Special Agent-in-Charge of the
New York Regional Office of the HHS-OIG.
Mr. BHARARA praised the investigative work of the USPIS
and the HHS-OIG.
This case is being prosecuted by the Office’s Complex
Frauds Unit. Assistant United States Attorney ROBIN W. MOREY is
in charge of the prosecution.
10-005 ###

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