Yesterday, we discussed how the DOJ began to pay attention to fraud around the COVID-19 pandemic. Today, this article reviews another somewhat related “hot” topic of DOJ-telemedicine. In the past year, we have seen telemedicine become more popular than ever. As one might expect, therefore, the Department of Justice (DOJ) appears to have focused its enforcement on telemedicine to ensure compliance with federal laws.
In April 2021, the Department of Justice accused four orthopedic stent suppliers and the owners of several marketing companies for planning a nationwide rebate and bribery program to order medically unnecessary orthopedic stents for medical insurance beneficiaries.
The five defendants charged include: Thomas Farese and Pat Truglia, owners of orthopedic stent suppliers, charged with one count of conspiracy to commit medical fraud and three counts of medical fraud; Christopher Cirri and Nicholas DeFonte, a fraudulent marketing company Owners and operators of, they were charged with one count of conspiracy to commit health care fraud; Domenic Gatto, the owner and operator of an orthopedic stent supplier, was charged one count of conspiracy to commit medical fraud.
Essentially, the government claimed that from October 2017 to April 2019, the defendant was involved in a nationwide conspiracy to defraud the Department of Veterans Affairs (CHAMPVA) Medicare, Tricare, Civilian Health and Medical Program, and other Federal and private health care benefits programs. The defendants allegedly paid and received illegal rebates in exchange for orders for orthopedic braces that were not medically necessary, resulting in a total loss of $65 million.
The Justice Department further accused Truglia, Cirri, and DeFonte of operating or controlling marketing call centers to solicit patients and induce them to receive orthopedic braces, whether they need them or not. The three defendants paid illegal kickbacks and bribes to telemedicine companies in exchange for doctors and other providers to sign bracing orders and falsely swear their medical necessity. The three defendants also concealed kickbacks and bribes by signing false contracts with fraudulent telemedicine companies and issuing invoices for “marketing” or “business process outsourcing” expenses.
Farese and Truglia purchased these stent orders through orthopedic stent suppliers in Georgia and Florida, through which they charged federal and private health care benefit programs for the order. In addition, in order to conceal their ownership interest in the bracket supplier, Farese and Truglia used nominal owners and provided these names to Medicare.
The complaint also stated that Gatto linked Cirri and DeFonte with other co-conspirators and arranged for them to sell orthopedic stent orders to orthopedic stent suppliers in New Jersey and Florida in exchange for illegal medical kickbacks and bribes. Gatto (and others) then paid rebates to Cirri and DeFonte for each federal healthcare beneficiary, and their orthopedic stent orders were sold to the orthopedic stent supplier. As mentioned above, in order to conceal kickbacks and bribes, Xili and Defonte produced false invoices, marking the payments as “marketing” and “business processing outsourcing” expenses. Similar to Farese and Truglia, Gatto concealed his ownership of the stent supplier by using the nominal owner on the form submitted to Medicare, and used the shell company to transfer the funds he paid for the supplier.
The charges faced by the defendant are punishable by up to 10 years in prison and a fine of $250,000, or twice the total profit or loss caused by the crime (whichever is higher).
Thomas Sullivan is the editor of policy and medicine and the president of Rockpointe Corporation, a company founded in 1995 to provide continuing medical education to healthcare professionals around the world. Before founding Rockpointe, Thomas served as a political consultant.
Post time: Jun-23-2021