Operation Rubber Stamp

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Corrupt doctor with money in his pocket

Fraud schemes involving telemedicine have become increasingly common as more people turn to virtual health services. The Department of Justice has conducted several nationwide takedowns of fraudulent telemedicine rings which have attempted to defraud patients and abuse the healthcare system.

Most recently, more than 30 defendants have been charged in the Southern District of Georgia for their involvement in a nationwide telemedicine fraud labelled Operation Rubber Stamp. This scheme resulted in over $1.5 billion in fraudulent billings to government healthcare insurance programs. (Just a billion and a half of taxpayer money wasted, no big deal.) It’s important to note that this takedown is the first billion-dollar case of its kind in the district’s history. 

The defendants encompass individuals and companies that worked together to collect patient data and then sell it to durable medical equipment (DME) suppliers, pharmacies, and labs. The scheme targeted patients by telemarketing durable medical equipment, test results, and medication to individuals who divulged medical complaints online. (Be careful what you complain about online. Sometimes, it’s better to keep your mouth shut.)

Some of the defendants involved in this operation are telemedicine executives who allegedly paid doctors and nurse practitioners to order unnecessary DME, diagnostic testing, genetic testing, and pain medications. DME companies, genetic testing laboratories, and pharmacies would then purchase the unnecessary orders in exchange for illegal kickbacks and bribes. (This scheme was run like a well-oiled machine. Everyone played their part.)  

The organizations involved in this healthcare fraud scheme submitted fraudulent claims for DME, testing, and medications to Medicare as well as other government healthcare providers. In addition to the telemedicine executives, more than two dozen licensed medical professionals, marketers, and the owners of DME companies, genetic testing laboratories, and pharmacies are defendants in this scheme. (Every shady doctor in town wanted in on this illegal scam.) More than 30 guilty pleas by those involved in the scheme has already been entered as a part of this takedown.

The doctors and nurses involved in the scheme ordered unnecessary equipment and medication without ever interacting with a patient or after a brief phone call discussing their problems. Nurse practitioner Sherley Leon Beaufils, is alleged to have ordered more than 3,000 orthotic braces, generating more than $3 million in fraudulent or excessive charges to Medicare. 

Both the Centers for Medicare and Medicaid Services and the Center for Program Integrity took administrative actions against companies due to this investigation. They revoked the Medicare billing privileges of more than 250 additional medical professionals for their involvement in telemedicine schemes. (Serves them right for breaking the Hippocratic Oath and the trust of their patients.)  

The former compliance officer for one of the main companies involved in the scheme has been charged for her role in the conspiracy. Toni De Lanoy has been charged with conspiracy to commit healthcare fraud for allegedly helping to facilitate more than $1 billion in fraudulent orders for DME billed to Medicare, Medicaid and other government insurance programs. (The only thing she was compliant with, was the companies who paid her tons of money.)  

Operation Rubber Stamp was part of a joint investigation led by the National Rapid Response Strikeforce of the Health Care Fraud Unit of the Criminal Division Fraud Section of the U.S. Department of Justice. The indictments pending against the remaining defendants are only allegations, anyone who has not pleaded guilty is to be presumed innocent until proven otherwise in a court of law.

Today’s Fraud of the Day comes from a Department of Justice press release, “Operation Rubber Stamp: Major health care fraud investLation results in significant new charges,” dated October 7, 2020.

SAVANNAH, GA: The third in a nationwide series of telemedicine fraud prosecutions includes cases in the Southern District of Georgia identifying more than $1.5 billion in fraudulent billings to government healthcare insurance programs.

The takedown – dubbed Operation Rubber Stamp, and following two similar nationwide Department of Justice initiatives in 2019 – brings prosecution totals up to 30 defendants now charged in the Southern District of Georgia, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The cases were announced in a joint news conference with District of South Carolina U.S. Attorney Peter M. McCoy.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.