Orthodontist found guilty of more than 1,800 cases of fraud

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Corrupt doctor with money in his pocket

Imagine earning money for services never performed – and that came from public coffers. That’s exactly what Dr. Richard Malouf did, according to Texas Medicaid investigators. Malouf, an orthodontist with several clinics in Dallas, falsely billed Medicaid for services that other doctors performed, some of which were done while he was out of the country on vacation. (I guess he figured no one would catch on that you can’t be in two places at once.)

Using his clinics as cover, Malouf fraudulently billed Medicaid a whopping total of 1,842 times to the tune of $538,228.45, according to court documents. Due to penalties enforced by the Texas Medicaid Fraud Protection Act, the good doctor owes Texas $12 million dollars. (It’s about time. This case has been ongoing since 2011, taking nine years to settle the matter.)  The whistleblowers and their lawyers stand to reap in 14-25% of the money owed. (Their reward for making sure taxpayers weren’t scammed out of millions of dollars more.)  

This fraudster is an example of someone who fell prey to the green-eyed monster of greed. Malouf owned a multimillion-dollar chain of orthodontia clinics, one of the most expensive mansions in Dallas, and had a fully functioning water park in his backyard, according to reports. Despite all these riches, he still defrauded Medicaid for hundreds of thousands more. (Ironically, in his quest to become even richer, he’s lost it all and tarnished his reputation.)

The Texas Attorney General’s office released a statement saying that identifying Medicaid fraud continues to be one of their top priorities. In fact, Texas has a Medicaid Fraud Control Unit specifically intended to detect and help prosecute these types of crimes. A few of the most common Medicaid fraud schemes are billing for medical procedures that were never performed, billing clients for medically unnecessary tests, billing for name brand medication but providing generic, and billing care for patients no longer living.

Today’s Fraud of the Day comes from an article, “Court Awards Millions for Texans in Medicaid Fraud Lawsuit,” published by East Texas Review on May 14, 2020.

AUSTIN – Attorney General Ken Paxton today announced that the Hon. Catherine Mauzy of the 126th Judicial District Court of Travis County has ruled Dr. Richard Malouf of ASDC Holdings, LLC responsible for 1,842 unlawful acts under the Texas Medicaid Fraud Prevention Act. Dr. Malouf operated orthodontics clinics for many years in the Dallas area and billed tens of millions of dollars to Texas Medicaid. The Court found that Malouf fraudulently billed Medicaid for services that were actually provided by a different doctor, including over 100 billings he filed while vacationing out of the country.

“Identifying and preventing Medicaid fraud continues to be a top priority for the Office of the Attorney General. Misconduct like this compromises the integrity of the Medicaid program and must be stopped as soon as it is discovered,” said Attorney General Paxton. “I am proud of this recovery of taxpayer money. My office is, as always, committed to ensuring that Medicaid dollars are preserved for those who need it most.”

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.