Kickback and Enjoy Your Incarceration

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hand holding American dollar currency isolated on blurred blackground injured woman with broken hand and green cast on arm, insurance health concept.

Robert Clay Smith, 60, of Alexandria, Louisiana, is the second doctor to plead guilty to accepting illegal kickbacks from a medical supply and billing company located in Rogers, Arkansas. Dr. Robert Dale Bernauer, Sr. of Louisiana pleaded guilty to his part in the scheme in July 2021. Also, a former billing director for the Rogers-based company, Amanda Dawn Rains, pleaded guilty in October 2021. (Where there’s one fraudster, there’s usually more.)

Smith was allegedly recruited by the medical supply and billing company to dispense pain creams and patches to his patients who were receiving workers’ compensation benefits. (He got a split of the profits to do so. The official term is “kickback.”)

The Rogers-based company took care of all the paperwork by submitting the fraudulent claims to the U.S. Department of Labor, Office of Workers’ Compensation Programs, which covers federal employees. Smith was paid up to 55 percent of the profits collected from billing insurers for medications that had been marked up by 15 to 20 times more than the actual cost.

Smith was paid more than $650,000 for participating in the kickback scheme between 2013 and 2017. Interestingly enough, he did not have a license to dispense medications at his clinic. Despite this very important fact, Smith bought the topical medications from the company and dispensed them to his workers’ compensation patients anyway.

Smith pleaded guilty to conspiracy to commit healthcare and wire fraud for the unlicensed administering of pain creams and patches to his workers compensation patients and billing insurers at a significant markup. When sentenced, he faces up to five years in prison. (What if the judge were to mark up his sentence 15 to 20 times?)

Today’s Fraud of the Day comes from the Department of Justice press release, “Second Doctor Pleads Guilty to Workers’ Comp Fraud Conspiracy,” dated March 29, 2022.

FAYETTEVILLE – An Alexandria, La., physician pleaded guilty today to having conspired to violate three different federal statutes in connection with a scheme to defraud both federal and private workers’ compensation insurers.

U.S. District Judge Timothy L. Brooks presided over the plea hearing, in which Robert Clay Smith, 60, waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conspiracy to commit health care fraud, wire fraud, and illegal remunerations (taking kickbacks).

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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.