Clinic Owners Who Moved Medicare Fraud Scheme from Miami to Detroit Sentenced to Three Years in Prison

Defendants Opened and Operated Clinic Solely to Defraud Medicare

WASHINGTON, April 9 /PRNewswire-USNewswire/ -- Miami residents Jose and Denisse Martinez were each sentenced today to three years in prison for their role in running a Canton, Mich.,-based drug infusion clinic designed to defraud Medicare, announced the Departments of Justice and Health and Human Services (HHS).  U.S. District Court Judge Victoria Roberts also ordered Jose and Denisse Martinez to pay $649,000 in restitution, jointly with co-defendants, and to each serve three years of supervised release following their prison terms. 

Jose Martinez, 33, and Denisse Martinez, 27, each pleaded guilty on Sept. 24, 2009, to one count of conspiracy to commit health care fraud.  In approximately five months of operating the purported clinic, the defendants billed nearly $1 million in fraudulent claims to Medicare.

According to court documents, Jose Martinez opened RDM Centers Inc., a medical clinic purporting to specialize in providing injection and infusion services to Medicare beneficiaries, in September 2006.  Jose Martinez's then-wife, Denisse Martinez, managed and operated the clinic.  According to court documents, the Martinezes came to Detroit from Miami for the sole purpose of committing Medicare fraud.

In their pleas, both defendants acknowledged that they hired Dr. Alan Silber and other employees to work at RDM Centers in order to create the appearance that the clinic was a legitimate health care facility providing necessary services to patients.

In their pleas, both Jose and Denisse Martinez admitted that during the time RDM Centers was open, the clinic routinely billed Medicare for services that were medically unnecessary or never provided.  Both defendants admitted that they purchased only a small fraction of the medications for which the clinic billed the Medicare program.  Both defendants also admitted that patients were prescribed medications at the clinic based not on medical need, but on which medications were likely to generate the highest Medicare reimbursements.

Denisse Martinez admitted in her plea that, despite having no medical training, she completed the clinic's patient records by filling in, among other things, the "diagnosis" and "treatment" sections of the patient charts, which were then provided to Dr. Silber for his signature.

According to information contained in the plea documents, Medicare beneficiaries were not referred to RDM Centers by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks by co-defendant William Reeves.  In exchange for their kickbacks, the Medicare beneficiaries would visit the clinic and sign false documents indicating that they had received the services billed to Medicare.  Kickbacks came in the form of cash and prescriptions for controlled substances.

Jose Martinez stated in his plea that he provided cash to Reeves to use for the kickback payments to beneficiaries.  Reeves recruited the Medicare beneficiaries from impoverished neighborhoods in central Detroit and drove them approximately 30 miles to RDM Centers.  Denisse Martinez stated in her plea that she understood the patients at the clinic were induced to visit RDM Centers through the payment of kickbacks.  Jose and Denisse Martinez also admitted to being aware that certain Medicare beneficiaries demanded that they be provided prescription drugs, including Vicodin, in exchange for their participation in the fraudulent scheme and that these drugs were in fact provided.

Between approximately November 2006 and March 2007, the Martinezes and their co-conspirators filed $970,631 in false and fraudulent claims with the Medicare program.  According to court documents, Medicare paid more than $649,000 of those false claims.

Co-defendants Silber and Reeves were convicted by a federal jury on April 2, 2010, for their roles in the fraudulent scheme.  Sentencing is scheduled for Aug. 6, 2010.

Today's result was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI's Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General's (OIG) Chicago Regional Office.

The case was prosecuted by Special Assistant U.S. Attorney Thomas Beimers from the Eastern District of Michigan as well as Senior Trial Attorney John K. Neal and Trial Attorney Benjamin Singer of the Criminal Division's Fraud Section.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Eastern District of Michigan. 

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for approximately $1.1 billion.  In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov 

SOURCE U.S. Department of Justice

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