U.S. Attorney's Office
Southern District of Florida
(305) 961-9001
November 19, 2014

Eleven Individuals Charged for Their Roles in Medicare and Medicaid Fraud Scheme Executed in Florida, Nicaragua, and the Dominican Republic

EIGHT RESIDENTS OF MIAMI—Dade County and three residents of Nicaragua have been charged for their alleged participation in a $25.2 million Medicare, Medicaid, and wire fraud scheme.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Pam Bondi, Florida Attorney General, Derrick L. Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Wendy A. Bashnan, Special Agent in Charge, U.S. Department of State, Diplomatic Security Service (DSS), made the announcement.

On October 30, 2014, a federal grand jury in Miami returned a 36-count indictment charging Pedro Hernandez, a/k/a “Peter Hernandez,” 51, of Miramar, Freddy Zeron, 52, of Miami and Nicaragua, Erendira V. Delgado, a/k/a “Eren Delgado,” 31, of Miami, Edgardo Rodriguez, 47, of Homestead and Nicaragua, Rodney Montoya, 36, of Miami, Santiago Bernabe Montoya, 72, of Miami, Jose Eloy Sanchez, a/k/a “Jose Eloy Sanchez Arguello,” 70, of Coral Gables and Nicaragua, Abram J. Rodriguez, a/k/a “Abe Rodriguez,” 31, of Miami, Mirna L Blanco, 49, of Hialeah, Deborah Smith, 53, of Hialeah, and Augustin Abaga, 48, of Sunny Isles, for allegedly participating in a scheme to defraud Medicare and Medicaid by submitting false and fraudulent enrollment applications which claimed that beneficiaries resided in Florida when, in fact, they resided in Nicaragua and the Dominican Republic. Eight individuals have been arrested, Freddy Zeron, Edgardo Rodriguez and Jose Eloy Sanchez remain at large.

In addition to the indictment, we are pursuing a parallel civil action to freeze the assets of various defendants for approximately $10 million in fraudulent proceeds.

The defendants are charged with conspiracy to commit health care fraud and wire fraud, substantive counts of health care fraud, conspiracy to defraud the United States and make false statements related to health care matters and substantive counts of making false statements related to health care matters.

As alleged in the indictment:

FHCP was authorized by the Centers for Medicare and Medicaid Services to offer Medicare Advantage HMO plans to Medicare beneficiaries residing in Miami-Dade County, among other counties in Florida. All defendants recruited individuals who resided in Nicaragua and the Dominican Republic to enroll in Medicare Advantage plans and Florida Medicaid by falsely and fraudulently representing in enrollment applications that they resided in Florida. In these enrollment applications, the defendants represented that the foreign residents resided in Florida by using non-residential addresses, the addresses belonging to friends and relatives of these foreign residents, and addresses associated with the defendants. The defendants induced the individuals residing in Nicaragua and the Dominican Republic to enroll in Medicare Advantage plans, including FHCP plans, by making false and fraudulent representations, including that Medicare benefits were available in Nicaragua and the Dominican Republic. As a result of the submission of these false and fraudulent enrollment applications, the defendants caused the Center for Medicare and Medicaid services to make monthly capitation payments to FHCP and other Medicare Advantage plans. The defendants also caused the Florida Medicaid program to pay Medicare premiums and deductibles for many beneficiaries who did not reside in Florida, a benefit for which non-Florida residents would not be entitled.

Additionally, the defendants caused physicians associated with Pharmovisa Inc., Axis Le Professional Medical Group, Inc., and Rodney Montoya Corp., where defendant Santiago B. Montoya was employed as a physician, each located in Miami, to be designated as the primary care physicians for the beneficiaries residing in Nicaragua and the Dominican Republic. The defendants paid for the beneficiaries to travel from the Dominican Republic and Nicaragua so that they could be seen by a U.S. licensed physician. The physician would then provide diagnoses which were used to calculate the amount of money FHCP and other Medicare Advantage plans would receive from Medicare. As a result of these false and fraudulent enrollment applications, the defendants obtained approximately $25,247,413 from Medicare and Florida Medicaid.

According to the indictment, Hernandez was the chief operating officer of FHCP until May 8, 2013, Abram Rodriguez was the marketing director until on or about April 21, 2014. Smith and Abaga were insurance agents employed by FHCP during the time of the scheme was ongoing. Blanco was employed by FHCP, as well as, Axis Le and Rodney Montoya Corp.

“Health care fraud is a devastating crime that threatens the strength and integrity of our health care system,” said U.S. Attorney Ferrer. “We are dedicated to protecting Medicare from fraud and abuse to ensure that beneficiaries of federal health care programs receive appropriate medical care. The charges announced today demonstrate that law enforcement in Miami will continue to fight the battle against health care fraud locally and across our borders.”

Florida Attorney General Pam Bondi stated, “This sophisticated $25 million Medicare and Medicaid fraud scheme that claimed that residents of Nicaragua and the Dominican Republic resided in Florida essentially stole from taxpayers. We will continue to partner with the Office of the United States Attorney and other federal agencies to investigate and prosecute those who defraud our Medicaid program.”

“Providing Medicare services in foreign countries but billing as if they occurred in the United States is in-your-face fraud,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General over Florida. “But our agents have a global reach, working with our law enforcement partners to track down and charge those responsible regardless of where they are in the world.”

“Unfortunately, scams that bilk our health care system do not stop at our borders,” said George L. Piro, Special Agent in Charge, FBI Miami. “These fraudsters sought out and recruited residents of Nicaragua and the Dominican Republic to swindle U.S. taxpayer dollars from the Medicare and Medicaid programs. We are pleased to have put these unscrupulous operators out of business.”

Mr. Ferrer commended FBI, HHS-OIG, the Florida Office of the Attorney General, Medicaid Fraud Control Unit, and DSS for their investigative efforts. The case is being prosecuted by Assistant U.S. Attorney Eric E. Morales and Special Assistant United States Attorney Hagerenesh Simmons.

Mr. Ferrer also thanked U.S. Department of State, Diplomatic Security Service, Regional Security Office, at the U.S. Embassies in Managua and Santo Domingo for their assistance with this investigation.

This case, brought as part of the Medicare Fraud Strike Force, under the supervision of U.S. Attorney’s Office for the Southern District of Florida, is being prosecuted by Assistant U.S. Attorney Eric E. Morales and Special Assistant U.S. Attorney Hagernesh Simmons. The civil parallel proceeding is being handled by Assistant U.S. Attorney Franklin G. Monsour.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,650 defendants who collectively have falsely billed the Medicare program for more than $4.5 billion. In addition, the 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.

An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

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