Former “Most Wanted” Health Care Fraud Fugitives Plead Guilty to $9.1 Million Detroit Medicare Fraud Scheme

WASHINGTON—Two sisters who owned a fraudulent Detroit-area medical clinic and who are former “most wanted” health care fraud fugitives pleaded guilty today in Miami for their leading roles in a $9.1 million Medicare fraud scheme, announced the Department of Justice, the FBI, and the Department of Health and Human Services (HHS).

Caridad Guilarte, 54, and Clara Guilarte, 57, each pleaded guilty before U.S. District Judge Cecilia M. Altonaga to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering. The sisters were charged in an indictment unsealed in June 2009 and were placed on the HHS Office of Inspector General (HHS-OIG) Most Wanted Fugitives list. They were arrested on March 13, 2011, by law enforcement authorities in Colombia and were returned to the United States on March 14, 2011.

In pleading guilty, the Guilarte sisters admitted that in approximately March 2005, they opened Dearborn Medical Rehabilitation Center (DMRC), in Dearborn, Mich., with the express intent to defraud the Medicare program. DMRC routinely billed Medicare for exotic and expensive medications that were medically unnecessary and were never provided. Although they billed Medicare for millions of dollars of these medications, the Guilartes admitted that they and their co-conspirators at the clinic had purchased only a small fraction of the medications.

The Guilartes admitted that Medicare beneficiaries were not referred to DMRC by their primary care physicians, or for any other legitimate medical purpose, but were recruited to come to the clinic through the payment of cash kickbacks. In exchange for those kickbacks, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. Patients were prescribed medications not based on need, but based on what medications were likely to generate the greatest reimbursements from Medicare.

According to court documents, Caridad and Clara Guilarte laundered the proceeds of the health care fraud through shell corporations in order to conceal the source and ownership of the funds stolen from Medicare.

The Guilartes admitted that between approximately March 2005 and March 2007, they caused the submission of approximately $9.1 million in false and fraudulent claims to the Medicare program for services purportedly provided at DMRC. Medicare paid approximately $6 million on those claims.

The defendants consented to have their case transferred to the Southern District of Florida for plea and sentencing. Caridad Guilarte also consented to the forfeiture of $464,096 seized from bank accounts she controlled.

At their sentencing, scheduled for Nov. 3, 2011, the Guilartes face a maximum of 10 years in prison for each count of conspiracy to commit health care fraud and 20 years in prison for each count of conspiracy to commit money laundering.

The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Inspector General Daniel R. Levinson of the HHS-OIG; and Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office.

The case is being prosecuted by Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Philip A. Ross of the Eastern District of Michigan and Adam Schwartz of the Southern District of Florida. The Criminal Division’s Office of International Affairs provided assistance. 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. Attorneys’ Offices for the Eastern District of Michigan and the Southern District of Florida.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS 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.