Clinic Owners Plead Guilty in Detroit-Area Infusion Therapy Scheme

WASHINGTON—Two owners and operators of clinics that claimed to specialize in treating HIV and other conditions pleaded guilty today for their roles in an infusion therapy scheme carried out at two Detroit-area clinics that submitted millions of dollars in fraudulent claims to Medicare.

The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; Special Agent in Charge Robert D. Foley, III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

Raymond Arias, 40, and his wife, Emelitza Arias, 25, of Troy, Michigan, each pleaded guilty before U.S. District Judge Paul D. Borman of the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, the defendants each face a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is currently scheduled for February 12, 2013.

According to plea documents, Raymond Arias conceived of and oversaw fraud schemes at two clinics for which he was a beneficial owner: Elite Wellness LLC and Carefirst Occupational & Rehabilitation Center Inc. He admitted to paying physicians to refer Medicare beneficiaries to Elite Wellness and to purchasing Medicare beneficiary identifications for the purpose of submitting fraudulent claims to Medicare for expensive infusion therapy services that were not rendered as claimed by Carefirst.

According to court documents, Raymond Arias attempted to hide the Elite Wellness scheme from law enforcement by directing a nominee owner to assume control of the claims submitted and the bank account into which Medicare payments were deposited. After the nominee owner became involved, Raymond Arias and his alleged co-conspirators submitted approximately $10 million in claims over a three-month period beginning in August 2010.

According to court documents, Raymond Arias directed this nominee to transfer approximately $2.6 million in Medicare payments offshore to Panama and Mexico.

Between approximately October 2009 and October 2010, Raymond Arias admitted, he and his alleged co-conspirators at Elite Wellness submitted or caused to be submitted approximately $12.5 million in fraudulent claims to the Medicare program for infusion therapy services that were not rendered. Medicare paid approximately $5.4 million of those claims.

According to plea documents, Emelitza Arias participated with her husband in a scheme to defraud Medicare by submitting claims for expensive infusion therapy services that were not rendered by Carefirst, of which she was also an owner. In an attempt to create an appearance that Carefirst was a legitimate enterprise, Emelitza Arias injected Medicare beneficiaries with vitamins. Emelitza Arias also assumed responsibility for the claims submitted by Carefirst and managed the bank account into which the fraud proceeds were deposited.

Between approximately July 2010 and June 2011, Raymond and Emelitza Arias and their alleged co-conspirators at Carefirst submitted or caused to be submitted more than $900,000 in fraudulent claims to the Medicare program for infusion therapy services that were not rendered. Medicare paid approximately $530,000 of those claims.

This case is being prosecuted by Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan and Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and 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 its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.