U.S. Department of Justice09.10.19
The owner and chief executive officer (CEO) of a telemedicine company pleaded guilty for his role in one of the largest healthcare fraud schemes ever investigated by the FBI and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and prosecuted by the Department of Justice, which resulted in charges in April 2019 against 24 defendants.
Lester Stockett, 52, of Medellin, Colombia, pleaded guilty today to one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks, and one count of conspiracy to commit money laundering. Stockett was the owner of Video Doctor USA (Video Doctor) and Telemed Health Group LLC (AffordADoc) (collectively, the Video Doctor Network), and was the CEO of AffordADoc. In connection with his plea agreement, Stockett agreed to pay $200 million in restitution to the United States, as well as forfeit assets and property traceable to proceeds of the conspiracy to defraud the United States and conspiracy to commit money laundering. Stockett’s sentencing is set for Dec. 16 before U.S. District Judge Madeline Cox Arleo of the District of New Jersey, who accepted his plea September 6.
“This CEO and his co-conspirators lined their own pockets with hundreds of millions of dollars by exploiting telemedicine technology meant to help elderly and disabled patients in need of healthcare,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Divison. “Today’s plea shows that the Department of Justice remains laser-focused on uprooting corporate healthcare fraud schemes, especially those built on the backs of the most vulnerable members of our community.”
“Healthcare fraud results in billions of dollars in losses and affects a multitude of people across American communities,” said FBI Assistant Director Robert Johnson. “We take violations of these laws extremely seriously. The FBI will use our full investigative resources and continue to collaborate with HHS-OIG, IRS-CI, and other partners to stop this type of illegal activity.”
“The extent of Mr. Stockett's fraud and money laundering, literally, knew no bounds,” said Special Agent in Charge Gregory W. Ehrie of the FBI’s Newark Field Office. “From the U.S. to Latin America, the Philippines, and the Dominican Republic, the FBI followed the trail of ill-gotten gains back to Stockett and his conspirators. They stole precious federal funds earmarked to assist the elderly. His admission today should resonate with anyone who is committing fraud against the U.S. government—the FBI will find you and your criminal efforts will not pay off.”
“This global scheme that took advantage of hundreds of thousands of vulnerable individuals was fueled by unbounded greed without regard for the rules of law,” said Deputy Inspector General for Investigations Gary L. Cantrell of the U.S. Department of Health and Human Services Office of Inspector General. “We will continue to work with our law enforcement partners to bring to justice those that prey on unsuspecting beneficiaries and steal from taxpayer-funded healthcare programs.”
“Bribes and illegal kickbacks will not be tolerated as part of our nation’s healthcare system,” said Special Agent in Charge John R. Tafur of IRS Criminal Investigation, Newark Field Office. “Medical equipment should only be ordered when medically necessarily, not when criminals wish to line their own pockets. Today’s guilty plea should let the American public know that IRS Criminal Investigation and our law enforcement partners will continue to root out individuals like Mr. Stockett who look to illegally profit off of our healthcare system.”
In connection with his guilty plea, Stockett admitted that he and others agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, pharmacies, brace suppliers and others in exchange for arranging for doctors to order medically unnecessary orthotic braces (braces) for beneficiaries of Medicare and other insurance carriers. The beneficiaries were contacted through an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America.
Stockett admitted that, in order to obtain the orders that were transmitted in exchange for kickbacks and bribes, he and other executives and employees of the Video Doctor Network paid illegal kickbacks and bribes to healthcare providers to order medically unnecessary braces for Medicare beneficiaries. Many of these orders were written after only a short telephone call between the healthcare provider and the beneficiary, with whom the healthcare provider had no prior doctor-patient relationship.
Stockett and others transferred the brace orders to co-conspirator brace suppliers to support more than $424 million in false and fraudulent claims to Medicare that were submitted by brace suppliers, he admitted. Medicare paid these brace suppliers in excess of $200 million for these claims.
Stockett admitted that he and other executives and employees of the Video Doctor Network were aware that it was a violation of the Anti-Kickback Statute for the Video Doctor Network or its owners or investors to receive money, directly or indirectly, from patient recruiters, purported marketers or marketing organizations, brace suppliers or pharmacies. Stockett and his co-conspirators concealed the illegal kickbacks and bribes by causing them to be paid indirectly through nominee companies and bank accounts, opened by Stockett and others in nominee names both in the United States and in foreign countries, including in the Dominican Republic, Stockett admitted. Stockett further admitted that he and others hid the existence of the foreign companies and bank accounts by making, or causing to be made, false statements to financial institutions and falsely reporting to the IRS and others that they and others had no influence over foreign bank accounts.
In addition, Stockett admitted that he and other owners and executives of the Video Doctor Network schemed to defraud investors and others by making false and fraudulent representations that the Video Doctor Network was a legitimate telemedicine enterprise that made revenue of “$10 million per year” and “20% profit” from payments by beneficiaries who enrolled in a membership program and paid for the telemedicine consultations. These statements were false because revenue was obtained by the Video Doctor Network through the receipt of illegal kickbacks and bribes, Stockett admitted.
With regard to money laundering, Stockett admitted that beginning about March 2016 and continuing to about April 2019, he and other owners and executives of the Video Doctor Network conspired to engage in domestic and international money laundering. Specifically, Stockett and his coconspirators transferred in excess of approximately $10 million in illegal kickback payments that they received, from a bank account of PCS CC LLC, a corporation located in the United States, to the bank account of Droneza Consulting, a corporation located in the Dominican Republic. Stockett and others then transferred more than $9.8 million from a bank account of Droneza Consulting to bank accounts of AffordADoc in the United States, in order to conceal that the Video Doctor Network was receiving kickbacks from brace suppliers in exchange for arranging for doctors to write orders that the Video Doctor Network provided to the brace suppliers, Stockett admitted.
Stockett was charged along with Creaghan Harry, 51, of Highland Beach, Fla., and Elliot Loewenstern, 56, of Boca Raton, Fla., in an indictment charging one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks and four counts of healthcare kickbacks. Stockett and Harry were separately charged with one count of conspiracy to commit money laundering. The case against Harry and Loewenstern is pending before Judge Arleo. Trial has not been set.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI, HHS-OIG and IRS-CI. Acting Assistant Chief Jacob Foster and Trial Attorney Darren Halverson of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine and DME marketing schemes—including Video Doctor USA and AffordADoc—should call to report this conduct to the FBI hotline at 1-800-CALL-FBI.
Additional documents related to the investigation and prior indictments are available here: https://www.justice.gov/opa/documents-and-resources-april-9-2019-press-release-health-care-fraud.
Lester Stockett, 52, of Medellin, Colombia, pleaded guilty today to one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks, and one count of conspiracy to commit money laundering. Stockett was the owner of Video Doctor USA (Video Doctor) and Telemed Health Group LLC (AffordADoc) (collectively, the Video Doctor Network), and was the CEO of AffordADoc. In connection with his plea agreement, Stockett agreed to pay $200 million in restitution to the United States, as well as forfeit assets and property traceable to proceeds of the conspiracy to defraud the United States and conspiracy to commit money laundering. Stockett’s sentencing is set for Dec. 16 before U.S. District Judge Madeline Cox Arleo of the District of New Jersey, who accepted his plea September 6.
“This CEO and his co-conspirators lined their own pockets with hundreds of millions of dollars by exploiting telemedicine technology meant to help elderly and disabled patients in need of healthcare,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Divison. “Today’s plea shows that the Department of Justice remains laser-focused on uprooting corporate healthcare fraud schemes, especially those built on the backs of the most vulnerable members of our community.”
“Healthcare fraud results in billions of dollars in losses and affects a multitude of people across American communities,” said FBI Assistant Director Robert Johnson. “We take violations of these laws extremely seriously. The FBI will use our full investigative resources and continue to collaborate with HHS-OIG, IRS-CI, and other partners to stop this type of illegal activity.”
“The extent of Mr. Stockett's fraud and money laundering, literally, knew no bounds,” said Special Agent in Charge Gregory W. Ehrie of the FBI’s Newark Field Office. “From the U.S. to Latin America, the Philippines, and the Dominican Republic, the FBI followed the trail of ill-gotten gains back to Stockett and his conspirators. They stole precious federal funds earmarked to assist the elderly. His admission today should resonate with anyone who is committing fraud against the U.S. government—the FBI will find you and your criminal efforts will not pay off.”
“This global scheme that took advantage of hundreds of thousands of vulnerable individuals was fueled by unbounded greed without regard for the rules of law,” said Deputy Inspector General for Investigations Gary L. Cantrell of the U.S. Department of Health and Human Services Office of Inspector General. “We will continue to work with our law enforcement partners to bring to justice those that prey on unsuspecting beneficiaries and steal from taxpayer-funded healthcare programs.”
“Bribes and illegal kickbacks will not be tolerated as part of our nation’s healthcare system,” said Special Agent in Charge John R. Tafur of IRS Criminal Investigation, Newark Field Office. “Medical equipment should only be ordered when medically necessarily, not when criminals wish to line their own pockets. Today’s guilty plea should let the American public know that IRS Criminal Investigation and our law enforcement partners will continue to root out individuals like Mr. Stockett who look to illegally profit off of our healthcare system.”
In connection with his guilty plea, Stockett admitted that he and others agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, pharmacies, brace suppliers and others in exchange for arranging for doctors to order medically unnecessary orthotic braces (braces) for beneficiaries of Medicare and other insurance carriers. The beneficiaries were contacted through an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America.
Stockett admitted that, in order to obtain the orders that were transmitted in exchange for kickbacks and bribes, he and other executives and employees of the Video Doctor Network paid illegal kickbacks and bribes to healthcare providers to order medically unnecessary braces for Medicare beneficiaries. Many of these orders were written after only a short telephone call between the healthcare provider and the beneficiary, with whom the healthcare provider had no prior doctor-patient relationship.
Stockett and others transferred the brace orders to co-conspirator brace suppliers to support more than $424 million in false and fraudulent claims to Medicare that were submitted by brace suppliers, he admitted. Medicare paid these brace suppliers in excess of $200 million for these claims.
Stockett admitted that he and other executives and employees of the Video Doctor Network were aware that it was a violation of the Anti-Kickback Statute for the Video Doctor Network or its owners or investors to receive money, directly or indirectly, from patient recruiters, purported marketers or marketing organizations, brace suppliers or pharmacies. Stockett and his co-conspirators concealed the illegal kickbacks and bribes by causing them to be paid indirectly through nominee companies and bank accounts, opened by Stockett and others in nominee names both in the United States and in foreign countries, including in the Dominican Republic, Stockett admitted. Stockett further admitted that he and others hid the existence of the foreign companies and bank accounts by making, or causing to be made, false statements to financial institutions and falsely reporting to the IRS and others that they and others had no influence over foreign bank accounts.
In addition, Stockett admitted that he and other owners and executives of the Video Doctor Network schemed to defraud investors and others by making false and fraudulent representations that the Video Doctor Network was a legitimate telemedicine enterprise that made revenue of “$10 million per year” and “20% profit” from payments by beneficiaries who enrolled in a membership program and paid for the telemedicine consultations. These statements were false because revenue was obtained by the Video Doctor Network through the receipt of illegal kickbacks and bribes, Stockett admitted.
With regard to money laundering, Stockett admitted that beginning about March 2016 and continuing to about April 2019, he and other owners and executives of the Video Doctor Network conspired to engage in domestic and international money laundering. Specifically, Stockett and his coconspirators transferred in excess of approximately $10 million in illegal kickback payments that they received, from a bank account of PCS CC LLC, a corporation located in the United States, to the bank account of Droneza Consulting, a corporation located in the Dominican Republic. Stockett and others then transferred more than $9.8 million from a bank account of Droneza Consulting to bank accounts of AffordADoc in the United States, in order to conceal that the Video Doctor Network was receiving kickbacks from brace suppliers in exchange for arranging for doctors to write orders that the Video Doctor Network provided to the brace suppliers, Stockett admitted.
Stockett was charged along with Creaghan Harry, 51, of Highland Beach, Fla., and Elliot Loewenstern, 56, of Boca Raton, Fla., in an indictment charging one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks and four counts of healthcare kickbacks. Stockett and Harry were separately charged with one count of conspiracy to commit money laundering. The case against Harry and Loewenstern is pending before Judge Arleo. Trial has not been set.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI, HHS-OIG and IRS-CI. Acting Assistant Chief Jacob Foster and Trial Attorney Darren Halverson of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine and DME marketing schemes—including Video Doctor USA and AffordADoc—should call to report this conduct to the FBI hotline at 1-800-CALL-FBI.
Additional documents related to the investigation and prior indictments are available here: https://www.justice.gov/opa/documents-and-resources-april-9-2019-press-release-health-care-fraud.
