WASHINGTON--Thirty-eight DME and infusion therapy providers have been arrested and $142 million in billing fraud uncovered by a Medicare Fraud Strike Force formed in south Florida, Attorney General Alberto Gonzales and HHS Secretary Michael Leavitt announced Wednesday.

In the first phase of the operation, investigations begun in March have resulted in charges including conspiracy to defraud the Medicare program, criminal false claims and violations of anti-kickback statutes, Leavitt said. If convicted, many of the defendants could get up to 20 years in prison.

According to a release from the Department of Justice, federal agents arrested 24 people Tuesday, concluding a sweep of DME company owners in southern Florida who were part of an alleged fraudulent prescriptions scam. That brought the total number of arrests under the strike force, which has so far focused only on DME and infusion, to 38.

Officials said a variety of schemes included dispensing unneccessary compounded aerosol meds rather than less expensive commercial pharmaceuticals. In one example, Eduardo Moreno, the owner of several DME companies, was arrested April 7 after being named in a six-count fraud indictment. Two of Moreno's companies, Brenda Medical Supply and Faster Medical Equipment, allegedly billed Medicare for more than $1.9 million for medically unnecessary services.

The FBI has seized some of Moreno's assets, including a Rolls-Royce Phantom worth approximately $200,000.


In another case, Barbara Diaz and Jose Prieto were charged with conspiring to defraud Medicare, submitting false claims and money laundering. The indictment alleges the pair engaged in an infusion therapy scheme where patients did not need the drugs that were purportedly used. From March 9 through Dec. 31, 2006, the defendants billed Medicare more than $900,000 for infusion.

Officials also said seizure warrants have been used to take money back from bank accounts associated with some of the schemes. In one case, agents from the HHS Office of Inspector General recovered more than $1.2 million from a corporate bank account after arresting Leider Alexis Munoz, president and CEO of RTC of Miami, an infusion clinic in Hialeah, Fla.

The strike force, a multi-agency team of investigators, identifies potential fraud cases through real-time analysis of billing data from the Medicare Program Safeguard Contractors and Health Care Information System claims data. It is part of a multi-phase enforcement and regulatory effort to "improve the quality of the industry and reduce the potential for fraud," according to the DOJ release. Additional measures include strengthening the requirements to become a provider and increasing scrutiny of existing providers.

"This initiative targets those who steal taxpayer funds intended to provide health care to the elderly," Gonzales said. The real-time access to billing data, he added, allows officials "to move quickly to make arrests and bring prosecutions as quickly as possible. With better tools and information-sharing, we can expect greater levels of enforcement."

Leavitt called the strike force "just one weapon in our arsenal" against fraud.


"We will be announcing the second step in this multi-year process within the next month," he said. "We expect industry leaders will embrace the changes that will improve the quality of the durable medical equipment industry and others who serve our Medicare beneficiaries."

In an effort to send "a strong message" to potential criminals, Leslie Norwalk, CMS acting administrator said the agency has opened two satellite offices dedicated to combating fraud in high-risk areas with a third on the way.

The strike force teams, each led by a federal prosecutor with agents from the FBI, HHS OIG and local law enforcement, operate out of the federal Health Care Fraud Facility in Miramar, Fla.