Man Admits $21.M Health Care Fraud Scheme, COVID-19 Wire Fraud Scheme

NEWARK, New Jersey—An Ocean County, New Jersey, man admitted his role in a durable medical equipment (DME) kickback scheme, U.S. Attorney Philip R. Sellinger announced.

Alexander Schleider, 57, of Lakewood, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit health care fraud and one count of wire fraud.

According to documents filed in the case and statements made in court:

Schleider owned and operated DME companies in New Jersey that provided orthotic braces to beneficiaries of Medicare and other federal and private health care benefit programs without regard to medical necessity. Schleider and his conspirators obtained prescriptions for the DME braces through the payment of kickbacks and bribes to individuals operating marketing call centers, who in turn utilized the service of telemedicine companies to obtain prescriptions for the DME. Schleider caused losses to Medicare and other health care benefit programs of $21.7 million.

Schleider also committed wire fraud in connection with funds made available in response to the COVID-19 pandemic. After one of his DME companies received $322,237 from the Department of Health and Human Services’ Health Resources and Services Administration Provider Relief Fund, Schleider submitted a fraudulent attestation to HRSA in which he claimed that the DME company provided diagnoses, testing and care for individuals with possible or actual cases of COVID-19 after Jan. 31, 2020. In reality, the DME company ceased billing for any services in April 2019. The attestation also falsely claimed that the payment would only be used to prevent, prepare for and respond to the public health emergency (PHE), and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable the PHE. Schleider did not use the funds for those purposes, but transferred them into other accounts and subsequently used them to purchase real estate and vehicles, among other things.

The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. Sentencing is scheduled for Nov. 8, 2023.