Man Charged for $60M Health Care Fraud & Kickback Scheme

MIAMI—A federal grand jury in Miami returned an indictment charging a Texas man for his alleged role in a $60 million health care fraud, wire fraud and kickback scheme involving the submission of false and fraudulent claims to Medicare for medically unnecessary durable medical equipment (DME), genetic tests and foot bath medications.

According to court documents, Robert Leon Smith III, 48, of Archer City, owned and/or operated a network of DME companies in Florida, Texas and Maryland through which he allegedly billed Medicare for medically unnecessary orthotic braces that were ineligible for Medicare reimbursement. Smith also allegedly referred doctors’ orders for medically unnecessary orthotic braces, genetic tests and foot bath medications to other DME suppliers, pharmacies and laboratories in exchange for kickbacks and bribes. 

Smith allegedly paid kickbacks and bribes to offshore call centers operated by his co-conspirators to obtain Medicare beneficiary information and falsified doctors’ orders. The offshore call centers allegedly used deceptive tactics to pressure Medicare beneficiaries to accept orthotic braces, genetic tests and foot bath medications. Smith and his co-conspirators allegedly paid kickbacks and bribes to the offshore call centers in exchange for Medicare beneficiary information, sometimes together with a forged doctor’s order. Smith also allegedly paid kickbacks and bribes to purported telemedicine companies in exchange for doctors’ orders signed by telemedicine practitioners who did not examine or treat the Medicare beneficiary. Smith allegedly used some of the doctors’ orders he acquired as a result of the payment of kickbacks and bribes to bill Medicare through his own network of DME companies and also referred doctors’ orders to other DME suppliers, pharmacies and labs in exchange for kickbacks and bribes. 

Smith is charged with one count of conspiracy to commit health care fraud and wire fraud, four counts of health care fraud, one count of conspiracy to defraud the United States and to pay and receive health care kickbacks and two counts of solicitation and receipt of health care kickbacks. If convicted, he faces a maximum penalty of 20 years in prison on each conspiracy to commit health care fraud and wire fraud count, a maximum penalty of 10 years in prison for each health care fraud and anti-kickback violations count and a maximum penalty of five years in prison on each conspiracy to defraud the United States and to pay and receive kickbacks count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at justice.gov/criminal-fraud/health-care-fraud-unit.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.