Four Charged for $15M DME Billing, Telemedicine Fraud

NASHVILLE—United States Attorney Henry C. Leventis announced criminal charges against four defendants in connection with alleged schemes to defraud Medicare. The charges stem from schemes to bill Medicare for medically unnecessary genetic tests, durable medical equipment, and medications that were procured through kickbacks used to obtain doctors’ orders and patient information.

The following individuals have been charged in the Middle District of Tennessee:

James Brandon “Brady” Washburn, 44, of Franklin, Tennessee, and Robert Houston McDowell, 43, of Murfreesboro, Tennessee, were charged by indictment with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks and paying and receiving health care kickbacks, in connection with their role in selling doctors’ orders for medically unnecessary genetic tests, medications and durable medical equipment (DME) to laboratories, pharmacies and DME companies. 

The defendants also owned and operated their own DME companies in Franklin and Brentwood, Tennessee, and bought doctors’ orders for orthotic braces and submitted claims for medically unnecessary items to Medicare. The defendants obtained the orders by paying kickbacks and bribes to purported telemedicine companies and marketers in exchange for doctors signing orders for DME. The indictment alleges that the defendants and their co-conspirators received over $1 million in kickbacks for selling doctors’ orders to laboratories, pharmacies and DME companies; that they submitted and caused to be submitted, through their DME companies, more than $6 million in false and fraudulent claims to Medicare for DME; and that their DME companies were paid over $2 million on those claims.

Paulo R. Costa, 36, of Palm City, Florida, and Mark J.W. Carr, 35, of Lighthouse Point, Florida were each charged by separate information with conspiracy to commit health care fraud and to pay and receive health care kickbacks in connection with an over $9 million scheme involving multiple pharmacies, including in Mt. Juliet and Goodlettsville, Tennessee. As alleged in the informations, the defendants obtained patient information through the use of call centers where telemarketers persuaded Medicare beneficiaries to accept prescriptions for expensive medications, which the beneficiaries neither needed nor wanted. The defendants obtained signed prescriptions by paying kickbacks to marketers and telemedicine companies and then billed Medicare Part D plan sponsors for prescriptions that were procured through the payment of kickbacks and that were medically unnecessary.

“Fraud and abuse continue to plague our federal health care programs and divert funds away from deserving patients,” said Henry C. Leventis, United States attorney for the Middle District of Tennessee. “As United States Attorney for the nation’s health care capital, I am proud of my office’s leadership on health care fraud enforcement and I am very appreciative of Attorney General Garland highlighting our efforts during his remarks earlier today.”  

“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a health care company, if you profit from the unlawful distribution of controlled substances, you will be held accountable,” said Attorney General Merrick B. Garland. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”

The charges filed in federal court are part of the Justice Department’s 2024 National Health Care Fraud Enforcement Action. The two-week nationwide law enforcement action resulted in criminal charges against 193 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.75 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Government, in connection with the enforcement action, seized over $231 million in cash, luxury vehicles, gold and other assets.

The United States Attorney’s Office for the Middle District of Tennessee worked with the Department of Health and Human Services Office of Inspector General (HHS-OIG) and the FBI to investigate and prosecute the cases filed during the enforcement period.

“We will not tolerate fraud that preys on patients who need and deserve high quality health care,” said Christi A. Grimm, the Department of Health and Human Services inspector general (HHS-OIG). “The hard work of the HHS-OIG team and our outstanding law enforcement partners makes today’s action possible. We must protect taxpayer dollars and keep Americans safe from harms to their health, privacy, and financial well-being.”

“Health care fraud is a crime that hurts all of us and each dollar taken from programs that help the elderly and the disabled is one dollar too many,” said Douglas S. DePodesta, Special Agent in Charge of the FBI Memphis Field Office. “The FBI is committed to fighting fraud and protecting taxpayer dollars, and with our law enforcement partners we will continue to identify and investigate the criminals who target the systems each of us depends on.”

Assistant U.S. Attorneys Sarah K. Bogni and Robert S. Levine of the Middle District of Tennessee are prosecuting the cases in the Middle District of Tennessee.

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