Marketing Executives Sentenced for $127M DME Fraud, Kickback Scheme

NEWARK, New Jersey—Two operators of a New Jersey marketing company were sentenced to prison for their roles in conspiracies to commit health care fraud and to pay and receive illegal kickbacks.

Eric Karlewicz AKA “Anthony Mazza,” 46, of Rockland County, New York, and Nicco Romanowski, 33, of Roswell, Georgia, were sentenced by U.S. District Judge Esther Salas in Newark federal court following their guilty pleas to informations charging conspiracy to violate the Federal Anti-Kickback statute and conspiracy to commit health care fraud. Karlewicz was sentenced to 51 months in prison and Romanowski was sentenced to 80 months in prison.

In total, Karlewicz and Romanowski caused the submission of false and fraudulent claims to health care benefit programs totaling in excess of $127 million for durable medical equipment (DME). Using proceeds from the scheme, Karlewicz and Romanowski purchased luxury vehicles, including a Ferrari, and Lamborghini, a Bentley and a BMW.

From June 2017 through May 2019, Karlewicz and Romanowski participated in a scheme with DME companies, telemedicine companies and doctors to submit false claims to health care benefit programs, including Medicare and TRICARE, based on a circular scheme of kickbacks and bribes. 

Karlewicz and Romanowski controlled a New Jersey-based marketing company, Empire Pain Center Holdings LLC (Empire), through which they and their co-conspirators identified Medicare and TRICARE beneficiaries to target. Employees of Empire called the beneficiaries to pressure them to agree to accept DME, frequently consisting of back, shoulder and knee braces. Karlewicz and Romanowski paid Empire’s employees commissions, bonuses and incentives to encourage them to convince as many beneficiaries as possible to accept DME, regardless of medical necessity.

Karlewicz and Romanowski, through Empire, then paid kickbacks to telemedicine companies, which in turn paid kickbacks to doctors in exchange for prescriptions for the DME. As agreed upon, the doctors signed the prescription orders regardless of medical necessity, often without ever speaking to the patient. Karlewicz and Romanowski distributed the prescriptions to DME suppliers around the country, with which Empire had additional kickback arrangements. These DME suppliers submitted claims for reimbursement to health care benefit programs including Medicare and TRICARE, and thereafter sent a portion of the proceeds to Empire as payment for the doctor’s orders generated through the conspiracy. Empire received more than $63 million from DME suppliers in exchange for the referrals.

In addition to the prison terms, each defendant was sentenced to three years of supervised release and ordered them to pay $127.6 million in restitution.  Karlewicz was ordered to forfeit more than $63 million, and Romanowski was ordered to forfeit more than $5.5 million.

Karlewicz and Empire entered into a civil settlement agreement. As part of that civil settlement agreement, Karlewicz and Empire admitted to violating the False Claims Act and agreed to the entry of a consent judgment against them in the amount of $63.8 million.

The civil settlement agreement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties, called relators, to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The relator, Robert Jackson Tyler, Jr., will receive a share of the funds recovered by the United States pursuant to the False Claims Act.