On May 18, 2007, the US Attorney’s Office reported that Jafet Garcia, a defendant in a massive South Florida Medicare fraud scheme, was sentenced in West Palm Beach Federal court to ten (10) years’ imprisonment.
According to the court file, the defendant and his partners purchased four medical equipment companies located in Miami-Dade and Palm Beach Counties, between February 2004 and December 2004. The defendant and his partners recruited individuals to pose as the owners of these companies. After setting up the companies, the defendant and his partners obtained patient and physician information which they used to prepare bogus prescriptions and/or certificates of medical necessity. The bogus prescriptions and certificates purported to authorize the provision of various types of medical equipment for the named Medicare beneficiaries; in truth, the prescriptions and certificates were prepared by the defendant and/or his accomplices and contained forged physicians’ signatures.
The defendant and/or his partners provided the bogus prescriptions and certificates to a Miami billing company for submission to Medicare. The billing company prepared Medicare claims which sought reimbursement for the cost of the equipment listed in the bogus prescriptions and certificates, even though such equipment was never authorized by a physician or provided to the beneficiaries. Medicare processed the fraudulent claims and issued reimbursement checks which the defendant and/or his accomplices cashed at a Miami check cashing store. The defendant and his partners would submit claims through a particular medical equipment company for only two to three months, close it and then begin billing through another company to avoid getting caught.
The four companies used by the defendant and his partners to defraud Medicare were Sunset Medical Corporation, King Medical Service and Supplies Corporation, Travelango Services Corp. and Clear Choice Home Health, Inc. During the course of the scheme, the defendant and his partners submitted more than $9 million in bogus Medicare claims.

On May 11, the US 11th Circuit Court of Appeals, issued an opinion reversing the of convictions, all convictions of one defendant for Medicare Health Care Fraud and money laundering, and vacated the sentence for incorrect loss calculations.
The scheme involved transporting patients to the defendants’ pharmacies in exchange for illegal kickbacks for patients and doctors. However, no evidence indicated that Medicare was billed for unnecessary medical procedures. A confidential informant met with the defendants to exchange, for a fee, their checks for cash, admitted on cross-examination that one defendant, Medina, a secretary, was always sent out of the room to avoid her hearing them talk about the kickback scheme.
The Court also vacated the money laundering counts which related to the fraud counts it had set aside, since money laundering involves the proceeds of activity known by the defendants to be illegal.
The Court upheld the convictions of two defendants as to the general conspiracy charge, under 18 U.S.C. § 371, but vacated the secretary’s conviction, finding that her lack of awareness of the kickback conspiracy, and of the conspiracy’s other objectives, left insufficient evidence to
convict.
The Court remanded the case for resentencing and noted that the district court failed to make a sufficient loss calculation, and instead sentenced the defendants for the entire amount Medicare was billed in the period, without explanation. However, in the absence of evidence of Medicare’s payment of unnecessary medical claims, or that the patient kickback scheme resulted in any actual loss to Medicare, this calculation was inadequate.

On May 9, investigators said the arrests of 38 people are the result of an operation conducted by a strike force made up of a team of federal, state and local investigators who have been concentrating on Medicare fraud — ”especially prevalent” in South Florida — since early March.
According to remarks made by Attorney General Alberto R. Gonzales at a press conference with Michael Leavitt, Secretary of Health and Human Services, “the indictments outline various types of fraudulent schemes. Those schemes included compounded aerosol medications — a process where a pharmacist makes medicine to meet a special medical need for a patient, rather than dispensing less expensive commercial pharmaceuticals. The indictments allege that the homemade medications were not necessary and that they were only prescribed to defraud Medicare.
“In one example, Eduardo Moreno, the owner of multiple DME companies, was arrested on April 7 after being named in a six-count indictment on fraud charges. Two of Moreno’s companies – Brenda Medical Supply Inc., and Faster Medical Equipment Inc. – allegedly billed Medicare for more than $1.9 million for services that were not medically necessary. The FBI has seized of some of Moreno’s assets, including a new Rolls Royce Phantom worth approximately $200,000.
Gonzales said that some of the 38 defendants allegedly paid Medicare recipients for use of their Medicare card numbers so that the defendants could submit fraudulent claims.
”We believe scores of shell companies have opened and obtained Medicare supplier numbers in Miami-Dade County alone,” Gonzales said.
“The landscape for fraud in south Florida has changed dramatically over the past two years. CMS has taken aggressive action to curb infusion therapy fraud and other organized fraud actions,” said Leslie Norwalk, acting administrator of the Centers for Medicare and Medicaid Services. “We have opened two satellite offices that are dedicated to combating fraud in high-risk areas and we will soon be opening a third. We are sending a strong message to those who seek to defraud the programs that if they engage in fraudulent activity, they will be caught and no longer able to take advantage of the programs to their own gain.”