A man from California has pleaded guilty to his involvement in a massive health care fraud scheme that led to losses of more than $10 million to Medicare. Adam Wayne Owens, 44, from Riverside, California, admitted in court that he was part of a conspiracy to violate federal anti-kickback laws. His actions involved arranging illegal payments in exchange for Medicare billing for cancer genetic tests that were not needed by the patients.
How the Scheme Worked
Owens owned and controlled marketing companies in California. From November 2018 to January 2020, he participated in a fraudulent operation with testing companies that provided at-home cancer genetic tests (CGX). His role in the scam was to target Medicare beneficiaries – mostly elderly people who receive health insurance through the government program – for these unnecessary tests.
To carry out the scheme, Owens and his co-conspirators obtained the personal and medical details of Medicare recipients. They passed this information to the testing companies, which then sent out cancer genetic test kits to the beneficiaries. Once the tests were completed and sent back to the testing companies, the results were used to submit false claims for Medicare reimbursement.
The testing companies paid Owens and his marketing companies for each test that resulted in a Medicare reimbursement. The kickback payments that Owens received for every test ranged from $1,700 to $2,000. This was all part of the plan to steal from the government’s health insurance program. Owens and his conspirators were paid for each test regardless of whether the patients needed or even wanted the tests.
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How Owens Hid His Illegal Activities
To hide the illegal payments, Owens took extra steps to make it look like everything was legal. Instead of accepting the kickbacks directly from the testing companies, the money was funneled through a company in New Zealand. This company wired the payments to Owens’ U.S. bank accounts.
Further disguising the payments, Owens set up a fake contract with the New Zealand company. On paper, it looked like one of his marketing companies was providing legitimate marketing and referral services. In reality, these companies were only being paid based on how many CGX tests were reimbursed by Medicare. The invoices Owens generated for these fake services helped him cover up the illegal kickbacks.
Huge Loss to Medicare
The fraudulent scheme continued for several months, causing a massive financial loss to Medicare. By the time Owens admitted his role in the scheme, the total loss to the program had exceeded $10 million. Medicare, which provides health coverage for millions of seniors, was the victim of this large-scale fraud.
Owens now faces serious legal consequences. He has pleaded guilty to conspiracy charges related to violating the federal Anti-Kickback Statute. This law makes it illegal for individuals or companies to receive or offer any payments in exchange for referrals for health care services that are reimbursed by government programs like Medicare. Breaking this law can lead to heavy fines and long prison sentences.
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For his role in the scam, Owens could face up to five years in prison. He may also be required to pay a fine of $250,000, or even double the amount of the loss caused by his actions. With the scale of the fraud and the large amount of money involved, Owens could be ordered to pay a significant fine in addition to serving a prison sentence.
Law Enforcement Agencies Involved
This investigation was carried out by several federal agencies working together. The FBI, the Department of Health and Human Services Office of Inspector General, the U.S. Department of Defense, and the U.S. Department of Veterans Affairs were all involved in uncovering the scheme. These agencies, under the direction of special agents in charge, worked together to gather evidence that led to Owens’ guilty plea.
Assistant U.S. Attorneys Garrett Schuman and Katherine Romano, who specialize in health care fraud, were responsible for prosecuting the case. Senior Trial Counsel Barbara Ward, who focuses on asset recovery and money laundering, also played a key role in the legal proceedings.
Owens’ guilty plea and the details of this case serve as a reminder of the importance of protecting taxpayer-funded programs like Medicare from fraud and abuse. The consequences of breaking these laws can be severe, and law enforcement will continue to investigate and prosecute those involved in illegal schemes like this one.
