A major health care fraud case has surfaced after Evelyn Herrera, a Florida businesswoman, pleaded guilty in federal court in the District of Vermont. The case involves a conspiracy to pay illegal health care kickbacks and submit fraudulent claims to Medicare. Federal authorities say the scheme affected individuals in Vermont, across New England, and in other parts of the United States, resulting in millions of dollars in improper Medicare payments.
Herrera, 62, of Loxahatchee, Florida, owned a durable medical equipment company called Merida Medical Supplies Inc. According to court documents, her company billed Medicare for medical braces that patients never requested and never received. The fraudulent activity led to significant losses for the federal health care program.
How the Medicare Fraud and Kickback Scheme Operated
Court records show that Herrera used Merida Medical Supplies to submit false claims to Medicare for wrist, knee, and back braces. These items are typically prescribed by doctors to help patients manage injuries or medical conditions. However, in this case, the braces were not ordered by patients or medical providers.
Herrera obtained the personal identifying information of individuals living in Vermont, throughout New England, and in other states. Using this information, Merida Medical Supplies submitted claims to Medicare as if the individuals had requested and received the medical equipment. The patients were unaware that their identities were being used for billing purposes.
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As a result of these false claims, Medicare was billed approximately $6.5 million. Before the scheme was detected, Medicare paid about $2.8 million to Merida Medical Supplies. Authorities identified the conduct as a health care kickback scheme, which involves illegal financial arrangements used to generate medical claims.
Health care kickbacks are prohibited under federal law because they encourage unnecessary or fake services and misuse taxpayer-funded programs. Medicare relies on accurate billing to ensure that funds are available for patients who truly need medical care.
Efforts to Hide Fraud Proceeds and Financial Activity
Court documents also describe steps taken by Herrera to conceal the proceeds of the fraud. Investigators say these actions were intended to hide the source of the money generated through the fraudulent Medicare claims.
Herrera transferred more than $300,000 in fraud proceeds to a cryptocurrency exchange. Cryptocurrency transactions can make it more difficult for authorities to trace the movement of funds. In addition, she sent approximately $125,000 through international wire transfers. These funds were used in connection with the purchase of property located in Tulum, Mexico.
The scheme came under scrutiny after the Centers for Medicare and Medicaid Services (CMS) issued a payment suspension letter to Merida Medical Supplies due to suspected fraud. This action stopped Medicare from issuing further payments to the company.
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After receiving the suspension notice, Herrera withdrew large amounts of cash from a bank account. Investigators say some of the funds were transferred for her personal benefit and to benefit members of her family. These transactions were included in court filings as part of the effort to move money after Medicare payments were halted.
Federal Investigation, Charges, and Prosecution
The case was investigated by the Department of Health and Human Services Office of Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI). The guilty plea was announced by Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division, along with Roberto Coviello, Special Agent in Charge of HHS-OIG, and Ted E. Docks, Special Agent in Charge of the FBI.
The prosecution is being handled by Trial Attorneys Sarah Rocha, Thomas Campbell, and Tiffany Wynn from the Justice Department’s Fraud Section. Herrera pleaded guilty to an information charging her with participating in a conspiracy to pay health care kickbacks. She is scheduled to be sentenced on May 11 and faces a maximum penalty of five years in federal prison.
The case is part of the Justice Department’s broader efforts through the Health Care Fraud Strike Force Program, which has charged thousands of defendants nationwide for fraud involving billions of dollars in false health care claims.