A telemedicine company owner has been sentenced to seven years in federal prison for carrying out a massive Medicare fraud scheme involving more than $56 million in false claims. The case centers on Reinaldo Wilson, 57, formerly of Richmond Hill, Georgia. Between 2017 and 2019, he owned and operated two telemedicine companies located in Bayonne, New Jersey.
In March 2021, Wilson pleaded guilty to conspiracy to commit wire fraud and health care fraud. The court ordered Wilson to serve seven years behind bars and to pay $27.9 million in restitution. That amount reflects the money Medicare paid out as a result of the fraudulent billing.
Federal authorities said the scheme targeted Medicare, the federal health insurance program that serves seniors and certain disabled individuals. Over two years, the operation generated tens of millions of dollars in improper claims.
How the $56 Million Medicare Fraud Scheme Operated
According to court documents and statements made in court, the fraud centered on durable medical equipment, mainly orthotic braces. These braces are meant to support injured or weak body parts. They can help people with legitimate medical conditions. However, in this case, officials said many of the beneficiaries did not need them.
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The scheme relied on illegal kickbacks. Wilson and others paid medical providers to sign orders for braces for Medicare beneficiaries, even when there was no medical necessity. Once signed, those orders were sold to marketing companies. The marketing companies often resold the orders to brace supply companies.
The brace companies then submitted claims to Medicare for reimbursement. Because the paperwork appeared valid, Medicare paid many of the claims.
More than 3,000 Medicare beneficiaries were connected to the scheme. Providers working with Wilson’s telemedicine companies signed orders for four or more orthotics per person. More than 40 beneficiaries received orders for 10 or more braces. Beneficiaries were encouraged to accept as many braces as possible to increase billing amounts.
In total, more than $56 million in false and fraudulent claims were submitted to Medicare. Of that amount, Medicare paid over $27.9 million.
Attempts to Conceal the Scheme
Court records show that Wilson attempted to hide his actions by creating a new telemedicine company. He convinced a member of his church that it was an investment opportunity. The church member invested $20,000 and opened the company and its bank accounts in her own name. Wilson then took control of the business and its accounts.
Federal officials described the scheme as a serious abuse of a taxpayer-funded program. Assistant Attorney General A. Tysen Duva said the defendant exploited Medicare instead of connecting patients with legitimate care. Special Agent in Charge Stefanie Roddy of the FBI’s Newark Field Office said the fraud involved crooked medical providers and co-conspirators. Acting Deputy Inspector General Scott J. Lampert of the Department of Health and Human Services Office of Inspector General said the sentence reflects serious consequences for those who manipulate providers and target vulnerable patients.
The case was investigated by the FBI, IRS Criminal Investigation, and the Department of Health and Human Services Office of Inspector General. The prosecution was handled by Trial Attorneys Darren C. Halverson and Nicholas K. Peone of the Justice Department’s Criminal Division Fraud Section.
The Fraud Section leads enforcement efforts through the Health Care Fraud Strike Force Program. Since March 2007, the program has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion.