A major health care fraud case has led to the sentencing of a Texas man, Robert “Bobby” Leon Smith III, who has been given more than 12 years in prison for running a large telemarketing scam. The scheme targeted Medicare beneficiaries across the United States and involved millions of dollars in false claims.
The case revealed how thousands of people were misled into accepting medical products they did not need. The court also ordered significant financial penalties, including restitution and forfeiture of assets.
Massive $61 Million Fraud Scheme Against Medicare
According to court documents, the fraud scheme was worth about $61.5 million. Robert “Bobby” Leon Smith III, 50, from Archer City, Texas, was found to be the leader of the operation. He owned and operated seven durable medical equipment companies located in Florida, Texas, and Maryland.
These companies were used to submit false claims to Medicare for items such as orthotic braces and foot baths. These products were often unnecessary and not required by the beneficiaries who received them.
Thousands of Medicare beneficiaries were affected. Many individuals were contacted through telemarketing calls and pressured into agreeing to receive medical products. In several cases, people clearly stated that they did not need the items, yet the pressure continued.
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Smith also ran a marketing company based in Texas. This company played a key role in carrying out the telemarketing campaigns. These campaigns were designed to convince beneficiaries to accept products that were not medically necessary.
Deceptive Telemarketing and Fake Medical Orders
The fraud scheme depended heavily on deceptive telemarketing practices. An offshore call center located in the Philippines was used to contact Medicare beneficiaries across the country.
Callers promoted medical items like braces, foot baths, and genetic tests. Beneficiaries were often persuaded or pressured into agreeing to these services, even when they expressed no interest.
To support the fraudulent billing, Smith and his co-conspirators obtained doctor orders through illegal means. This included paying kickbacks and bribes to certain telemedicine companies. These companies provided medical orders that were not legitimate.
Smith also sold these doctor orders to other medical suppliers, knowing they would be used to submit false claims to Medicare. Evidence presented in court showed that some of these orders were described as “trash” or “junk” when they could not be sold.
In addition, some medical orders were completely fake. They included forged signatures of doctors who were unaware of the scheme and had not approved any treatments. These fake documents were used to bill Medicare for large amounts of money.
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Sentencing, Fugitive Arrest, and Federal Investigation
After a four-day jury trial, Robert “Bobby” Leon Smith III pleaded guilty in March 2025 to charges of conspiracy to commit health care fraud and wire fraud, along with health care fraud.
Before sentencing, Smith failed to appear in court and became a fugitive. He remained at large for more than a month before being apprehended by the U.S. Marshals Service.
The court sentenced him to 150 months in prison, which equals 12.5 years, followed by two years of supervised release. He was also ordered to pay more than $30 million in restitution and forfeit about $9.2 million, along with real estate located in Texas.
The case was investigated by federal agencies, including the FBI under Special Agent in Charge Brett Skiles, and the U.S. Department of Health and Human Services Office of Inspector General, with Acting Deputy Inspector General Scott J. Lampert involved in the announcement.
Assistant Attorney General A. Tysen Duva also announced the case, while Trial Attorney Owen Dunn from the Justice Department’s Criminal Division prosecuted it. Officials confirmed that the scheme affected Medicare beneficiaries nationwide and involved widespread fraudulent activity.