An Arlington woman and an Austrian citizen were sentenced to 151 months in prison for a $27 million Medicare kickback scam, the US Department of Justice reports.
Leah Hagen, 50, of Arlington, and Michael Hagen, 54, an Austrian citizen and Arlington resident, owned and ran Metro DME Supply LLC and Ortho Pain Solutions LLC, two durable medical equipment (DME) enterprises.
The defendants paid kickbacks and bribes to their co-conspirator’s call center in the Philippines from March 2016 to January 2019 in return for signed physicians’ orders for DME that were used to submit false claims to Medicare totaling more than $59 million.
Medicare paid the defendants more than $27 million based on the fraudulent claims. The accused sent millions of dollars overseas to buy a house in Spain, among other things.
The defendants were found guilty of executing bogus contracts through their DME firms. They disguised kickbacks and bribery as marketing and business process outsourcing to hide the payments from the authorities.
The Hagens’ DME claims to Medicare were for medically unnecessary treatments not delivered as promised. In return for gift cards, beneficiaries were sometimes persuaded to take braces they didn’t need or desire.
Following an eight-day trial, the Hagens was found guilty of conspiracy to defraud the United States, as well as conspiracy to pay and receive healthcare kickbacks and money laundering.
US District Judge Jane J. Boyle of the Northern District of Texas convicted the Hagens and ordered them to pay $27,104,359.
Over 4,200 people have been charged by the Health Care Fraud Strike Force, including fifteen strike groups working in twenty-four districts. They have collectively billed the Medicare program for roughly $19 billion.
Interagency detectives and prosecutors make up the Health Care Fraud Strike Force (Strike Force). Strike Force employs modern data analysis tools to uncover abnormal billing levels in “hot zones” of healthcare fraud.
The first Strike Force was established in March 2007 as part of a collaborative investigation and prosecution effort in South Florida to combat Medicare fraud, waste, and abuse.
The case against the Hagens was prosecuted by Assistant Deputy Chief Adrienne Frazier and Trial Attorneys Brynn Schiess and Catherine Wagner of the Criminal Division’s Fraud Section.
According to their government website, the Dallas Strike Force has successfully prosecuted home health fraud and numerous kickback schemes.
Dallas Strike Force attorneys collaborate with federal and state law enforcement partners to improve healthcare accountability and reduce the prevalence of fraudulent providers in Texas, particularly in more densely populated regions.