Friday, July 12, 2013
McALLEN - The owner of a now defunct McAllen area durable medical equipment (DME) business has been ordered to prison for his role in a conspiracy and scheme to defraud Medicare and Medicaid through fraudulent billings, United States Attorney Kenneth Magidson and Texas Attorney General Greg Abbott announced today. The scheme involved approximately $11.1 million in false claims to Medicare and Medicaid.
Former RGV DME Owner Marcello Herrera, 40, along with his wife Carla Cantu Herrera, 32, and their former employee Ramon De La Garza, 52, all of Mission, pleaded guilty on Feb. 21, 2013, to conspiring to defraud Medicare and Texas Medicaid. Beatriz Ramos, 28, of Edinburg, a former biller for RGV DME, pleaded guilty to the conspiracy on Oct. 16, 2012. Marcelo Herrera and De La Garza also pleaded guilty to one count of aggravated identity theft for unlawfully using the identity of a beneficiary to bill Medicare and Medicaid $5,000 for a power wheelchair that was not requested, prescribed, needed or delivered.
Today, Marcello Herrera was handed a sentence of 120 months for the conspiracy conviction in addition to a mandatory 24-month-term for aggravated identity theft which must be served consecutively to the other sentence imposed, resulting in a total 144 months in federal prison. He will also serve three years of supervision following his release. In addition to the prison sentence, he was ordered to pay restitution to Medicare and Medicaid in the amount of $6,103,953.74.
As part of his plea of guilty, Marcelo Herrera agreed to the entry of a money judgment against him in the sum of $6,103,953.74 and to forfeit wheelchairs, scooters and other DME items discovered in his leased storage facility in Alamo, which had been rented by him and ultimately seized by the FBI.
From early 2004 through late 2011, Marcello Herrera, who did business as RGV DME in the McAllen area, engaged in and directed a scheme to submit fraudulent claims to Medicare and Texas Medicaid for power wheelchairs, incontinent supplies, hospital beds and mattresses as well as other DME supplies. At various times, his wife, Carla Cantu Herrera - who admitted to being marketing director, chief financial officer, chief operating officer, office manager, human resources manager and co-owner of RGV DME - and billers De La Garza and Ramos all participated in the conspiracy and aided Marcello Herrera and each other in the submission of fraudulent billings, wire fraud and theft of the identities of beneficiaries and doctors.
In court on Feb. 21, 2013, Marcelo Herrera admitted that during the time of his fraudulent scheme, he submitted or caused the submission of more than $11.1 million in false and fraudulent claims to Medicare and Texas Medicaid for which he illegally received in excess of $6.1 million. Carla Herrera admitted that during her participation in the conspiracy, the fraudulent billings exceeded $9.9 million for which they received illegal payments exceeding $5.5 million, while De La Garza admitted that during his participation in the conspiracy the fraudulent billing exceed $9.6 million for which payments exceeded $5 million. Marcelo Herrera, Carla Herrera and De La Garza admitted that approximately 85% of their Medicare and Texas Medicaid billings were false and fraudulent.
The three defendants in court on Feb. 21, 2013, also admitted that marketers were used to obtain Medicare and Medicaid identification numbers and other information from beneficiaries which they in turn used to fraudulently bill Medicare and Medicaid for DME that was either never prescribed or prescribed but never delivered. The Herreras further acknowledged they or their marketers attempted to obtain referrals of patients or orders for DME from doctors in exchange for gifts.
Ramon De La Garza will be sentenced July 24, while Beatriz Ramos and Carla Herrera are set for Aug. 27 and Sept. 18, 2013, respectively.
Marcelo Herrera has been in custody since his arrest on June 12, 2012. He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by the FBI, the U.S. Department of Health and Human Services Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit.
Special Assistant United States Attorney Rex Beasley and Assistant United States Attorney (AUSA) Grady Leupold are prosecuting the case. AUSAs Mary Ellen Smyth and Kristine Rollinson assisted with the asset forfeiture aspects of the case.