The Department of Justice [DOJ] announced that on March 16, 2012, a Miami-area resident pleaded guilty  for his role in a fraud scheme  that resulted in the submission of more than $200 million in fraudulent claims to Medicare.  The Department of Justice, the FBI and the Office of Inspector General [OIG] of the Department of Health and Human Services (HHS) were involved in the investigation and prosecution of the matter.
 
Frank Criado, 33, pleaded guilty before U.S. Magistrate Judge Barry L. Garber in Miami to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.  Criado was charged in an indictment unsealed on Feb. 15, 2011, in the Southern District of Florida.

Criado admitted to participating in a fraud scheme that was orchestrated by the owners and operators of American Therapeutic Corporation (ATC); its management company, Medlink Professional Management Group Inc.; and the American Sleep Institute (ASI).  ATC, Medlink and ASI were Florida corporations headquartered in Miami.  ATC operated purported partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando.  ASI purported to provide diagnostic sleep disorder testing.
 
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI.  In some cases, the patients received a portion of those kickbacks.  Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services to attend treatment programs that were not legitimate PHPs so that ATC and ASI could bill Medicare for the medically unnecessary services.  According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare.
 
Criado admitted to serving as a patient broker who provided patients for ATC and ASI in exchange for kickbacks in the form of checks and cash.  The amount of the kickback was based on the number of days each patient spent at ATC. According to his plea agreement, Criado’s participation in the ATC fraud resulted in $7.3 million in fraudulent billings to the Medicare program. Sentencing for Criado is scheduled for May 31, 2012, at 8:30 a.m.  He faces a maximum penalty of 15 years in prison and a $250,000 fine.
 
ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011.  ATC, Medlink and 11 of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.