An eye on enforcement: Notable fraudsters hit with significant sentences

A number of prominent fraudsters are facing prolonged prison time for three multi-million dollar schemes involving drug repackaging, watered-down HIV medication and elaborate offshore Medicare claims paid to fake Miami addresses. 

  • After reports last week detailed the recovery challenges associated with fraud schemes that take place outside of U.S. borders, the ringleader of a $25 million Medicare fraud scheme carried out in Nicaragua and the Dominican Republic was sentenced to eight years in prison, according to The Miami Herald. Pedro Hernandez, former chief operating officer of Florida Healthcare Plus, received just half of the prison time sought by prosecutors because medical services were actually provided, according to U.S. District Judge Federico Moreno. 
  • The same judge also showed some leniency when sentencing Santiago B. Montoya, M.D., the physician involved in the overseas scheme, noting that the doctor provided legitimate care to some expatriates, and helped authorities collect evidence against Hernandez. Moreno also sentenced Hernandez's executive business associate to three years in prison, decreasing the jail time for assisting prosecutors with their investigation.
  • In Michigan, Kim Duron Mulder, the notorious CEO of Kentwood Pharmacy in Grand Rapids, was sentenced to 10 years in prison for billing Medicare and Medicaid for drugs that were repackaged from nursing homes and adult foster homes, according to the U.S. Attorney's Office for the Western District of Michigan. Ultimately, insurers paid for more than $79 million worth of drugs that were cross contaminated, improperly labeled, contained the wrong dosages or included the wrong drug altogether.  In the sentencing, Chief U.S. District Judge Robert Jonker said Mulder "created a culture of chaos" and the fact that the business was established in Mulder's wife's name indicated it was set up with the intent to perpetrate the fraud scheme from the beginning. Kentwood's former director of sales was sentenced to 14 years, and the chief pharmacist was sentenced to six.
  • Finally, Oscar Huachillo, who owned and operated HIV/AIDS clinics throughout New York City, was sentenced to 87 months in prison for fraudulently billing Medicare at least $31 million by diluting doses of HIV medication, according to the U.S. Attorney's Office for the Southern District of New York. In some instances, Huachillo billed for doses that were never administered or were unnecessary. Last year, the OIG found that unnecessary HIV drugs could be contributing to as much as $32 million in improper Part D payments.

For more:
- read The Miami Herald article  
- here's the U.S. Attorney's Office for the Western District of Michigan announcement
- here's the U.S. Attorney's Office for the Southern District of New York announcement

Suggested Articles

The HHS OIG is asking for an additional $23.7 million to support fraud oversight that has benefited from an emphasis on data analytics.

A New York surgeon was sentenced to 13 years in prison for fraud and more physician practice news from around the web.

A federal judge has ruled that the U.S. government’s remaining fraud case against UnitedHealth can move forward.