MCALLEN—United States Attorney Kenneth Magidson and Texas Attorney General Greg Abbott announced on Feb. 21 the owner of a now defunct McAllen area durable medical equipment (DME) business, his wife and another former employee have been convicted for their roles in a conspiracy and scheme to defraud Medicare and Medicaid through fraudulent billings.
As part of his plea, RGV DME Owner Marcello Herrera, 40, admitted he sent more than $11.1 million in false claims to Medicare and Medicaid. Herrera and his wife Carla Cantu Herrera, 32, along with their former employee Ramon De La Garza, 52, all of Mission, entered a plea of guilty to conspiring to defraud Medicare and Texas Medicaid.
Marcelo Herrera and Ramon De La Garza also each 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.
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, Carla Cantu Herrera, De La Garza and Beatriz Ramos, 28, of Edinburg, 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.
Marcelo Herrera admitted in court 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 dollars.
Carla Herrera admitted that the fraudulent billings exceeded $9.9 million for which they received illegal payments exceeding $5.5 million during her participation in the conspiracy, 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.
All admitted that 85% of their Medicare and Texas Medicaid billings were false and fraudulent. All have also agreed to orders of restitution for the amounts attributable to them individually. The defendants admitted 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 also admitted that they or their marketers attempted to obtain referrals of patients or orders for DME from doctors in exchange for gifts. Conspiracy to commit health care fraud carries a maximum punishment of 10 years in federal prison without parole and a $250,000 fine upon conviction.
Aggravated identity theft carries a mandatory two-year additional prison term that must be served by Marcelo Herrera and De La Garza after serving the term of imprisonment imposed for their respective conspiracy convictions.
As part of their pleas of guilty, Marcelo Herrera and Carla Cantu Herrera further agreed 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.
In addition, Marcelo Herrera and Carla Cantu Herrera agreed to the entry of money judgments against themselves in the sums of $6,103,953.74 and $5,519,703.37, respectively. The money judgment against De La Garza is $5,059,198.96.
Sentencing of the defendants was scheduled for May 16, 2013. Marcelo Herrera and De La Garza, who have been in custody since June 28, 2012, will remain in custody. Carla Cantu Herrera was permitted to remain on bond pending a hearing on Feb. 27, 2103.
Ramos entered a guilty plea on Oct. 16, 2012, to one count of conspiracy to commit health care fraud and remains free on bond awaiting sentencing, set for April 17, 2013.
The U.S. Department of Health and Human Services-Office of Inspector General, the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation leading to the charges. 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.
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