Texas Healthcare Fraud Takedown Results in Charges Against 58 Individuals

The Justice Department announced today a coordinated health care fraud enforcement operation across the state of Texas, involving charges against a total of 58 individuals across all four federal districts in Texas for their alleged involvement in Medicare fraud schemes and networks of “pill mill” clinics resulting in $66 million in loss and 6.2 million pills.  Of those charged, 16 were doctors or medical professionals, and 20 were charged for their role in diverting opioids.  

Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF) partners.  The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI, Health and Human Services-Office of Inspector General (HHS-OIG) and the Drug Enforcement Administration (DEA).  In addition, the operation includes the participation of the Veterans Affairs-OIG and the Department of Labor, various other federal law enforcement agencies and Texas State Medicaid Fraud Control Units. 

The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), Department of Labor-Office of Worker’s Compensation Programs, and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries.  The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals allegedly involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.

Today’s arrests come three weeks after the Department announced that the Health Care Fraud Unit’s Houston Strike Force coordinated the filing of charges against dozens in a trafficking network responsible for diverting over 23 million oxycodone, hydrocodone and carisoprodol pills.

“Today’s charges highlight the amazing work being done by the Department’s Medicare Fraud Strike Force and our partners in Texas,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “As we continue to dedicate resources to battle healthcare and opioid fraud schemes in Texas and elsewhere, we are shining an inescapable light on dirty doctors, clinic owners, pharmacists, and others who may have long believed they could perpetrate their frauds behind closed doors.”

“Healthcare should revolve around patients’ well-being – not providers’ personal interests,” said U.S. Attorney Erin Nealy Cox of the Northern District of Texas.  “When medical professionals line their own pockets by submitting false insurance claims or prescribing unnecessary medications, equipment, or treatments, it not only drains taxpayer coffers – but it makes healthcare more expensive for everyone else.  We cannot allow the healthcare industry to become bloated by fraud.”

“Sadly, opioid proliferation is nothing new to Americans,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “What is new, is the reinforced fight being taken to dirty doctors and shady pharmacists. Texas may have four U.S. Attorneys, but we are focused on one health care mission: shutting down pills mills and rooting out corruption in health care. From Lufkin to Laredo and Dallas to Del Rio, one of us will shut these operations down.”

“Every dollar stolen from Medicare through fraud comes out of the pocket of taxpayers,” said U.S. Attorney Joseph D. Brown of the Eastern District of Texas.   “These are real costs that help drive up the cost of medical services for everyone. It is important that there be real consequences for those who cheat the system.”

“I am proud to fight healthcare fraud in Texas alongside Ryan Patrick, Erin Nealy Cox, and Joe Brown,” said U.S. Attorney John Bash of the Western District of Texas.  “These crimes drive up the cost of health insurance, waste tax revenue and threaten the well-being of Texans.”

“These arrests across multiple investigations and jurisdictions is further proof that successful teamwork exemplifies Texas law enforcement,” said DEA Houston Special Agent in Charge Will R. Glaspy.  “Today’s operation affirms both our commitment to targeting those individuals who illegally divert opioids in our communities, and our collective will to bring those individuals to justice.”

“Health care fraud undermines our country by driving up medical costs, wasting taxpayer dollars, and often harming patients,” said HHS - OIG Special Agent in Charge C.J. Porter.  “Today’s takedown shows that we are fighting hard to protect Medicare and Medicaid and the patients served by those programs.  Working closely with our law enforcement partners, our agents are determined to ensure fraudsters pay for their crimes.”

“Today’s announcement demonstrates the close collaboration between the FBI and its law enforcement partners in North Texas,” said Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office.  “The enormous economic damage caused by those who defraud crucial public health programs, as well as the ever-increasing loss of life caused by illicit and illegitimate pill schemes cannot be overstated.  The public can rest assured the FBI will continue to make these investigations a top priority moving forward.”

Among those charged in the Northern District of Texas are the following:

    Michael Charles Braddick, Kyle Martin Hermesch, and Bioflex Medical were charged for their alleged participation in a scheme to defraud the Department of Labor- Office of Worker’s Compensation Programs.  Bioflex Medical is located in Dallas, Texas.  The case is being prosecuted by Special Assistant U.S. Attorney Jennifer Bray.

    Nehaj Rizvi was charged for his alleged participation in a scheme to defraud Medicare through Life Spring Housecall Physicians, Inc., a company located in Dallas, Texas.  The case is being prosecuted by Assistant U.S. Attorney Douglas Brasher.

    Dr. Brian Carpenter and Jerry Hawrylak were charged for their alleged participation in a scheme to defraud TRICARE through a compounding pharmacy located in Fort Worth, Texas.  The case is being prosecuted by Trial Attorney Brynn Schiess of the Fraud Section.

    Leah Hagen and Michael Hagen were charged for their alleged participation in conspiracies to pay and receive kickbacks and launder money through Metro DME Supply and Ortho Pain Solutions, both durable medical equipment companies in Arlington, Texas.  The case is being prosecuted by Trial Attorney Brynn Schiess.

    Nilesh Patel, Dr. Craig Henry, and Bruce Henry were charged for their alleged participation in a scheme to defraud TRICARE through marketing company RxConsultants and a compounding pharmacy located in Fort Worth, Texas.  The case is being prosecuted by Trial Attorney Carlos Lopez of the Fraud Section.

    Bruce Stroud and Bobbi Stroud were charged for their alleged participation in a scheme to defraud Medicare through New Horizons Durable Medical Equipment, Striffin Medical Supply, and 4B Ortho Supply, all durable medical equipment companies located in the Dallas/Fort Worth area of Texas. The case is being prosecuted by Trial Attorney Carlos Lopez.

    Jamshid Noryian, Dehshid Nourian, Christopher Rydberg, Leyla Nourian, Ashraf Mofid, Dr. Leslie Benson, Dr. Michael Taba, and Ali Khavarmanesh were charged for their alleged participation in a scheme to defraud the Department of Labor- Office of Worker’s Compensation and Blue Cross Blue Shield and conspiracies to launder money and evade the payment of taxes through Ability Pharmacy, Industrial & Family Pharmacy, and Park Row Pharmacy, all located in the Dallas/Fort Worth area of Texas.  The case is being prosecuted by Assistant Chief Adrienne Frazior of the Fraud Section.

The charges and allegations contained in the indictments are merely accusations.  The defendants are presumed innocent until and unless proven guilty.

The Fraud Section leads the MFSF, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  MFSF maintains 15 strike forces operating in 24 districts.  Since its inception in March 2007, MFSF has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.