NY Medical Supplier Arrested for $10.7M Medicare Fraud Scheme

By | August 16, 2012

(Source: FBI) - A federal jury in Central Islip today convicted the owner of a Long Island medical supply company of a $10.7 million Medicare fraud and wrongful disclosure of private patient information.

The conviction of Helene Michel of Old Brookville, New York, was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Janice K. Fedarcyk, Assistant Director in Charge of the Federal Bureau of Investigation, New York Field Office; and Thomas O’Donnell, Special Agent in Charge of Health and Human Services (HHS), Office of the Inspector General (OIG), Office of Investigations, New York.

The evidence at trial established that over the course of four and a half years the defendant stole private patient information from various nursing homes on Long Island and then submitted thousands of fraudulent claims to Medicare. The claims sought payment for services and equipment that were never provided by the defendant’s company, Medical Solutions Management Inc., of Hicksville, New York. Among the fraudulent claims proven at trial was the defendant’s demand for reimbursement for supplying boots and braces to an elderly patient who was in fact an above-the-knee double-amputee.

The defendant then used the proceeds of the scheme to purchase a $2.2 million home in Old Brookville, New York, as well as to fund a pension plan for herself and an investment brokerage account collectively worth $2 million.

The defendant, who used the alias “Dr. Elene Allonce,” among others, was charged in a three-count superseding indictment in March 2012 with conspiracy, health care fraud, and wrongful disclosure of patient information in violation of the Health Insurance Portability and Accountability Act, commonly known as “HIPAA.” The case represents one of the first criminal prosecutions in the nation for wrongful disclosure of patient information under HIPAA.

“To this defendant, the elderly were not patients to be helped, but pawns to be exploited for personal gain. Invasion of patient privacy and fraud against the health care program that the elderly depend upon are intolerable,” said United States Attorney Lynch. “Let today’s verdict stand as a warning to all that we will tenaciously investigate violators, protect patient rights, and vindicate the hard-earned support taxpayers provide the Medicare program.”

Ms. Lynch expressed her appreciation to Health and Human Services, Office of the Inspector General, Office of Investigations, New York, for its assistance.

FBI Assistant Director in Charge Fedarcyk stated, “The defendant showed no regard for patients’ privacy rights when she stole their personal identity information to file false medical claims. She padded her own pockets at the expense of the Medicare kitty. The verdict today should serve as a warning to those who disregard privacy laws to defraud publicly funded programs meant to help our seniors.”

When sentenced by United States District Judge Joseph F. Bianco, Michel faces a maximum sentence of 10 years’ imprisonment on each count, as well as fines of up to $250,000 per count.

This case was prosecuted by Assistant United States Attorneys Charles P. Kelly and Burton T. Ryan, Jr.

Defendant:
Helene Michel, 45

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