Clinic owner and operator admit to participating in a conspiracy to defraud the Medicare program

Sep 25 2009

Clinic owners and operators Jose Martinez and Denisse Martinez pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program, Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Terrence Berg of the Eastern District of Michigan and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced.

Jose Martinez, 33, and Denisse Martinez, 27, each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Victoria Roberts. At sentencing, which is scheduled for Feb. 18, 2010, both defendants face a statutory maximum of 10 years in prison and a $250,000 fine.

According to court documents, Jose Martinez, in September 2006, opened RDM Center Inc., a Canton, Mich., medical clinic purporting to specialize in providing injection and infusion services to Medicare beneficiaries. Jose Martinez's then-wife, Denisse Martinez, managed and operated the clinic.

In their pleas, both defendants acknowledged that they hired a physician and other employees to work at RDM Center in order to create the appearance that the clinic was a legitimate health care facility providing necessary services to patients, when in fact, everyone working at the clinic knew that it was operated for the sole purpose of defrauding Medicare.

In their pleas, both Jose and Denisse Martinez admitted that during the time that the RDM Center was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or never provided. Both defendants admitted that they purchased only a small fraction of the medications for which the clinic billed the Medicare program. Both defendants also admitted that patients were prescribed medications at the clinic based not on medical need, but on which medications were likely to generate Medicare reimbursements.

Denisse Martinez admitted in her plea that, despite having no medical training, she completed the clinic's patient records by filling in, among other things, the "diagnosis" and "treatment" sections of the patient charts, which were then provided to the physician for his signature.

According to information contained in the plea documents, Medicare beneficiaries were not referred to RDM Center by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. In exchange for their kickbacks, the Medicare beneficiaries would visit the clinic and sign false documents indicating that they had received the services billed to Medicare. Kickbacks came in the form of cash and prescriptions for controlled substances.

Jose Martinez stated in his plea that he provided cash to a patient recruiter for the purpose of paying Medicare beneficiaries to sign paperwork indicating that they had received infusion and injection therapy services which they did not in fact receive. Denisse Martinez stated in her plea that she understood the patients at the clinic were induced to visit RDM Center through the payment of kickbacks. Both defendants further admitted to being aware that certain Medicare beneficiaries demanded that they be provided prescription drugs, including Vicodin, in exchange for their participation in the fraudulent scheme and that such drugs were in fact provided.

Both defendants admitted in their pleas that between approximately November 2006 and March 2007, they and their co-conspirators filed $970,631 in false and fraudulent claims with the Medicare program. According to court documents, Medicare actually paid more than $649,000 of those false claims.

The case is being prosecuted by Trial Attorneys John K. Neal and Benjamin D. Singer of the Criminal Division's Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Eastern District of Michigan.

Since the inception of Strike Force operations in March 2007 - Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three) and Houston (Phase Four) - the Strike Force has obtained indictments of 300 individuals and organizations that collectively have billed the Medicare program for more than $680 million. In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.