Podiatrist and Pharma Sales Rep Sentenced in Health Care Fraud Conspiracy

By the Constantine Cannon Whistleblower Team 

Earlier this month, the U.S. Attorney’s Office for the Eastern District of California announced that a federal district judge sentenced Felipe Ruiz and Jose Gabriel Aguirre to 63 months in prison for conspiracy to commit health care fraud.  In addition to the prison sentences, the judge also ordered forfeiture of nine properties owned by the defendants, as well as personal forfeiture money judgments against the two defendants totaling $14.7 million.[1]

What Was the Health Care Fraud Scheme at Issue in This Case?

One of the defendants, Ruiz, was a podiatrist who owned a medical practice in California called West Coast Podiatry Inc. (WCP).  The other defendant, Aguirre, was a pharmaceutical sales representative who sold skin graft products to Ruiz and WCP.[2]  According to the DOJ press release, Ruiz bought skin grafts from Aguirre and allowed Aguirre, who was not licensed to practice medicine, “to apply skin grafts and perform other medical procedures on patients suffering from severe wounds, including foot amputations.”[3]  The DOJ claimed that Aguirre performed medical procedures without supervision from a physician, and that patients believed Aguirre was a doctor, calling the pharma sales rep “Dr. Gabe.”[4]

According to the DOJ, the defendants submitted fraudulent claims to Medicare, Medicaid, and Medi-Cal that “falsely represented that Ruiz and other physicians had performed the medical procedures, such as applying skin grafts to patients, when Aguirre”—not the physicians—“had actually rendered the services.”[5]  Despite staff and auditors raising concerns over billing practices, Ruiz ultimately submitted over $3 million in false claims to government payors over a three-year period.[6]

What Were Some Examples of the Fraudulent Conduct Alleged?

The DOJ press release goes so far as to incorporate and cite two specific examples to highlight the egregious misconduct at issue in this case: “WCP submitted $150,000 in claims to Medicare in 2023, claiming a physician performed the procedures, when in fact the physician was out of the country on vacation.  In another example, Aguirre cut into patients with recently amputated feet with a scalpel and appl[ied] skin grafts without a physician’s supervision.”[7]

Commentary on the Case

The U.S. Attorney for the Eastern District of California, Eric Grant, commented on the sentencing: “We trust licensed medical professionals to safeguard their patients and not hand them over to unqualified individuals. This podiatrist put profit over patient safety by allowing a salesman to perform medical procedures on vulnerable Medicare beneficiaries.”[8]

Constantine Cannon partner Marlene Koury, who has extensive experience representing whistleblowers who bring False Claims Act cases based on claims of health care fraud, stated: “Reporting health care fraud is critical to protecting patients and safeguarding trust in government-funded health care programs.  Some of the most compelling, important health care fraud cases are those that not only remedy the financial harm incurred by the government and taxpayers, but they also put a stop to misconduct that causes significant harm to patients.”

How Can Whistleblowers Help Stop Health Care Fraud?

While it is unknown whether or to what extent whistleblowers were involved in this case, the DOJ press release does note that staff and third-party auditors raised concerns with what they observed.[9]  Whistleblowers, particularly insiders who observe first-hand the misconduct at issue, play a crucial role in identifying and reporting health care fraud.  Indeed, federal law incentivizes such reporting.  Under the qui tam  (or whistleblower provisions) of the False Claims Act, private parties can file lawsuits on behalf of the United States and receive up to 30% of funds recovered.

Our Firm Helps Health Care Fraud Whistleblowers

Constantine Cannon has significant experience representing whistleblowers, including those who report health care fraud. Please contact us if you believe you have a case.  We will connect you with an experienced member of the Constantine Cannon whistleblower team for a free and confidential consultation.

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Sources:

[1] See https://www.justice.gov/usao-edca/pr/podiatrist-and-pharmaceutical-sales-representative-sentenced-32-million-healthcare.  

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

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