Texas Fugitive Caught and Sentenced to 12+ Years in Prison for $61M Telemarketing Fraud Scheme Targeting Medicare Beneficiaries

By the Constantine Cannon Whistleblower Team 

On March 25, a federal court sentenced Texas resident Robert “Bobby” Leon Smith III to 150 months in prison and two years of supervised release for allegedly orchestrating a $61.5 million healthcare fraud and wire fraud scheme. The scheme relied on deceptive telemarketing tactics that targeted thousands of Medicare beneficiaries and resulted in shipments of medically unnecessary foot baths, genetic testing, and orthotic braces.[1]

Smith’s DME Supply Companies

Smith owned and operated seven durable medical equipment (DME) supply companies in Maryland, Florida, and Texas. He allegedly used his companies to submit millions of dollars of false claims to Medicare for medically unnecessary items and tests.[2]

How Did Smith Allegedly Use His Marketing Company in the Scheme?

Smith owned a marketing company in Texas that he allegedly used to create deceptive telemarketing campaigns to target Medicare beneficiaries for the scheme. Smith worked with a call center in the Philippines to sell medically unnecessary tests and products to Medicare beneficiaries across the United States. According to evidence shared at trial, Smith was heard in recordings pressuring Medicare beneficiaries to accept the products even if the individuals declined or said they did not need them.[3]

How Did Smith Receive Doctors’ Orders for the Products?

Smith allegedly received doctors’ orders by paying bribes and kickbacks to telemedicine companies. He sold the orders to other medical suppliers that he knew would use them to submit false claims to Medicare. During trial, Smith was also heard in a recording allegedly saying that some of the doctors’ orders he purchased were unusable, deeming them “trash” and “junk.”

Smith’s former business partner explained that the scheme used “fake” doctors’ orders with forged signatures, and that many of the doctors whose signatures appeared on the orders allegedly did not know about the scheme.[4]

What Did Smith Plead Guilty To?

In March, after four days of a jury trial, Smith pleaded guilty to one count of conspiracy to commit healthcare fraud and wire fraud and one count of healthcare fraud.

Smith did not appear for sentencing and remained at large until the U.S. Marshals Service apprehended him. During sentencing, the court ordered Smith to pay $30,158,608.25 in restitution and to forfeit $9,215,225 and Texas real estate.

Were Whistleblowers Involved in This Case?

While it is unknown whether whistleblowers were involved in initiating this case, whistleblowers often play a critical role in sharing important information about fraud with the government.

Under the qui tam, or whistleblower provisions of the False Claims Act, private parties can bring lawsuits on behalf of the government against those that defraud the government, including for healthcare fraud-related matters. Successful whistleblowers may receive up to 30% of any recovery.

Constantine Cannon Helps Healthcare Fraud Whistleblowers

Constantine Cannon attorney Ginger Buck commented: “Whistleblowers play a key role in exposing healthcare fraud schemes like this one. By coming forward, they help protect Medicare beneficiaries and recover funds for the government.”

If you believe you have a potential whistleblower case involving healthcare fraud, violations of the Anti-Kickback Statute and False Claims Act, please contact us. We will connect you with an experienced whistleblower attorney for a free and confidential consultation.

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Sources:

[1] See https://www.justice.gov/opa/pr/texas-fugitive-apprehended-and-sentenced-over-12-years-prison-61m-telemarketing-fraud-scheme

[2] Id.

[3] Id.

[4] Id.

Tagged in: Healthcare Fraud, Medicare,