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Operation Brace Yourself Nets $20M Settlement with DME Fraudster

Posted  February 9, 2021

This week, the Department of Justice announced it had reached a $20.3 million settlement with a Florida businesswoman who pleaded guilty to conspiracy to commit healthcare fraud and filing a false tax return.  The settlement resolved allegations that the woman, Kelly Wolfe, participated in a scheme to defraud Medicare by filling sham prescriptions for Durable Medical Equipment (DME) like back, ankle, knee, and wrist braces.

The underlying civil lawsuit was brought by a whistleblower under the qui tam provisions of the False Claims Act, which allows individuals with information about fraud against the government to file a lawsuit in the government’s name and collect up to 30% of any monies recovered.  The whistleblower, a former employee of one of the defendants, revealed an alleged scheme through which defendants set up sham DME storefronts in several states and paid kickbacks to marketers, who then conspired with telehealth companies to generate sham physician prescriptions for DME.  Defendants then allegedly sent shoddy, medically unnecessary orthotics to senior citizens, paid for by Medicare.  The whistleblower will receive more than $4 million for her assistance in bringing the case.

Soon after the whistleblower filed her lawsuit in spring 2019, the DOJ announced a massive, nationwide raid called “Operation Brace Yourself” targeting companies and individuals orchestrating similar DME fraud schemes.  The raid resulted in charges against 24 defendants who had submitted more than $1.7 billion in claims to federal healthcare programs, getting paid more than $900 million in the process.

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Tagged in: FCA Federal, Healthcare Fraud, Medical Devices and DME, Medicare, Tax Fraud, Whistleblower Case,