A federal jury convicted a New York man today in an over $600 million health care fraud, wire fraud, and identity theft scheme.
According to court documents and evidence presented at trial, Mathew
James, 54, of East Northport, operated a medical billing company that
billed for procedures that were either more serious or entirely
different than those James’ doctor-clients performed. James directed
his doctor-clients to schedule elective surgeries through the emergency
room so that insurance companies would reimburse at substantially higher
rates. When insurance companies denied the inflated claims, James
impersonated patients to demand that the insurance companies pay the
outstanding balances of tens or hundreds of thousands of dollars.
“James orchestrated a fraudulent medical billing scheme to steal from
insurance companies and businesses, in order to line his own pockets,”
said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice
Department’s Criminal Division. “This conviction shows that medical
billers who fuel health care fraud will be brought to justice.”
“The defendant stands convicted of carrying out an audacious scheme
in which he used insurance companies like ATM machines. He stole
hundreds of millions of dollars until he was finally exposed by a paper
trail a mile-long, phone recordings on which he impersonated patients,
and text messages and emails with his co-conspirator doctor clients
demonstrating his nefarious billing practices. For this massive fraud, a
federal jury convicted him today,” said U.S. Attorney Breon Peace for
the Eastern District of New York. “Health care fraud is not a victimless
crime, because fraudulent billing ultimately affects consumers who must
pay the cost of higher insurance premiums.”
“Health care fraud, including fraudulent billing schemes like this,
costs U.S. taxpayers tens of billions of dollars annually. These crimes
impact all of us in many ways, including increased health insurance
premiums, greater out-of-pocket expenses and copayment amounts for
medical treatment, and reduced or lost benefits, just to name a few,”
said Assistant Director Luis Quesada of the FBI’s Criminal Investigative
Division. “The FBI, together with our law enforcement partners, is
committed to rooting out health care fraud in all its forms and bringing
those who seek to exploit our health care system to justice.”
James was convicted of conspiracy to commit health care fraud, health
care fraud, three counts of wire fraud, and three counts of aggravated
identity theft. He is scheduled to be sentenced at a later date and
faces up to 10 years in prison for health care fraud conspiracy, up to
10 years in prison for health care fraud, up to 20 years in prison for
each of three wire fraud counts, and a two year mandatory minimum each
for three aggravated identity theft counts. A federal district court
judge will determine any sentence after considering the U.S. Sentencing
Guidelines and other statutory factors.
The FBI investigated the case.
Acting Assistant Chief Miriam Glaser Dauermann of the Criminal
Division’s Fraud Section and Assistant U.S. Attorneys Catherine Mirabile
and Antoinette Rangel of the Eastern District of New York are
prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat
health care fraud through the Health Care Fraud Strike Force Program.
Since March 2007, this program, comprised of 15 strike forces operating
in 24 federal districts, has charged more than 4,200 defendants who
collectively have billed the Medicare program for more than $19 billion.
In addition, the Centers for Medicare & Medicaid Services, working
in conjunction with the Office of the Inspector General for the
Department of Health and Human Services, are taking steps to hold
providers accountable for their involvement in health care fraud
schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.