The U.S. Department of Justice (DOJ) recently announced the sentencing of a podiatrist and patient recruiter for their fraudulent billing scheme in Paradise, Texas. The DOJ released a statement, saying that podiatrist Dr. Brian Carpenter, 58, of Paradise, Texas, and recruiter Jerry Lee Hawrylak, 71, of Lake Worth, Texas, launched a multimillion-dollar scam against TRICARE, the healthcare program serving U.S. service members plus their families.

A jury in the Northern District of Texas convicted both defendants. Dr. Carpenter was found guilty of one charge of conspiracy, and his co-defendant Mr. Hawrylak was found guilty of one count of conspiracy to commit health care fraud plus six counts of health care fraud.

The convicted men, as noted in court documents, were sentenced to “45 months and 60 months in prison, respectively, and ordered to pay over $7 million in restitution for their roles in a scheme to fraudulently bill TRICARE — the health care program for U.S. service members and their families — for compounded creams that were medically unnecessary and procured through kickbacks and bribes.”

Legal documents say that Dr. Carpenter and Mr. Hawrylak worked in tandem, with the doctor signing prescriptions for “compounded pain and scar creams for TRICARE beneficiaries to whom he never spoke and whom he never examined or treated.” Mr. Hawrylak’s role in the scheme was to recruit TRICARE beneficiaries to “accept the medically unnecessary creams.”

From November 2014 to January 2017, the two men led the Fort Worth-based pharmacy to bill TRICARE about $8.5 million for the compound creams. Legal documents state that evidence at trial “included so-called standing orders signed by Carpenter that were backdated so the pharmacy could change prescriptions after the fact to maximize TRICARE reimbursement. The prescriptions Carpenter signed and maintained in his office authorized unlimited refills and listed fake addresses for beneficiaries.”

Assistant Chief Brynn Schiess and Trial Attorney Andrea Savdie of the Criminal Division’s Fraud Section prosecuted the case, working within the Health Care Fraud Section, the Criminal Division whose role is to “combat health care fraud through the Health Care Fraud Strike Force Program.”

This program, as per the announcement, was launched in 2007, and is “comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion.”

Los Angeles healthcare law attorney Art Kalantar regularly defends medical providers charged with healthcare fraud in California. In Kalantar’s view, doctors charged with defrauding government programs like Medicare or TRICARE are often criminally prosecuted for errors in billing practices without having any intent to defraud the government.

“The Health Care Fraud statute (18 U.S.C. 1347) requires a knowing and willful intent to defraud a health care benefit program such as Medicare or TRICARE,” Kalantar explains, “or to obtain money or property under control of a health care benefit program by false or fraudulent pretenses.” However, Kalantar also points out that the statute does not require that a person have actual knowledge of the law or a specific intent to commit a violation in order to be found guilty of violating the law.

Kalantar also notes that health care fraud can be prosecuted both civilly and criminally, and defense strategies differ depending on the type of prosecution. In this case, the prosecution charged two different conspiracy charges; however, the DOJ has many “arrows in its quiver” because in health care criminal cases it also charges Mail Fraud, Wire Fraud, False Statements to Federal Investigators, Program Fraud and Bribery, Money Laundering and Tax Evasion.

Kalantar cites the crippling effect on health care providers when the DOJ couples the filing of criminal charges with seizure of assets. He analogizes this situation to “being challenged to a fist fight with both hands tied behind your back.”

“Federal criminal laws are highly nuanced and technical,” notes Kalantar, who says health care fraud prosecutions are complex legal proceedings. “That’s one of the reasons why it is critical for a provider to contact a healthcare law attorney as soon as they become aware of an investigation or the filing of a formal charge,” he cautions.

The Centers for Medicare & Medicaid Services are currently working with the Health and Human Services Office of Inspector General to “hold providers accountable for their involvement in health care fraud schemes.” Meanwhile, the DOJ Fraud Section’s Health Care Fraud Unit, according to their website, includes “over 80 experienced white-collar prosecutors who focus on prosecuting the nation’s most complex health care fraud matters as well as medical professionals involved in the illegal prescribing and dispensing of opioids and other controlled substances.”

The Health Care Unit’s stated core mission is to “protect the public involving health care benefit programs such as Medicare, Medicaid, and TRICARE, and to protect patients from egregious fraudulent schemes that result in patient harm, including the overprescribing of controlled substances.”

The Unit routinely prosecutes defendants who orchestrate schemes that result in the loss of hundreds of millions of dollars, the distribution of thousands of controlled substance pills, and complex money laundering, tax, and other associated financial crime offenses.

The special Unit prosecuted the podiatrist and patient recruiter in this fraud case as part of their mission to uncover schemes that result in hundreds of millions of dollars in “the distribution of thousands of controlled substance pills, and complex money laundering, tax, and other associated financial crime offenses.”

Authorities from numerous agencies announced the sentencing, including the DOJ, the Department of Defense Office of Inspector General’s (DOD-OIG) Defense Criminal Investigative Service (DCIS) Southwest Field Office, the Department of Health and Human Services Office of Inspector General (HHS-OIG) Dallas Regional Office, the FBI Dallas Field Office, the Department of Labor Office of Inspector General (DOL-OIG) Central Regional Office, and the Department of Veterans Affairs Office of Inspector General (VA-OIG) South Central Field Office.