MIAMI – A federal judge on Friday sentenced a Miami man who had owned the nation's largest community mental health center chain to 50 years in prison for his role in a $205 million Medicare fraud scam.
The sentence is the longest ever for a case brought under a Medicare fraud strike force.
Federal authorities said Lawrence Duran, 49, preyed on patients with Alzheimer's disease and severe dementia, orchestrating an elaborate scam where staff forged patient charts to bill Medicare for therapy sessions and other services it never delivered.
Prosecutors said doctors and employees at American Therapeutic Corp. and its sister companies were instructed to alter diagnoses and medications to make it seem that they qualified for expensive sleep studies and mental health treatments. Patients suffering acute mental illness and on the verge of hospitalization were supposed to get intensive counseling, but federal officials said ATC didn't provide any.
ATC also paid the owners of assisted living facilities and halfway houses to round up patients for their seven mental health centers in south and central Florida for therapy sessions that were never held. In some cases, elderly and infirm patients were left in rooms for hours and weren't cognizant of where they were or what was happening around them, authorities said.
"Instead of providing patients with the treatment they needed, Mr. Duran and his co-conspirators used them as props to fill their fraudulent mental health centers, said Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Some patients also cashed in on the scheme by providing their Medicare numbers, while others were not coherent enough to demand kickbacks, authorities said.
The indictment said ATC co-owner Marianella Valera manipulated records so patients would have to stay longer at the facility, racking up higher Medicare bills.
Duran and Valera were arrested in a massive bust last fall, culminating a months-long investigation into the latest Medicare service to be targeted by scammers — mental health care. Authorities started investigating the now-defunct company after an employee contacted them.
The two pleaded guilty to multiple charges, including health care fraud and money laundering. Duran was also ordered to pay more than $87 million in restitution at Friday's sentencing. Valera is scheduled to be sentenced next week.
Duran also created an organization to lobby Congress for additional funds to support the mental health services his fraud scheme purported to provide. He can be seen on a YouTube video last year visiting U.S. Rep. Ileana Ros-Lehtinen to discuss health care reform, saying his centers treat more than 450 patients daily.
"We want to try to protect them, make sure the patients we're providing services for are well treated," he says in the video.
The Medicare fraud strike force teams, which operate in nine fraud hot spots around the country, have charged more than 1,140 defendants since 2007.
Christopher Dennis, special agent in charge of the HHS inspector general in the Florida region, said: "Mr. Duran thought he could enrich himself and beat the law. He will now have years and years behind bars to reflect on that mistake."
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