An Ocean County man admitted his role in a durable medical equipment kickback scheme, U.S. Attorney Philip R. Sellinger announced.
According to officials, Alexander Schleider, 57, of Lakewood, pleaded guilty in Trenton federal court to an information charging him with one count of conspiracy to commit health care fraud and one count of wire fraud.
Officials said Schleider owned and operated durable medical equipment (DME) companies in New Jersey that provided orthotic braces to beneficiaries of Medicare and other federal and private health care benefit programs without regard to medical necessity.
According to documents filed in the case and statements made in court:
Schleider and his conspirators obtained prescriptions for the DME braces through the payment of kickbacks and bribes to individuals operating marketing call centers, who in turn utilized the service of telemedicine companies to obtain prescriptions for the DME. Schleider caused losses to Medicare and other healthcare benefit programs of $21.7 million.
Court documents state, Schleider also committed wire fraud in connection with funds made available in response to the COVID-19 pandemic.
After one of his DME companies received $322,237 from the Department of Health and Human Services Health Resources and Services Administration Provider Relief Fund, Schleider submitted a fraudulent attestation to HRSA in which he claimed that the DME company provided diagnoses, testing, and care for individuals with possible or actual cases of COVID-19 after Jan. 31, 2020.
According to the authorities, in reality, the DME company had ceased billing for any services in April 2019.
The attestation also falsely claimed that the payment would only be used to prevent, prepare for, and respond to coronavirus and that the payment shall reimburse the recipient only for healthcare-related expenses or lost revenues that are attributable to coronavirus.
Officials said Schleider did not use the funds for those purposes, but transferred them into other accounts and subsequently used them to purchase real estate and vehicles, among other things.
The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest.
The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. Sentencing is scheduled for Nov. 8, 2023.