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Ryan K. Stumphauzer was honored at the National Health Care Anti-Fraud Association’s 2010 (NHCAA) Annual Training Conference held at the Mandalay Bay Hotel & Casino in Las Vegas on November 17, 2010.  The National Health Care Anti-Fraud Association (NHCAA) is the leading national organization focused exclusively on the fight against health care fraud. NHCAA is a private public partnership — whose members comprise more than 100 private health insurers and those public sector law enforcement and regulatory agencies having jurisdiction over health care fraud committed against both private payers and public programs.  The brochure for the NHCAA's Annual Training Conference is here.

Mr. Stumphauzer received the Honorable Mention Award for Investigation of the Year for his work in the case of United States v. Michel Huarte et al.  The Huarte case was unprecedented in terms of its geographic breadth, organization, sophistication, and scope.  Indeed, the Medicare fraud scheme involved 35+ medical clinics in five states that collectively submitted more than $110 million in fraudulent claims to Medicare and Medicare Advantage plans.  The Huarte case also revealed many novel trends in Medicare fraud, including: (1) a Miami-based crime organization successfully exported its operations to at least four states, including Georgia, Louisiana, North Carolina, and South Carolina, where they perceived less scrutiny from Medicare regulators, (2) the Miami-based organization began to target Medicare Advantage providers, rather than Medicare Part A, because they could avoid billing edits and on-site inspections, thereby allowing them to bill for expensive infusion drugs from P.O. boxes, (3) the organization set-up a massive identity theft scheme that allowed them to obtain the identities of dozens of physicians and hundreds of Medicare beneficiaries around the county, and (4) the organization operated and controlled check cashing stores in Florida and Louisiana to launder the vast fraud proceeds.  

During the early years of the scheme, from about 2005 until 2007, the Miami-based organization defrauded Part A of the Medicare program by setting up a series of at least seven sham medical clinics in south and central Florida.  These clinics defrauded the Medicare system by submitting false and fraudulent claims for expensive medications allegedly utilized to treat HIV, AIDS, cancer, and other ailments. The top-level conspirators concealed their involvement by recruiting nominee owners who signed the Medicare applications, corporate bank records, and other documents necessary to commit the fraud.  Such nominee owners were paid a handsome fee, sometimes over $100,000, with the understanding they would flee to Cuba when the scheme was completed.  Collectively, these clinics submitted $61 million of false claims to Medicare, and received payments totaling $23 million.  The conspirators then used the fraud proceeds to buy at least $2.7 million in cars, including a Lamborghini Gallardo, a Lamborghini Murcielago, a Ferrari 612 Scaglietti, two (2) Bentley Continental GTs, two (2) Mercedes Benz CL63s, and at least six (6) Mercedes Benz S550s. 

Later, as the conspirators became more sophisticated, they expanded their scheme outside the State of Florida, and also began to target Medicare Advantage providers.  In total, the conspirators opened 29 new medical clinics in Florida, Georgia, North Carolina, South Carolina, Louisiana, and elsewhere.   These clinics were merely P.O. Boxes or abandoned storefronts; none of them did any legitimate business.  Collectively, the clinics submitted approximately $55.5 million of false and fraudulent claims to various private insurance companies that offered coverage to Medicare beneficiaries through Medicare Advantage programs.

To facilitate the fraud scheme at these new phantom clinics, the conspirators purchased the personal identifying information of hundreds of Medicare beneficiaries living in the host states of Florida, Georgia, Louisiana, North Carolina, and South Carolina.  These patient names were purchased from a conspirator who was employed at a Miami-area company, where he had access to the personal identifying information of millions of Medicare-eligible beneficiaries.  After obtaining the patient identities, the conspirators would contact the Medicare Advantage provider, either via internet or by phone, to change the unwitting patients’ address, phone number, and or email. 

To further facilitate the fraud, the conspirators misappropriated the identities of various physicians in the host states of Florida, Louisiana, North Carolina, and South Carolina.  More specifically, the conspirators would obtain the doctors' names and unique identifying numbers from various public sources, including the internet.  Alternatively, the conspirators would stage mock "interviews" with various unwitting physicians, leading the physician to believe they were being hired to serve as the medical director at a legitimate clinic.  These interviews were merely a ruse to obtain the doctor's personal identifying information.

The NHCAA also honored special agents of the Federal Bureau of Investigation (FBI), Florida Department of Law Enforcement (FDLE), and the Internal Revenue Service (IRS) for their outstanding investigative work.


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