A federal jury in Dallas, Texas, convicted the owners and operators of four orthotic brace suppliers in Texas and Arkansas today for a $6.5 million illegal kickback scheme, including violations of the federal Anti-Kickback Statute.
According to court documents and evidence presented at trial, Bruce Stroud, 40, Bobbi Stroud, 39, husband and wife and residents of Prosper, Texas, and Kenric Griffin, 52, of Frisco, Texas, jointly owned and operated four orthotic brace suppliers: New Horizons Durable Medical Equipment, Striffin Medical Supply, 4B Ortho Supply, and Grace Professional DME.
The evidence showed that between January 2017 and April 2019, the Strouds and Griffin, through their companies, caused approximately $12.5 million to be billed in claims to Medicare for unnecessary braces based on brace orders received in exchange for illegal kickbacks. Medicare paid the defendants approximately $6.5 million for those claims. The defendants concealed the scheme by entering into numerous sham agreements with purported marketing companies that characterized the illegal payments for doctors’ orders as “marketing” expenses.
The Strouds and Griffin were convicted of conspiracy to defraud the United States and to offer and pay illegal health care kickbacks, and seven violations of the Anti-Kickback Statute. The defendants are all scheduled to be sentenced on Sept. 7. Each defendant faces a total of up to 55 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Chad E. Meacham for the Northern District of Texas; Special Agent in Charge Miranda Bennett of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge Matthew DeSarno of the FBI’s Dallas Field Office; and Major William Marlowe of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
The HHS-OIG, FBI, and MFCU investigated the case.
Trial Attorneys Carlos A. López and Darren C. Halverson of the Criminal Division’s Fraud Section 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 HHS-OIG, 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.