Ex-VB businessman convicted in $8m healthcare fraud scheme
NORFOLK, Va. (WAVY) — A former Virginia Beach businessman has been sentenced to 51 months in prison in connection with a multi-million dollar health care fraud scheme.
According to the US Department of Justice, Frank Alosa, 49, of Kentucky, and another individual operated a medical supply company that defrauded federal health care programs.
The fraud occurred in 2018 and 2019 through Merchant Card Solutions LLC, which did business as Med Brace Shop. The company sold durable medical equipment supplies and submitted fraudulent claims to Medicare, Tricare and Virginia Medicaid.
Alosa and his co-conspirator purchased illegal orders of unwanted and medically unnecessary durable medical equipment, such as orthopedic braces. They then used these orders to bill Medicare and other health care programs.
The fraudulent billing totaled more than $8 million, the DOJ said. Alosa and the co-conspirator used the proceeds for their personal benefit.
Orders for medical equipment were placed by a third party reaching out to beneficiaries and offering unnecessary equipment. Medical providers then endorsed unnecessary medical equipment in exchange for illegal kickbacks.
“As a result, the equipment was released to recipients without regard to actual medical necessity and the orders were billed to their insurance programs, benefiting Alosa and his co-conspirator’s company,” he said. said the DOJ.
Alosa also hid his co-conspirator’s criminal history from Med Brace Shop because he could not own or manage the business.
“Methods of concealment included, among other things, the creation of a front company for the purpose of making illegal payments to other entities and individuals involved in the scheme,” the DOJ said.
These agencies were defrauded:
- Health insurance of at least $3,843,922.89
- Tricare of at least $43,370.42
- Virginia Medicaid of at least $5,121.42.
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