November 17, 2011: Nationwide Supplier of Medical Equipment Pleads Guilty to Health Care Fraud, Money Laundering and Selling Adulterated and Misbranded Medical Devices
Food and Drug Administration
Office of Criminal Investigations
U.S. Department of Justice Press Release
For Immediate Release
November 17, 2011
United States Attorney
District of Rhode Island
Contact: Jim Martin
Illinois businessman admits to shipping unwanted and unneeded medical supplies and "erectile pumps" to Medicare recipients at government expense
PROVIDENCE, R.I. - The owner of Planned Eldercare, a nationwide supplier of durable medical equipment located in Buffalo Grove, Ill., pled guilty today in U.S. District Court in Providence, R.I., to defrauding the Medicare program by targeting arthritic and/or diabetic Medicare beneficiaries, and ensuring that his company ordered and shipped medical equipment and supplies to Medicare beneficiaries that they did not order and/or were not medically necessary.
U.S. Attorney Peter F. Neronha announced the guilty plea of Gary Winner, 49, of Northbrook, Ill., to two counts of health care fraud, and one count each of money laundering and the introduction of an adulterated and misbranded medical device into interstate commerce. Winner faces a maximum sentence of 33 years imprisonment, a fine of $760,000, and a term of supervised release of 4 years when he is sentenced on February 10, 2012. Winner has agreed to forfeit approximately $2 million in proceeds derived by defrauding the Medicare program.
Winner admitted to the court that from 2005 through early 2009 he instructed Planned Eldercare employees, upon successfully reaching individuals as a result of unsolicited telemarketing calls, to inquire if they suffered from diabetes or arthritis. Once call recipients identified themselves as suffering from either ailment, as an inducement for recipients to provide their Medicare and physician information, employees were instructed to inform recipients that Planned Eldercare could provide them with products to help with their ailments "at no cost to you." Once employees obtained Medicare beneficiaries' agreement to receive certain products, Winner instructed employees to order as many products as possible whether or not the beneficiaries requested them or had a medical need for the equipment. Winner admitted that Medicare was billed for thousands of products that beneficiaries did not order.
Winner also admitted that he instructed his employees to falsely inform male diabetic beneficiaries that an "erectile pump" was good for prostate problems, and was designed to help blood circulation exclusively in the urinary tract and prostate region. Winner admitted that as part of the scheme, he ordered penis enlargers from an x-rated website for $26.00 each, repackaged them with an information sheet stating that regular use of the enclosed "erectile pump" helps with bladder control, urinary flow and prostate comfort, and then shipped them to recipients. Winner received in reimbursement from Medicare an average of $284 per item.
Winner also admitted that he waived copayments for all Medicare patients, a practice which is prohibited by Medicare. By waiving copayments they otherwise would be responsible for, Winner induced beneficiaries to accept products they had not ordered and not report the alleged fraudulent billing to Medicare.
The case is being prosecuted by Assistant U.S Attorney Dulce Donovan.
The matter was investigated by Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Railroad Retirement Board, Office of Inspector General; and the Food and Drug Administration, Office of Criminal Investigations.