Los Angeles Physician Assistant Found Guilty in $18.9 Million Medicare Fraud Scheme

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LOS ANGELES—A physician assistant whoworked at fraudulent medical clinics where he used the stolen identities ofdoctors to write prescriptions for medically unnecessary durable medicalequipment (DME) and diagnostic tests has been convicted of conspiracy, healthcare fraud, and aggravated identity theft charges in connection with a $18.9million Medicare fraud scheme.
After a two-week trial in federal courtin Los Angeles, a jury on Friday afternoon found David James Garrison, 50, ofLeimert Park, guilty of one count of conspiracy to commit health care fraud,six counts of health care fraud, and one count of aggravated identity theft.
The evidence at trial showed thatGarrison worked at fraudulent medical clinics that operated as prescriptionsmills and trafficked in fraudulent prescriptions and orders for medicallyunnecessary DME, such as power wheelchairs, and diagnostic tests. Thefraudulent prescriptions and orders were used by fraudulent DME supplycompanies and medical testing facilities to defraud Medicare. Garrison wrotethe prescriptions and ordered the tests on behalf of some doctors he never metand who did not authorize him to write prescriptions and order tests on theirbehalf.
The trial evidence showed that betweenMarch 2007 and September 2008, Garrison’s co-conspirator, Edward Aslanyan, andothers owned and operated several Los Angeles medical clinics established forthe sole purpose of defrauding Medicare. Aslanyan and others hired street-levelrecruiters to find Medicare beneficiaries willing to provide the recruiterswith their Medicare billing information in exchange for high-end powerwheelchairs and other DME, which the patient recruiters told the beneficiariesthey would receive for free. Often, the Medicare beneficiaries did not have alegitimate medical need for the power wheelchairs and equipment. The patientrecruiters provided the beneficiaries’ Medicare billing information to Aslanyanand others, or they brought the beneficiaries to the fraudulent medicalclinics. In exchange for recruiting the Medicare beneficiaries, Aslanyan andothers paid the recruiters cash kickbacks.
Many of the beneficiaries whose Medicarebilling information was used at the medical clinics lived hundreds of milesfrom the clinics, including some beneficiaries who lived more than 300 milesfrom the clinics. One witness testified that the clinics used beneficiaries wholived such long distances from the clinics because the billing numbers ofMedicare beneficiaries who lived in and around Los Angeles had been used inother Medicare fraud schemes and, therefore, could no longer be used to billMedicare.
The evidence presented at trial showedthat Garrison wrote prescriptions for power wheelchairs that the beneficiariesdid not need and did not use. In some cases, Garrison wrote power wheelchairprescriptions for beneficiaries he never examined and who never visited the clinics.In one instance, according to the evidence presented at trial, Garrisonprescribed a power wheelchair to a beneficiary who did not have the mentalcapacity to operate the wheelchair.
Once Garrison wrote the power wheelchairprescriptions, Aslanyan and others sold the prescriptions for as much as $1,500to the owners and operators of approximately 50 fraudulent DME supplycompanies. The fraudulent prescriptions were used to submit fraudulent powerwheelchair claims to Medicare. The DME supply companies purchased the powerwheelchairs wholesale for approximately $900 per wheelchair but submitted billsto Medicare at a rate of approximately $5,000 per wheelchair.
The trial evidence also showed thatGarrison ordered medically unnecessary diagnostic tests for many Medicarebeneficiaries, including tests for sleep studies, ultrasounds, and nerveconduction. These tests were then billed to Medicare by fraudulent diagnostictesting companies that paid Aslanyan kickbacks to operate from the medicalclinics.
Throughout the trial, evidence wasintroduced that showed that Garrison had admitted to writing prescriptions forpower wheelchairs and ordered diagnostic tests on behalf of approximately sixdifferent doctors and that he did not have a Delegation of Services Agreementwith at least two of these doctors, as required by law.
As a result of this fraud scheme,Garrison, Aslanyan, and their co-conspirators submitted and caused thesubmission of more than $18 million in false and fraudulent claims to Medicare,which paid approximately $10.7 million on those claims.
Garrison is scheduled to be sentenced byUnited States District Judge Consuelo B. Marshall on September 17. At thattime, Garrison faces a maximum statutory penalty of 72 years in federal prisonand a $2 million fine. The aggravated identity theft conviction carries amandatory two year prison sentence.
Currently, Garrison is facing federaldrug charges as a result of his alleged involvement with another medical clinicwhere medically unnecessary prescriptions for Oxycontin were distributed (see:http://www.justice.gov/usao/cac/Pressroom/2011/147.html). Garrison is scheduledto go on trial in the drug case on November 6. He is presumed innocent of thecharges against him in this case.
The conviction of Garrison was announcedby Assistant Attorney General Lanny A. Breuer of the Justice Department’sCriminal Division; United States Attorney André Birotte, Jr.; Tony Sidley,Assistant Chief of the California Department of Justice, Bureau of Medi-CalFraud and Elder Abuse; Glenn R. Ferry, Special Agent in Charge for the LosAngeles Region of the HHS Office of Inspector General (HHS-OIG); and StevenMartinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
The case is being prosecuted by AssistantUnited States Attorney David Kirman and DOJ Trial Attorney Jonathan T. Baum.
The case was brought as part of theMedicare Fraud Strike Force, supervised by the Criminal Division’s FraudSection and the United States Attorney’s Office for the Central District ofCalifornia. The Medicare Fraud Strike Force operations are part of the HealthCare Fraud Prevention and Enforcement Action Team (HEAT), a joint initiativeannounced in May 2009 between the Department of Justice and HHS to focus theirefforts to prevent and deter fraud and enforce current anti-fraud laws aroundthe country.
Since their inception in March 2007,strike force operations in nine districts have charged 1,330 defendants whocollectively have falsely billed the Medicare program for more than $4 billion.In addition, the HHS Centers for Medicare and Medicaid Services, working inconjunction with the HHS-OIG, are taking steps to increase accountability anddecrease the presence of fraudulent providers. To learn more about HEAT, go towww.stopmedicarefraud.gov.