Miami resident Daisy Martinez pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program, Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Terrence Berg of the Eastern District of Michigan; Andrew G. Arena, Special Agent-in-Charge of the Detroit Field Office of the FBI; and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced.
Martinez, 50, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald Rosen. At her sentencing, which is scheduled for Feb. 11, 2010, Martinez faces a maximum penalty of 10 years in prison and a $250,000 fine.
In her guilty plea, Martinez admitted that in approximately March 2006, she devised a scheme with co-conspirator Jose Rosario to open a clinic that purported to specialize in infusion and injection therapy services in Michigan. Martinez admitted that the sole purpose of the clinic was to defraud Medicare. Martinez and her co-conspirators opened Sacred Hope Medical Center Inc. in Southfield, Mich., in October 2006. According to court documents, Martinez was an owner of the clinic, and she also managed the clinic on a day-to-day basis. Martinez and Rosario recruited various co-conspirators into their scheme, including an office manager, Lill Vargas-Arias, to help run the clinic; a physician, purportedly to treat patients at the clinic; and recruiters/drivers who were in charge of bringing Medicare beneficiaries to the clinic. Rosario pleaded guilty for his role in the scheme on Aug. 18, 2009. Vargas-Arias pleaded guilty to her role on Sept. 2, 2009.
Martinez admitted in her guilty plea that during the time Sacred Hope was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided. Martinez admitted she was aware that the clinic had purchased only a small fraction of the medications for which it had billed Medicare. Martinez also admitted that patients were prescribed medications at the clinic based not on medical need, but on what medications were likely to generate Medicare reimbursements. Martinez, along with Rosario, admitted to helping falsify medical files maintained by the clinic to make the treatments purportedly being given there appear legitimate, when in fact they were not.
Martinez admitted that Medicare beneficiaries were not referred to Sacred Hope by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. In exchange for those kickbacks, Martinez admitted, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. According to court documents, kickbacks came in the form of cash and prescriptions for narcotic drugs. Martinez admitted to knowing that co-conspirator Arnaldo Rosario, who also pleaded guilty in the same case on Aug. 18, 2009, oversaw and facilitated the payment of cash kickbacks to the Medicare beneficiaries.
Martinez also admitted that beginning in approximately November 2006, she and other co-conspirators opened another infusion and injection clinic, Xpress Center Inc. (XPC), in Livonia, Mich. As with Sacred Hope, XPC's sole purpose was to defraud Medicare. Martinez admitted that she and her co-conspirators used the same fraudulent practices to open and then operate XPC as Sacred Hope, including creating fictitious patient files to cover up fraudulent billings to Medicare. As at Sacred Hope, Martinez admitted she was fully aware that XPC routinely billed the Medicare program for services that were medically unnecessary and in many instances were never provided. As at Sacred Hope, Martinez admitted to knowing that the purpose of the clinic was not to provide legitimate health care to patients, but rather to defraud the Medicare program.