Federal agents serve a search warrant at Certified Medical Supply Inc., 603 E. Eighth St., in Port Angeles on Tuesday morning. (Jesse Major/Peninsula Daily News)

Federal agents serve a search warrant at Certified Medical Supply Inc., 603 E. Eighth St., in Port Angeles on Tuesday morning. (Jesse Major/Peninsula Daily News)

Federal agents serve search warrants in Port Angeles in nationwide case

Department of Justice: Action part of ‘one of the largest health care fraud schemes investigated’

PORT ANGELES — Federal agents served search warrants at two durable medical equipment supply companies in Port Angeles on Tuesday morning in connection with what the Department of Justice is calling “one of the largest health care fraud schemes investigated” in the nation.

Federal authorities said the $1.2 billion scam involved foreign call centers and doctors who prescribed unnecessary orthopedic braces to hundreds of thousands of elderly or disabled people across the country, defrauding Medicare of hundreds of millions of dollars.

“The defendants took advantage of unwitting patients who were simply trying to get relief from their health concerns,” said U.S. Attorney Craig Carpenito in a statement.

“Instead, the defendants preyed upon their weakened state and pushed millions of dollars’ worth of unnecessary medical devices, which Medicare paid for, and then set up an elaborate system for laundering their ill-gotten proceeds.”

No one in Port Angeles has been charged.

Agents from the FBI, the U.S. Department of Health & Human Services Office of the Inspector General and Department of Veterans Affairs Office of Inspector General who were serving warrants at Canoga Medical Supply, 310 E. Eighth St., and Certified Medical Supply Inc., 603 E. Eighth St., would not comment.

The state Department of Revenue lists Matthew Gibbs as the owner of Canoga Medical Supply. Gibbs and Shane Eli Yamamoto are listed as owners of Certified Medical Supply Inc.

Canoga Medical Supply was incorporated in California while Certified Medical Supply was incorporated in Nevada. A Nevada phone number listed for Gibbs was “not in service” Tuesday.

Both Gibbs and Yamamoto have addresses in the greater Victoria area, according to the Nevada Secretary of State’s Office.

The Port Angeles Police Department provided security at Canoga Medical Supply while agents served a warrant. Agents at Certified Medical Supply were seen going through boxes of paper records and photographing evidence.

Emily Langlie, spokesperson for the Department of Justice in Seattle, said that she does not expect any charges or arrests resulting from the Port Angeles search warrants “at this point.”

The case has resulted in charges against 24 defendants, including the CEOs, COOs and others associated with five telemedicine companies, the owners of more than a dozen durable medical equipment companies and three licensed medical professionals for their alleged participation in health care fraud schemes involving more than $1.2 billion in loss, as well as the execution of more than 80 search warrants in 17 federal districts, according to a Department of Justice press release.

Those charges are being prosecuted in the District of New Jersey, the Middle District of Florida, the Northern District of Texas, the Western District of Texas, the Eastern District of Pennsylvania and the Central District of California.

On Tuesday the Center for Medicare Services, Center for Program Integrity took “adverse administrative action” against 130 durable medical equipment companies that had submitted more than $1.7 billion in claims and were paid more than $900 million.

The Department of Justice said that in addition to the Medicare Fraud Strike Force prosecutions, related search warrants were served in New Jersey, South Carolina, California, Nebraska, Florida, Missouri and at the two locations in Port Angeles.

The Department of Justice alleges a scheme involving illegal kickbacks and bribes by the durable medical equipment companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that are medically unnecessary.

Medical equipment companies would get $500 to $900 per brace from Medicare and would pay kickbacks of nearly $300 per brace.

The Department of Justice said some of the defendants controlled an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America.

The defendants paid doctors to prescribe braces either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen, according to the Department of Justice.

The scam was detected last summer, officials said. Complaints from beneficiaries were pouring in to the Medicare fraud hotline, and some consumer news organizations warned seniors. As the investigation progressed, Cantrell said, federal agents gained cooperation from people familiar with the various schemes.

The proceeds were laundered through international shell corporations and used to purchase exotic cars, yachts and luxury real estate in the United States and abroad, according to the Department of Justice.

“These defendants — who range from corporate executives to medical professionals — allegedly participated in an expansive and sophisticated fraud to exploit telemedicine technology meant for patients otherwise unable to access health care,” said Assistant Attorney General Brian Benczkowski. “This Department of Justice will not tolerate medical professionals and executives who look to line their pockets by cheating our health care programs.”

Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine and DME marketing schemes — including Video Doctor USA, AffordADoc, Web Doctors Plus, Integrated Support Plus and First Care MD — should call to report this conduct to the FBI hotline at 1-800-CALL-FBI (225-5324).

________

Reporter Jesse Major can be reached at 360-452-2345, ext. 56250, or at jmajor@peninsuladailynews.com.

More in News

Residents vote early in Dearborn, Mich., Nov. 3, 2024. Like in 2020, the vote count will still feature “blue mirages” or “red mirages,” in which one candidate builds a fleeting lead simply because mail or Election Day ballots are counted first. (Nick Hagen/The New York Times)
What we’ll know and when we’ll know it: A guide to election night

Four years ago, it took days for news organizations to project Joe… Continue reading

A man drops off his ballot this weekend in front of the Clallam County courthouse in Port Angeles. Dropboxes across Clallam and Jefferson counties will be open until 8 p.m. tonight. Go to www.peninsuladailynews.com for initial results. Election coverage will be in Thursday’s print edition. (Dave Logan/for Peninsula Daily News)
Election day

A man drops off his ballot this weekend in front of the… Continue reading

Clallam last of its kind in nation

County has predicted president since 1980

Bruce Skinner. (Leah Leach/for Peninsula Daily News)
Skinner earns festivals association lifetime award

Veteran music festival organizer also inducted into Hall of Fame

Hood Canal Bridge closures set Thursday night

The Hood Canal Bridge on state Highway 104 will repeatedly… Continue reading

Decoy carver Ben Tyler, left, talks about the carvings he has on display to Brian Erickson, from Juneau, Alaska, during the Port Townsend Woodworkers Show at the Legion Hall in Port Townsend on Saturday. (Steve Mullensky/for Peninsula Daily News)
Decoy carvings

Decoy carver Ben Tyler, left, talks about the carvings he has on… Continue reading

About two dozen witches set off on the second annual Witches Paddle from Northwest Maritime to the Pourhouse pub on Saturday, a distance of half a mile. (Steve Mullensky/for Peninsula Daily News)
Witches paddle

About two dozen witches set off on the second annual Witches Paddle… Continue reading

Jefferson commissioner to speak at Studium Generale East

Jefferson County commissioner Kate Dean will present “Small Town… Continue reading

Port Angeles City Council to meet Wednesday

The Port Angeles City Council will conduct public hearings… Continue reading

Cindy, left, and Alan Turner are selling Port Book and News after 38 years in business. The store has become a fixture in Port Angeles for its thoughtful selection of books, carefully curated gifts, exceptional customer service and community-minded spirit. (Paula Hunt/Peninsula Daily News)
Port Book and News for sale after nearly 40 years

Store known for its curated selection of books, magazines

Family members of Ruth McCord celebrate the dedication of a park named after their mother’s legacy on Oct. 25. The future park, located near North Seventh Avenue and West Hendrickson Road, looks to honor the late Sequim resident’s wishes to offer a place for youngsters and the elderly alike. (Michael Dashiell/Olympic Peninsula News Group)
Sequim dedicates a new city park

Land to offer attractions for both youth, elderly

Operations scheduled at Bentinck range this week

The land-based demolition range at Bentinck Island will be… Continue reading