Telemedicine CEO Pleads Guilty in $424M Faud Scheme

The owner of telemedicine company Video Doctor Network on Friday pleaded guilty for his role in what the Justice Department is calling one of the largest healthcare fraud schemes prosecuted to date in the U.S.

Lester Stockett, 52, a resident of Colombia, agreed to pay $200 million in restitution to the U.S. as part of his plea agreement.

The Justice Department in April brought charges against 24 defendants including Stockett for their role in a $424 million conspiracy to defraud Medicare and receive illegal kickbacks. Stockett’s company allegedly received kickbacks from brace suppliers in exchange for arranging for physicians to order medically unnecessary medical equipment, such as back, knee and shoulder braces.

Stockett, owner of the Video Doctor Network and CEO of one of its subsidiaries, AffordADoc, on Friday pleaded guilty to one count of conspiracy to defraud the U.S. and pay and receive healthcare kickbacks, as well as one count of conspiracy to commit money laundering. His sentencing is set for Dec. 16 in New Jersey.

As part of his guilty plea, Stockett said he and others had solicited and received illegal kickbacks and bribes from patient recruiters, pharmacies and brace suppliers. In exchange, he said he and other Video Doctor Network employees bribed healthcare providers to order medically unnecessary orthotic braces for Medicare beneficiaries.

These Medicare beneficiaries were contacted through an international telemarketing network, which identified hundreds of thousands of elderly and disabled patients.

“This CEO and his co-conspirators lined their own pockets with hundreds of millions of dollars by exploiting telemedicine technology meant to help elderly and disabled patients in need of healthcare,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division said in a statement.

Brace suppliers, which were co-conspirators in the scheme, submitted more than $424 million in false and fraudulent claims to Medicare for these orders, Stockett said.

Medicare paid brace suppliers more than $200 million for these claims, according to the Justice Department.

Stockett said he and others hid illegal kickbacks and bribes by having them paid indirectly through nominee companies and bank accounts, both in the U.S. and in other countries.

Between March 2016 and April 2019, Stockett said he and other Video Doctor Network executives transferred more than $10 million in illegal kickback payments to a bank account in the Dominican Republic. They then transferred more than $9.8 million from that bank account in the Dominican Republic to bank accounts of AffordADoc in the U.S.

Stockett and other Video Doctor Network executives had also defrauded investors by claiming the company was a legitimate telemedicine enterprise that made $10 million in revenue annually, while revenue was obtained through illegal kickbacks and bribes, according to the plea agreement.

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Source: https://www.modernhealthcare.com/legal/telemedicine-ceo-pleads-guilty-424-million-medicare-fraud-scheme

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