A one-of-a-kind Medicare fraud case — U.S. expatriates using fake Miami addresses to receive millions of dollars in federal healthcare coverage while living abroad — has reached a climax with 10 defendants pleading guilty.
The last remaining defendant, a former Miami doctor with a revoked medical license who resettled to Nicaragua long ago, has no plans to surrender, authorities say.
This week, five of the 10 defendants — including the lawyer son of another Miami doctor who operated a clinic in Managua — were sentenced to prison terms ranging from just over one year to four years for healthcare and wire fraud convictions.
Federal prosecutors sought much harsher sentences. But U.S. District Judge Federico Moreno took into consideration that the medical services covered by the taxpayer-funded Medicare program were mostly provided to the retired U.S. citizens living in both Nicaragua and the Dominican Republic — just not in the Miami area, where they falsely claimed to have permanent residences. Generally, little to no services are provided in the typical South Florida Medicare scam.
In the end, the Medicare scheme without borders cost taxpayers $25 million.
Using phony local addresses, more than 1,000 expatriate patients were illegally — and perhaps wittingly — enrolled between 2011 and 2014 in a network operated by a Coral Gables managed-care business, Florida Healthcare Plus, and several other smaller companies. Florida Healthcare Plus was liquidated by state regulators after federal agents raided its headquarters last November.
U.S. Attorney Wifredo Ferrer said Wednesday that investigators and prosecutors, long accustomed to fighting Medicare fraud in South Florida, prevailed in this unusual case “even when the offenders move the crime outside our shores.”
Among the five sentenced Monday: Rodney Montoya, 36, who graduated from law school at Florida International University before going to work for his father, Dr. Santiago B. Montoya, 72, to sign up expatriate patients at a clinic in Nicaragua. The father has also pleaded guilty and awaits sentencing along with three other defendants in August.
In a revealing court filing, Rodney Montoya’s defense attorney said his Nicaraguan-born client struggled with alcohol and drugs as a youth growing up in Miami — shunned by his parents because he was gay. Despite a spotty academic record, he eventually turned his life around with the financial assistance of his father, obtaining a law degree not only from FIU but also a European law degree in the Netherlands.
But when Rodney finished his studies, his father asked him to help open a new clinic in Managua — and that’s when the son’s life took a turn for the worse, defense attorney Scott Fingerhut said.
In 2012, the father and son agreed to merge their new clinic with an established medical facility run in Nicaragua’s capital by the chief operating officer at Florida Healthcare Plus, Pedro Hernandez, 51, the racket’s ringleader, and his associates, Freddy Zeron, 52, and Edgardo Rodriguez, 47. All have pleaded guilty to fraud charges. Rodriguez was sentenced to 3 1/2 years in prison on Monday. Hernandez and Zeron face sentencing in August.
Fingerhut acknowledged in the court filing that the Managua clinics signed up as many foreign beneficiaries as possible, without following residency rules under the Medicare program.
“Rodney knew better, but he did not do better,” Fingerhut wrote about his client, who cooperated with authorities after his arrest. “With or without a legal education, he knew better.”
At his sentencing Monday, Montoya was given a four-year sentence and ordered to pay back $13.2 million to the U.S. government for his share of the Medicare losses. Court records show he has already reimbursed $1 million of that total, which is unusual in a Medicare fraud case.
Meanwhile, his relationship with his father and family has been torn apart, “leaving only ruins,” Fingerhut wrote in the court filing.
The man who lured Montoya and his father into the scheme was Hernandez, who faced trial in June but opted to cut a plea deal. Hernandez admitted to directing the illegal exportation of Medicare benefits as the onetime COO of Florida Healthcare Plus. He collaborated with Abram Rodriguez, the company’s former marketing director, to sign up retirees abroad as Medicare patients. Rodriguez, who also chose not to go to trial last month and pleaded guilty, faces sentencing with Hernandez in August.
The illicit operation in the Dominican Republic was directed by Erendira V. Delgado, 31, of Miami, who was sentenced to almost 3 1/2 years in prison on Monday.
“In these enrollment applications, the defendants represented that the foreign residents resided in Florida by using nonresidential addresses, the addresses of beneficiaries’ friends and relatives, and addresses associated with the defendants,” the U.S. attorney’s office said in a statement released Wednesday.
Federal prosecutor Eric Morales said that Florida Healthcare Plus, which operated under the private Medicare Advantage plan, received about $10.5 million in government payments for illegally treating the beneficiaries in Nicaragua and the Dominican Republic.
“Florida Healthcare Plus at that time was a dirty company,” Morales said during a previous court hearing, adding that Hernandez and his conspirators also used other South Florida managed-care companies to carry out the scam.
Florida Healthcare Plus and its contractors promoted the program to expats in Nicaragua and the Dominican Republic by advertising in local newspapers and on the Internet, according to an indictment. They first recruited retired Americans and native Nicaraguans who had fled their homeland for the United States during a civil war, and then targeted retirees in the Dominican Republic.
Florida Healthcare Plus and the contractors flew some patients to Miami to establish phony addresses and undergo evaluations for Medicare, the prosecutor said. Then, they returned to the Latin American countries, where they were treated by Montoya but also by unlicensed foreign doctors, such as Jose Eloy Sanchez-Arguello, 70, a former Miami physician whose license was revoked in 1998, state records show.
Florida Healthcare Plus and its contractors misled the expatriates to exploit them in order to swindle Medicare, the indictment said.
Authorities said the investigation — led by agents with the U.S. Department of Health and Human Services’ Office of Inspector General, the Diplomatic Security Service and the FBI — is the first of its kind in South Florida, the nation’s capital of healthcare fraud, and in the United States. They credited the state Medicaid fraud control unit and the U.S. Embassy in Managua with assisting in the probe.
“Greed does not respect the law, does not concern itself with patient welfare and is not limited by international borders,” said HHS-OIG’s special agent in charge, Shimon Richmond.