A wealthy South Florida eye doctor won’t be able to practice medicine for the foreseeable future after a federal magistrate judge Thursday ordered that Salomon Melgen be detained before trial.
Melgen — already charged in a public corruption case with his close friend, U.S. Sen. Robert Menendez — remained behind bars Thursday on a newly filed Medicare fraud indictment after prosecutors argued he was a flight risk to his native Dominican Republic.
“His ties to the Dominican Republic are very strong,” Assistant U.S. Attorney Carolyn Bell told Magistrate Judge James Hopkins. She noted that Melgen has a boat at his North Palm Beach waterfront home, lots of cash, citizenship in the Dominican Republic, a resort villa and other assets there and connections to officials in that country.
“He could flee to the Dominican Republic or to another country for that matter,” said Bell, adding that the DR has an extradition agreement with the United States but it doesn’t include a provision for a possible fugitive accused of healthcare fraud.
The judge made his decision after Melgen’s defense attorneys agreed with prosecutors to the detention, reserving the right to revisit his bond request in the future. Defense attorneys Anne Lyons and Maria Dominguez, in the meantime, worked out an agreement to have their client transferred from a Palm Beach County jail to the Federal Detention Center in downtown Miami.
On Thursday, Melgen also entered a not guilty plea at his arraignment in federal court in West Palm Beach.
Melgen, 61, was arrested late Tuesday at his medical office in West Palm Beach on charges involving $190 million in Medicare claims. Melgen, recognized as one of Medicare’s top-billing physicians, collected more than $105 million in reimbursements based on substantial “fraudulent” claims to the taxpayer-funded program for eye injections and other treatments between 2008 and 2013, according to an indictment.
The indictment, unsealed Wednesday, listed 30 patients treated by Melgen for wet macular degeneration, a retinal disease that causes blindness, and for other ailments. Prosecutors say he fabricated diagnoses to generate costly treatments such as eye injections that were “unnecessary” — costing the taxpayer-funded Medicare program millions of dollars.
But Melgen’s defense attorneys sharply contested the allegations, saying the procedures were necessary and benefited his patients.
“We’re confident that he will be found not guilty,” Lyons told the Miami Herald.
On Wednesday, his attorneys argued that the physician should be allowed bail while he awaits trial. They also noted that he was granted a $1.5 million bond in the separate New Jersey corruption case involving his friend, Menendez. They said he turned over his passport and his private plane to federal authorities as conditions of his bail in that case.
Lastly, they revealed that Melgen has a serious health problem and was scheduled to undergo a biopsy on Friday.
Legal observers said prosecutors are putting intense pressure on Melgen — who is extremely vulnernable after being indicted twice in the same month — because they want him to cooperate, acknowledge his role and turn on his longtime friend, Menendez.
“The vise-grip is getting tighter and tighter,” said defense attorney, David Weinstein, former chief of the public corruption and counterterrorism section at the U.S. attorney’s office in Miami. “It also allows them [Melgen’s attorneys] to start drafting up a cooperation deal with an eye towards ultimately getting a bond.”
Melgen was thrust into the national spotlight earlier this month when he was charged along with Menendez, a powerful Democratic lawmaker, in an alleged graft scheme entailing close to $1 million in gifts and donations in return for official favors. Among them: the senator’s intervening on Melgen’s behalf to resolve a longstanding Medicare billing dispute.
Melgen, charged in the new 76-count indictment with healthcare fraud, filing false claims and making false statements, was arrested by Health and Human Services and FBI agents following a two-year investigation.
Melgen is a longtime ophthalmologist who has owned and operated Vitreo-Retinal Consultants of the Palm Beaches since 1990. His high-volume business, with four offices in Palm Beach and St. Lucie counties, has provided clinical and surgical services to as many as 100 patients in a single day, according to the indictment.