Santiago B. Montoya, a 72-year-old Miami doctor, was the medical front man for a one-of-a-kind scam that raked in $25 million from Medicare for services provided to retired U.S. citizens living in Nicaragua and the Dominican Republic, authorities say.
In total, a federal prosecutor said Tuesday, about 1,200 expatriates established fake Florida addresses to enroll in Medicare through a local managed care company that bilked the taxpayer-funded program.
“Some of them had never lived in Florida at all,” Assistant U.S. Attorney Eric Morales told Magistrate Judge Chris McAliley during a series of bond hearings for Montoya, a licensed physician who treated patients in Nicaragua, and other key figures in the case.
The physician, who has dual U.S.-Nicaraguan citizenship, must be kept behind bars before trial because he is recognized as a flight risk, the judge ruled. So must his son, Rodney Montoya, 36, of Miami, a medical service provider, and Pedro Hernandez, 51, of Miramar, the alleged mastermind of the unprecedented scheme. A fourth defendant, Abram Rodriguez, 31, of Miami, was granted a $400,000 bond.
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They are among 11 defendants charged last week with conspiring to fleece Medicare. Nine have been arrested and two are at large in Nicaragua.
Hernandez is accused of directing the illegal exportation of Medicare benefits as the one-time chief operating officer of Coral Gables-based Florida Healthcare Plus. According to an indictment, he collaborated with Rodriguez, the company’s marketing director, to sign up retirees as Medicare patients in the two Latin American countries from 2011 to 2014.
Morales, the prosecutor, said that Florida Healthcare Plus, which operates 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 told the judge, adding that Hernandez and his conspirators also used other South Florida managed care companies to carry out the alleged scam.
Florida Healthcare Plus and its contractors allegedly promoted the program to expats in Nicaragua and the Dominican Republic by advertising in local newspapers and on the Internet. 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, Morales said.
The defendants are also accused of defrauding the parallel state Medicaid program for low-income people.
Florida Healthcare Plus and its contractors deliberately misled the expatriates to exploit them in order to swindle Medicare, the indictment said.
“To induce individuals to enroll in [Medicare Advantage] plans, the defendants initially represented that Medicare benefits were available in Nicaragua and the Dominican Republic,” according to the indictment.
“When questions about Medicare coverage outside the United States were raised, the defendants made false and fraudulent representations, including that ‘people retired in the U.S. now in Nicaragua can get free medical care,’ and that medical coverage offered in Nicaragua and the Dominican Republic was not offered by, or billed to, Medicare,” the indictment stated.
Defense attorneys Andrew Levi and Bruce Lehr, representing Hernandez, the former HealthPlus COO, said they plan “to mount a vigorous defense.”
Sam Rabin, an attorney representing Rodriguez, the one-time marketing director, said his client was involved in “legitimate” businesses.
Santiago Montoya’s attorney, Harry Solomon, did not contest the prosecutor’s request to hold his client before trial. His son, represented by attorney Scott Fingerhut, agreed to the same terms last week.
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 believed to be the first of its kind in South Florida, the nation’s capital of healthcare fraud, and in the United States.
Florida Healthcare Plus has not responded to requests for comment.