Two men guilty of fleecing $17 million from Medicare in South Florida, jury says
A South Florida man who owned a chain of medical equipment companies and an associate were found guilty on Monday of committing healthcare fraud by paying bribes to generate patients so they could bill $34 million to the federal Medicare program for unnecessary services.
Michael Kochen, 42, of Aventura, and Sandro Herek, 55, of Coral Springs, received more than $17 million in payments from the taxpayer-funded Medicare system in a healthcare fraud conspiracy spanning a decade, the 12-person jury found in Miami federal court.
Kochen’s chain of about 30 companies — which operated under the CLADD Group LLC in North Miami — sold durable medical equipment such as knee, shoulder and wrist braces to patients who were referred by doctors affiliated with Herek’s telemedicine business, VirtualNet.
Kochen’s father, Marcelo Kochen, 69, of Bay Harbor Islands, was also charged in the conspiracy case but did not stand trial because of poor health.
Both Michael Kochen and Herek face up to 20 years in prison after being convicted of the main conspiracy charge and several other kickback counts.
During closing arguments, prosecutor Roger Cruz told jurors Michael Kochen was the “foreman of the fraud factory that he and his father ran out of Miami, selling braces.”
“But if you really think about it, they weren’t selling braces,” Cruz said. “They were selling lies.”
Michael Kochen’s attorney Jayne Weintraub argued that the evidence didn’t prove that Michael Kochen was committing fraud.
“This is a healthcare fraud case. Think about it. A fraud. Misrepresentations. Lies. I’m sure you expected to see Michael Kochen on a phone lying to somebody to get something,” Weintraub said. “That’s not what you saw at all. At all. The contrary. You saw Michael acting in good faith. .... You saw Michael Kochen hiring healthcare lawyers.”
According to an indictment, the Kochens were accused of paying kickbacks to Herek so that his telemedicine company, VirtualNet, would refer patients “without regard to the medical necessity for the prescribed [durable medical equipment] or whether the DME was eligible for Medicare reimbursement.”
The objective of paying kickbacks to Herek and other operators of telemedicine companies was to obtain doctors’ prescription orders for patients enrolled in Medicare Advantage Plans, the indictment says. Those plans are operated by private insurers and reimbursed by the federal government under the Medicare system for the elderly and indigent.
To generate a stream of patients for Kochen’s companies, Herek and others “employed call centers that used deceptive and misleading marketing tactics to recruit Medicare Advantage beneficiaries for medically unnecessary DME,” according to the indictment.
The healthcare fraud trial, which started on Nov. 3 before U.S. District Judge Donald Graham, almost didn’t get underway.
In late September, before the trial was to begin the following month, U.S. Attorney General Pam Bondi fired a federal prosecutor in Miami who was in charge of the healthcare fraud case. Bondi terminated Assistant U.S. Attorney Will Rosenzweig — while he was observing the Jewish New Year on Sept. 23 — because he had posted critical blog commentary about President Donald Trump during his first term while Rosensweig was working for a law firm in Washington, D.C.
As a result, the U.S. Attorney’s Office said it was not prepared to proceed without him. Fellow prosecutor David Turken asked Judge Graham to delay the start of the trial until early November, saying if he didn’t grant the request, the office would consider dropping the charges.
Graham kept to his initial schedule to start the trial with jury selection on Oct. 6, but he delayed the opening statements and the government’s presentation of evidence until Nov. 3. Graham’s decision appeared to salvage the healthcare fraud trial, giving the U.S. Attorney’s Office extra time to replace Rosenzweig with prosecutors Cruz and Robert Moore so they could get up to speed alongside Turken.
At trial, Michael Kochen was represented by defense lawyers Jayne Weintraub, Christopher Cavallo and Jonathan Etra. Herek’s defense lawyer was David Tarras.
