Crime

Judge to set terms for release of South Florida eye doctor before trial on Medicare fraud charges

Dr. Salomon Melgen leaves the Martin Luther King Jr. Federal Courthouse after an arraignment in April in Newark, N.J.
Dr. Salomon Melgen leaves the Martin Luther King Jr. Federal Courthouse after an arraignment in April in Newark, N.J. Associated Press

Wealthy Palm Beach County eye doctor Salomon Melgen, jailed for two months in a politically charged Medicare fraud case, will soon be free — once a federal magistrate sets a bond amount and what are expected to be strict conditions on his release.

U.S. District Judge Kenneth Marra on Friday ruled that Melgen — arrested by federal agents in mid-April after he had been indicted on separate corruption charges with his close friend, New Jersey Sen. Robert Menendez — was entitled to bail.

Marra overturned a previous decision by Magistrate Judge James Hopkins, who had detained Melgen after concluding he was a flight risk to his native Dominican Republic or another foreign country. The case was sent back to Hopkins, who was scheduled Wednesday to finalize the terms and price for Melgen’s freedom pending his trial. The physician remained in jail pending that decision.

Melgen, a longtime ophthalmologist who has owned and operated Vitreo-Retinal Consultants of the Palm Beaches since 1990, is one of the top-billing Medicare doctors in the country. His high-volume business, with four offices in Palm Beach and St. Lucie counties, provided clinical and surgical services to as many as 100 patients in a single day — though a substantial portion of the claims totaling hundreds of millions of dollars were “fraudulent,” according to an indictment.

Before his release from federal detention, Melgen must meet several conditions set by the district court judge in his ruling issued Friday.

Melgen, who lives in a waterfront mansion in North Palm Beach, cannot live near the water and cannot have access to his plane or boat; must be confined to his residence and wear an electronic monitor; must surrender his U.S. and Dominican passports; must obtain a written declaration from the Dominican Republic saying that country would not shield him from extradition if he flees; and he, his wife and their children must provide sworn financial affidavits.

Marra also ordered Melgen — represented by former Miami federal prosecutors Matthew Menchel and Kirk Ogrosky — to “pledge the assets” owned by him and his family as “security” for his appearance at trial.

In his ruling, Marra found — unlike Hopkins and the U.S. attorney’s office — that “there are conditions of release that will reasonably assure his appearance” at trial, though he agreed with the magistrate judge “this is a very difficult decision.”

The district judge noted that while the 61-year-old Melgen has “significant ties to the Dominican Republic and the financial means to flee to that country or possibly others,” he is a naturalized U.S. citizen who has lived in the United States for nearly 40 years, with children and grandchildren living in the South Florida community. Marra concluded he has “significant local ties.”

Marra reasoned that Melgen knew he had been under investigation by U.S. authorities in South Florida and New Jersey for two years before he was indicted and yet he “voluntarily returned.”

“Furthermore, the court concludes that [the] nature and notoriety of the charges [Melgen] is facing in New Jersey, and that the fact that he is a co-defendant with a United States Senator, makes it unlikely that any attempt to flee would be successful,” Marra wrote in his four-page ruling.

“Thus, with little likelihood that an attempt to flee will succeed, and with sufficient assets at risk that would leave [Melgen] and his family financially devastated if such an attempt is made, conditions of release can be fashioned that will assure [his] appearance as required.”

In mid-April, Melgen was arrested at his medical office in West Palm Beach on charges involving $190 million in Medicare claims. Melgen 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 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.

Melgen was thrust into the national spotlight in early April 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 intervention on Melgen’s behalf to resolve a longstanding Medicare billing dispute. Melgen was granted a $1.5 million bond in the New Jersey case.

Melgen, charged in a 76-count healthcare fraud indictment with filing false claims and making false statements, was arrested by Health and Human Services and FBI agents following a two-year investigation.

Marra, in concluding that Melgen deserved a bond, nonetheless found that the charges against him were “quite serious” and “considerable.”

Correction: Early versions of this story did not make clear that Melgen remained behind bars pending the final terms of his release, which were expected to be set Wednesday.

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