A federal grand jury has returned an indictment against a 47-year-old Syracuse-area man charging him with operating a kickback scheme involving Medicare and Medicaid. Timothy Klein, of Fayetteville, has been charged with conspiracy to pay and receive health care kickbacks, soliciting and receiving health care kickbacks, offering and paying health care kickbacks, and money laundering. According to U.S. Attorney Trini E. Ross, the charges against Klein carry a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorneys Franz M. Wright and Michael DiGiacomo, who are handling the case, stated that according to the indictment, between February 2017, and December 2018, Klein conspired with others to defraud Medicare and Medicare drug plan sponsors. Klein, who operated JRS Group, LLC, and his co-conspirators enriched themselves by, among other things, submitting prescription drug claims to Medicare and Medicare drug plan sponsors for items that were medically unnecessary and procured through kickbacks and bribes, and diverting fraud proceeds for their own personal use and benefit. As part of the conspiracy:
- Klein through his company, JRS, recruited insurance brokers to contact Medicare beneficiaries and offer them prescription medicines at no cost, without regard to any actual medical necessity. Klein paid kickbacks and bribes to the insurance brokers, for Medicare prescriptions paid for through the beneficiaries’ Part D plan, a federally funded program.
- Klein paid an individual and their company, Advanced Telehealth, to provide doctors to perform telemedicine visits with the beneficiaries recruited by insurance brokers. Following the telemedicine visits, the doctors would sign prescriptions for the beneficiaries, which prescriptions had been preselected and/or filled out by Klein.
- Klein entered into agreements with ProRX and SunRise Pharmacy, whereby the pharmacies paid Klein a sum of money for each filled prescription.
In addition, three other defendants have pleaded guilty for their roles in the fraud scheme:
- Simon Santos-Arias pleaded guilty to conspiracy to commit healthcare fraud. Santos-Arias, a medical doctor licensed in New York State, performed telemedicine visits for Advanced Telehealth, then prescribed medications for patients that were medically unnecessary. The total loss amount, attributed to the defendant was $3,118,936.68.
- John Weinmann and Kyle Fenton pleaded guilty to receiving a kickback under a federal health care program. In 2017, operating as independent insurance brokers, both Weinmann and Fenton entered into an agreement with Timothy Klein’s JRS Group to target Low Income Subsidy (LIS) Medicare beneficiaries. The two were paid a kickback for each prescription medication they were able to get filled and paid for under beneficiaries’ Medicare coverage. Weinmann received approximately $32,150 in kickbacks and Fenton received $30,270 for arranging for the purchase and payments of prescription medications that were medically unnecessary.
