NEW YORK—Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), announced the arrests of Erin Foley and Ted Albin on charges of health care fraud and conspiracy to violate the Anti-Kickback Statute. As alleged in a four-count Indictment unsealed in federal court, Foley and Albin ran a Medicare billing company that they used to bill Medicare for more than $25 million in fraudulent claims for durable medical equipment (DME), and on which Medicare and related private insurers paid out more than $9 million. Foley and Albin are also charged with illegally buying such DME orders for use in their own DME supply companies and with introducing buyers to sellers in return for additional kickbacks.
“Violations of the Anti-Kickback Statute involving durable medical equipment can waste scarce federal health care program funds and corrupt the medical decision-making process," Gruchacz said. "Individuals who participate in the federal health care system are required to obey laws meant to preserve both the integrity of program funds and the provision of appropriate, quality services to patients.”
According to statements made in court and publicly filed documents in this case:[1]
From at least 2018 through 2021, Foley and Albin owned and controlled Grapevine Professional Services, Inc. (Grapevine), a billing company they used to bill Medicare for more than $25 million, and to collect more than $9 million, through claims based on orders for DME that had been unlawfully sold and bought. Such billing included both billing directly to Medicare through Medicare Part B and billing to private insurance companies that were reimbursed through Medicare Part C. Most of these unlawful purchases of DME orders were by Grapevine customers that were registered with Medicare as DME supply companies. Additional unlawful purchases were made directly by Foley and Albin through three DME supply companies that they owned and controlled. Once these DME orders were unlawfully purchased, Foley and Albin used those orders as the basis for fraudulent claims to Medicare and to private insurers covered by Medicare Part C.
In addition, Foley and Albin acted essentially as brokers of DME orders, introducing Grapevine customers who wished illegally to buy DME orders to co-conspirators who illegally sold them orders. In return for such introductions of buyers to sellers, Foley and Albin received additional kickbacks, both in the form of cash and in the form of additional DME orders. Foley and Albin also profited through these introductions by gaining additional illegal billing business for Grapevine. Following these introductions, Foley and Albin continued to oversee the relations between buyers and sellers of DME orders, for example by tracking how many orders particular sellers owed to particular buyers.
Foley, 46, of Loxahatchee, Florida, and Albin, 46, of Stuart, Florida, are each charged with conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison; health care fraud, which carries a maximum sentence of 10 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison.
The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
The charges contained in the Indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
