Ten indicted in $1.4 Billion scheme allegedly billing for fraudulent lab tests

Ten people have been indicted in connection to a scheme of using rural hospitals across multiple states to allegedly bill private insurance companies for fraudulent laboratory testing claims.Those charged in an indictment filed in the Middle District of Florida include defendants Jorge Perez, 60, of Miami-Dade County, Florida; Seth Guterman, 54, of Chicago, Illinois; Ricardo Perez, 57, of Miami-Dade County, Florida; Aaron Durall, 48, and Neisha Zaffuto, 44, each of Broward County, Florida; Christian Fletcher, 34, of Atlanta, Georgia; James Porter Jr., 49, of Marion County, Florida; Sean Porter, 52, of Citrus County, Florida; Aaron Alonzo, 44, and Nestor Rojas, 45, each of Miami-Dade County, Florida.

The rural hospitals involved in this case are Campbellton-Graceville Hospital, a 25-bed rural hospital located in Graceville, Florida; Regional General Hospital of Williston, a 40-bed facility located in Williston, Florida; Chestatee Regional Hospital, a 49-bed rural hospital located in Dahlonega, Georgia; and Putnam County Memorial Hospital, a 25-bed rural hospital located in Unionville, Missouri.

The conspirators billed insurers roughly $1.4 billion for laboratory urinalysis drug tests and blood tests and were paid about $400 million. This allegedly went on from the end of 2015 to the beginning of 2018.

The indictment alleges that the defendants used their various management companies to take over small, rural hospitals in financial trouble.

From there, they used the hospitals to bill private insurance companies for millions of dollars of lab tests that were typically conducted at outside laboratories controlled by the conspirators and billed by agencies also affiliated to the scheme, the indictment said.

Although the tests were conducted in outside laboratories, the insurers were billed as if the tests were performed at the hospitals. The hospitals had negotiated for higher reimbursement rates if the tests were complete on-site. As such, the scheme used the hospitals as a shell to bill for tests.

The conspirators are also accused of money laundering to promote the scheme and to distribute the fraudulent proceeds.