A Fayetteville resident, Timothy Klein, has pleaded guilty to federal charges related to a fraudulent scheme that defrauded Medicare of approximately $3.1 million. The guilty plea was entered on Wednesday, marking a significant development in a case that highlights serious issues within healthcare fraud.
According to the U.S. Attorney’s Office for the Western District of New York, Klein, aged 49, admitted to conspiracy to pay and receive health care kickbacks. This charge carries a maximum penalty of five years in prison and a $250,000 fine. Prosecutors detailed that Klein conspired with others from February 2017 to September 2018 to submit fraudulent prescriptions to Medicare and Medicare Part D plan sponsors.
Klein operated JRS Group LLC, where he orchestrated a complex scheme that exploited the Medicare system. He arranged for unnecessary prescriptions to be obtained through kickbacks and bribes, subsequently using the proceeds for personal gain. In an alarming tactic, Klein recruited insurance brokers to reach out to Medicare beneficiaries, offering them prescription drugs at no cost, regardless of their medical necessity.
These brokers were incentivized through kickbacks and bribes from Klein for prescriptions billed to the beneficiaries’ federally funded Part D plans. Klein further collaborated with a company named Advanced Telehealth, compensating them to provide doctors who conducted telemedicine visits with the recruited beneficiaries. After these consultations, physicians signed prescriptions that had already been prepared by Klein, facilitating the fraudulent claims.
Klein also entered into agreements with pharmacies, including ProRX and SunRise Pharmacy, where he received payments for each prescription filled. One notable transaction occurred on September 17, 2018, when Klein received a check totaling $95,479.05 from ProRX, reflecting payments for numerous referred prescriptions.
The scope of this fraudulent operation is significant, resulting in over $3.1 million in improper payments from Medicare. Alongside Klein, other individuals involved in the scheme, including Simon Santos Arias, a doctor, and insurance agents John Weinman and Kyle Fenton, have also pleaded guilty.
This case underscores the vulnerabilities in the Medicare system, particularly regarding prescription drug claims. Federal authorities continue to investigate the extent of the fraud and the individuals involved, aiming to hold accountable those who exploit the system designed to provide care for vulnerable populations.
