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Financial Crimes

Leader of Florida-based Medicare fraud sentenced to more than 5 years

HOUSTON - A Florida man was sentenced on Friday to five years and three months in federal prison for leading a Medicare fraud ring that submitted more than $9 million in false and fraudulent Medicare claims for alleged infusion-therapy services. The sentence was announced by U.S. Attorney José Angel Moreno, Southern District of Texas. The investigation was conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in coordination with U.S. Department of Health and Human Services' Office of Inspector General, the FBI, and the Social Security Administration's Office of Inspector General.

Alberto Noriega, 49, of Miami, Fla., went before Senior U.S. District Judge Ewing Werlein Jr. and was sentenced to 63 months in federal prison without parole to be followed by a three-year-term of supervised release. Judge Werlein further ordered Noriega to pay $1,440,367 in restitution to the victimized insurance companies.

Noriega was indicted by a federal grand jury in Houston on June 24, 2010 and was arrested by federal law enforcement agents in Miami on July 1. He has been in federal custody without bond since his arrest and will remain in custody pending transfer to a Bureau of Prisons facility to be designated in the near future where he will serve out his sentence.

Noriega pleaded guilty on Dec. 10 to conspiracy to commit health care fraud. According to information presented in court, from December 2008 through February 2010, Noriega and numerous co-conspirators executed a health care fraud scheme originating in the State of Florida, specifically targeting the Medicare Advantage Plan (MAP). MAP is a health care benefit program that allows Medicare beneficiaries to obtain their benefits through private insurance companies rather than through the traditional Medicare program.

From Florida, Noriega dispatched numerous co-conspirators, including Cuban nationals, to various cities in Texas and across the southeastern United States, including Houston and McAllen, Texas; Jackson, Miss.; Atlanta, Ga.; Charlotte, N.C.; and Miami to serve as "nominee" or "straw" owners for infusion-therapy clinics that purportedly operated in these cities. These individuals were referred to as "nominee" owners because their involvement was limited to signing paperwork to set up the clinics, while Noriega, in actuality, controlled them. Noriega's infusion-therapy clinics purportedly offered infusion therapy, injection therapy and other expensive medical treatments designed to treat patients suffering from cancer, HIV and AIDS.

To set up the clinics, the nominee owners - acting at Noriega's direction - incorporated the clinics in the states in which they purportedly operated. However, none of the clinics had actual business locations or any personnel; the clinics existed only on paper. The primary business locations of the clinics were UPS store mailboxes, which were rented by the nominee owners. For each clinic, using the address of the rented mailbox and the identity of the nominee owner among other information, Noriega obtained a National Provider Identifier (NPI) through Medicare. The NPI was used by Medicare to identify medical providers and was needed by a provider to submit claims to the insurance companies providing MAP coverage for Medicare beneficiaries.

Over time, Noriega and his co-conspirators submitted about $9,129,420 in false and fraudulent infusion-therapy claims to the following seven insurance companies providing coverage under MAP: Aetna, Cigna, WellPoint, Healthnet, Humana, United Healthcare and Sterling Healthcare. To submit the claims, Noriega used genuine Medicare beneficiary information including names, social security numbers and dates of birth that he illegally obtained from a number of sources. The claims were also falsified to include diagnoses that the Medicare beneficiaries did not have and listed expensive infusion-therapy services that were never performed. The insurance companies subsequently issued reimbursement checks to the clinics, which were deposited into bank accounts that were opened by the nominee owners. The fraud proceeds were later funneled back to Noriega and his co-conspirators in Florida through a variety of means.

For signing corporate records, renting mailboxes and opening bank accounts, Noriega paid the nominee owners large sums of cash. As part of their agreement with Noriega, however, the nominee owners were required to leave the United States after they completed their work in setting up the false clinics. Many nominee owners fled to Cuba to avoid extradition to the United States, as there is no extradition treaty between the two countries. However, Noriega's primary co-conspirator, Miguel Miranda, 44, of Miami, was apprehended by federal law enforcement agents in Miami on Jan. 14, 2010.

Miranda has since pleaded guilty to conspiracy to commit health care fraud in U.S. District Court for the Southern District of Mississippi in Jackson, Miss. He is scheduled to be sentenced in Jackson on March 9.

Assistant U.S. Attorneys Justin Blan and Gregory S Saikan, Southern District of Texas, prosecuted the case.