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New Jersey Man Admits To Role In Durable Medical Equipment Kickback Scheme


Durable Medical Equipment (DME) refers to a category of medical devices and equipment that are designed for individuals who have disabilities. These items include wheelchairs, walkers, canes, crutches, braces, splints and supports. They each aid in mobility. DME also includes devices that aid with everyday living. Hospital beds, oxygen equipment, Continuous Positive Airway Pressure (CPAP) machines and nebulizers are also part of this category.


Durable medical equipment plays a crucial role in improving the quality of life and independence for many people. However, they have also been misused by those seeking personal profit. This is evidenced by Alexander Schleider. As the District of New Jersey branch of the U.S. Attorney's Office reported last Friday, the 57-year admitted his role in a durable medical equipment kickback scheme.


Schleider owned several New Jersey-based DME companies.


According to documents filed in the case and statements made in court, Schleider’s businesses provided orthotic braces to beneficiaries of Medicare. Many of these individuals also received benefits from other federal and private health care benefit programs. Without regard to medical necessity, Schleider and his conspirators obtained prescriptions for the DME braces. They did so through the payment of kickbacks and bribes to individuals operating marketing call centers.


The call center operators utilized the service of telemedicine companies to obtain prescriptions for the DME. As a result of his scheme, Schleider caused losses of $21.7 million to Medicare and other health care benefit programs.


Schleider also committed wire fraud.


This act was in connection with funds made available in response to the COVID-19 pandemic. According to the U.S. Attorney’s Office report, one of Schleider’s DME companies received $322,237 from the Department of Health and Human Services’ Health Resources and Services Administration Provider Relief Fund.


After receiving the money, Schleider submitted a fraudulent attestation to HRSA. In it, he claimed that the DME company provided diagnoses, testing and care for individuals with possible or actual cases of COVID-19 after January 31, 2020. However, the DME company had actually ceased billing for any services in April 2019.


The attestation made other false claims.


They included stating that the payment would only be used to prevent, prepare for and respond to coronavirus. As well, it attested that the payment would reimburse the recipient only for health care related expenses or lost revenues that were attributable to coronavirus. “Schleider did not use the funds for those purposes, but transferred them into other accounts and subsequently used them to purchase real estate and vehicles, among other things,” says the report.


Schleider faces a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. His charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. His sentencing is scheduled for November 8, 2023.


Are you an attorney who is currently working a healthcare fraud case?


The clinical experts at Allegiant Experts can help you! We coordinate and support courageous whistleblowers that shine lights on fraud, waste and abuse. Contact us today to schedule a complimentary consultation. Please don’t hesitate to give us a call at 407-217-5831. You may also email us at info@allegiantexperts.com.

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