In one of the largest recent Medicare fraud cases, Peter Roussonicolos, a Florida durable medical equipment (DME) company owner, was sentenced to 12 years in federal prison for orchestrating a scheme that defrauded Medicare of more than $61 million.

Here’s how the scheme worked:

• Hidden Ownership: Roussonicolos used straw owners to disguise his true role in several DME companies, evading disclosure requirements and regulatory oversight.
  
  
• Illegal Kickbacks: He arranged payments to marketers and telemedicine providers in exchange for patient referrals, blatantly violating federal Anti-Kickback Statute provisions.
  
  
• False Documentation: Physicians and other medical providers were incentivized to generate fraudulent prescriptions and medical necessity documentation, creating a paper trail that made the claims appear legitimate.
  
  
• Excessive Billing: Using this structure, the companies submitted tens of millions in false claims to Medicare for equipment patients didn’t need—or never even received.
  
  

The Department of Justice and HHS-OIG highlighted this case as part of their ongoing crackdown on healthcare fraud, waste, and abuse, emphasizing the importance of transparency, compliance, and strong internal controls.

Compliance Takeaways:

1. Ownership transparency matters. Hidden or straw ownership arrangements are a red flag that regulators actively investigate.
   
   
2. Kickback-free operations are critical. Even “creative marketing arrangements” can be viewed as inducements if tied to patient referrals
   
   
3. Medical necessity must be genuine. Documentation is not just paperwork—it’s evidence, and falsification leads directly to liability.
   
   
4. Internal oversight saves businesses. Routine compliance audits, robust training, and third-party reviews can prevent practices from drifting into legally risky territory.
   
   

The Roussonicolos case is a cautionary tale: shortcuts and “workarounds” to grow revenue may look profitable in the short term, but in regulated industries like healthcare, they often end in criminal convictions, reputational collapse, and financial ruin.

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