Buffalo, N.Y. — A Fayetteville man pleaded guilty to federal charges Wednesday for his role in a $3.1 million health care kickback scheme that defrauded Medicare by paying for prescriptions patients didn’t need, federal prosecutors said.
Timothy Klein, 49, pleaded guilty to conspiracy to pay and receive health care kickbacks, a charge that carries a maximum penalty of five years in prison and a $250,000 fine, according to a news release from the U.S. Attorney’s Office for the Western District of New York.
Klein conspired with others between February 2017 and September 2018 to submit fraudulent prescription drug claims to Medicare and Medicare Part D plan sponsors, prosecutors said. Klein operated JRS Group LLC and arranged for unnecessary prescriptions obtained through kickbacks and bribes, then taking the proceeds for personal use, they said.
Federal prosecutors said Klein recruited insurance brokers to contact Medicare beneficiaries and offer prescription drugs at no cost, regardless of medical necessity. Klein paid kickbacks and bribes to the brokers for prescriptions billed to beneficiaries’ federally funded Part D plans, they said.
Klein also paid an individual and their company, Advanced Telehealth, to provide doctors to conduct telemedicine visits with beneficiaries recruited by the brokers, prosecutors said. After those visits, doctors signed prescriptions that had already been selected or filled out by Klein, they said.
Klein then entered agreements with ProRX and SunRise Pharmacy, under which the pharmacies paid him for each prescription they filled. In one instance cited by prosecutors, Klein received a check for $95,479.05 from ProRX on Sept. 17, 2018, representing payments for referred prescriptions.
The guilty plea follows earlier federal charges accusing Klein of orchestrating a scheme involving a telemedicine doctor, insurance agents and pharmacies that billed Medicare for millions of dollars in unnecessary prescriptions, prosecutors said.
The scheme resulted in at least $3.1 million in improper Medicare payments.
An out-of-state doctor, Simon Santos Arias, and insurance agents John Weinman and Kyle Fenton have also pleaded guilty in connection with the case.