Damian Williams, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”) New York Regional Office announced today the arrest of ZACHARY S. SEID and ANTHONY CRACCHIOLO on charges of conspiracy, health care fraud, wire fraud, and unlawfully receiving kickbacks in connection with Medicare. As alleged in an Indictment unsealed today in Manhattan federal court, SEID and CRACCHIOLO, ran companies dedicated to illegally buying and selling prescriptions for durable medical equipment (“DME”) such as leg, arm, and back braces, and then using those prescriptions to file fraudulent Medicare claims for more than $11 million, as well as selling such prescriptions to other DME supply companies, so that those companies in turn could also file fraudulent Medicare claims. The case has been assigned to U.S. District Judge John P. Cronan. SEID and CRACCHIOLO, who were arrested this morning in Florida, will be presented tomorrow before magistrate judges in the Southern District of Florida.
U.S. Attorney Damian Williams said: “Medicare is an invaluable taxpayer-funded program dedicated to providing affordable health care to beneficiaries over 65 or with disabilities, not to enriching those who would defraud the program by buying and selling false prescriptions.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “These allegations describe a greed-fueled scheme that undermined our health care system and the people it serves. Such scams threaten patient health, waste taxpayer funds, and drive up healthcare costs for all of us. Working closely with our law enforcement partners, we will continue to aggressively root out health care fraud and bring criminals to justice.”
As alleged in the Indictment:[1]
From at least July 2019 through at least October 2020, SEID and CRACCHIOLO engaged in a scheme to defraud Medicare in at least three ways. First, SEID and CRACCHIOLO illegally paid kickbacks of more than $565,000 to purchase fraudulent DME prescriptions, including prescriptions “signed” by doctors who never in fact signed or authorized those prescriptions and were unaware that their names and identities were being so used. These DME prescriptions were for such equipment as braces for ankles, knees, elbows, wrists, and backs. Second, SEID and CRACCHIOLO unlawfully received more than $425,000 in kickbacks, reselling some of these prescriptions to DME suppliers, so that those suppliers in turn could fraudulently bill Medicare for the DME. Finally, in about May and June 2020, SEID and CRACCHIOLO acquired five of their own fraudulent DME supply companies, and used the bogus prescriptions to file more than $11 million in fraudulent Medicare claims, seeking payment to the DME suppliers that SEID and CRACCHIOLO controlled.
Together, SEID and CRACCHIOLO sold to multiple DME supply companies, and established control over at least five DME supply companies of their own, which they used to submit their fraudulent Medicare claims. Those companies were: 1 Medical Supplies Corp., Ameri Med Supplies Corp., One Medical Health Supplies Corp., Sun Med Equip Corp., and Sunrise Med Service Group Corp. In addition, Seid owned a company called Seid Services, Inc., while Cracchiolo owned a company called Dataco.
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SEID, 35, of Boynton Beach, Florida, and CRACCHIOLO, 42, of Parkland, Florida, are each charged in four counts with conspiracy to commit health care fraud and wire fraud, health care fraud, wire fraud, and receiving kickbacks in violation of the Anti-Kickback Statute. The conspiracy and wire fraud counts each carry a maximum potential prison sentence of 20 years; the health care fraud count carries a maximum potential prison sentence of 10 years; and the count charging violation of the Anti-Kickback statute carries a maximum potential prison sentence of five years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the investigative work of HHS-OIG.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney David Raymond Lewis is in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.