Crime & Courts

Kingpin in international Medicare fraud ring to pay $40 million in restitution

A Philippines-based kingpin in the billion-dollar Medicare fraud scheme announced earlier this week by S.C. federal investigators has quietly pleaded guilty to conspiring to cheat the government and agreed to pay at least $40 million in restitution.

Herb Kimble, an American citizen who owns call centers in the Philippines that became vital cogs in an international fraud scheme, pleaded guilty April 4 in a closed-door proceeding in federal court in Columbia. Records in his case were sealed until earlier this week after law enforcement began arresting some two dozen other suspects across the country.

Kimble has secretly cooperated with investigators for months. He has agreed to tell all he knows about the fraud and its participants, as well as testify before a federal grand jury, according to a plea agreement in his case.

Already, Kimble “has provided substantial assistance to the government in its investigation of health care fraud,” the agreement said. “With (Kimble’s) assistance, the government has been able to investigate widespread fraud.”

Using dozens of U.S.-based middlemen and straw companies, Kimble and his fellow conspirators cheated the federal government out of approximately $1 billion in needless Medicare payments since 2014, according to prosecutors and documents.

Before Kimble started cooperating, the government estimated it had been cheated for only $9.5 million, according to his plea agreement.

Because Kimble’s assistance helped expand the fraud investigation, prosecutors are recommending that he get probation, according to his plea agreement.

The scheme involved selling cheap, Chinese-made and medically unnecessary neck, leg and back braces to thousands of mostly elderly people, who paid for them with Medicare, according to law enforcement.

TV and online advertisements encouraged people to call Kimble’s call centers, which screened the callers to make sure they were Medicare-eligible. Then, the call centers linked the eligible consumers up with doctors who wrote medically unnecessary prescriptions without seeing the patient.

The scheme included doctors, shipping companies and medical equipment companies that went on to bill Medicare “millions upon millions of dollars,” federal officials said.

The scheme used numerous bank accounts and straw companies to manage the flow of money and appear legitimate, investigators said. The scheme was based in South Carolina, Florida, California, New Jersey, Texas and Pennsylvania, officials said.

Proceeds from the scheme were used to buy “exotic cars, yachts and luxury real estate,” U.S. Attorney Sherri Lydon said at a press conference earlier this week. She said the victims in the scheme were “taxpayers who will pay for higher health care premiums and out-of-pocket costs that result from fraud on our Medicare system.”

The U.S. Attorney’s office on Friday said it would have no comment on Kimble since the investigation is continuing.

Jim Griffin, the Columbia lawyer who represents Kimble, declined comment “beyond what is in the plea agreement.”

Medicare is a federal health insurance program that provides basic health for more than 44 million people, most of whom are over 65.

John Monk has covered courts, crime, politics, public corruption, the environment and other issues in the Carolinas for more than 40 years. A U.S. Army veteran who covered the 1989 American invasion of Panama, Monk is a former Washington correspondent for The Charlotte Observer. He has covered numerous death penalty trials, including that of the Charleston church killer, Dylann Roof, and that of child killer Tim Jones.