Luis Duluc, Medicare Fraud, Florida 2013

A Florida man who had been the owner and operator of multiple physical therapy rehabilitation facilities pleaded guilty in federal court for his role in organizing and leading a $28.3 million Medicare fraud scheme involving physical and occupational therapy services. Luis Duluc, 53, formerly of southwest Florida, pleaded guilty in the U.S. District Court for the Middle District of Florida to conspiracy to commit health care fraud and making a false statement relating to health care matters.

Duluc faces a maximum penalty of 15 years in prison. According to documents filed in the case, Duluc and his co-conspirators used various physical therapy clinics and other business entities throughout Florida and elsewhere to submit approximately $28,347,065 in fraudulent reimbursement claims to Medicare from 2005 through 2009. Medicare paid approximately $14,424,865 on those claims.

Duluc was chairman and president of a Delaware holding company known as Ulysses Acquisitions Inc. Duluc and his co-conspirators used Ulysses Acquisitions to purchase comprehensive outpatient rehabilitation facilities (CORFs) and outpatient physical therapy providers (OPTs) including West Coast Rehab Inc. in Fort Myers, Fla.; Rehab Dynamics Inc. in Venice, Fla.; Polk Rehabilitation Inc. in Lake Wales, Fla.; and Renew Therapy Center of Port St. Lucie LLC in Port St. Lucie, Fla., in order to gain control of these clinics' Medicare provider numbers.

Working with co-conspirators in Miami and elsewhere, Duluc obtained identifying information of Medicare beneficiaries by paying kickbacks and stealing beneficiaries' identifying information. Duluc and his co-conspirators also obtained unique identifying information of physicians. They then used this information to create and submit false claims to Medicare through the clinics Ulysses Acquisitions purchased. These claims sought reimbursement for therapy services that were not legitimately prescribed and not actually provided.

Part of the conspiracy included what came to be known as the 80/20 deal, which Duluc developed and marketed. The 80/20 deal involved extensive kickback arrangements with co-conspirators who owned other therapy clinics that were used to further the overall fraud scheme. For example, Duluc and co-conspirators used the clinics they controlled to submit false reimbursement claims to Medicare on behalf of Miami-based therapy clinics such as Hallandale Rehabilitation Inc., Tropical Physical Therapy Corporation, American Wellness Centers Inc., and West Regional Center Inc. Duluc and co-conspirators would retain approximately 20 percent of the money Medicare paid on these claims and pay the other 80 per cent of the fraud proceeds to the co-conspirator clinic owners.

When Duluc and his co-conspirators were done using the clinics they acquired through Ulysses Acquisitions, they engaged in sham sales of the clinics to nominee or straw owners, all of whom were recent immigrants to the United States who had no background or experience in the health care industry. Duluc did this in an effort to try to disassociate himself from the fraudulent operations of the rehabilitation facilities.

This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Middle District of Florida.

Source: https://www.justice.gov/archives/opa/pr/leader-283-million-medicare-fraud-scheme-pleads-guilty