Wayne Smith, Medicare Fraud, Michigan 2009

DETROIT, MI – In a shocking case of Medicare fraud, Wayne Smith, a 47-year-old patient recruiter from Jackson, Michigan, was sentenced to 27 months in prison for his role in a wide-ranging conspiracy to defraud the Medicare program. According to the U.S. District Court Chief Judge Gerald E. Rosen, Smith must also pay $4.9 million in restitution, jointly with co-defendants, and serve three years of supervised release following his prison term.

Smith pleaded guilty on December 10, 2009, to one count of conspiracy to commit health care fraud. Between approximately October 2006 and March 2007, Smith and his co-conspirators caused more than $6.5 million in false and fraudulent claims to be submitted to the Medicare program for services supposedly provided by Sacred Hope Center Inc., and Xpress Center Inc., purported infusion clinics. Medicare actually paid more than $4.9 million of those claims.

Evidence presented during the sentencing hearing established that beginning in approximately October 2006 and continuing until March 2007, Smith recruited more than 40 patients to Sacred Hope and Xpress Center. Both clinics existed for the purpose of causing fictitious claims for injection and infusion therapy services to be billed to Medicare.

According to court documents, owners of Sacred Hope and Xpress Center, including Miami residents Daisy Martinez and Jose Rosario, came to Detroit to start the clinics because of heavy law enforcement scrutiny in Florida of fraudulent infusion clinics. Smith was hired to recruit and pay kickbacks to Medicare beneficiaries to come to the clinic.

During the time that Sacred Hope and Xpress Center were open, the clinics routinely billed the Medicare program for services allegedly performed, but in reality the services were medically unnecessary and/or never provided. Evidence presented at sentencing and during the trial of Dr. Toe Myint, the doctor at Sacred Hope, showed that the clinics’ owners purchased only a small fraction of the medications for which the clinic billed the Medicare program.

Wayne Smith, 47, pleaded guilty on December 10, 2009, to one count of conspiracy to commit health care fraud, in the Eastern District of Michigan. This case was prosecuted by Senior Trial Attorney John Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section. The FBI and HHS Office of Inspector General (HHS-OIG) conducted the investigation, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division.

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