The US Department of Justice has launched a major crackdown on two companies and two individuals accused of orchestrating a massive healthcare and COVID-19 pandemic-related fraud scheme, which exploited taxpayer-funded programs to the tune of over $500 million. The Justice Department today announced three separate civil and criminal actions, aimed at holding those responsible accountable for their actions.
At the heart of the scheme are two companies, Avella Specialty Pharmacy and Allure Medical, which allegedly worked together to defraud government healthcare programs, including Medicare, Medicaid and the Federal Employees Health Benefits Program. The two companies, along with two individual defendants, Christopher Delancy and Robert Warren, are accused of submitting fake claims, using kickbacks and other illicit means to siphon off millions of dollars.
According to the Department of Justice, the scheme involved Avella Specialty Pharmacy, a New York-based company, which allegedly provided kickbacks to patient recruiters and other individuals to induce them to refer Medicare and Medicaid patients to Allure Medical, a company owned by Delancy. The patients would then receive unnecessary and expensive medical treatments, which were then billed to the government programs at inflated rates.
The Justice Department alleges that between 2019 and 2022, the scheme resulted in over $500 million in fraudulent claims being submitted to taxpayer-funded programs. This is one of the largest healthcare-related fraud schemes ever prosecuted by the Justice Department.
In addition to the civil and criminal actions, the Department of Justice has also reached a settlement with Avella Specialty Pharmacy, in which the company has agreed to pay $120 million to resolve allegations of False Claims Act violations.
The actions announced today demonstrate the Department of Justice's commitment to protecting taxpayers from healthcare-related fraud and abuse, said a Justice Department spokesperson. The investigation, led by the US Attorney's Office for the Southern District of New York, and the Office of Inspector General for the Department of Health and Human Services, involved a collaborative effort with other federal agencies.
The Justice Department's actions send a clear message to those who would seek to exploit taxpayer-funded programs for personal gain: we will vigorously pursue and prosecute those responsible, and we will do everything in our power to protect the integrity of these programs.
