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Feds indict Miami VA employees and medical suppliers accused of kickback scheme

A gavel. (TNS/Released)

Several Miami and West Palm Beach VA Healthcare System workers and the owners of local medical supply companies were indicted in an alleged kickback scheme that netted the suppliers millions of dollars in proceeds while the VA employees pocketed thousands in bribes over the past decade.

Five of the employees, who worked at the Miami VA hospital, had their first appearances in federal court on Tuesday, and four more employees from the West Palm Beach VA hospital are expected to have their first appearances on Wednesday. An announcement of the investigation’s results is expected Wednesday afternoon.

The employees are accused of using government credit cards to order medical and other hospital supplies through corrupt vendors in exchange for cash payments and kickbacks. In some cases, prosecutors said, the prices of the supplies were “grossly inflated, while in other cases the orders were only partially fulfilled or not fulfilled at all.”

“It is a very sad day when public employees are alleged to have violated their duty to provide honest services to the VA, a federal agency that furnishes critical medical services to our military veterans,” said U.S. Attorney for the Southern District of Florida Ariana Fajardo Orshan. “These charges do not reflect the hard work and integrity of the hundreds of thousands of law abiding VA employees throughout the United States.”

About 10 medical supply companies “collectively obtained millions of dollars in proceeds as a result of fraud and kickbacks” at the West Palm Beach VA Hospital, according to an indictment of several employees there.

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It was not immediately clear whether the company owners had been indicted on Wednesday, but the vendors were described as “co-conspirators” in the indictment of the four West Palm Beach VA employees, filed by federal prosecutor Roger Stefin.

Prosecutors in the U.S. Attorney’s Office of the Southern District of Florida charged three inventory management specialists at the West Palm Beach hospital, Clinton Purvis, Robert “Bob” Johnson Jr. and Kenneth Scott, with conspiracy to commit healthcare fraud and other healthcare fraud-related charges. They charged Christopher Young, a materials handler at the facility, with the falsification of records.

As part of a scheme to enrich themselves, the employees submitted “fictitious and inflated invoices” to the VA hospital in West Palm Beach for supplies and materials not furnished or only partly furnished, the indictment for the employees said. The employees then authorized the payment of the invoices so they could receive kickbacks “in exchange for their placing fictitious and inflated orders with said vendors,” according to the indictment.

Prosecutors also charged several employees at the Miami VA hospital: inventory management specialist Waymon Melvon Woods, utility systems operator Don Anderson, electrician Jose Eugenio Cuervo, supervisory supply technician Donnie Hawkes and supply technician Eugene Campbell, all for bribery-related charges ranging from three to five counts each. The bribery charges carry a 15-year maximum sentence for each count. All of the men worked at the Miami VA hospital, according to the indictments, filed by federal prosecutor Amanda Perwin.

In addition to four bribery-related counts involving $4,200 in payments, Campbell was also charged with four counts of theft of government funds totaling $13,200. Each theft count carries a 10-year maximum sentence. While the payments and alleged thefts in Campbell’s indictment ranged from 2014 to 2016, the rest of the purchase orders listed in indictments for the other defendants were from earlier this year.

Woods was accused of receiving or attempting to receive kickbacks for five purchase orders ranging from February to April and totaling $6,600. Anderson was accused of receiving or attempting to receive kickbacks for three purchase orders ranging from February to March and totaling $2,100.

Cuervo was accused of receiving or attempting to receive kickbacks for five purchase orders ranging from February to March and totaling $5,400. Hawkes was accused of receiving or attempting to receive kickbacks for four purchase orders ranging from February to March and totaling $2,900.

Several companies were listed in the Miami VA and West Palm Beach VA indictments, all of which federal prosecutors say were owned and operated by Jorge Flores. The companies are JAF Supply Inc., Supply4vet Inc. Delray Medical Supply/Distributors Inc., Sunshine Supply USA Inc. MarfGroup LLC and E&J Supply Inc. Prosecutors said the companies were acting as supply vendors to the Miami VA hospital and other VA hospitals.

VA hospital supply vendors operated by Carlicha Starks and Earron Starks, including Ekno Medical Supply LLC and Collonade Medical Supply LLC. were listed in the indictments for the West Palm Beach VA defendants and Campbell.

The indictment for the West Palm Beach employees also listed Patriots Supply Corp. and Veterans Medical Supply Depot, Inc., companies owned by Robert Kozak, as participating in the scheme. The indictment said the scheme dates back to 2009.

Special agents for the VA’s Office of Inspector General investigated the cases.

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© 2019 Miami Herald