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Florida woman pleads guilty to role in $400M medical brace fraud following Contact 5 investigation

Scheme used medical braces to exploit elderly, steal from taxpayers, feds say
Posted at 6:46 PM, Feb 05, 2021
and last updated 2021-02-05 20:17:40-05

TAMPA, Fla. — A Florida woman first questioned by Contact 5 investigators about dozens of bogus medical supply companies she owned has pleaded guilty to a Medicare fraud scheme worth $400 million.

Kelly Wolfe of Tampa Bay has pleaded guilty to health care fraud charges stemming from her role in a scheme that used medical braces to exploit the elderly and steal from taxpayers, federal investigators said Thursday.

Wolfe now faces a maximum of 13 years in federal prison.

According to the U.S. Attorney in the Middle District of Florida, Wolfe, who ran a medical billing company, Regency Inc., falsified documentation in order to establish bonus durable medical equipment companies to bill for medically unnecessary equipment.

Two years ago, she became the subject of a Contact 5 Investigation when we traced her to numerous durable medical equipment companies in the Tampa Bay area.

The companies claimed to provide seniors with medical braces.

As part of our Emmy-award winning series into medicare fraud through the use of DME equipment, Medicare patients told us how they received boxes of medical braces they never needed, wanted and or ordered.

According to federal investigators, between 2017 and 2019, Wolfe used her billing company to establish DME fronts using "trickery and deception."

As part of the scheme, Wolfe used straw owners to conceal her ownership of many companies so she could submit a total of more than $400 million in illegal DME claims to Medicare and the medical program within the Department of Veterans, according to the U.S. Department of Justice.

According to investigators, Wolfe and her conspirators bribed doctors to approve prescriptions for the braces. In almost all the cases, investigators said doctors had no contact with any of the beneficiaries they wrote medical brace prescriptions for.

The feds raided numerous DME companies around the country in 2019 as part of a historic crack down on health care fraud. Wolfe’s DME companies were among the businesses raided in “Operation Brace Yourself.”

Investigators said Wolfe also admitted to using funds from her billing company to pay for personal expenses and did not report this as income to the IRS. As part of her settlement, Wolfe has agreed to pay back more than $20 million.

"This pernicious telefraud scheme's ambitions were cut short by the exceptional partnership of our law enforcement partners," said Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of Inspector General. "This guilty plea and the forfeiture of tens of millions of dollars back to the U.S. Treasury show our determination to stop such damaging fraud schemes and to bring fraudsters to justice."

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