DME Company Owners Sentenced to More than 12 Years for Kickback Scheme

On December 16, 2021, the Department of Justice (“DOJ”) announced that Leah and Michael Hagen had been sentenced to 151 months in prison and were ordered to pay approximately $27 million back to the government in restitution for their role in a Medicare kickback conspiracy.

Earlier this year, a jury convicted the Hagens of conspiracy to defraud the United States and to pay and receive health care kickbacks, and of conspiracy to launder money.  

The Hagens owned and operated two durable medical equipment (“DME”) companies, Metro DME Supply LLC and Ortho Pain Solutions LLC. At trial, evidence was presented that the Hagens paid kickbacks and bribes to a call center in the Philippines in exchange for signed doctors’ orders for DME that were used to submit false claims. From those claims, Medicare paid the defendants more than $27 million. The Hagens were said to have concealed the payments of kickbacks and bribes by signing deceptive contracts disguising such payments as marketing and business process outsourcing.  

This case was investigated by HHS-OIG and the FBI’s Dallas Field Office and was brought as part of Operation Brace Yourself, which Chilivis Grubman has written about in previous posts.  The case was prosecuted by the Criminal Division’s Fraud Section, which leads the Health Care Fraud Strike Force that has charged more than 4,200 defendants accused of collectively billing the Medicare program for nearly $19 billion Since its inception in March 2007. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations and false claims allegations.  If you need assistance with such a matter, please contact us today.