DOJ Announces Prison Sentences in $34.8 Million Medicare Fraud Scheme Involving Unnecessary Orthotic Braces

The Department of Justice (DOJ) has announced that two Florida durable medical equipment (DME) company owners were sentenced to federal prison for their roles in a $34.8 million health care fraud conspiracy involving medically unnecessary orthotic braces, fraudulent physician orders, and illegal kickbacks. Kenneth Charles Kessler III received a 33-month sentence, and Michael Andrew Gomez received a 24-month sentence. Both pleaded guilty in May 2026 to conspiracy to commit health care fraud.

According to court documents summarized by the DOJ, Kessler and Gomez owned and operated seven Florida DME supply companies. Those companies submitted millions of dollars in false claims to Medicare for orthotic braces shipped nationwide to beneficiaries who did not need them. The DOJ stated that some beneficiaries had not requested the braces. Kessler profited by more than $1.4 million, and Gomez profited by more than $2.3 million.

Fraudulent Physician Orders and Kickbacks

The DOJ reported that Kessler and Gomez paid kickbacks and bribes to obtain fraudulent signed doctors’ orders. They used those orders to ship braces and bill Medicare. The case shows why a signed order cannot substitute for a legitimate clinical process or independent support for medical necessity.

The DOJ also stated that the defendants shifted fraudulent billing among their DME companies to evade Medicare payment suspensions. Common ownership of multiple legitimate suppliers is not itself improper, but moving questioned billing to another entity instead of correcting the underlying issue can substantially increase enforcement risk.

CMS and law enforcement can compare billing volume, beneficiary populations, referral sources, personnel, addresses, and ownership across related suppliers. A sudden transfer of business after a payment suspension or audit may draw particular attention when the same operations or referral channels continue under another supplier number.

Compliance Priorities for Providers and Suppliers

Providers and suppliers should maintain evidence that each item was requested, ordered through a legitimate clinical encounter, medically necessary, delivered, and billed under the correct entity. Marketing and referral arrangements should be reviewed for payments tied directly or indirectly to federally reimbursed orders. Organizations should also monitor unusual geographic patterns, concentrated referral sources, high utilization, beneficiary complaints, and abrupt changes in billing among commonly controlled entities.

GWB represents healthcare providers in connection with government investigations and False Claims Act litigation. If you need assistance with such a matter, contact us today.