Newark, N.J. – Alexander Schleider, a 57-year-old resident of Lakewood, New Jersey, has admitted his involvement in a durable medical equipment kickback scheme, according to U.S. Attorney Philip R. Sellinger. Schleider pleaded guilty before U.S. Magistrate Judge Michael A. Shipp in Trenton federal court to one count of conspiracy to commit health care fraud and one count of wire fraud.
Schleider was convicted in a scheme to defraud investors with Facebook’s stock IPO in 2013. He was convicted and sentenced to 52 months in prison.
Now, he’s involved in another scam to defraud.
The case, as outlined in court documents and statements, reveals that Schleider owned and operated durable medical equipment (DME) companies in New Jersey. These companies provided orthotic braces to beneficiaries of Medicare and other federal and private health care benefit programs without assessing medical necessity. To obtain prescriptions for the DME braces, Schleider and his co-conspirators paid kickbacks and bribes to individuals operating marketing call centers. These individuals, in turn, utilized telemedicine companies to obtain prescriptions for the DME. The scheme resulted in losses of $21.7 million to Medicare and other health care benefit programs.
In addition to the health care fraud charges, Schleider committed wire fraud related to funds allocated in response to the COVID-19 pandemic. After one of his DME companies received $322,237 from the Department of Health and Human Services’ Health Resources and Services Administration Provider Relief Fund, Schleider submitted a fraudulent attestation to HRSA. In the attestation, he falsely claimed that the DME company provided diagnoses, testing, and care for individuals with possible or actual cases of COVID-19 after January 31, 2020. However, the company had stopped billing for any services in April 2019. Schleider misused the funds by transferring them into other accounts and using them for personal expenses, such as purchasing real estate and vehicles.
The charge of conspiracy to commit health care fraud carries a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. Sentencing is scheduled for November 8, 2023.
This case underscores the commitment of law enforcement to combat health care fraud and hold individuals accountable for their actions. The sentencing will take place in November, providing an opportunity for the court to determine appropriate penalties for the crimes committed.