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Man sentenced for $336M healthcare fraud, wire fraud, and identity theft scheme

Press releases may be edited for formatting or style | February 05, 2024 Insurance
A New York man was sentenced today to 12 years in prison and ordered to pay over $336 million in restitution for a years-long fraud scheme in which he and his co-conspirators, including physicians throughout the country, defrauded multiple health insurance companies out of hundreds of millions of dollars.

According to court documents and evidence presented at trial, Mathew James, 54, of East Northport, operated medical billing companies to provide billing services for physicians — primarily plastic or orthopedic surgeons throughout the United States — and used his companies to carry out a massive scheme to defraud insurance companies. As a third-party medical biller, James submitted claims to insurance companies and, when necessary, requested reconsideration or appeals of denied claims, typically earning a percentage of the amount paid by the insurance companies. The evidence showed that James billed for procedures that were either more serious or entirely different than those his doctor-clients performed. In addition, James made thousands of calls in which he impersonated patients and patients’ relatives to induce insurance companies to reconsider denied claims or pay more on approved claims, resulting in tens of millions of dollars in additional reimbursement to his doctor-clients and from which he received a percentage of the fraudulent proceeds.

James also directed his doctor-clients to schedule elective surgeries through the emergency room so that insurance companies would reimburse at substantially higher rates. When insurance companies denied the inflated claims, James impersonated patients to demand that the insurance companies pay the outstanding balances of tens or hundreds of thousands of dollars.
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A federal jury convicted James on July 13, 2022, of health care fraud, conspiracy to commit health care fraud, wire fraud, and aggravated identity theft.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.

The FBI investigated the case.

Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Catherine Mirabile and Antoinette Rangel for the Eastern District of New York prosecuted the case. Assistant U.S. Attorney Tanisha Payne for the Eastern District of New York is handling asset forfeiture.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, the program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with Department of Health and Human Services Office of Inspector General, are taking steps to hold providers accountable for their involvement in health care fraud schemes.

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