A Medical Device Daily

The owners of two Miami-based healthcare corporations were sentenced to 63 and 56 months for their roles in separate Medicare fraud schemes, Assistant Attorney General Alice Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida reported yesterday.

In two separate cases resulting from the operations of the Medicare Fraud Strike Force, defendant Juan Carlos Castaneda, 43, the owner and operator of International Surgical-Med Pharmaceuticals (International; Miami), a pharmacy, was sentenced on March 28 to 63 months in prison by U.S. District Judge James Cohn in federal court in Miami. Jorge Novoa, 71, the owner and operator of Sunny Nutrition Services (Miami), a durable medical equipment (DME) company, was sentenced on March 27 to 56 months in prison by U.S. District Judge Donald Graham.

In July 2007, Castaneda pleaded guilty, without a plea agreement, to all counts in an indictment that charged Castaneda with conspiring to pay cash kickbacks to 72 owners of DME companies in exchange for compounded aerosol medication prescriptions. Castaneda billed Medicare for these drugs through International and then kicked back 50% of the Medicare payments to the DME owners. At sentencing, the court found that Castaneda received more than $4.5 million from Medicare and paid $2,040,500 in twice-monthly cash kickbacks to DME company owners as part of the scheme.

In September 2007, Novoa pleaded guilty to all charged counts in an indictment without a plea agreement. That indictment charged that between February 1999 and February 2004, Novoa conspired to defraud the Medicare program through fraudulent claims and kickbacks in which he obtained Medicare cards and personal information from Medicare beneficiaries in order to submit fraudulent claims for unnecessary medical equipment and aerosol medications. At sentencing, the court found that Novoa paid cash kickbacks of $70 to $200 to Zabdy Westerburger, MD, to obtain bogus prescriptions. These false prescriptions called for unnecessary medical equipment and related aerosol medications for the Medicare beneficiaries, who were given either a cursory examination or no examination at all. Westerburger was convicted of Medicare fraud in 2006.

Both cases were investigated by the U.S. Department of Health and Human Services, Office of Inspector General and the FBI.

In other legalities: Maquet Cardiovascular (Rastatt, Germany) reported that it filed concurrent patent infringement complaints in the U.S. International Trade Commission and the U.S. District Court for the District of Northern California against Terumo and Terumo Cardiovascular Systems (both Tokyo).

The complaints allege that Terumo infringes two Maquet U.S. patents through the manufacture, use, sale, and/or importation of its VirtuoSaph endoscopic vessel harvesting (EVH) system. The ITC case seeks to exclude the infringing products from importation into the U.S. and the district court case seeks monetary damages and an injunction.

"Maquet, and its predecessors, have pioneered eight generations of EVH products each built on our proprietary technology that delivers demonstrated efficacy, safety, and reliability," said Patrick Walsh, executive VP and COO of Maquet Cardiovascular. "As our patients rely on this technology for quicker recovery after heart bypass surgery, we must defend our intellectual property assets so that we can continue EVH innovation."