A Kansas man has admitted to his role in a significant health care fraud scheme, pleading guilty to operating an internet-based platform that defrauded Medicare and other federal health care programs of over $1 billion. Gregory Schreck, 50, from Johnson County, confessed to targeting numerous Medicare beneficiaries by acquiring their personal information and persuading them to accept unnecessary medical items.
Court documents reveal that Schreck and his associates managed DMERx, a platform that produced fraudulent doctors' orders for orthotic braces and pain creams. As vice president of the company running DMERx, Schreck acknowledged facilitating connections between pharmacies, suppliers, marketers, and telemedicine companies willing to exchange illegal kickbacks for signed doctors' orders. These orders were then falsely represented as legitimate medical evaluations.
The fraudulent activities resulted in Medicare and insurers paying more than $360 million based on false claims. Schreck now faces up to 10 years in prison after pleading guilty to conspiracy to commit health care fraud. His sentencing will be determined by a federal district court judge considering various guidelines and factors.
The announcement was made by Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division along with officials from several investigative agencies including HHS-OIG, FBI Miami Field Office, VA-OIG’s Southeast Field Office, and DCIS Southeast Field Office.
HHS-OIG, FBI, VA-OIG, and DCIS are actively investigating the case. The prosecution is being handled by Trial Attorneys Darren C. Halverson and Jennifer E. Burns from the Criminal Division’s Fraud Section with assistance from Andrea Savdie and Shane Butland.
The Fraud Section's Health Care Fraud Strike Force Program has been instrumental in combating health care fraud since its inception in March 2007. The program has charged over 5,800 defendants who have collectively billed more than $30 billion from federal health care programs and private insurers.
More details about these efforts can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.