BLACK East Northport man convicted of $600M in health care fraud, feds say

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East Northport man convicted of $600M in health care fraud, feds say​



Mathew James, left, leaves the Central Islip Federal Courthouse, free...


Mathew James, left, leaves the Central Islip Federal Courthouse, free on bond after attending a hearing. June 16, 2022. A federal jury in Central Islip returned a guilty verdict on eight counts of a superseding indictment charging Mathew James with perpetrating an over $600 million health care fraud scheme, which also included wire fraud and aggravated identity theft charges. Credit: John Roca
By Keldy Ortizkeldy.ortiz@newsday.comUpdated July 14, 2022 7:50 pm
An East Northport man was found guilty Wednesday of defrauding insurance companies out of more than $600 million and impersonating patients, federal prosecutors said.
The federal jury convicted Mathew James, 54, of health care fraud, wire fraud and identity theft scheme, prosecutors said in a news release.
James, who operated a medical billing company, Leale Inc. in East Northport, billed patients for a series of procedures different from those his doctor-clients performed, and had them schedule elective surgeries through an emergency room so insurance companies reimbursed at a higher price, prosecutors said.

When insurance companies denied the reimbursement, James, according to court documents and evidence at trial, posed as several patients and demanded the companies to pay the balance which was tens or hundreds of thousands of dollars.
“The defendant stands convicted of carrying out an audacious scheme in which he used insurance companies like ATM machines. He stole hundreds of millions of dollars until he was finally exposed by a paper trail a mile-long, phone recordings on which he impersonated patients, and text messages and emails with his co-conspirator doctor clients demonstrating his nefarious billing practices," said U.S. Attorney for the Eastern District Breon Peace.
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He was indicted on Aug. 22, 2019, according to court documents.

“James orchestrated a fraudulent medical billing scheme to steal from insurance companies and businesses, in order to line his own pockets,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department in a statement.

James will be sentenced at a later date and can face up to 10 years in prison for health care fraud conspiracy, up to 10 years for health care fraud, and up to 20 years for each of the three wire fraud counts. He will face a two-year mandatory minimum for three aggravated identity theft counts.

“Health care fraud, including fraudulent billing schemes like this, costs U.S. taxpayers tens of billions of dollars annually. These crimes impact all of us in many ways, including increased health insurance premiums, greater out-of-pocket expenses and copayment amounts for medical treatment, and reduced or lost benefits, just to name a few,” said FBI Assistant Director Luis Quesada in a statement.

James' attorney, Paul M. Krieger, declined to comment.

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A federal jury convicted a New York man today in an over $600 million health care fraud, wire fraud, and identity theft scheme.


According to court documents and evidence presented at trial, Mathew James, 54, of East Northport, operated a medical billing company that billed for procedures that were either more serious or entirely different than those James’ doctor-clients performed. James 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.


“James orchestrated a fraudulent medical billing scheme to steal from insurance companies and businesses, in order to line his own pockets,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This conviction shows that medical billers who fuel health care fraud will be brought to justice.”


“The defendant stands convicted of carrying out an audacious scheme in which he used insurance companies like ATM machines. He stole hundreds of millions of dollars until he was finally exposed by a paper trail a mile-long, phone recordings on which he impersonated patients, and text messages and emails with his co-conspirator doctor clients demonstrating his nefarious billing practices. For this massive fraud, a federal jury convicted him today,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Health care fraud is not a victimless crime, because fraudulent billing ultimately affects consumers who must pay the cost of higher insurance premiums.”


“Health care fraud, including fraudulent billing schemes like this, costs U.S. taxpayers tens of billions of dollars annually. These crimes impact all of us in many ways, including increased health insurance premiums, greater out-of-pocket expenses and copayment amounts for medical treatment, and reduced or lost benefits, just to name a few,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI, together with our law enforcement partners, is committed to rooting out health care fraud in all its forms and bringing those who seek to exploit our health care system to justice.”


James was convicted of conspiracy to commit health care fraud, health care fraud, three counts of wire fraud, and three counts of aggravated identity theft. He is scheduled to be sentenced at a later date and faces up to 10 years in prison for health care fraud conspiracy, up to 10 years in prison for health care fraud, up to 20 years in prison for each of three wire fraud counts, and a two year mandatory minimum each for three aggravated identity theft counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.


The FBI investigated the case.
 
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