Telemedicine company owners admit to $64M nationwide kickback scheme

The owners of telemedicine company RediDoc admitted their roles in a $64 million fraud, bribery and kickback scheme, the Justice Department said May 10.

Stephen Luke, 54, and David Laughlin, 48, conspired with others from September 2017 to December 2019 to illegally enrich themselves by submitting fraudulent claims to federal benefit programs, the department said. They received about $32 million from marketing companies and paid several million in kickbacks to physicians around the country.

They engaged in a circular scheme of kickbacks and bribes paid to physicians and solicited from marketing companies, pharmacies and medical equipment providers, the department said. The latter two paid bribes and kickbacks to marketing companies in exchange for drug prescriptions and physician orders for equipment.

The marketing companies got personal information of Medicare and Tricare beneficiaries, which they sent to RediDoc, along with prefilled prescriptions and medical equipment orders, the department said. RediDoc then gave the beneficiary information, premarked prescriptions and equipment orders to physicians.

RediDoc paid those physicians bribes and kickbacks, and the physicians often approved the prescriptions and equipment orders despite not having contact with beneficiaries or determining medical necessity, the department said.

RediDoc then sent those prescriptions and orders to pharmacies and equipment providers for fulfillment and billing, the department said. After those entities were reimbursed, they sent portions of the reimbursements to the marketing companies. The marketing companies then shared the money with Mr. Luke, Mr. Laughlin and RediDoc to start the process over again.

The kickback and fraud charges are punishable by a maximum of five and 10 years in prison, respectively, along with fines, restitution and forfeiture penalties. Mr. Luke and Mr. Laughlin may receive lighter sentences than the maximums.

Sentencing is set for Oct. 11.

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