Gregory Schreck, 50, of Johnson County, Kansas, pleaded guilty to orchestrating a massive fraud scheme that defrauded Medicare and other federal health care programs of over $1 billion, the U.S. Department of Justice (DOJ) announced on February 21.
Schreck, along with his co-conspirators, operated an internet-based platform called DMERx, which was used to generate fraudulent doctor’s orders. The scheme targeted hundreds of thousands of Medicare beneficiaries through deceptive mailers, TV ads, and offshore call centers. Schreck and his team convinced beneficiaries to provide personal information and consent to receiving medically unnecessary items such as orthotic braces, pain creams, and other products.
As a vice president of the company behind DMERx, Schreck connected pharmacies, durable medical equipment (DME) suppliers, and marketers with telemedicine companies that accepted illegal kickbacks in exchange for fraudulent doctors’ orders. These orders falsely claimed that a doctor had examined and treated Medicare beneficiaries, despite doctors signing off on the orders without determining medical necessity.
The illegal network of suppliers and pharmacies then billed Medicare and other insurers for over $1 billion, receiving more than $360 million in payments for the fraudulent claims. Schreck and his co-conspirators profited handsomely from the scheme, coordinating the illegal transactions and referring completed orders to suppliers and telemarketers who paid for the fraud.
Schreck’s guilty plea marks a significant step in the Justice Department’s ongoing efforts to combat health care fraud, with a particular focus on schemes that exploit Medicare and federal health programs.
