FBI raids Florida medical firm with connection to 'Wolf of Wall Street'
On Wednesday, FBI agents, the Florida fraud department, and local law enforcement officials closed entrances to the building of Med-Care Diabetic & Medical Supplies Inc., in Boca Raton, Florida, and were seen removing boxes of files. Employees of the company were seen leaving the offices as law enforcement officials arrived, according to Reuters.
Agents also cleared out a dozen computers in the separate office of LMC Medical Supplies – which reportedly “shares executives” with Med-Care, such as Porush’s wife Lisa. FBI Spokesman James Marshall declined to comment further about the investigation.
Med-Care – one of the largest diabetic supply companies in the country – has 500 employees and serves more than 350,000 patients, according to the Florida Sun Sentinel. In 2013, it brought in just under $100 million. It’s unclear if any individuals were arrested or taken into custody.
Working at Med-Care as its top executive is Danny Porush, who was portrayed under an alias in the Hollywood movie 'The Wolf of Wall Street,' as the partner-in-crime of Jordan Belfonte. The movie depicted Wall Street executives who ripped off their clients to fund their lavish, cocaine- and sex-filled lifestyles.
FBI raids Florida offices of firm linked to man who inspired Wolf of Wall Street: FBI agents raid the offices... http://t.co/N3uL1SnAo0
— kommud (@kommud) January 14, 2015
Both were convicted of insider trading, perjury, conspiracy, and money laundering, and Porush was ordered to pay $200 million in restitution for his acts. Both were caught by the FBI and served reduced sentences after cooperating with law enforcement. Porush’s new wife, Lisa, several of his sons, his step-daughter, and daughter also occupy positions at the Florida medical supply firm.
Agents wouldn’t confirm whether the raid has anything to do with a whistleblower lawsuit that accused the company of Medicare fraud. The lawsuit was brought by plaintiff Tiffany Bumbury, who worked for three months in the New York office of a company affiliated with Med-Care Diabetic, and alleged the company cold-called seniors on Medicare – an act which is generally prohibited – and then sent supplies that were medically unnecessary and not requested. The company then charged Medicare.
Judge Kenneth L. Ryskamp threw out the lawsuit in June 2014 because he said the plaintiff did not provide enough evidence to back up her claim.
In her complaint, Bumbury said Porush and others provided a script of "materially false statements," and encouraged telemarketers to "say whatever they needed to say" to secure a sale. Then, she said, the company billed Medicare for the cost of the equipment. Exhibits associated with her suit include copies of mailing labels in which recipients refused the medical supplies shipped by the company.
"The pleading consists merely of a handful of thin facts regarding Bumbury's employment and her recollection of the statements she made to customers and that customers purportedly made to her during her brief tenure as a telemarketer," Ryskamp wrote, according to the Palm Beach Post.
"Even assuming for the sake of argument the authenticity of the exhibits and the reliability of (Bumbury's) information, they do not show that Med-Care submitted specific false claims to Medicare."
The judge had earlier barred Bumbury's lawyer from attempting to collect information on Med-Care as part of the discovery process. The judge said, in essence, that he would not allow a fishing expedition into the company, which is licensed in all 50 states to sell medical supplies such as nebulizers, diabetic supplies, back braces, and equipment to treat sleep apnea.
The dismissed lawsuit is not the first time that allegations of improper billing have been raised about Med-Care.
The company was the subject of a hearing held by the Senate Subcommittee on Financial and Contracting Oversight in April 2013. Among roughly 100,000 suppliers of what is known as 'durable medical equipment,' the committee chose two companies to investigate in more detail. Med-Care was one of them.
The committee invited Med-Care to testify. When the company would not voluntarily make an official available to the committee, Chairwoman Sen. Claire McCaskill (D-Missouri) sent a subpoena. Steve Silverman, a founder of Med-Care, testified.
The company filed over 600,000 claims and received about $84.5 million in Medicare payments between 2009 and 2012, according to a staff investigation performed before the hearing. It found a high rate of what appeared to be improper claims.