The United States Attorney’s Office for the Middle District of Pennsylvania announced the indictment of seven individuals charged in connection with a large-scale health care fraud scheme. The defendants are accused of conspiring to submit fraudulent health insurance claims for medically unnecessary prescription treatments, costing insurers millions of dollars.
The following individuals were indicted on charges of conspiracy to commit health care fraud, multiple counts of health care fraud, and violations of the federal Anti-Kickback Statute:
- Frank Suess (78), of Wellington, Florida
- Luis Salgado (50), of Naperville, Illinois and Davenport, Florida
- Melissa Driscoll (43), of East Stroudsburg, Pennsylvania
- Victor Velazco (35), of Loxahatchee, Florida
- Warren Pizik (68), of Davie, Florida
- Dave Singh (37), of Pembroke Pines, Florida
- Diana Castro (53), of Brooklyn, New York
According to U.S. Attorney Gerard M. Karam, the charges stem from a conspiracy between 2019 and 2020 to submit fraudulent claims for prescription drug treatments marketed as “foot baths.” The drugs, which included high-cost medications like vancomycin, tobramycin, and clindamycin, were not intended or approved for use in foot baths but were sold to insurance companies as part of a scheme to defraud the system. The foot baths, marketed as antibiotic and antifungal treatments, were prescribed to patients despite the fact that the medications were not suitable for such use.
One example of the fraud involved an individual whose insurance was billed $43,209.99 for a one-month supply of tobramycin vials, while another patient was charged $12,476.54 for vancomycin capsules. Ultimately, the insurance companies paid a fraction of these amounts for claims tied to foot bath prescriptions that were allegedly medically unnecessary.
The scheme involved multiple pharmacies, including Sterling Pharmacy, which was located in Jermyn, Pennsylvania. Melissa Driscoll purchased Sterling Pharmacy in March 2018 using funds from Frank Suess, who, along with Victor Velazco, operated a network of businesses. The indictment alleges that Suess and Velazco concealed their involvement in these businesses by using other individuals to serve as “front” owners of the pharmacies. These pharmacies, in turn, were used to process fraudulent prescriptions for foot bath treatments, often bypassing the legitimate pharmaceutical practices.
In addition to the fraud charges, the indictment includes allegations of conspiracy to obstruct a federal investigation into the fraudulent activities. The defendants are accused of falsifying records and using various tactics to conceal their illegal actions from authorities, including creating false documents to mislead investigators.
As part of the scheme, Luis Salgado, the CEO of MedX Marketing Solutions, allegedly provided patient recruiters with templated forms to obtain signed foot-bath orders from individuals, including some who attended health fairs in New York. Diana Castro, a Brooklyn podiatrist, approved these orders despite their lack of medical necessity. She was allegedly paid in cash for her participation. The fraudulent claims were then billed to insurers, with one health insurance provider paying approximately $685,000 for claims related to these foot baths.
The indictment also includes allegations of kickbacks paid to several individuals involved in the scheme. Melissa Driscoll allegedly paid MedX $312,192.28 in kickbacks, while other payments were made to Salgado, Pizik, and other individuals.
The U.S. government is seeking forfeiture of assets obtained through the fraud, including a commercial property in Wellington, Florida, and a residential property in Naperville, Illinois, purchased with proceeds from the scheme.
If convicted, the defendants face significant penalties. The maximum sentence for conspiracy to commit health care fraud and for violations of the Anti-Kickback Statute is 10 years in prison, a term of supervised release, and fines for each offense. Those charged with obstruction of a health care investigation or falsifying records face up to 20 years in prison.
The indictment highlights the ongoing efforts to combat health care fraud and ensure accountability within the health care system.
