Handcuffs The Justice Departmentsaid physicians, insurers, and brace suppliers conspired to placefalse orders for $424 million in false claims. (Photo:Shutterstock)

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The Godfather could learn a thing or two from the latesttelemedicine scam artists about how to really organize a crime.

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According to a release from the U.S. Department of Justice, acabal of conspirators, led by executives atVideo Doctor Network, defrauded Medicare of more than $200 millionin false claims between 2016 and 2019. As outlined by statements tothe DOJ by Video Doctor Network owner Lester Stockett, theconspirators laundered the millions through a web of shellcompanies and offshore bank accounts, and solicited kickbacks andbribes from related parties. They were finally indicted in April.

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As part of a plea agreement, Stockett agreed to personally pay afine of $200 million and faces sentencing in December. But Stockettwas hardly alone in the scam, the DOJ said.

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Related: New scam uses DNA tests to steal identities, commithealth care fraud

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The fraudulent scheme involved 24 defendants and centered on agarden variety piece of medical equipment: medical braces. Using adifferent application of telecommunications–the telemarketer–theparties deployed a phone bank network to contact Medicarerecipients for whom orders for unnecessary medical braces wereplaced and billed to Medicare. The Justice Department saidphysicians, insurers, and brace suppliers conspired to place falseorders for $424 million in false claims, for which Medicarereimbursed them $200 million.

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According to the DOJ, "Stockett admitted that he and othersagreed to solicit and receive illegal kickbacks and bribes frompatient recruiters, pharmacies, brace suppliers and others inexchange for arranging for doctors to order medically unnecessaryorthotic braces (braces) for beneficiaries of Medicare and otherinsurance carriers.

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"Stockett admitted that, in order to obtain the orders that weretransmitted in exchange for kickbacks and bribes, he and otherexecutives and employees of the Video Doctor Network paid illegalkickbacks and bribes to health care providers to order medicallyunnecessary braces for Medicare beneficiaries. Many of these orderswere written after only a short telephone call between the healthcare provider and the beneficiary, with whom the health careprovider had no prior doctor-patient relationship."

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"This global scheme that took advantage of hundreds of thousandsof vulnerable individuals was fueled by unbounded greed withoutregard for the rules of law," said Deputy Inspector General forInvestigations Gary L. Cantrell of the U.S. Department of Healthand Human Services Office of Inspector General.

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The Video Doctor Network scandal is the second to rock thetelemedicine world in less than a year. Last December, Teladoc CFOMark Hirschhorn resigned following an investigation into hisrelationship with a female subordinate that involved alleged stockfraud. A class action lawsuit charged that Hirschhorn had beengiving his subordinate stock tips for years that enriched her.

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But publicly traded Teladoc seems to have shaken off thescandal. Its shares tell from the high $80s in 2018 to below $45 ashare following the bad news, triggering the lawsuit. But they haverecovered to almost $63 a share as of this week, reaching nearly$72 a share in August.

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