Today the Department of Justice (DOJ) held a press conference which was led by Dr. Mehmet Oz, the Administrator of the Centers for Medicare and Medicaid (CMS) and officials from the DOJ, announcing the results of its 2025 National Health Care Fraud Takedown. The takedown resulted in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various health care fraud schemes. Many of the indictments involved in schemes around durable medical equipment (DME), Adderal distribution, addiction services and other areas. However Wound Care, specifically around the use of amniotic “skin substitutes,” made the news in the fraud press release.
Here’s a link to specific cases which is tedious to review since they are grouped by geographic region rather than topic: 2025 National Health Care Fraud Takedown Case Summaries.
We were already aware of the case involving Alexandra Gehrke and Jeffrey King in Arizona, and of David Jenson, DPM with Nestor Refael Romero Magallanes in The Woodlands, TX. This case is notable for the fact that, according to the information released by the DOJ, the defendants were warned that their billing was improper when they were audited in early 2023, but continued their billing practices, and in the weeks following a search warrant, interfered with the investigation by pressuring patients into writing false statements claiming that they had qualifying wounds.
New indictments in the press release include Paulino Gonzalez of Las Vegas, NV who has been charged with conspiracy to commit fraud in a $94 million dollar scheme to order, recommend and apply amniotic wound grafts in return for illegal kickbacks. Gonzalex, a nurse, is alleged to have received $7,392,584 in kickbacks from an “allograft distributor.” A wound care company paid Gonzalez to apply allografts, some of which were medically unnecessary. Medicare paid over $54 million of the $94 million that were billed. The case is being tried by the Texas Strikeforce.
Mary Huntly, a Nurse Practitioner in Las Vegas, NV was charged with conspiracy to commit fraud for participating in a scheme to receive illegal kickbacks for amniotic grafts billed to Medicare. The indictment states that, “From September 2024 through April 2024, Huntly, a nurse practitioner, applied medically unnecessary allografts to Medicare beneficiaries that were procured through illegal kickbacks and bribes… [that] fraudulently billed Medicare approximately $14,333,550 of which Medicare paid $9,105,563.”
More information as it becomes available. This is certainly not the way that we would like the field of wound care to make the news.
More “Skin Substitute / CTP” Fraud Cases from the DOJ’s June 30th Announcement:
Ira Denny, 56, of Surprise, Arizona, was charged by information with conspiracy to commit health care fraud in connection with a scheme to defraud Medicare by billing for medically unnecessary amniotic allografts that were procured through kickbacks and bribes. As alleged in the information, medically untrained sales representatives identified and referred elderly Medicare beneficiaries to Denny, a nurse practitioner, who applied amniotic allografts to the beneficiaries without exercising independent medical judgment and in the amount and frequency determined by the sales representatives. Medicare was billed approximately $209,359,607 for allografts ordered and applied by Denny, which were medically unreasonable and unnecessary, ineligible for reimbursement, and procured through kickbacks and bribes. Medicare paid approximately $138,590,922 based on these false and fraudulent claims. The case is being prosecuted by Trial Attorneys William Hochul III and Shane Butland of the National Rapid Response Strike Force and Assistant U.S. Attorney Matthew Williams of the District of Arizona.
Tyler Kontos, 29, of Mesa, Arizona, Joel “Max” Kupetz, 36, of Scottsdale, Arizona, and Jorge Kinds, 49, of Phoenix, Arizona, were charged by indictment with conspiracy to commit health care fraud, health care fraud, and conspiracy to defraud the United States in connection with a $1 billion amniotic wound allograft fraud scheme. Kontos and Kupetz were also charged with transactional money laundering, and Kupetz was charged with receiving health care kickbacks. As alleged in the indictment, the defendants targeted elderly Medicare patients, many of whom were terminally ill in hospice care, through Arizona-based companies Apex Mobile Medical LLC, Apex Medical LLC, Viking Medical Consultants LLC, and APX Mobile Medical LLC to cause unnecessary and expensive allografts to be applied to these vulnerable patients’ wounds indiscriminately, without coordination with the patients’ treating physicians, to superficial wounds that did not need this treatment, and in sizes excessively larger than the wound. Kontos and Kupetz—neither of whom had any medical training—located elderly Medicare patients with wounds of any size or severity, ordered and recommended the ordering of allografts to be placed on the patients’ wounds, and referred the patients to Kinds and other nurse practitioners to apply the allografts. Kinds, a licensed nurse practitioner, applied whatever quantities and sizes of allografts medically untrained sales representatives ordered for the patients, without conducting an independent medical assessment, resulting in the application of numerous and inappropriately large allografts to single small wounds and wounds that required only traditional conservative treatment to heal. In just fourteen months, the defendants and their co-conspirators caused the submission of over $1 billion in false and fraudulent claims to Medicare, CHAMPVA, TRICARE, and commercial insurers, of which over $600 million was paid. Kontos and Kupetz received illegal kickbacks for ordering and arranging for and recommending the purchasing and ordering of allografts, while Kinds received up to $1,000 for each allograft application. Assets were seized upon the defendants’ indictment, including cryptocurrency and bank accounts totaling more than $7.2 million. The case is being prosecuted by Trial Attorneys William Hochul III and Shane Butland of the National Rapid Response Strike Force and Assistant U.S. Attorney Matthew Williams of the District of Arizona. Trial Attorney Yuliana Reyes of the Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Joseph Bozdech of the District of Arizona are handling asset forfeiture.
Gina Palacios, 40, of Phoenix, Arizona, was charged by information with conspiracy to commit health care fraud in connection with a scheme to defraud Medicare by billing for medically unnecessary amniotic allografts that were procured through kickbacks and bribes. As alleged in the information, medically untrained sales representatives identified and referred elderly Medicare beneficiaries to Palacios, a nurse practitioner, who applied amniotic allografts to the beneficiaries without exercising independent medical judgment and in the amount and frequency determined by the sales representatives. Medicare was billed approximately $59,470,478 for allografts ordered and applied by Palacios, which were medically unreasonable and unnecessary, ineligible for reimbursement, and procured through kickbacks and bribes. Medicare paid approximately $28,442,271 based on these false and fraudulent claims. The case is being prosecuted by Trial Attorneys William Hochul III and Shane Butland of the National Rapid Response Strike Force and Assistant U.S. Attorney Matthew Williams of the District of Arizona.
Marlen Veliz Rios, 58, of Hialeah, Florida, was charged via indictment with health care fraud and conspiracy to commit money laundering. The indictment alleges that Veliz Rios, owner of Loves Community Health Mental Health Inc. (“Loves”), carried out a scheme to submit false and fraudulent claims to Medicare for approximately $15,349,089 for wound care and skin graft products that were medically unnecessary and not provided, of which approximately $10,033,562 was paid. Further, the indictment alleges that upon receipt of the fraud proceeds, Veliz Rios caused bank transfers from the Loves bank account to the accounts of shell companies that she also controlled. The indictment alleges that Veliz Rios did this in order to launder the funds by issuing checks from the shell company accounts in the name of third party companies and individuals, in order to distribute the cash back to Veliz Rios’ co-conspirators for their personal use and benefit. As a result of this broader investigation, the government has already seized more than $4,600,000 in fraud proceeds from the various accounts involved in this case. The case is being prosecuted by Assistant U.S. Attorney Eduardo Gardea, Jr. of the U.S. Attorney’s Office for the Southern District of Florida, and Assistant U.S. Attorney G. Raemy Charest-Turken is handling asset forfeiture.
Yvoune Kara Petrie, 54, of Leesburg, Virginia was charged by information with health care fraud in connection with a scheme to bill CareFirst BlueCross BlueShield (CareFirst) for medical services and products that were not provided to patients, not prescribed by a physician, and not medically necessary. As alleged in the information, Petrie was the president and chief operating officer of Virginia Integrative Health, a medical clinic that provided hyperbaric oxygen therapy (“HBOT”) to patients. Petrie recruited her family members and friends to participate in her fraud as patients and she submitted fraudulent claims based on profit rather than the services that were actually prescribed. Petrie hired physicians at her clinic, but then used at least four physician’s National Provider Identifiers (“NPIs”) without their knowledge or permission to submit fraudulent claims to CareFirst. For example, Petrie used one physician’s NPI to submit fraudulent HBOT claims for that physician, as if the physician prescribed HBOT treatment for himself, but the treatment was never provided nor prescribed. As a result of the fraud scheme, Petrie caused at least $1,900,000 in actual loss to CareFirst. The case is being prosecuted by Assistant U.S. Attorney Zachary H. Ray of the U.S. Attorney’s Office for the Eastern District of Virginia.
Pinnacle Health PC and Daniel Rasmussen, of Seattle, Washington, have agreed to pay the United States $1,115,976 to resolve claims that they violated the False Claims Act when Pinnacle billed for an injectable form of an amniotic fluid product called FlowerAmnioFlo. As alleged, Pinnacle billed for this product to both Medicare and Tricare despite it being considered experimental and not approved for any diagnosis. The case is being prosecuted by Assistant U.S. Attorney Nickolas Bohl of the U.S. Attorney’s Office for the Western District of Washington.
Dr. Fife is a world renowned wound care physician dedicated to improving patient outcomes through quality driven care. Please visit my blog at CarolineFifeMD.com and my Youtube channel at https://www.youtube.com/c/carolinefifemd/videos
The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.
