Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASEWednesday, August 18, 2010

Detroit-Area Doctor Sentenced to 14 Years in Prison for Medicare Fraud Scheme

WASHINGTON – Farmington Hills, Mich., physician Jose Castro-Ramirez was sentenced today to 14 years in prison for his role in a wide-ranging conspiracy to defraud the Medicare program, the Departments of Justice and Health and Human Services announced. Castro-Ramirez was also ordered to pay $9.4 million in restitution and sentenced to a three-year term of supervised release following his prison term.

On March 11, 2010, after a three-week trial, a federal jury convicted Castro-Ramirez of one count of conspiracy to commit health care fraud, 11 counts of health care fraud and one count of conspiracy to launder the proceeds of the fraudulent scheme. Castro-Ramirez was sentenced today by U.S. District Judge Sean F. Cox in the Eastern District of Michigan.

Evidence at trial established that beginning in 2003, the defendant, a physician licensed in the state of Michigan, entered into an agreement with co-conspirator Suresh Chand to defraud the Medicare program. Chand, who was sentenced to 81 months in prison in April for his role in the scheme, owned and controlled several companies operating in Warren, Mich., including Continental Rehab Services Inc. (CRS), and Pacific Management Services Inc. (PM), that purported to provide physical and occupational therapy services to Medicare beneficiaries. In reality, Chand and his associates at CRS and PM created fictitious therapy files, appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. The fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by Chand and his co-conspirators. The fictitious therapy files Chand and his co-conspirators created would appear to justify the billings to Medicare, when in fact no physical or occupational therapy services had been provided.

Evidence introduced at trial established that in order to create the fictitious therapy files, Chand and his co-conspirators paid cash kickbacks and other inducements to Medicare beneficiaries, in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had received therapy services. Chand also would pay licensed physical and occupational therapists to sign fictitious “progress notesâ€