7 defendants in Arizona cases charged as part of nationwide crackdown on health care fraud

PHOENIX – Seven defendants in Arizona cases have been charged as part of a massive nationwide crackdown on health care fraud, authorities announced Monday.

Overall, state and federal prosecutors are pursuing charges against over 320 individuals, including nearly 100 medical professionals, for alleged schemes involving over $14.6 billion in fraudulent claims. The government reported $2.9 billion in actual losses.

The Department of Justice said it was the largest coordinated takedown of health care fraud schemes in its history.

Law enforcement seized more than $245 million in cash, luxury vehicles, cryptocurrency and other assets as prosecutors warned of a growing push by transnational criminal networks to exploit the U.S. health care system. As part of the sweeping crackdown, officials identified perpetrators based in Russia, Eastern Europe Pakistan and other countries.

“Every dollar we prevent from going to fraudsters is a dollar that stays in the system to serve legitimate beneficiaries,” Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services (CMS), said in a press release. “Through advanced data analytics, real-time monitoring and swift administrative action, CMS is leading the fight to protect Medicare, Medicaid and the trust Americans place in these vital programs. We’re not waiting for fraud to happen; we’re stopping it before it starts.”

One of the Arizona defendants lives overseas, and six are from metro Phoenix.

Farrukh Jarar Ali, 41, of Pakistan, was indicted for conspiracy to commit health care fraud and wire fraud, three counts of wire fraud and money laundering.

Ali is accused of participating in a scheme involving over 40 Arizona substance abuse treatment clinics through a Pakistani company he owned that provided medical enrollment, coding and billing services. He allegedly submitted about $650 million in false claims to the Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid agency.

3 Valley residents accused in $1 billion allograft scheme

In another Arizona case, three Valley residents – 29-year-old Tyler Kontos of Mesa, 36-year-old Joel “Max” Kupetz of Scottsdale and 49-year-old Jorge Kinds of Phoenix — were indicted for conspiracy to commit health care fraud, health care fraud, and conspiracy to defraud the United States.

Kontos and Kupetz were also charged with transactional money laundering, while Kupetz faces another charge of receiving health care kickbacks.

Kontos and Kupetz, who aren’t medically trained, allegedly found elderly patients on Medicare, including some in hospice care, and referred them to licensed nurse practitioners, including Kinds, for expensive and unnecessary wound treatment.

The three defendants and other co-conspirators allegedly were responsible for fraudulent billings for allografts totaling $1 billion.

Who are the other Arizona health care fraud defendants?

Here’s a look at the other Arizona cases involving Valley residents:

• Cle’Esther Davenport, 51, of Peoria is accused of receiving $739,000 in kickbacks to refer patients to an outpatient treatment center called Tusa Integrated Clinic. Tusa allegedly defrauded AHCCCS out of over $1.5 million in improper payments.
• Ira Denny, 56, of Surprise is a nurse practitioner who allegedly ordered and applied over $200 million in unnecessary amniotic allografts for elderly Medicare recipients.
• Gina Palacios, 40, of Phoenix faces similar accusations as Denny, with Medicare billing for unnecessary amniotic allografts totaling nearly $60 million.

“Health care fraud doesn’t just steal money from taxpayers, it also degrades trust in the system Americans rely on to care for themselves and their loved ones” District of Arizona U.S. Attorney Timothy Courchaine said in a press release. “I am proud that the District of Arizona, in coordination with the entire Department of Justice, is working hard to hold criminals accountable for putting ill-gotten gains above their community’s well-being.”

The Associated Press contributed to this report.

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