Two Florida residents have been charged with allegedly defrauding the federal government's largest health care programs, including a man linked to the American Mafia.
The Department of Justice announced Nov. 19 that Thomas Farese, 79, of Delray Beach, and Domenic Gatto, 47, of Palm Beach Gardens, have been charged with health care fraud, conspiracy to commit health care fraud and wire fraud and other crimes totaling $25 million in losses by Medicare, Tricare and CHAMPVA, the Department of Veterans Affairs’ health program for eligible veterans' spouses and children.
The charges mark the second time in seven months the men have faced charges for allegedly engaging in health care fraud: in April, they and others were charged with conspiracy and committing fraud, allegedly bilking government health programs of $65 million.
According to court documents, Farese and Gatto hid their ownership of several medical equipment companies and arranged orders for medical devices, namely orthotic braces.
They then supposedly arranged and paid for orders, soliciting, bribing and receiving kickbacks from physicians for braces that weren't needed by patients -- orders that in turn were billed to the federal government, according to the Justice Department.
The pair also were involved in a related kickback scheme involving prescriptions for compounded medications -- prescriptions that are prepared for individual patients by specialty pharmacies that have been a frequent target of scammers for nearly the past decade.
Farese is no stranger to the U.S. legal system: he was charged and convicted in 1980 of running a multimillion-dollar marijuana smuggling and distribution operation through a Fort Lauderdale shipping company, sentenced to 30 years in prison and released in 1994.
Two years later, Farese was charged for laundering more than $1 million in drug money through several Florida coast strip clubs.
During his sentencing hearing in that case, federal prosecutor Jeffrey Slomar called Farese "a capo regime [captain] in the Colombo organized crime family" with "contacts throughout the world to facilitate money-laundering transactions," according to court documents.
He was sentenced to 10 years in prison and released in 2005, only to return seven years later, convicted again of money laundering.
He remained in prison until 2012, according to court documents.
Gatto is the developer of a West Palm Beach hotel complex, Banyan Cay Resort and Golf. He doesn’t appear to have a record of arrest prior to April.
Since at least 2013, the Justice Department has doggedly pursued companies and individuals that have profited from fraudulent orders for medical devices and compounded medications, which are personalized prescriptions crafted for patients who can't tolerate certain ingredients.
In the case of Tricare, the Justice Department has filed charges and convicted hundreds of persons involved in the schemes, including pharmacists, doctors, marketers and salesmen, including military troops.
Farese and Gatto face up to 20 years in prison if convicted of wire fraud and 10 years per count of conspiracy and health care fraud. The charge of violating the federal Anti-Kickback Statute carries a punishment of up to 5 years of prison, according to the Justice Department.
The men also face fines up to $250,000 for each count or twice the gross profit or loss caused by the offense, whichever is greater.
Both men have posted bonds of $700,000 and were released. According to the court, Farese's bail was paid by his wife Suzanne, daughter of Alphonse Persico, an alleged underboss in the Joseph Colombo crime family who died in prison in 1989.
Neither returned phone messages left by Military.com requesting comment on their cases.
-- Patricia Kime can be reached at firstname.lastname@example.org. Follow her on Twitter at @patriciakime.