A man from Fayetteville, New York, has pleaded guilty to federal charges connected to a scheme that defrauded Medicare out of more than $3.1 million. On Wednesday, Timothy Klein, aged 49, admitted to conspiracy to pay and receive health care kickbacks, a charge that carries a potential sentence of up to five years in prison and a fine of $250,000, according to a statement from the U.S. Attorney’s Office for the Western District of New York.
Klein’s illegal activities occurred between February 2017 and September 2018, during which he conspired with others to submit fraudulent prescription drug claims to both Medicare and Medicare Part D plan sponsors. He operated through his company, JRS Group LLC, and utilized kickbacks and bribes to facilitate unnecessary prescriptions for patients, profiting from the proceeds.
As detailed by federal prosecutors, Klein enlisted insurance brokers to reach out to Medicare beneficiaries, offering prescription drugs at no cost, regardless of their actual medical needs. In exchange for these illicit referrals, Klein paid substantial kickbacks to the brokers for prescriptions billed to the beneficiaries’ federally funded Part D plans.
Additionally, he engaged an individual and their company, Advanced Telehealth, to provide doctors who would conduct telemedicine visits with the recruited beneficiaries. During these visits, doctors signed prescriptions that had already been pre-filled by Klein, circumventing legitimate medical protocols.
Klein established agreements with pharmacies such as ProRX and SunRise Pharmacy, which compensated him for each prescription they processed. In one notable instance, Klein received a check amounting to $95,479.05 from ProRX on September 17, 2018, representing payments for prescriptions he referred.
This guilty plea follows earlier federal charges against Klein, which accused him of orchestrating a complex scheme involving telemedicine doctors, insurance agents, and pharmacies, resulting in millions of dollars in Medicare billing for unnecessary prescriptions. The fraudulent operations led to at least $3.1 million in improper Medicare payments.
Klein is not alone in facing consequences for this scheme. An out-of-state doctor, Simon Santos Arias, and insurance agents John Weinman and Kyle Fenton have also pleaded guilty in connection with the case, highlighting the extensive network involved in this fraud.
This case underscores the ongoing efforts by federal authorities to combat health care fraud, ensuring accountability for those who exploit the system for personal gain. The repercussions for Klein and his associates serve as a reminder of the serious legal consequences tied to such fraudulent activities.
