Federal prosecutors have reached a settlement for $1.6 million with an American Fork telemarketing company over accusations of Medicare fraud.
The company, Western Medical Group, and its owners, Benjamin D. George and Jody C. Rookstool, have agreed to pay $1,634,844 to settle allegations under the False Claims Act, U.S. Attorney for Utah John W. Huber announced Tuesday.
Western Medical — doing business under that name and also as Arizona Medical and Senior First Medical, among others — were accused of using a telemarketing scheme to sell knee and back braces to Medicare beneficiaries. The federal government argued that Western Medical violated Medicare’s ban on telephone solicitation to sell beneficiaries products already covered under Medicare.
The allegations were first made by company whistleblowers in December 2013. The court filings that detailed those allegations included telemarketing scripts that promised all costs would be paid by Medicare, and that the company would handle all the paperwork.
The settlement does not determine liability, Huber’s office said.
A CBS News investigation in February 2015 reported Western Medical had been involved in a similar telemarketing scheme to sell pain-relief creams, again with the costs covered by insurance for sometimes thousands of dollars.
“Misuse of taxpayers dollars is something we take very seriously,” Huber said in a statement. “The money recovered will be put back into federal health care programs where it can be used to provide medical services for the elderly and disabled.”
Eric Barnhart, special agent in charge of the FBI’s Salt Lake City field office, warned consumers not to be taken in by telemarketers trying to sell medical products. One sign of fraud, he said, is when telemarketers promise to waive co-payments or otherwise bypass a customer’s doctor.
Western Medical has since gone out of business; messages left with George’s and Rookstool’s lawyers were not immediately returned.
