California Man Charged in $10 Million Healthcare Fraud, Wire Fraud, and Kickback Conspiracy

A California man was arraigned on charges relating to his role in a fraud and kickback scheme that caused more than $10 million in losses to Medicare, Attorney for the United States Vikas Khanna announced.

Adam Wayne Owens, 43, of Riverside, California, is charged in a superseding indictment with one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to violate the federal Anti-Kickback Statute. Owens appeared today before U.S. District Judge Michael E. Farbiarz in Newark and was released on a $500,000 unsecured bond. 

According to documents filed in the case and statements made in court:

From November 2018 to January 2020, Owens participated in a kickback and bribery scheme with testing companies and telemedicine providers, resulting in the submission of false and fraudulent claims to Medicare. Owens owned and controlled marketing companies in California through which he and his conspirators identified Medicare beneficiaries to target for at-home cancer genetic tests (CGX). Owens and his conspirators used a variety of methods to obtain personal and medical information from the Medicare beneficiaries, including making unsolicited telephone calls to elderly cancer patients. Owens and his conspirators then caused CGX testing kits to be sent to the beneficiaries regardless of whether they needed or wanted them. Once the CGX tests were completed and returned, Owens’ conspirators submitted claims for reimbursement to Medicare. In exchange for Owens’ role in the conspiracy, his companies received kickback payments ranging from $1,700 to $2,000 for each CGX test resulting in Medicare reimbursement.

To conceal the scheme, the testing companies wired various kickback payments to a shell company in New Zealand, which then wired the payments to bank accounts controlled by Owens in the United States. To further conceal the scheme, Owens entered into a sham contract with the New Zealand shell company which made it appear that one of Owens’ marketing companies was engaged in and being paid for legitimate marketing and referral services. Owens then generated invoices falsely purporting that the marketing company was providing hourly referral services for the New Zealand shell company. Instead, Owens received payments from the New Zealand shell company based solely on the number of CGX tests that Medicare reimbursed.      

Owens and his conspirators caused a loss to Medicare of more than $10 million.

Conspiracy to commit health care fraud and wire fraud is punishable by a maximum potential penalty of 20 years in prison. Conspiracy to violate the federal Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison. Each count is also punishable by a fine of $250,000, or twice the gain or loss from the offense, whichever is greatest.

Attorney for the United States Khanna credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Acting Special Agent in Charge Brian J. Solecki; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Garrett J. Schuman of the Health Care Fraud Unit and Senior Trial Counsel Barbara A. Ward of the Asset Recovery and Money Laundering Unit.

The charges and allegations contained in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.