Indictment — No. 2:22-cr-00180 (Dkt. 35, E.D.N.Y.)

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A superseding indictment filed June 27, 2023 as Document 35 in United States v. Perry Frankel, Cr. No. 22-180 (S-1) (JS) (Case 2:22-cr-00180-JS), in the U.S. District Court for the Eastern District of New York. The caption cites 18 U.S.C. §§ 1347 and 1957(a) and (b). The introduction describes Medicare, Medicare Advantage, Medicaid Managed Care and private health plans. Counts One through Five are captioned Health Care Fraud, and the document ends with a criminal forfeiture allegation.

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“Indictment — No. 2:22-cr-00180 (Dkt. 35, E.D.N.Y.).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-2-22-cr-00180-dkt-35-e-d-n-y-b5b2e69001/, SHA-256 6e3b416dea4ea021736d10f2293455a9f6120d65fafcc6a3adbd5efd72c6422e.

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Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 1 of 15 PageID #: 112

FI LED
IN CLERK'S OFFICE
HDM/DJ:PJC/KML U.S. DISTRICT COURT E.D.N.Y.
F.# 2021R01058

UNITED STATES DISTRICT COURT
* JUN 27 2023 *
EASTERN DISTRICT OF NEW YORK LONG ISLAND OFFICE
- - - - - - - - - - - -X

UNITED STATES OF AMERICA SUPERSEDING
INDICTMENT
- against -
Cr. No. 22-180 (S-1) (JS)
PERRY FRANKEL, (T. 18, U.S.C., §§ 982(a)(l),
982(a)(7), 982(b)(l), 1347, 1957(a),
Defendant. 1957(b), 2 and 3551 et seq.;
T. 21, U.S.C., § 853(p))
-X
THE GRAND JURY CHARGES:

INTRODUCTION

At all times relevant to this Superseding Indictment, unless otherwise indicated:

I. Background

A. The Medicare and Medicaid Programs

1. The Medicare Program ("Medicare") was a federal health care program

providing benefits to persons who were over the age of 65 or disabled. Medicare was

administered by the Centers for Medicare and Medicaid Services ("CMS"), a federal agency

under the United States Department of Health and Human Services. Individuals who received

benefits under Medicare were referred to as Medicare "beneficiaries."

2. Medicare was divided into multiple parts. Medicare Part A covered

health services provided by hospitals, skilled nursing facilities, hospices and home health

agencies. Medicare Part B covered outpatient hospital services and professional services

provided by physicians and other providers (individually, "Provider," and collectively,

"Providers").
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 2 of 15 PageID #: 113

3. Medicare Part C-also known as Medicare Advantage-offered

beneficiaries the opportunity to secure coverage from private insurers ("Contractors") for many

of the same services that were provided by Parts A and B, in addition to certain mandatory and

optional supplemental benefits.

4. CMS provided fixed, monthly payments to the Contractors for each

beneficiary enrolled in a Medicare Advantage plan administered by the Contractors. These

monthly payments were referred to as "capitation" payments. To obtain payment for treatment

or services provided to a beneficiary enrolled in a Medicare Advantage plan, health care

providers submitted itemized claim forms to the Contractors.

5. The Medicaid Program ("Medicaid';) in New York State was a federally

and state funded health care program providing benefits to individuals and families who met

specified financial and other eligibility requirements and certain other individuals who lacked

adequate resources to pay for medical care. CMS was responsible for overseeing the Medicaid

program. Individuals who received benefits under Medicaid, like those who received benefits

under Medicare, were referred to as "beneficiaries."

6. Medicaid covered the costs of physicians' services and outpatient care,

among other services.

7. In New York State, Medicaid offered a managed care delivery system to

provide Medicaid benefits to eligible beneficiaries called Medicaid Managed Care. Under

Medicaid Managed Care, private entities referred to as managed care organizations provided

insurance plans covering most Medicaid benefits to eligible beneficiaries in exchange for

monthly payments from New York State.

2
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 3 of 15 PageID #: 114

8. Various private insurers participated in Medicare Part C as Contractors

and offered eligible participants, referred to as "members," the opportunity to enroll in Medicare

Advantage plans. These private insurers also participated in New York's Medicaid Managed

Care plans.

9. Various private insurers offered commercial health insurance plans for

individuals and families throughout New York State ("Private Plans"). A medical provider

must have been enrolled with the Private Insurers as a participating provider in order to submit

claims for medical services.

10. Medicare, Medicare Advantage plans, Medicaid Managed Care plans and

Private Plans were "health care benefit program[s]" as defined by Title 18, United States Code,

Section 24(b).

11. CMS assigned Providers a unique national provider identifier ("NPI")

number. A Provider used its assigned NPI number when submitting claims for reimbursement

to Medicare, Medicare Advantage plans, Medicaid Managed Care plans and Private Plans

(collectively, the "Health Care Benefit Programs").

12. A Provider was required to be enrolled with the Health Care Benefit

Programs in order to submit claims. To enroll in Medicare, a Provider was required to enter into

an agreement with CMS in which the Provider agreed to comply with all applicable statutory,

regulatory and program requirements for reimbursement from Medicare. By signing the

Medicare enrollment application, the Provider certified that the Provider understood that

payment of a claim was conditioned on the claim and the underlying transaction complying with

Medicare regulations, Medicare program instructions and federal law, and on the Provider's

compliance with all application conditions of participation in Medicare. A similar agreement

3
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was required of Providers enrolled in Medicare Advantage plans, Medicaid Managed Care plans

and Private Plans.

13. Providers were authorized to submit claims to the Health Care Benefit

Programs only for services that were medically necessary and actually provided to the

beneficiaries and members.

14. In order to receive payment for a service covered by the Health Care

Benefit Programs, the Provider was required to submit a claim for payment electronically or in

writing. The claim required the Provider to identify, among other information: the Provider

submitting the claim; the Provider providing the service; the beneficiary or member; the services

rendered; the diagnosis or nature of the illness or condition treated; and the date or dates of

service.

15. The Health Care Benefit Programs paid for claims only if the items or

services were medically reasonable, medically necessary for the treatment or diagnosis of the

patient's illness or injury, documented and actually provided as represented.

B. CPT Codes for Evaluation and Management Services

16. A claim to the Health Care Benefit Programs identified the service or

services provided using billing codes, also known as current procedural terminology codes

("CPT Codes"), which specifically identified the medical service or services provided to

beneficiaries or members.

17. The Health Care Benefit Programs covered evaluation and management

services or "office visits" when certain requirements were met. The CPT Codes for evaluation

and management services were organized into various categories and levels. In general, the

4
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 5 of 15 PageID #: 116

more complex the visit, the higher the level of reimbursement from insurance. To bill using any

CPT Code, the services furnished must have met the definition of the CPT Code.

18. Prior to January 1, 2021, CPT Code 99202 was a code used to identify an

office or other outpatient visit for the evaluation and management of a new patient, which

required three key components: an expanded problem focused history; an expanded problem

focused examination; and straightforward medical decision making. The description of CPT

Code 99202 indicated that: (a) usually, the presenting problem(s) were of low to moderate

severity; and (b) typically, 20 minutes were spent face-to-face with the patient and/or family.

19. Beginning on January 1, 2021, CPT Code 99202 was a code used to

identify an office or other outpatient visit for the evaluation and management of a new

patient, which required a medically appropriate history and/or examination and straightforward

medical decision making. When selecting CPT Code 99202 based on time spent on the date of

the encounter, the code indicated that a total of 15-29 minutes was spent.

20. Prior to January 1, 2021, CPT Code 99212 was a code used to identify an

office or other outpatient visit for the evaluation and management of an established patient,

which required at least two of the following three key components: a problem focused history; a

problem focused examination; and straightforward medical decision making. The description of

CPT Code 99212 indicated that: (a) usually, the presenting problem(s) were self-limited or

minor; and (b) typically, 10 minutes were spent face-to-face with the patient and/or family.

21. Beginning on January 1, 2021, CPT Code 99212 was a code used to

identify an office or other outpatient visit for the evaluation and management of an established

patient, which required a medically appropriate history and/or examination and straightforward

5
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 6 of 15 PageID #: 117

medical decision making. When selecting CPT Code 99212 based on time spent on the date of

the encounter, the code indicated that a total of 10-19 minutes was spent.

22. Prior to January 1, 2021, CPT Code 99213 was a code used to identify an

office or other outpatient visit for the evaluation and management of an established patient,

which required at least two of the following three key components: an expanded problem

focused history; an expanded problem focused examination; and medical decision making of low

complexity. The description of CPT Code 99213 indicated that: (a) usually, the presenting

problem(s) were of low to moderate severity; and (b) typically, 15 minutes were spent face-to-

face with the patient and/or family.

23. Beginning on January 1, 2021, CPT Code 99213 was a code used to

identify an office or other outpatient visit for the evaluation and management of an established

patient, which requires a medically appropriate history and/or examination and low level of

medical decision making. When selecting CPT Code 99213 based on time spent on the date of

the encounter, the code indicated that a total of 20-29 minutes was spent.

C. The Defendant and Relevant Entities

24. The defendant PERRY FRANKEL was a medical doctor who was

licensed by the State of New York and whose principal area of practice was cardiology.

FRANK.EL was the owner of Advanced Cardiovascular Diagnostics, PLLC ("Advanced

Cardio"), a New York State professional services limited liability company. FRANKEL was a

signatory on bank accounts ending in 6386 ("Account x6386") and 6408 ("Account x6408") held

at Financial Institution-I, an entity the identity of which is known to the Grand Jury.

6
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 7 of 15 PageID #: 118

25. Advanced Cardio was a cardiology practice located in Great Neck, New

York. Advanced Cardio also operated numerous mobile COVID-19 testing sites throughout

Long Island, New York.

26. Insurer-I, an entity the identity of which is known to the Grand Jury, was

a private insurance company with operations in New York State. Insurer-I offered Medicare

Advantage plans, Medicaid Managed Care plans and Private Plans to eligible individuals within

New York State and elsewhere.

27. Insurer-2, an entity the identity of which is known to the Grand Jury, was

a private insurance company with operations in New York State. Insurer-2 offered Medicare

Advantage plans, Medicaid Managed Care plans and Private Plans to eligible individuals within

New York State and elsewhere.

28. Insurer-3, an entity the identity of which is known to the Grand Jury, was

a private insurance company with operations in New York State. Insurer-3 offered Medicare

Advantage plans and Private Plans to eligible individuals within New York State and elsewhere.

29. Insurer-4, an entity the identity of which is known to the Grand Jury, was

a private insurance company with operations in New York State. Insurer-4 offered Private Plans

to eligible individuals within New York State and elsewhere.

II. The Fraudulent Scheme

30. From approximately September 2020 to approximately March 2022, the

defendant PERRY FRANKEL, together with others, submitted and caused the submission of

false and fraudulent claims to the Health Care Benefit Programs for evaluation and management

services during the COVID-19 pandemic that were medically unnecessary, not provided as

represented and ineligible for reimbursement.

7
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 8 of 15 PageID #: 119

31. Specifically, the defendant PERRY FRANKEL took advantage of the

COVID-19 pandemic for his own financial gain. FRANKEL operated numerous mobile

COVID-19 testing sites at various locations throughout Long Island, New York (collectively, the

"Mobile Testing Sites"), and caused the Mobile Testing Sites to offer COVID-19 testing to

members of the public, as the effects of the COVID-19 pandemic were felt in the United States

and many individuals were reporting difficulty obtaining tests to determine whether they were

infected with the COVID-19 virus.

32. The Mobile Testing Sites were staffed in some instances with mid-level

providers, including nurse practitioners and physicians' assistants and/or, in some instances,

medical assistants and COVID-19 swabbers. Beneficiaries and members visited the mobile

COVID-19 testing sites to be tested for COVID-19 and briefly met with medical assistants and

swabbers and sometimes nurse practitioners and physicians' assistants, who typically interacted

with beneficiaries and members for less than five minutes, which included collecting insurance

information, asking beneficiaries and members whether they had COVID-19 symptoms and

administering a nasal swab for COVID-19 testing. Often, beneficiaries and members remained

in their cars during the testing process. Beneficiaries and members at the Mobile Testing Sites

did not receive evaluation and management services as defined in CPT Codes 99202, 99212, and

99213.

33. The defendant PERRY FRANKEL certified to Medicare that he would

comply with all Medicare rules and regulations and federal laws, including, among other things,

that he would not knowingly present or cause to be presented a false and fraudulent claim for

payment by Medicare.

8
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 9 of 15 PageID #: 120

34. The defendant PERRY FRANKEL submitted or caused the submission of

false and fraudulent claims to the Health Care Benefit Programs using CPT Codes 99202, 99212

and 99213, seeking payments for evaluation and management services for beneficiaries and

members who received COVID-19 tests from the Mobile Testing Sites, when, in fact, these

evaluation and management services were not provided. For some claims, FRANKEL was not

in New York State on the dates he purportedly provided evaluation and management services at

the Mobile Testing Sites.

35. The defendant PERRY FRANKEL was listed as the rendering provider for

all of the evaluation and management services purportedly provided at the Mobile Testing Sites,

even though he did not, in fact, provide these services.

36. From approximately September 2020 to approximately March 2022, the

defendant PERRY FRANKEL submitted and caused to be submitted approximately $17 million

in claims to the Health Care Benefit Programs for evaluation and management services in

connection with COVID-19 testing that was medically unnecessary, not provided as represented

and ineligible for reimbursement, for which the Health Care Benefit Programs paid

approximately $3 million.

COUNTS ONE THROUGH FIVE
(Health Care Fraud)

37. The allegations contained in paragraphs one through 36 are realleged and

incorporated as if fully set forth in this paragraph.

38. In or about and between September 2020 and March 2022, both dates

being approximate and inclusive, within the Eastern District of New York and elsewhere, the

defendant PERRY FRANKEL, together with others, did knowingly and willfully execute and

attempt to execute a scheme and artifice to defraud the Health Care Benefit Programs, which

9
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 10 of 15 PageID #: 121

were health care benefit programs, as that term is defined under Title 18, United States Code,

Section 24(b), and to obtain, by means of one or more materially false and fraudulent pretenses,

representations and promises, money and property owned by, and under the custody and control

of the Health Care Benefit Programs, in connection with the delivery of and payment for health

care benefits, items and services.

39. On or about the dates specified below, within the Eastern District of New

York and elsewhere, the defendant PERRY FRANKEL, together with others, submitted and

caused to be submitted the following false and fraudulent claims to the Health Care Benefit

Programs for evaluation and management services that were not medically necessary, not

provided as represented and ineligible for reimbursement, in an attempt to execute, and in

execution of, the scheme described above;

:, ~i!r!}'::'.:?~\\\lf :,J,s~~~r: .• A:tJ!!'l~
.J •• ,..,. <: J.:.... ;,, __
i. I 1:~ •... ~ ,,,,

ONE · Individual- I, Medicare March 23, CPT 99202 $250.00
an individual 2021
whose identity
is lmown to
the Grand Jury
TWO Individual-2, Insurer-3 March 23, CPT 99212 $200.00
and individual 2021
whose identity
is lmown to
the Grand Jury
THREE Individual-3, Insurer-I May 21, 2021 CPT 99202 $250.00
an individual
whose identity
is lmown to
the Grand Jury
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 11 of 15 PageID #: 122

FOUR Individual-4, Insurer-I July 1, 2021 CPT 99202 $250.00
an individual
whose identity
is known to
the Grand Jury
FIVE Individual-5, Medicare November 28, CPT 99212 $200.00
an individual 2021
whose identity
is known to
the Grand Jury

(Title 18, United States Code, Sections 1347, 2 and 3551 et seq.)

COUNTS SIX THROUGH SEVEN
(Engaging in Unlawful Monetary Transactions)

40. The allegations contained in paragraphs one through 36 are realleged and

incorporated as if fully set forth in this paragraph.

41. On or about the dates listed below, within the Eastern District ofNew

York and elsewhere, the defendant PERRY FRANKEL, together with others, did knowingly and

intentionally engage in one or more monetary transactions, to wit: the transactions set forth

below, in and affecting interstate commerce, in criminally derived property that was of a value

greater than $10,000 and that was derived from specified unlawful activity, to wit: health care

fraud, in violation of Title 18, United States Code, Section 1347, knowing that the property

involved in such monetary transactions represented the proceeds of some form of unlawful

activity:

SIX March 12, 2021 PERRY FRANKEL caused
the issuance of a check in the

11
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 12 of 15 PageID #: 123

$15,000 payable to Miller
Motor Cars Inc. from
Account x63 86 in furtherance
of the purchase of a 2021
Bentley Bentayga
SEVEN December 13, 2021 PERRY FRANKEL caused
the issuance of a wire transfer
in the amount of
approximately $125,000
payable to Summit Farms
LLC from Account x6408 in
furtherance of a payment to
an equestrian stable

(Title 18, United States Code, Sections 1957(a), 1957(b), 2 and 3551 et seq.)

CRIMINAL FORFEITURE ALLEGATION
ASTOCOUNTSONETHROUGHFIVE

42. The United States hereby gives notice to the defendant that, upon his

conviction of any of the offenses charged in Counts One through Five, the government will seek

forfeiture in accordance with Title 18, United States Code, Section 982(a)(7), which requires any

person convicted of a federal health care offense to forfeit property, real or personal, that

constitutes, or is derived directly or indirectly from, gross proceeds traceable to the commission

of such offenses.

43. If any of the above-described forfeitable property, as a result of any act or

omission of the defendant:

(a) cannot be located upon the exercise of due diligence;

(b) has been transferred or sold to, or deposited with, a third party;

(d) has been substantially diminished in value; or

12
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 13 of 15 PageID #: 124

(e) has been commingled with other property which cannot be divided

without difficulty;

it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p), as

incorporated by Title 18, United States Code, Sections 982(b)( 1), to seek forfeiture of any other

property of the defendant up to the value of the forfeitable property described in the forfeiture

allegation.

CRIMINAL FORFEITURE ALLEGATION
AS TO COUNTS SIX AND SEVEN

44. The United States hereby gives notice to the defendant that, upon his

conviction of either of the offenses charged in Counts Six and Seven, the government will seek

forfeiture in accordance with Title 18, United States Code, Section 982(a)(l), which requires any

person convicted of such offenses to forfeit any property, real or personal, involved in such

offenses, or any property traceable to such property.

45. If any of the above-described forfeitable property, as a result of any act or

omission of the defendant:

(a) cannot be located upon the exercise of due diligence;

(b) has been transferred or sold to, or deposited with, a third party;

(d) has been substantially diminished in value; or

(e) has been commingled with other property which cannot be divided

without difficulty;

it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p), as

incorporated by Title 18, United States Code, Section 982(b)( 1), to seek forfeiture of any other

13
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 14 of 15 PageID #: 125

property of the defendant up to the value of the forfeitable property described in this forfeiture

allegation.

(Title 18, United States Code, Sections 982(a)(l) and 982(b)(l); Title 21, United

States Code, Section 853(p))

A TRUE BILL

fvL flJ-
FOREPERSON

9;-(;a,ur/J667 A ~ t l . S . ~
BREON PEACE
UNITED STATES ATTORNEY
EASTERN DISTRICT OF NEW YORK

~'9-~~/~~
GLENN S. LEON
CHIEF, FRAUD SECTION
CRIMINAL DIVISION
U.S. DEPARTMENT OF JUSTICE

14
Case 2:22-cr-00180-JS Document 35 Filed 06/27/23 Page 15 of 15 PageID #: 126

F. #2021R01058
FORMDBD-34 No.
JUN. 85

UNITED STATES DISTRICT COURT
EASTERN District of NEW YORK

CRIMINAL DIVISION

THE UNITED STATES OF Al\IBRICA

PERRY FRANKEL,
Defendant.

SUPERSEDING INDICTMENT
(T. 18, U.S.C., §§ 982(a)(7), 982(b)(l), 1347, 1957(a), 1957(b),
2 and 3551 et seq.; T. 21, U.S.C., § 853(p))

A true bill. ____ £t..___ ~---------- Foreperson

Filed in open court this _________________ day,

of ____________ A.D. 20 ____ _

Clerk

Bail,$ __________ _

Patrick J. Campbell and Kelly M. Lyons, DOJ Trial Attorneys, (718) 254-6366

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