On July 26, 2021, the DOJ (U.S. Attorney’s Office – Middle District of Florida) announced that U.S. District Judge William Jung sentenced Dr. Richard Davidson to six years in federal prison for conspiracy to commit health care fraud. As part of his sentence, the court ordered Davidson to forfeit approximately $650,000 in funds traceable to the offense or as substitute assets. The court also entered a money judgment of $2.47 million and ordered $10.72 million in restitution. Davidson lost his medical license due to his conviction. Davidson pled guilty to the fraud scheme in 2020.
According to the plea agreement, in 2018, Davidson and his conspirators established a conglomerate of durable medical equipment (“DME”) supply companies. They lied to Medicare to secure billing privileges. The scheme involved placing the companies in the names of straw owners. By concealing their true ownership, the conspirators secretly gained control of multiple companies, which Medicare prohibits. This enabled the conspirators to submit high volumes of illegal DME claims while attempting to evade law enforcement scrutiny. In one year, through the conglomerate, Davidson and his conspirators submitted more than $20 million in illegal DME claims, resulting in more than $10 million in payments from Medicare and the Civilian Health and Medical Program of the Department of Veterans Affairs (“CHAMPVA”).
To attain such high volumes of claims, the conspirators used bribes and kickbacks. Specifically, Davidson and his conspirators illegally purchased thousands of signed doctors’ orders for DME braces from so-called “marketers.” The marketers, for their part, had generated the signed doctors’ orders under the guise of “telemedicine,” but no telemedicine had actually occurred. Instead, the “marketers” had bribed doctors to sign the DME brace orders that supported the illegal claims. Davidson and his conspirators paid millions to secure the illegal DME claims for submission to Medicare and CHAMPVA.