Fraud of the Month – March 2021

“Operation Brace Yourself”

BY ARINZE IFEKAUCHE | March 2, 2021

A Florida businesswoman was sued and prosecuted for operating a sprawling network of illegitimate durable medical equipment (DME) companies. Kelly Wolfe, of Indian Rocks Beach, FL admitted to masterminding a $400M DME scam aimed at Medicare and CHAMPVA (Civilian Health Civilian Health and Medical Program of the VA) recipients. She pled guilty to conspiracy to commit health care fraud and filing a false tax return.

Wolfe ran Regency Inc., a medical billing company she used to set up a series of fraudulent medical supply companies. She used Regency to falsify the documents necessary for her and her co-conspirators to use straw owners to procure and operate as many as 50 fly-by-night medical supply companies in the Tampa Bay-area. A local TV station investigated Wolfe’s activities, and found that DME offices tied to her criminal enterprise were routinely staffed with just a few employees and the office spaces were filled with hip, wrist, and knee braces. The recipients would then receive notification that the equipment had been billed to their Medicare or CHAMPVA plan.

According to court documents, Wolfe and her conspirators bribed doctors to approve unneeded equipment. Once the network was established, they billed more than $400M worth of claims to taxpayer funded plans –– justifying the enormous volume of claims as “telehealth visits.” Local seniors, unaware that they had been conscripted into the scheme, reported receiving medical braces in the mail that they never ordered from companies they’d never heard. The equipment was almost always from doctors to whom they’d never spoken. Wolfe’s DME companies were among the businesses raided in a nationwide fraud investigation entitled “Operation Brace Yourself.” Many of them shut down after the FBI raids. Wolfe’s tax charge stems from her admission to using Regency’s funds for personal items that did not qualify as legitimate business expenditures.

A former Regency employee turned whistleblower is entitled to 23% of the $20.3M False Claims Act lawsuit brought against Wolfe and her company. The suit resolves a number of claims that Regency violated the False Claims Act in a number of ways: including falsifying documentation in order to fraudulently establish DME corporations to bill for medically unnecessary DME equipment, and engaging in improper marketing practices that violated the Anti-Kickback Statute.

Wolfe faces a maximum penalty of 13 years in prison for her crimes. She is currently awaiting sentencing. 

Arinze Ifekauche is the Communications Director of the Coalition Against Insurance Fraud. He can be reached at arinze@insurancefraud.org.