MIAMI — Lawrence S. Duran and Marianella Valera pleaded guilty in federal court Thursday to a massive conspiracy to steal $200 million from the taxpayer-funded Medicare program.
The Miami couple who directed the nation's largest mental health racket could get more than 20 years in prison.
Duran, 49, and Valera, 40, owned a chain of seven mental health clinics operated by a company called American Therapeutic Corp. The couple, along with their company and subsidiaries, were indicted in October with conspiring to defraud Medicare in a major Justice Department case that includes 22 other defendants, from senior company employees to psychiatrists to patient recruiters.
"They reaped millions in illegal profits by operating a sham mental health care company that provided unnecessary and illegitimate treatments to patients, many of whom were recruited through bribes and kickbacks, and then they laundered the proceeds," Assistant Attorney General Lanny A. Breuer said in a statement.
He called the $200 million scam a staggering sum.
A week ago, the company's marketing director, Margarita Acevedo, 41, became the first defendant to plead guilty. Acevedo, who is cooperating with authorities as part of her plea agreement, said she paid millions in kickbacks to South Florida recruiters associated with assisted-living facilities and halfway houses in exchange for supplying therapy services to thousands of patients who didn't need them.
Among American Therapeutic's patients: elderly people suffering from dementia and Alzheimer's disease who could not have benefited from the costly group therapy sessions, according to prosecutors.
"In fact, these patients were not eligible for this program, services were not provided as billed, and patient charts were altered so that Medicare inspections would not uncover the fraud," wrote a magistrate judge, summarizing the government's case before ordering the couple's pretrial detention in November.
Duran and Valera, co-owners of American Therapeutic, pleaded to the 38-count indictment after extensive negotiations for a plea deal failed. It charged them with conspiring to defraud Medicare by filing false claims for mental health services; paying kickbacks to patients, patient recruiters and operators of assisted-living facilities; and laundering money through a subsidiary company called MedLink.
A major dispute over how much the couple bilked from Medicare must still be resolved before sentencing. Their lawyers, Lawrence Metsch and Arthur Tifford, have argued that the figure should be $83 million, the actual amount the federal program paid their company between 2003 and 2010. Justice Department trial attorney Jennifer Saulino has argued that the figure should be $200 million, the amount their company billed Medicare — or the "intended loss."
The calculation of the loss to Medicare will have a significant influence on their prison sentences, which could range from 10 to 20-plus years.
Federal agents have frozen the couple's personal and corporate bank accounts. They also possess about $7 million in assets, such as luxury cars, real estate and jewelry that authorities seized with a temporary restraining order.