SAN DIEGO (CNS) - A physician and an owner of a Carson-based medical supply company, who are accused of submitting $1.3 million in fraudulent power-wheelchair claims to Medicare, pleaded not guilty Tuesday to federal conspiracy, health care fraud and witness tampering charges.
Dr. Irving Schwartz, who was arrested in Yuba City last week, is charged with conspiracy to receive health care kickbacks and defrauding the Medicare trust fund. He remains free on $75,000 bond.
Jose Melendez, of Oceanside Medical Services, is charged with conspiracy, witness tampering and health care fraud.
Melendez faces up to 20 years in prison if convicted, while Schwartz could get up to five years if he's found guilty.
According to the indictment, the scheme focused on the sale of fraudulent power wheelchair prescriptions, with the goal of obtaining reimbursements from Medicare for chairs that patients did not need, and in some cases, did not want.
The indictment alleges that Schwartz and a co-conspirator would travel to El Centro to find elderly Medicare patients.
Schwartz would allegedly write the patients prescriptions for power wheelchairs, even though the patients did not need them and could walk without assistance.
According to the indictment, Schwartz collected a $300 kickback in exchange for each power wheelchair prescription.
One of the doctor's co-conspirators would then sell the power wheelchair prescriptions to Melendez, charging him $1,000 per prescription, according to the indictment.
Melendez, in turn, allegedly sold some of the power wheelchair prescriptions to other co-conspirators, charging an additional mark-up on each prescription.
As the last step in the scheme, Melendez and other co-conspirator owners of medical supply companies would submit the fraudulent prescriptions to Medicare for reimbursement, billing up to $5,865 for each power wheelchair, according to the indictment.
In separate but related cases, three co-conspirators, Gloria Hernandez, Aristeo Tavares and Laura Tavares have pleaded guilty, prosecutors said.
Schwartz and Melendez will be back in court Sept. 10 for a motion and trial-setting hearing.