Healthcare Fraud Scheme Results in 17-Year Sentence for Florida Businessman
A South Florida businessman, Michael Kochen, has been sentenced to 17 years in prison following his conviction for healthcare fraud targeting the Medicare program. The verdict was delivered after a federal jury found him guilty of orchestrating bribes for patient referrals and billing Medicare $35 million for unnecessary medical services. U.S. District Judge Donald Graham also mandated Kochen to repay $19 million to Medicare.
Kochen operated approximately 30 medical equipment companies under the CLADD Group LLC, specializing in durable medical equipment such as orthopedic braces. These products were supplied to patients through referrals from doctors linked to a telemarketing company owned by Sandro Herek, who also received kickbacks for referrals. Herek, residing in Coral Springs, was sentenced to over seven years in prison for his involvement.
Both men were convicted in December on charges of conspiracy to commit healthcare fraud and related bribery offenses. They are required to surrender to authorities on August 9. The presiding judge imposed sentences shorter than federal guidelines due to inconsistencies in sentencing for similar fraud cases in the region.
Federal prosecutors recommended a 20-year sentence for Kochen, emphasizing the severity of his fraudulent activities. "We have a defendant who has still not accepted responsibility," stated Assistant U.S. Attorney Roger Cruz. Another prosecutor referred to these actions as part of a comprehensive fraud scheme.
In defense, Kochen's legal team argued that his activities were not as egregious as other cases in the area, highlighting that actual medical supplies were delivered to patients. Defense attorney Christopher Cavallo noted differences between Kochen's operations and cases where billed items never reached patients.
Despite acknowledging the jury's decision, Kochen sought leniency, citing his familial responsibilities. Herek's attorney, David Tarras, argued that the evidence against Herek was insufficient and emphasized that his client did not migrate from Brazil with fraudulent intentions.
The indictment accused Kochen and his father, Marcelo, of facilitating kickbacks to Herek in exchange for patient referrals without medical necessity. This practice exploited beneficiaries of Medicare Advantage Plans, which are managed by private insurers but funded by the federal government for seniors.
Federal agencies, including the FBI and the Department of Health and Human Services, investigated the case, which encountered potential delays after a Miami-based federal prosecutor was dismissed. However, a schedule adjustment enabled new prosecutors to continue the proceedings, culminating in the trial and subsequent convictions.