Sisters sentenced in $6 million Medicare fraud in Dearborn

Two sisters, Caridad and Clara Guilarte, opened a clinic in Dearborn that purported to offer infusion therapy to people from the AIDS virus — just like the suspicious clinics all over Miami-Dade. They were sentenced to 14 years in prison for defrauding Medicare of more than $6 million. / Office of Inspector General

MIAMI — When Medicare started paying attention to the spike in costly HIV therapy claims in South Florida, a group of criminal entrepreneurs headed north to the Detroit area to exploit new territory, authorities say. Leading the first wave in 2005 were two sisters, Caridad and Clara Guilarte, who opened a clinic in Dearborn, Mich., that purported to offer infusion therapy to people from the AIDS virus — just like the suspicious clinics all over Miami-Dade.

“They were trailblazers of the worst kind,” Justice Department trial attorney Benjamin Singer said at the sisters’ sentencings today in U.S. District Court in Miami. “They opened a new strain (of Medicare fraud) in Detroit.” The judge agreed, sentencing the sisters, who came to the United States from Cuba in the early 1980s, to 14 years in prison for defrauding Medicare of more than $6 million.

U.S. District Judge Cecilia Altonaga gave the Guilarte sisters — who fled to Latin America in 2007 when they learned they were under federal investigation — five more years in prison than prosecutors and defense attorneys had agreed on in their plea agreements on convictions for health-care-fraud and money-laundering conspiracies.

The judge said her initial intentions were to sentence the sisters to maximum prison terms — 30 years — but she was “tempered” by the disparity with lower sentences already imposed on other defendants in the Caridads’ case and related Detroit investigations.

The Guilarte sisters, who were indicted in Detroit in 2009, asked to have their case transferred to their hometown in Miami after they fled to Venezuela and were arrested in Colombia this year.

“We are tired of seeing the brazen, callous manner with which countless people defraud our Medicare system,” Altonaga said.. “We must stop the epidemic. ... Both of you took what you learned in South Florida and exported it to Michigan.”

Altonaga reminded Caridad, 54, and Clara, 57, that the United States welcomed both with “open arms” from communist Cuba and that they returned the privilege by stealing millions from the U.S. government’s health-care program for the elderly and disabled.

The Justice Department said the sisters — Caridad is a legal permanent resident, Clara a naturalized U.S. citizen —pocketed $3.8 million from their HIV-therapy scam in Detroit, but none of that money has been recovered. Both sisters apologized to the judge and the U.S. government, saying they “must pay” for their theft. But the judge didn’t buy it, saying at one point to Clara: “Even though you say you must pay, I have every conviction you will not pay.”

The Guilarte sisters were among 53 suspects charged with Medicare fraud in the Detroit area in June 2009, the first cases brought by a Justice Department strike force that opened in that city after the Medicare corruption crisis in Miami-Dade.

The takedown was such a big deal that U.S. Attorney General Eric Holder held a news conference in Washington to spotlight the spread of Medicare fraud.

“In fact, 10 of the defendants named in the indictments ... are alleged to have brought their fraud schemes from Miami to Detroit,” Holder said. “After we arrested criminals in Miami, their cohorts simply moved their schemes to Detroit.”

According to an indictment and other court records, the Guilarte sisters incorporated Dearborn Medical Rehabilitation Center in November 2005. The sisters joined with other indicted Miami collaborators: Daisy Martinez, Jose Rosario, Martin Tasis and Joaquin Tasis. “The four had previously been partners in fraudulent infusion therapy clinics in Miami,” Singer, the prosecutor, wrote in court papers. The sisters told Martinez, who would ultimately cooperate with authorities as part of a plea deal, that Medicare was “paying well” for HIV infusion therapy in Michigan.

But when Martinez and the three others traveled from Miami to Detroit to meet the sisters, the Guilartes said they had a problem: obtaining patients with valuable Medicare cards.

Collectively, the partners expanded the business, hired local recruiters and paid off inner-city Detroit black men with Medicare cards who were eligible for expensive HIV services.

The patients did not need the infusion drugs, nor did they receive them in most instances, prosecutors said. Moreover, the infusion therapy taken intravenously had been obsolete for more than a decade, replaced by stronger antiretroviral drugs. Nonetheless, Medicare, known for its lax scrutiny of bills, continued to pay out hundreds of millions of dollars for the obsolete HIV therapy over the past decade.

The Guilartes and their co-conspirators submitted $9.1 million in Medicare claims for purported HIV therapy and collected about $6.1 million from the federal program through 2007. Singer said in court papers that the Guilartes’ Dearborn clinic “spread like a veritable contagion” in the Detroit area, where other offenders opened clinics, tapping into the city’s poor and sick population of Medicare beneficiaries.

Hundreds of clinic owners, operators, recruiters, doctors and beneficiaries joined the Detroit Medicare racket, submitting millions of dollars in false claims “above and beyond (the Guilartes’) haul,” Singer wrote. “Every one of those clinics had at its origin (in the sisters’) scheme,” he wrote.

The Justice Department has charged about 140 people — many from Miami — with Medicare fraud in Detroit. So far, about two-thirds of them, including the Guilartes’ co-conspirators, have been convicted.