A man from Fayetteville, New York, has pleaded guilty to charges related to a kickback scheme involving Medicare and Medicaid. Timothy Klein, 49, entered his plea before U.S. District Judge Lawrence J. Vilardo, admitting to conspiracy to pay and receive health care kickbacks. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
According to Assistant U.S. Attorneys Franz M. Wright and Paul E. Bonanno, Klein operated the company JRS Group, LLC between February 2017 and September 2018. During this period, Klein conspired with others to defraud Medicare and Medicare drug plan sponsors by submitting claims for prescription drugs that were medically unnecessary and obtained through kickbacks and bribes.
Prosecutors detailed how Klein recruited insurance brokers through his company JRS to contact Medicare beneficiaries and offer them prescription medications at no cost, regardless of medical necessity. "Klein paid kickbacks and bribes to the insurance brokers, for Medicare prescriptions paid for through the beneficiaries' Part D plan, a federal funded program," stated the press release.
Additionally, Klein paid an individual and their company Advanced Telehealth to provide doctors who would perform telemedicine visits with the beneficiaries recruited by insurance brokers. After these telemedicine visits, doctors would sign prescriptions that had been preselected or filled out by Klein.
Klein also made agreements with ProRX and SunRise Pharmacy in which the pharmacies paid him a sum of money for each filled prescription referred by him. For example, on September 17, 2018, he received a check totaling $95,479.05 from ProRx as payment for prescriptions he referred.
The investigation was conducted by several agencies including the Federal Bureau of Investigation; U.S. Department of Health and Human Services Office of Inspector General; New York State Department of Financial Services; U.S. Department of Defense Criminal Investigative Service; and the U.S. Postal Inspection Service Boston Division.
Sentencing is scheduled for June 2, 2026 before Judge Vilardo.
