Billed $34.8 Million, Sentenced to 33 Months: What Federal Medicare Brace Cases Actually Turn On

A federal press release that leads with a $34.8 million figure and ends with a 33 month sentence is telling you something about how these cases really work. On September 4, 2026, the Justice Department announced that two Florida men who owned seven durable medical equipment companies were sentenced for a conspiracy to bill Medicare for orthotic braces that beneficiaries did not need and often did not ask for. One received 33 months. The other received 24 months. If you own a DME company in South Florida, or you are a physician whose signature is sitting in someone else's billing file, the distance between that headline number and those sentences is the part worth studying.

Seven Florida DME companies, orthotic braces shipped to beneficiaries nationwide, and $34.8 million billed to Medicare. The sentences were 33 and 24 months. The distance between those numbers is the defense.

Key Takeaways

• Federal Medicare brace prosecutions are charged under 18 U.S.C. 1349 conspiracy and 18 U.S.C. 1347 health care fraud, with kickback counts under 42 U.S.C. 1320a-7b.
• Amount billed and amount received are different numbers, and the gap between them is often the single most valuable argument at sentencing.
• Both defendants in the September 2026 Southern District of Florida case pleaded guilty to one conspiracy count and received sentences under three years.
• Shifting billing among affiliated companies to evade Medicare payment suspensions is treated as evidence of intent, not as ordinary business restructuring.
• The Sentencing Commission's revised loss table takes effect November 1, 2026, and changes the math for anyone sentenced on or after that date.

What Actually Happened

According to the Justice Department, two men who lived in Miami and Miramar owned and operated seven Florida durable medical equipment supply companies. Through those companies they submitted claims to Medicare for orthotic braces. The government's position was that the braces were medically unnecessary, that the supporting doctors' orders were obtained by paying illegal kickbacks and bribes, and that the braces were shipped to beneficiaries nationwide who neither requested nor needed them.

The detail that carries the most weight is the billing pattern. The government alleged that when one company drew a Medicare payment suspension, the fraudulent billing moved to another company under the same ownership. That is not a paperwork problem. Prosecutors read it as proof that the operators knew the claims were false and were managing around detection rather than correcting the underlying conduct.

A suspension notice on one desk and a second company's letterhead beside it is the fact pattern prosecutors build an intent case around. The government does not read it as restructuring. It reads it as managing around detection.

Both men pleaded guilty in May 2026 to a single count of conspiracy to commit health care fraud. Sentences came down on September 4, 2026 in the Southern District of Florida. The FBI Miami Field Office and HHS-OIG investigated, and trial attorneys from the Justice Department's National Fraud Enforcement Division prosecuted the case.

What the Government Is Actually Building

The Justice Department stood up the National Fraud Enforcement Division in April 2026, and this case is a clean example of what that reorganization looks like on the ground. Health care fraud matters that once ran entirely through a local Strike Force are now staffed out of a national component with its own charging priorities. For a target in Florida, that changes who is making decisions about your case and what leverage a local relationship actually buys.

The investigative entry point has shifted too. In DME matters, the government rarely starts with a whistleblower anymore. It starts with claims data. Billing outliers, ordering physicians whose volume does not match their practice, and beneficiaries clustered in states where the supplier has no physical presence all surface without anyone filing a complaint. By the time agents make contact, the government usually has the claims history and the bank records.

By the time the FBI and HHS-OIG arrive at the warehouse, the claims data and the bank records are already in hand. The search is confirmation, not discovery.

South Florida remains one of the most active federal health care fraud enforcement zones in the country, and the Strike Force program has charged more than 6,200 defendants nationally since 2007. Any Southern District of Florida defense attorney who handles these matters will tell you the same thing: the district's prosecutors have seen every version of the DME fact pattern.

Exposure and Charges

Health care fraud under 18 U.S.C. 1347 carries up to ten years per count, and up to twenty years if the conduct results in serious bodily injury. Conspiracy under 18 U.S.C. 1349 carries the same maximum as the substantive offense, which is why the government so often charges the conspiracy alone and lets the guideline calculation do the rest of the work.

Paying for signed physician orders brings in the federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b. An Anti-Kickback Statute defense in a DME case usually turns on whether the payments were for legitimate services and whether the arrangement fits a safe harbor, not on whether money changed hands. A parallel civil track runs alongside it. The False Claims Act, 31 U.S.C. 3729, permits treble damages plus a per-claim penalty.

The Distance Between $34.8 Million and 33 Months

Here is where the September case becomes instructive for anyone under investigation. The guideline range in a fraud case is driven by loss under Section 2B1.1. The government's opening position is almost always the total amount billed. In this matter that number was $34.8 million. The actual profits were reported at roughly $1.4 million and $2.3 million. Sentences landed at 33 and 24 months. Whatever combination of loss argument, role adjustment, acceptance of responsibility, and 18 U.S.C. 3553(a) mitigation produced that outcome, it moved the result a very long way from where the headline number pointed.

Anyone facing sentencing in this space should also be tracking the calendar. The Sentencing Commission adopted a restructured loss table that takes effect November 1, 2026, collapsing sixteen tiers into eight and raising the dollar thresholds at nearly every level. It is not retroactive. It applies to defendants sentenced on or after that date, which makes sentencing timing a live strategic question in pending cases right now.

Critical Mistakes People Make Early

The first is treating a Medicare payment suspension as an administrative dispute. A suspension is frequently the visible edge of a criminal investigation that started months earlier. Responding to it as a billing appeal, without a Medicare suspension defense strategy that accounts for the criminal exposure, hands the government a written account of your position before you know what it already has.

The second is opening a new company. Moving billing to an affiliated entity after a suspension is the exact conduct the government described in the September case, and it converts an argument about billing judgment into an argument about concealment. If a suspension has landed, that decision needs counsel before it is made, not after.

The third is talking to agents. Investigators who arrive asking about doctors' orders are not gathering context. A false or careless answer is a separate federal crime under 18 U.S.C. 1001, chargeable even if the underlying billing turns out to be defensible. The same caution applies to a federal grand jury subpoena or an HHS-OIG subpoena.

The fourth is waiting. People receive a federal target letter and spend weeks deciding whether it is serious. A target letter means the government believes it has substantial evidence tying you to a crime. That is the moment when pre-indictment work still has room to operate, and it is the moment most often wasted.

A Strategic Defense Approach

Pre-indictment is where DME cases are won, narrowed, or lost. Before charges exist, the government's theory is still forming, and a pre-indictment defense lawyer can sometimes reach the line prosecutor with facts that change the shape of the case: a physician relationship that was genuinely clinical, billing performed by an outside company, a compliance program the client actually followed. Once an indictment returns, that flexibility mostly disappears.

Attacking loss is the highest-value technical work in a health care fraud matter, and it starts long before sentencing. The government builds loss from total billings. The defense argument is that billed amounts include claims Medicare denied, claims that were medically supportable, and claims tied to beneficiaries who received and used the equipment. Every dollar moved out of the loss figure is potential offense levels. PSR objections and a supported federal sentencing memorandum are where that argument gets made, and they depend on claims analysis done months earlier.

"Attacking loss is the highest-value technical work in a health care fraud matter, and it starts long before sentencing. Every dollar moved out of the loss figure is potential offense levels."— Aaron M. Cohen, AMC Defense Law

Cooperation is a real decision and not a default. In a multi-company DME structure, the government usually wants the ordering physicians and the marketing intermediaries. A client in the middle of that chain has something to offer, but cooperation carries licensure, exclusion, and civil consequences that need to be priced first. In a physician federal investigation defense, exclusion from federal health care programs is frequently a worse practical outcome than the sentence.

Why Timing Matters Right Now

Two clocks are running. The first is the investigation. Claims data does not go stale, but the government's theory hardens as agents interview witnesses and build a chronology. Facts that would have redirected the case in month two rarely land the same way in month fourteen.

The second is the November 1, 2026 guideline change. The revised loss table is a meaningful difference in exposure, and it applies based on sentencing date rather than offense date. Anyone under federal investigation in Florida should be making both calculations while there is still room to act on them.

Common Questions

Facing a Federal Health Care Fraud Investigation in Florida?

If you own or operate a durable medical equipment company, sign orders for one, or have received a payment suspension, a subpoena, or a target letter, confidential counsel early is the most useful step available to you. AMC Defense Law represents individuals and entities in federal health care fraud investigations and prosecutions, including DME, kickback, and billing matters, in Florida and nationwide. Contact the firm to arrange a confidential consultation about your situation.

If you or your loved ones have been arrested, call Aaron M. Cohen, 24 hours a day to get help.

Aaron M. Cohen, Esq. is the founding attorney of AMC Defense Law in Boca Raton, Florida, with more than 30 years defending complex federal and state criminal matters nationwide.