South Florida DME Medicare Fraud: Why the Money Laundering Count Drives the Sentence and the Forfeiture

Three South Florida men just learned how a durable medical equipment case becomes a prison case. None of the three pleaded guilty to health care fraud. They pleaded guilty to laundering the money. They still went to federal prison for five to six and a half years, lost millions to forfeiture, and owe millions more in restitution. If you run a DME company, a marketing operation that feeds one, or any business that touches Medicare dollars, that distinction is the whole game, and most people in this space do not understand it until it is too late.

The shell company paper trail is concrete and hard to explain away. It converts a billing dispute into a financial crime that a jury understands.

What Actually Happened

According to the Department of Justice, the defendants owned and operated two durable medical equipment companies: Braces and Orthotics LLC in the Eastern District of Virginia and Stone Oak Durable Medical Equipment LLC in the Southern District of Florida. Between January 2022 and February 2023, those companies submitted about $6.9 million in fraudulent claims to Medicare for orthotic braces that patients did not need and that were never eligible for reimbursement.

The mechanics are familiar to anyone who has watched this enforcement area. The companies paid kickbacks and bribes to an offshore marketing company. In exchange, that marketer delivered Medicare beneficiaries and signed doctors' orders. The orders made the claims look clinically supported. They were not. Once Medicare paid, the proceeds moved through a chain of shell companies the defendants and their associates controlled, which is how more than $2.2 million was laundered out for their own benefit.

All three pleaded guilty in December 2025 to conspiracy to commit money laundering. One defendant received 70 months, another 78 months, and the third 60 months. The court ordered two of them to pay $2,217,840.35 in forfeiture and $3,016,324.20 in restitution, and ordered the third to pay $1,723,773.18 in forfeiture and $2,249,392.09 in restitution.

The Money Laundering Count Is the Real Story

Here is the point most operators miss. The government did not need a health care fraud conviction to send these men to prison. It secured guilty pleas to conspiracy to commit money laundering under 18 U.S.C. § 1956. In a DME case, the fraud generates the dirty money, but the laundering count is often where the heavier exposure and the forfeiture actually live.

Money laundering charges under Section 1956 and the related transactional offense under 18 U.S.C. § 1957 carry their own statutory maximums: up to 20 years on the substantive 1956 counts and 10 years on 1957. They also drive forfeiture of every dollar traced through the scheme. The moment fraud proceeds get pushed through a shell company to disguise their source, a second and independent felony is complete. Prosecutors like laundering counts because the shell company paper trail is concrete, it is hard to explain away, and it converts a billing dispute into a financial crime that a jury understands.

Where the Exposure Lives: Charges, Statutes, and the Math

A DME scheme that touches Medicare can be charged across several statutes at once. The core health care fraud offense is 18 U.S.C. § 1347, which carries up to 10 years per count, or 20 years if the offense results in serious bodily injury. The kickback arrangement with the offshore marketer is its own crime under the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, punishable by up to 10 years per violation. The laundering and the shell company transactions add Sections 1956 and 1957 on top.

Sentencing is driven by loss. Under the federal guidelines, the intended loss to Medicare, here roughly $6.9 million, sets the base offense level, and enhancements stack for the number of victims, the use of sophisticated means like shell entities, and a defendant's role. Forfeiture runs on a parallel track under 18 U.S.C. § 982, which is why the forfeiture and restitution figures in this case add up to more than the $2.2 million that was laundered. The government can pursue the fraud loss as restitution to Medicare and the laundered proceeds as forfeiture at the same time. They are not the same number, and a defendant can be ordered to pay both.

The Mistakes DME Operators and Marketers Make Early

Treating an HHS-OIG subpoena or a payment suspension as a billing problem to be handled by a biller or a consultant, instead of the opening move in a criminal investigation.

Talking to federal agents who show up at the office or the home without counsel present, on the theory that cooperating early looks good. It does not. It locks in statements before anyone knows what the government has.

Assuming the marketing company absorbs the kickback risk. It does not. Under 42 U.S.C. § 1320a-7b, paying and receiving are both crimes, and marketers, lead generators, and the operators who hire them are all chargeable.

Believing that no indictment means no exposure. By the time these three were sentenced, the investigation had already run for years. The quiet period is when the case is built.

Continuing to move money through related entities after learning of an inquiry, which can convert a fraud case into a fresh obstruction or laundering count.

The Strategic Defense Approach

The cases in this space are won or lost before the indictment, not at sentencing. When a DME or marketing operator comes in during the investigation stage, there is real room to work: testing whether the government can actually prove knowledge and intent, separating a legitimate marketing or consulting relationship from a disguised kickback, and getting ahead of the loss calculation before the government locks in an inflated number.

Early federal investigation defense is about controlling three things. First, the narrative, which means making sure the government hears the defense theory of the billing and the marketing relationship before it commits to a charging theory. Second, the client's exposure on the money side, because positioning on forfeiture and restitution early can change the shape of any resolution. Third, the cooperation question, which is a genuine fork in the road that has to be analyzed honestly rather than reflexively, with a clear-eyed read on what the client knows, who else is involved, and whether substantial assistance is realistic.

If charges do come, the work shifts to the loss number, the role adjustment, and the laundering counts, because shaving the guideline loss and defeating or limiting the sophisticated means and laundering enhancements is often worth more real time than any single trial argument.

"The window to influence the outcome is the quiet stretch most targets spend hoping the problem resolves itself. It does not resolve itself, and waiting is the single most expensive choice a target in this district can make."— Aaron M. Cohen, AMC Defense Law

Why Timing Matters in South Florida

South Florida is not a neutral venue for these cases. The Southern District of Florida runs one of the most aggressive Medicare fraud enforcement operations in the country, with a strike force model that has been refined over almost two decades and prosecutors who have tried DME, telemedicine, and laundering cases many times over. They know the shell company playbook because they have seen it repeatedly, and they coordinate with HHS-OIG and federal financial investigators from the start.

That changes the calculus on timing. Charging decisions are still fluid while the investigation is open. Loss figures are not yet locked. The decision about who gets charged and who becomes a witness is frequently still in play. Once the indictment lands, those levers are gone. The window to influence the outcome is the quiet stretch most targets spend hoping the problem resolves itself. It does not resolve itself, and waiting is the single most expensive choice a target in this district can make.

Common Questions

Facing a Federal Health Care Fraud or Money Laundering Investigation in South Florida?

AMC Defense Law represents DME operators, marketers, physicians, and business owners in federal health care fraud and money laundering investigations and prosecutions, in the Southern District of Florida and in federal districts nationwide. The firm handles target letter responses, HHS-OIG subpoenas, pre-indictment negotiation, proffer preparation, and sentencing advocacy. If federal agents have contacted you or your company, or if you believe you are under investigation, the time to act is now, before charging decisions are made. Consultations are confidential.

A DME operator or marketer who retains counsel during the investigation stage, before any indictment, has options that are gone once the grand jury acts.

If federal agents have contacted you, your company has received a subpoena or payment suspension, or you believe you are under investigation for healthcare fraud or money laundering, call Aaron M. Cohen, 24 hours a day to get help.