A New York man was sentenced today to 12 years in prison and ordered to pay over $336 million in restitution for a years-long fraud scheme in which he and his co-conspirators, including physicians throughout the country, defrauded multiple health insurance companies out of hundreds of millions of dollars.
According to court documents and evidence presented at trial, Mathew James, 54, of East Northport, operated medical billing companies to provide billing services for physicians—primarily plastic or orthopedic surgeons throughout the United States — and used his companies to carry out a massive scheme to defraud insurance companies.
James worked as a third-party medical biller, submitting claims to insurance companies and, when necessary, requesting reconsideration or appeals of denied claims. Officials stated that he typically received a cut of the money the insurance companies paid.
The evidence showed that James billed for procedures that were either more serious or entirely different than those his doctor-clients performed.
In addition, James made thousands of calls in which he impersonated patients and patient’s relatives to induce insurance companies to reconsider denied claims or pay more on approved claims, resulting in tens of millions of dollars in additional reimbursement to his doctor-clients and from which he received a percentage of the fraudulent proceeds.
James also directed his doctor-clients to schedule elective surgeries through the emergency room so that insurance companies would reimburse them at substantially higher rates.
When insurance companies denied the inflated claims, James impersonated patients to demand that the insurance companies pay the outstanding balances of tens or hundreds of thousands of dollars.
A federal jury convicted James on July 13, 2022, of healthcare fraud, conspiracy to commit healthcare fraud, wire fraud, and aggravated identity theft.
The FBI investigated the case.
Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Catherine Mirabile and Antoinette Rangel for the Eastern District of New York prosecuted the case. Assistant U.S. Attorney Tanisha Payne for the Eastern District of New York is handling asset forfeiture.
The Fraud Section leads the Criminal Division’s efforts to combat healthcare fraud through the Health Care Fraud Strike Force Program.
Since March 2007, the program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants, who collectively have billed federal healthcare programs and private insurers more than $27 billion.
. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.