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Palm Beach Gardens Man Sentenced in Healthcare Fraud Scheme After U.S. Department of Labor Investigation
MIAMI, FL – After an investigation by the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the U.S. District Court for the Southern District of Florida has sentenced Lanny Todd Fried – of Palm Beach Gardens, Florida – to 57 months in prison and 36 months of supervised release; and ordered him to pay a $81,163 fine for his role in a healthcare-related, money-laundering scheme.
EBSA investigators determined Fried signed an employment agreement to serve as a sales representative with Smart Lab LLC, a confirmatory urinalysis testing facility located in Palm Beach Gardens, Florida. The agreement enabled him to receive commissions of approximately 50 percent of the insurance reimbursements for the substance abuse facilities he referred to Smart Lab.
EBSA found that these commissions paid to Fried and other Smart Lab sales representatives, were in fact kickback payments to be paid to individuals and entities associated with local substance abuse recovery centers for the referral of excessive, medically unnecessary, fraudulent, and duplicative confirmatory drug testing that was billed to healthcare benefit programs and insurance companies. From 2015 through 2017, Fried was paid more than $600,000 generated from the fraud. Fried, in turn, used a portion of the money to pay out illegal kickbacks in an effort to encourage more referrals.
Investigators also determined that Fried recruited friends and business associates to sign employment agreements with Smart Lab for the purpose of engaging in similar healthcare fraudulent activity.
"Healthcare fraud victimizes both the individuals being targeted, and the community at-large," said Employee Benefits Security Administration Regional Director Isabel Colon, in Atlanta. "Anyone EBSA finds to be perpetrating such crimes will be held accountable. The U.S. Department of Labor is committed to ensuring that employee benefits are not abused."
In November 2018, the court sentenced Smart Lab co-founders H. Hamilton Wayne to 63 months in prison, followed by 3 years of supervised release, and a $50,000 fine; his brother, Justin Wayne to 46 months in prison, followed by 3 years of supervised release, and a $20,000 fine; and their brother, Ethan Wayne to 36 months of probation and a $20,000 fine. In addition, the court ordered $3,851,733 in restitution by H. Wayne and $2,897,389 in restitution by Justin Wayne. The court also ordered Smart Lab LLC to pay $2,897,389 in restitution. Another of Fried's associates, Lawrence Weisberg was also sentenced in November to 6 months in prison and 12 months of supervised release. The court also ordered Weisberg to pay a $7,500 fine, and forfeit $41,234 for his role in the scheme.
EBSA, the FBI, the IRS, the Amtrak Office of the Inspector General, the Office of Personnel Management-Office of the Inspector General, the Florida Department of Insurance Fraud, the Palm Beach Sheriff's Department, and other local police departments combined efforts in the investigation. The U.S. Attorney's Office for the Southern District of Florida prosecuted the case.
Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.