A Johnson County man has pleaded guilty in federal court to running an online platform that created fake doctors’ orders that enabled him and two other suspects to defraud Medicare and other federal health care programs of more than $1 billion.
On Feb. 20 in the U.S. District Court for the Southern District of Florida, Gregory Schreck, 50, pleaded guilty to conspiracy to commit health care fraud, admitting that he helped in running an internet-based service that carried out the scheme.
In July 2023, Schreck, along with Brett Blackman, also of Johnson County, and Gary Cox, of Arizona, were charged by then-U.S. Attorney General Merrick Garland for being part of what Garland at the time called “one of the largest health care fraud schemes” ever prosecuted by the Department of Justice.
The crimes took place in Miami-Dade and Palm Beach counties in Florida, and charges were filed in the U.S. District Court for the Southern District of Florida.
Initially, federal prosecutors’ indictment accused the men of defrauding federal health care programs of nearly $2 billion. This week’s announcement from the Department of Justice said Schreck pleaded guilty to a more than $1 billion fraud scheme.
Schreck’s attorney did not immediately return a request for comment from the Johnson County Post for this story.
The business was based in Overland Park
The three men charged in the case ran HealthSplash Inc., based in Overland Park, with Blackman acting as the CEO, Schreck as the vice president and Cox as the director.
HealthSplash’s LinkedIn page still lists an address at 7007 College Blvd.
According to records with the Kansas Secretary of State’s office, the company’s corporate address was also once listed at 12022 Blue Valley Pkwy.
Originally formed in 2017, state filings show the company’s status is now forfeited.
The last annual report the state has on file for the company was in 2021.
How the scheme worked
In his plea, Schreck admitted to using a software platform called DMERx to generate and sell templated doctors’ orders for such things as orthotic braces and prescription creams that would be charged to Medicare and the civilian medical program of the Department of Veterans Affairs.
According to a U.S. Department of Justice press release, the three men targeted hundreds of thousands of people who qualified for federal health care plans from around February 2015 through October 2020 through television ads, telemarketing campaigns and misleading mailers.
People who responded to the ads and calls would be connected with off-shore call centers and up-sold to medical items with the highest reimbursements, according to the Department of Justice public affairs office.
The respondents’ personal information then would allegedly be used to generate false paperwork concealing that no in-person examination by a doctor had taken place.
The software-generated doctors’ orders were also sold to medical device suppliers, pharmacies and telemarketing companies for kickbacks and bribes, according to the indictment.
The suppliers of the equipment and pharmacies that paid illegal kickbacks in exchange for these doctors’ orders generated through DMERx billed Medicare and other insurers more than $1 billion, the Department of Justice said.
More than $360 million of the false and fraudulent claims were paid through Medicare and insurers.
Schreck faces federal prison time
Schreck faces a maximum penalty of 10 years in prison.
A sentencing hearing will be scheduled at a later date, a Department of Justice press release said.
Blackman and Cox have jury trials scheduled to start on May 5 in the U.S. District Court for the Southern District of Florida.
They face three felony charges of conspiracy to commit health care fraud and wire fraud, conspiracy to pay and receive health care kickbacks and conspiracy to defraud the United States and make false statements in connection with health care matters.
Other Johnson County court news: Man sentenced to more than 11 years in prison for DUI crash that killed Lenexa boy
