An Illinois man plans to plead guilty in Rhode Island to charges he shipped unwanted "erectile pumps" to diabetes patients as part of a Medicare fraud scheme, federal prosecutors said Thursday.
Gary Winner, 49, is accused of purchasing $26 penis enlargers from an adult website, repackaging them and shipping them to patients with information claiming the devices helped "bladder control, urinary flow and prostate comfort."
Prosecutors say he then charged Medicare $284 each as part of the scheme, claiming the pumps treated erectile dysfunction.
Rhode Island U.S. Attorney Peter F. Neronha said the Northbrook, Ill., resident also agreed to forfeit $2 million that he collected in the fraud, which began in 2005. Winner and his defense attorney did not immediately return messages on Thursday.
In a plea agreement signed Tuesday, Winner has agreed to plead guilty to five charges, Neronha said, including health care fraud, the introduction of an adulterated and misbranded medical device into interstate commerce and money laundering.
Prosecutors say Winner targeted Medicare beneficiaries through his medical equipment company, Planned Eldercare, based in Buffalo Grove, Ill., and persuaded patients to provide their Medicare information by offering free medical equipment and supplies.
The plot targeted arthritis and diabetes patients through telemarketing, prosecutors said.
For male diabetes patients, Winner told his staff to say an erectile pump would help with prostate problems and blood circulation, prosecutors said.
In charging Medicare, Winner claimed the devices treated erectile dysfunction, prosecutors said. Medicare reimburses for products treating organic impotence and erectile dysfunction. Medicare requires the devices be "medically necessary" and prescribed by a physician, prosecutors said. The erectile pumps shipped by Winner served "no medical purpose," they said.
When employees confronted Winner about sending out supplies for arthritis patients regardless of need, he is accused of saying "it doesn't cost the client anything as the government is paying for it, and that the government would just print more money, so order more." Prosecutors also say he told patients inquiring about items they didn't order to "put them under the sink."
Winner is also charged with waiving copayments for Medicare patients, which the program prohibits. By doing this, Winner induced beneficiaries to accept products they had not ordered and not report the fraudulent billing to Medicare, prosecutors said.
A change-of-plea hearing has been scheduled for Oct. 18. Winner faces up to 33 years in prison and $760,000 in fines, prosecutors said.