Illinois man sentenced in erectile pump fraud case
Saturday, February 11, 2012
PROVIDENCE, R.I. (AP) — An Illinois man was sentenced Friday by a federal judge in Rhode Island to more than three years in prison for shipping unwanted penis enlargers to diabetes patients as part of a larger fraud scheme that prosecutors say bilked $2.2 million from Medicare over four years.
Gary Winner, 50, of Wheeling, Ill., must also forfeit more than $2.2 million that prosecutors say Medicare lost because of the plot.
U.S. District Court Judge William E. Smith also ordered Winner to pay a $12,500 fine and serve three years of supervised release following his prison sentence.
Lawyers for Winner had sought a maximum sentence of 1 1/2 years. The guidelines for determining Winner’s punishment recommended that he get a prison term between just under six years and a little more than seven years. Winner’s attorneys argued that punishment was too harsh, according to court papers.
Winner’s attorneys also asked that his emotional problems and difficult childhood, including physical and psychological abuse at his father’s hands, be taken into consideration, court papers show.
Prosecutors sought a prison term at the low end of the sentencing range. Winner pleaded guilty in November to two counts of health care fraud, the introduction of an adulterated and misbranded medical device into interstate commerce and money laundering. He faced up to 33 years in prison.
Winner purchased penis enlargers for an average of $26 each from online sex shops and then repackaged and shipped them to patients with information claiming the so-called “erectile pumps” helped “bladder control, urinary flow and prostate comfort,” according to court papers outlining the charges against him.
The online stores peddling adult sexual products sold the devices under a variety of names, prosecutors said.
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, prosecutors said.
The plot targeted arthritis and diabetes patients through telemarketing, prosecutors said.
Diabetes patients received the penis enlargers repackaged in clear plastic bags with an information sheet claiming “regular use” increases blood flow in the urinary tract and prostate. Winner then charged Medicare an average of $284 each for a total of $370,305, authorities said.
In charging Medicare, Winner claimed the devices treated erectile dysfunction, prosecutors said. Medicare reimburses for products treating organic impotence and erectile dysfunction and requires the devices be “medically necessary” and prescribed by a physician. The erectile pumps shipped by Winner served “no medical purpose,” prosecutors said.
Winner is accused of swindling an additional $1.8 million by seeking reimbursement for arthritic packages he claimed Medicare beneficiaries and their physicians ordered.
When employees confronted Winner about sending out supplies regardless of need, authorities allege he responded: “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.”
Prosecutors also alleged Winner waived 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.
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