DOJ: Florida man planned to use coronavirus business loans to defraud Medicare $5.6M

Coconut Creek man accused of seeking PPP loans, health care fraud

FILE - In this Nov. 28, 2018, file photo, the Department of Justice seal is seen in Washington, D.C. (AP Photo/Jose Luis Magana, File) (Jose Luis Magana, Copyright 2018 The Associated Press. All rights reserved)

BROWARD COUNTY, Fla. – A Broward County man was arrested this week on federal charges after Department of Justice investigators say he sought loans meant to help businesses during the coronavius pandemic in a scheme to defraud Medicare of at least $5.6 million by filing claims for orthotic braces for people who did not want or need them.

The loans meant for businesses hardest hit by the economic coronavirus fallout known as paycheck protection loans have been fraught with controversy in recent weeks as political groups and large corporations were awarded loans then later returned the funds, according to the Associated Press. The forgivable loans authorized under the federal CARES Act are for small businesses to help with payroll, mortgages, rent and utilities.

According to the DOJ, Carolos Belone, 37, the owner of R&S Pharmacy Inc., a medical equipment company, submitted several PPP loan applications to financial institutions. Investigators said Belone supplied fake tax documents and a doctored profit and loss statement for his business, which included fraudulent claims to Medicare for orthotic braces.

Orthotic braces can be used to support hips, knees or other joints.

Investigators interviewed several patients who said they did not want or need orthotic braces and had not authorized their Medicare numbers to be used to submit claims for the items. They also said they never received the braces.

Investigators said Belone obtained $22,000 in PPP loans and then used those funds to further his Medicare scheme and sent $12,000 of the loan money to his personal account.

Belone is charged with wire fraud, conspiracy to commit health care fraud, payment of health care kickbacks and making false statements to a financial institution.