International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Tuesday, May 15, 2018

South Texas Doctor Charged with $240 Million Health Care Fraud and International Money Laundering Scheme

A physician based in the McAllen, Texas area was charged in an indictment unsealed today for his role in a $240 million health care fraud and international money laundering scheme.  Download Zamora-Quezada Indictment

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan J. Patrick of the Southern District of Texas, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office made the announcement. 

Jorge Zamora-Quezada, 61, of Mission, Texas, was charged in a seven-count indictment filed in the Southern District of Texas.  He was charged with one count of conspiracy to commit health care fraud, five counts of health care fraud and one count of conspiracy to commit money laundering.  Zamora-Quezada had his initial court appearance earlier today. His detention hearing is tomorrow, May 15, at 2 p.m. CDT before U.S. Magistrate Judge Peter E. Ormsby in the McAllen Division of the Southern District of Texas.

“Jorge Zamora-Quezada allegedly orchestrated a massive fraud scheme that jeopardized the health and wellbeing of innocent children, elderly, and disabled victims,” said Acting Assistant Attorney General Cronan.  “The allegations that Zamora-Quezada violated his oath to do no harm by administering unnecessary chemotherapy and other toxic medications to patients with serious diseases — including some of the most vulnerable victims imaginable — are almost beyond comprehension.  The Criminal Division is committed to combatting health care fraud and protecting victims of reprehensible schemes like the one alleged in this case.”

“We take allegations of this nature very seriously,” said U.S. Attorney Patrick.  “The prosecution of health care fraud is a high priority for the Southern District of Texas, especially when we suspect vulnerable patients have been allegedly exploited, misdiagnosed or possibly given potentially harmful medications as a means of committing that fraud.”

“Today’s indictment is the first step in holding Dr. Zamora-Quezada accountable for his allegedly egregious criminal conduct,” said HHS-OIG Special Agent in Charge Porter.  “His patients trusted him and presumed his integrity; in return he allegedly engaged in a scheme of false diagnoses and bogus courses of treatment, and doled out prescriptions for unnecessary and harmful medications, all for his personal financial gain and with no regard for patient well-being.  HHS-OIG will always pursue criminals masquerading as legitimate physicians, weed them out, and seek the harshest possible punishment, particularly when patient harm is a factor.” 

“The FBI is dedicated to working with our task force partners to address health care fraud, which is a growing and serious crime that impacts every city and small town in the nation,” said FBI Special Agent in Charge Combs.  “This investigation highlights an even greater concern presented by health care fraud than the significant financial losses—the physical and emotional harm suffered by the patients and their families.  It is why we at the FBI, together with our task force partners, are dedicated to seeking justice for the victims of Dr. Zamora-Quezada’s alleged crimes.”

 As set forth in the indictment, from 2000 through the filing of the indictment, Zamora-Quezada and his co-conspirators falsely diagnosed vulnerable patients -- including the young, elderly and disabled, from the Rio Grande Valley, San Antonio, and elsewhere -- with various degenerative diseases, including rheumatoid arthritis.  He and his co-conspirators then administered chemotherapy and other toxic medications to the patients based on that false diagnosis.  In addition to falsely diagnosing patients, Zamora-Quezada and his co-conspirators allegedly conducted a battery of fraudulent, repetitive, and excessive medical procedures on patients in order to increase revenue and fund Zamora-Quezada’s lavish and opulent lifestyle.

The indictment alleges that Zamora-Quezada and his co-conspirators flew in Zamora-Quezada’s million-dollar private jet or drove in his Maserati, which were both emblazoned with his initials, “ZQ,” between his offices in the Rio Grande Valley and San Antonio in order to perpetuate the fraud.  He and his co-conspirators transferred the proceeds derived from the conspiracy to purchase private jets, luxury vehicles, clothing from high-end retailers such as Louis Vuitton, and exclusive real estate located throughout the United States and Mexico.  He and his co-conspirators allegedly obstructed investigations by causing the creation of false and fictitious patient records, and concealed thousands of medical records from Medicare by stashing them in an unsecured and dilapidated barn located in the Rio Grande Valley.

The indictment also alleges that Zamora-Quezada and his co-conspirators laundered the proceeds of their fraud scheme by dissipating, transforming and concealing the source and location of the fraud proceeds by investing such proceeds in commercial and residential real estate in the United States and Mexico.  Among other properties, he and his co-conspirators acquired two penthouses in Puerto Vallarta, Mexico; a condominium in Aspen, Colorado; a condominium in Punta Mita, Mexico; and multiple homes and commercial properties located throughout Texas.  He then created the false appearance of legitimate wealth and income by renting the various commercial and residential properties that he acquired to individuals and entities.  Zamora-Quezada and his co-conspirators allegedly laundered the proceeds through a casa de cambio, or money exchange house, to various accounts maintained by financial institutions in Mexico. 

The indictment seeks the forfeiture of Zamora-Quezada’s personal jet, Maserati and multiple residential and commercial properties in the United States and Mexico.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the HHS-OIG’s McAllen Field Office, the FBI’s San Antonio Division-McAllen Resident Agency’s Rio Grande Valley Health Care Fraud Task Force and the McAllen Complex Financial Crimes Task Force. These task forces are comprised of investigators from Texas Department of Insurance, McAllen Police Department, Pharr Police Department and the Texas Health and Human Service Commission.  Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case.

The FBI is seeking to identify potential victims of Zamora-Quezada and his co-conspirators.  If you were a patient of Zamora-Quezada from January 2000 through May 2018 and believe you may have been affected by his or his co-conspirators alleged crimes, please contact the FBI via the FBI victim’s hotline, 1-833-432-4873, Option 8, or if you have access to email you may email the taskforce at ZamoraPatient@fbi.gov. The FBI is legally mandated to identify victims of federal crimes that it investigates and provide these victims with information, assistance services, and resources.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion. 

http://lawprofessors.typepad.com/intfinlaw/2018/05/south-texas-doctor-charged-with-240-million-health-care-fraud-and-international-money-laundering-scheme.html

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