Medical supply co. owner sentenced in $3.5M local fraud scheme

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WACO, Texas (KWTX) A medical supply company owner who was convicted in June 2016 in connection with a $3.5 million Central Texas health care fraud scheme was sentenced to 27 years in federal prison Thursday in U.S. District Court in San Antonio.

DTS Medical Supply Co. owner Daniel Thomason Smith, 55, was also ordered to pay more than $3.2 million in restitution and to spend three years on supervised release after completing his prison sentence.

Smith and co-defendant Kathleen Marina Kelly-Tuorila, 45, who was the firm’s officer manager, were convicted on June 28, 2016 of one count of conspiracy to commit health care fraud, one count of aiding and abetting health care fraud, 11 counts of aiding and abetting aggravated identity theft and eight counts of aiding and abetting false statements related to a health care matter.

Sentencing is pending for KellyTuorila.

Evidence presented during trial showed that that between May 2006 and January 2010, Smith and Kelly-Tuorila conspired to submit numerous false and fraudulent benefit claims to Medicaid and Medicare seeking compensation for powered wheelchairs.

A third defendant, Robin Renee Haigler, 60, of Waco, was employed on a commission basis to recruit customers, primarily in the Waco area, testimony showed.

Haigler pleaded guilty to the conspiracy charge in August 2015 and was sentenced in November 2016 to 87 months in federal prison.

Kelly-Tuorila used the collected customer information from Haigler to generate and submit fraudulent claims for reimbursement to Medicaid and Medicare for powered wheelchairs.

Names of physicians were used to support claims for reimbursement, but the physicians named never prescribed the power wheelchairs and in some cases didn’t even know the patients for whom they were prescribed, testimony showed.

Evidence also showed that even though the company billed for powered wheelchairs, they delivered less-expensive powered scooters to customers, which resulted in a larger payment from Medicaid or Medicare and a larger percentage of profit for DTS and Smith.