Syracuse area man pleads guilty to operating kickback scheme involving Medicare And Medicaid

BUFFALO, N.Y. - U.S. Attorney Michael DiGiacomo announced today that Timothy Klein, 49, of Fayetteville, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to conspiracy to pay and receive health care kickbacks, which carries a maximum penalty of five years in prison and a $250,000 fine.

Assistant U.S. Attorneys Franz M. Wright and Paul E. Bonanno, who are handling the case, stated that between February 2017, and September 2018, Klein conspired with others to defraud Medicare and Medicare drug plan sponsors. Klein, who operated JRS Group, LLC, and his co-conspirators enriched themselves by, among other things, submitting prescription drug claims to Medicare and Medicare drug plan sponsors for items that were medically unnecessary and procured through kickbacks and bribes, and diverting fraud proceeds for their own personal use and benefit. As part of the conspiracy:

• Klein through his company, JRS, recruited insurance brokers to contact Medicare beneficiaries and offer them prescription medicines at no cost, without regard to any actual medical necessity. Klein paid kickbacks and bribes to the insurance brokers, for Medicare prescriptions paid for through the beneficiaries' Part D plan, a federal funded program.
• Klein paid an individual and their company, Advanced Telehealth, to provide doctors to perform telemedicine visits with the beneficiaries recruited by insurance brokers. Following the telemedicine visits, the doctors would sign prescriptions for the beneficiaries, which prescriptions had been preselected and/or filled out by Klein.
• Klein entered into agreements with ProRX and SunRise Pharmacy, whereby the pharmacies paid Klein a sum of money for each filled prescription. For instance, on or about September 17, 2018, the defendant received a check totaling $95,479.05 from ProRx representing payments for prescriptions referred to ProRx.

The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Philip Tejera, U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent-in-Charge Naomi Gruchacz, the New York State Department of Financial Services, under the direction of Acting Superintendent Kaitlin Asrow, the U.S. Department of Defense Criminal Investigative Service, under the direction of Special Agent-in-Charge Christopher M. Silvestro, and the U.S. Postal Inspection Service Boston Division, under the direction of Acting Inspector-in-Charge Nicholas J. Bucciarelli.

Sentencing is scheduled for June 2, 2026, before Judge Vilardo.

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