Prosecutors insist eye doctor stole $136 million from Medicaid

WEST PALM BEACH, Fla.—Either Dr. Salomon Melgen is one of the biggest Medicare swindlers ever, stealing more than $100 million from the federal health care program, or a penny ante thief who walked off with $64,000.

Those were the widely contrasting arguments made Thursday by prosecutors and Melgen’s defense attorneys as they tried to persuade U.S. District Judge Kenneth A. Marra to sentence the Dominican-born, Harvard-trained doctor to 30 years or something significantly less.

Prosecutors are seeking 30 years. They say the doctor subjected elderly patients to painful tests and treatments they didn’t need, for diseases they didn’t have, to support a vacation home in his native Dominican Republic, lavish trips to Europe and outside business interests. The government also says he bribed New Jersey Democratic Sen. Bob Menendez.

Assistant U.S. Attorney Alexandra Chase told Marra that Melgen’s practice was so “permeated” with fraud that the judge should accept the government’s estimate. Chase said even if the 63-year-old Melgen stole just $65 million—about half as much—he would be eligible for a life sentence. She pointed to Melgen often seeing more than 100 patients a day, and his employees performing in seconds tests that normally take 10 minutes or more, making them useless for diagnosis but allowing the doctor to bill Medicare for them.

“The system was set up to maximize fraud,” she said.

Melgen’s attorneys argued that the government only proved Melgen stole about $64,000, the amount they will concede was falsely charged for 30 patients who stood in during the trial as a representative sample of the more than 2,000 Melgen saw between 2008 and 2013, most of them numerous times. They say the selection of those patients came from a larger sample of 310 that wasn’t random but cherry-picked and any extrapolation from those samples should be thrown out. They want a short sentence, perhaps even time served.

Josh Sheptow portrayed his client as ahead of his time, injecting patients with then-experimental drugs that are now approved. Medicare does not pay for experimental treatments, noted Sheptow, who suggested Melgen may have falsified billing statements to get around those restrictions. That would still be fraud, Sheptow said, but he said the treatments were legitimate and therefore the government didn’t lose anything with many of his patients.

A jury found Melgen guilty of 67 counts last April after a twomonth trial, including health care fraud, submitting false claims and falsifying records in patients’ files.

He is charged separately with bribing Menendez in exchange for interceding with the Medicare officials investigating his practice and other favors, including getting visas for his foreign mistresses. A federal jury in New Jersey hung on that case last month, and prosecutors there have not said whether they will retry them.

Melgen’s attorneys rested much of their sentencing argument on the doctor’s use of the drug Lucentis between 2008 and 2013. During most of that time, Medicare approved its use only for wet age-related macular degeneration or ARMD, a retinal disease that can cause blindness.