Durable Medical Equipment Fraud Defense
Former DOJ Fraud Section Prosecutors. Nationwide Defense for DME Suppliers, Owners, Executives, Physicians, and Marketers Facing Federal Durable Medical Equipment Fraud Investigations and Charges.
Based in Washington, D.C., Armstrong & Bradylyons PLLC defends DME suppliers, company owners, executives, ordering physicians, sales representatives, marketers, and other individuals in federal durable medical equipment fraud investigations and cases nationwide.
The firm’s healthcare fraud defense practice is built on nearly a decade of combined experience at the nation’s preeminent healthcare fraud enforcement unit: the Healthcare Fraud Unit of DOJ’s Fraud Section. Scott Armstrong, Drew Bradylyons, and Andrea Savdie tried 17 federal jury trials in healthcare fraud cases at DOJ’s Fraud Section involving over $2.8 billion in alleged false and fraudulent claims to federal healthcare programs. The firm uses that experience to defend DME suppliers and their owners, executives, and employees at every stage of a federal case: from the first audit or grand jury subpoena, through federal indictment, and at trial.
The firm defends individuals in the districts where DME fraud enforcement is most active: Strike Force districts including the Southern District of Florida, the Eastern District of New York, the Northern District of Illinois, the Central District of California, the Southern District of Texas, the District of New Jersey, and the Eastern District of Michigan.
Armstrong & Bradylyons PLLC defends every DME fraud case from the start as if it will go to trial. That is not a slogan. It is the operating principle of the firm, grounded in 25 federal jury trials in complex fraud cases in federal courts across the country.
Trial experience drives results at every stage. DME fraud cases are factually dense and data-driven. They involve complex billing records, ordering patterns, supplier enrollment documentation, marketing agreements, and allegations that equipment was not delivered, not medically necessary, or procured through kickbacks. The firm builds the factual record from the first day of engagement: analyzing claims data, retaining medical experts, identifying and preparing witnesses, and developing a case theory that can withstand the government’s scrutiny.
The firm’s attorneys know how federal prosecutors build healthcare fraud cases because they built them. Scott Armstrong served for nearly a decade at DOJ’s Fraud Section, where he served as lead trial counsel in 16 federal jury trials, including complex healthcare fraud cases involving Medicare, Medicaid, and Tricare. Scott also directed DOJ’s Appalachian Regional Prescription Drug Task Force. Drew Bradylyons served as Chief of EDVA’s Financial Crimes and Public Corruption Unit and, before that, supervised the Healthcare Fraud Unit’s Miami Strike Force at DOJ’s Fraud Section. That combined experience provides the firm with an unmatched understanding of how federal healthcare fraud cases are investigated, charged, and tried.
The firm relishes the opportunity to try cases. Its willingness to go to trial and its proven skills at trial provide significant leverage in negotiations with federal prosecutors at every stage of a DME fraud case.
Durable medical equipment fraud is one of the longest-running and most aggressively prosecuted categories of federal healthcare fraud. It is also one of the most active right now. In 2025 and early 2026, DOJ, CMS, and HHS-OIG have taken enforcement actions of historic scale against DME suppliers and their operators.
Operation Gold Rush, announced in June 2025 as part of the $14.6 billion National Health Care Fraud Takedown, resulted in the largest loss amount ever charged in a healthcare fraud case brought by DOJ. A transnational criminal organization used foreign straw owners to acquire dozens of Medicare-enrolled medical supply companies across the United States and then submitted $10.6 billion in fraudulent claims for urinary catheters and other DME using the stolen identities of over one million Americans. Nineteen defendants were charged across the Eastern District of New York, the Northern District of Illinois, the Central District of California, the Middle District of Florida, and the District of New Jersey. Twelve were arrested, including four who were apprehended in Estonia.
Individual DME fraud prosecutions have also produced severe sentences. In July 2025, a Florida DME supplier owner was sentenced to 12 years in prison for a $61 million scheme involving five DME companies, nominee owners, and kickbacks to patient recruiters. In March 2026, a Texas DME company owner was sentenced to 90 months in prison for a $59.9 million conspiracy involving kickbacks for signed doctors’ orders and billing for medically unnecessary orthotic braces. In December 2025, the CEO of a healthcare software company that facilitated DME billing was sentenced to 15 years in prison for his role in a conspiracy involving over $1 billion in false claims.
On February 27, 2026, CMS imposed a nationwide six-month moratorium on new Medicare enrollment for DMEPOS medical supply companies. The moratorium was published in the Federal Register and applies to all new supplier enrollments nationwide. CMS cited longstanding program integrity problems, OIG reports dating back to 1998, and the surge of fraudulent billing by medical supply companies. The moratorium gives the government time to develop additional enforcement and oversight measures.
The HHS Office of Inspector General has issued multiple reports identifying improper payment rates for DME, including findings that Medicare payments to suppliers exceeded acquisition costs by hundreds of millions of dollars for certain product categories. CMS has also deployed AI-driven data analytics through its new Health Care Fraud Data Fusion Center to detect anomalous DME billing in real time.
DME suppliers, company owners, ordering physicians, sales representatives, and marketers face real and immediate exposure to federal criminal and civil enforcement. The enforcement environment for DME fraud is the most aggressive it has ever been.
The firm’s DME fraud defense practice is built on healthcare fraud trial experience, deep knowledge of Medicare DME supplier enrollment and billing requirements, and years of experience investigating and prosecuting complex healthcare fraud cases at DOJ’s Fraud Section. These tools are deployed at every phase of a case.
Challenging the Government’s Billing Analysis
Federal DME fraud cases are built on Medicare claims data. The government identifies suppliers with billing volumes that diverge from peer averages, unusually high claim-to-delivery ratios, geographic billing anomalies, and rapid spikes in claims volume following enrollment or ownership changes. The firm challenges the government’s data at every level: the selection of comparators, the methodology used to identify outliers, the assumptions underlying extrapolation calculations, and the conclusions drawn from aggregate billing patterns. A billing anomaly is not fraud. The firm ensures that distinction is drawn clearly and forcefully.
Medical Necessity and Ordering Physician Defense
The government’s case often hinges on the claim that DME was not medically necessary or that physicians’ orders were issued without a legitimate patient evaluation. The firm retains qualified medical experts to review patient records, physicians’ orders, and clinical documentation. These experts can establish that the prescribed equipment was clinically appropriate, that the ordering physician conducted a legitimate evaluation, and that the equipment met the patient’s documented medical needs. Expert testimony on medical necessity is critical to rebutting the government’s characterization of legitimate prescribing as fraudulent ordering.
Medicare DMEPOS Supplier Standards and Billing Rules
DME billing is governed by a complex web of Medicare supplier standards, CMS coverage determinations, HCPCS codes, prior authorization requirements, and competitive bidding rules. The firm analyzes the applicable supplier enrollment requirements, billing rules, and coverage criteria to challenge the government’s interpretation. Regulatory complexity and inconsistent CMS guidance are powerful defense tools. Many claims the government characterizes as fraudulent are better explained by confusing billing requirements, evolving coverage determinations, or good faith compliance efforts.
Challenging the Government’s Proof of Knowledge and Intent
Federal healthcare fraud requires proof of willful and knowing fraud. Billing errors are not crimes. The firm builds the factual record to demonstrate that the supplier acted in good faith, relied on existing compliance programs or professional guidance, and did not intend to defraud Medicare. Where the government relies on cooperating witness testimony to establish intent, the firm attacks the reliability, credibility, and motivations of those witnesses. The firm’s attorneys have extensive experience cross-examining cooperating witnesses in federal healthcare fraud trials.
Federal DME fraud investigations target individuals at every level of the supply chain: from the owners and executives who control DME companies, to the physicians who sign orders, the sales representatives who market equipment, and the billing staff who submit claims. Armstrong & Bradylyons PLLC defends these individuals in federal investigations, after indictment, and at trial.
Defense of DME Supplier Owners and Operators
The firm defends the founders, owners, and operators of DME supply companies in federal fraud, Anti-Kickback Statute, and money laundering investigations and prosecutions. DME company owners are the primary targets of federal enforcement. Prosecutors pursue owners who allegedly submitted claims for equipment never delivered, billed for medically unnecessary equipment, paid kickbacks for patient referrals or signed physicians’ orders, used nominee or straw owners to conceal their involvement, or operated companies whose sole purpose was to generate fraudulent Medicare claims. The firm defends DME owners against these allegations by challenging the government’s evidence of personal knowledge, direction, and intent.
Defense of Ordering Physicians
The firm defends physicians who face federal exposure for signing orders for durable medical equipment. Ordering physicians are increasingly targeted when the government alleges that they signed orders without conducting legitimate patient evaluations, signed pre-completed order forms supplied by DME companies or telemarketers, or received kickbacks disguised as consulting fees, medical director fees, or other compensation in exchange for signing orders. The firm defends ordering physicians by challenging the government’s clinical evidence and establishing the legitimate medical basis for the physician’s prescribing decisions.
Defense of Sales Representatives and Marketers
The firm defends DME sales representatives, independent marketers, and call center operators in federal investigations. Sales professionals face criminal exposure when the government alleges that they paid kickbacks to physicians for signed orders, purchased patient leads or beneficiary information, used deceptive telemarketing practices to solicit patients, or marketed DME to patients who did not need it. The government scrutinizes marketing agreements that it views as disguised kickback arrangements. The firm defends marketers by challenging the government’s characterization of legitimate business relationships as illegal kickback schemes.
Defense of Healthcare Executives and Investors
The firm defends healthcare executives, management company operators, and investors in DME companies. Federal prosecutors use theories of conspiracy and aiding and abetting to reach individuals beyond those who directly submitted false claims. Executives, silent partners, and investors who exercised operational control over DME companies face federal fraud, kickback, and money laundering charges. The firm defends these individuals by challenging the government’s proof of knowledge, personal involvement, and intent.
Defense of Billing Staff and Administrative Personnel
The firm defends billing managers, office managers, and other administrative personnel in federal DME fraud investigations and cases. These individuals face criminal exposure when the government alleges that they submitted or directed the submission of false claims, maintained fraudulent documentation, or participated in schemes to conceal the true nature of the DME company’s operations. The firm defends administrative personnel by challenging the government’s evidence of knowing participation in fraudulent conduct.
Federal DME fraud investigations follow a pattern. Understanding that pattern is the first step to defending against it. Scott Armstrong and Drew Bradylyons built these types of cases as senior prosecutors at DOJ’s Fraud Section. They know how federal investigators identify targets, develop evidence, and present cases to grand juries.
Claims Data Analytics
The investigation typically begins with data. HHS-OIG, CMS, and the FBI use sophisticated claims data analytics and AI-driven tools to identify DME suppliers with anomalous billing patterns. The government’s Health Care Fraud Data Fusion Center combines data from DOJ, HHS-OIG, FBI, and CMS to detect billing anomalies in real time. Investigators flag suppliers with sudden spikes in claims volume, billing for high-cost items at volumes that exceed peer averages, geographic billing patterns inconsistent with the supplier’s location, and claims submitted shortly after enrollment or ownership changes. These data-driven flags trigger the deeper investigation.
Supplier Enrollment and Ownership Scrutiny
Federal investigators scrutinize DME supplier enrollment applications, ownership disclosures, and changes of ownership. CMS requires DME suppliers to disclose all owners, managing employees, and individuals with operational control. Investigators look for nominee or straw owners, concealed felony convictions that would disqualify the supplier from Medicare enrollment, undisclosed ownership interests, and patterns of companies being acquired and then rapidly generating high volumes of claims. Operation Gold Rush demonstrated the government’s focus on transnational organizations that purchase legitimate DME companies and convert them into vehicles for fraudulent billing.
Delivery Verification
The government investigates whether DME was actually delivered to patients. Investigators visit patients at their homes, interview beneficiaries, review delivery records and proof-of-delivery documentation, and compare claims to actual delivery logs. In many DME fraud prosecutions, the government’s core allegation is that the equipment was never delivered at all. In other cases, the government alleges that equipment was delivered but was not the item billed, was of inferior quality, or was never ordered by the patient’s physician.
Ordering Physician Analysis
The government examines the relationship between the DME supplier and the ordering physicians. Investigators analyze whether the physician had a legitimate patient relationship, whether the physician conducted a face-to-face evaluation before signing the order, whether the physician signed pre-completed order forms without reviewing the patient’s medical records, and whether the physician received compensation from the DME supplier that could constitute a kickback. Physicians who sign high volumes of orders for a single DME supplier are flagged for scrutiny.
Kickback and Marketing Analysis
The government investigates referral relationships and marketing arrangements. In DME fraud cases, prosecutors examine whether suppliers paid kickbacks to physicians for signed orders, purchased patient leads or beneficiary information from call centers or telemarketers, paid per-order or per-referral fees disguised as marketing or consulting fees, or entered into sham medical directorship or consulting agreements with ordering physicians. Marketing agreements that tie compensation to referral volume are a primary enforcement target under the Anti-Kickback Statute (42 U.S.C. § 1320a-7b).
Search Warrants for Electronic Devices and Cloud Accounts
Federal agents routinely seek and execute search warrants for cell phones, laptops, tablets, and cloud-based accounts in DME fraud investigations. These warrants target text messages, emails, iCloud backups, Google Drive contents, and messaging applications. The government is looking for communications between owners, sales representatives, physicians, and billing staff that reveal knowledge of fraudulent billing, directives to submit claims for undelivered equipment, discussions about kickback payments, and efforts to conceal the true ownership or operations of the DME company.
Cloud account warrants are particularly powerful. Federal agents obtain these warrants under 18 U.S.C. § 2703 of the Stored Communications Act and serve them directly on Apple, Google, and other service providers. The target of the warrant may not learn of its existence until well after the government has obtained and reviewed the contents.
Whistleblower Lawsuits
A significant number of federal DME fraud investigations originate from qui tam whistleblower lawsuits filed under the False Claims Act. Current or former employees file sealed complaints alleging that the DME supplier submitted false claims to Medicare. The DOJ investigates the complaint while it remains under seal. If DOJ intervenes, the case is unsealed and the supplier faces both civil FCA liability and potential criminal prosecution. The whistleblower receives 15% to 25% of any recovery. DME suppliers should be aware that most criminal DME fraud cases brought by DOJ grow out of whistleblower lawsuits.
Federal DME fraud enforcement is concentrated in Medicare Fraud Strike Force districts with deep healthcare fraud infrastructure and high volumes of DME billing activity. Armstrong & Bradylyons PLLC defends DME suppliers in every one of these jurisdictions.
Southern District of Florida
The Southern District of Florida is the historic epicenter of DME fraud enforcement. South Florida has been a primary target of the Medicare Fraud Strike Force since the program’s inception. DME fraud prosecutions in the Southern District have involved billing for equipment never delivered, sham DME companies, kickback-driven patient recruitment, and telemarketing schemes. The district’s experienced federal prosecutors and its proximity to high-volume DME billing markets make it the highest-risk jurisdiction for DME suppliers. In July 2025, a Florida DME owner was sentenced to 12 years in prison for a $61 million scheme.
Eastern District of New York
The Eastern District of New York was a lead charging district in Operation Gold Rush, the $10.6 billion transnational DME fraud scheme that represented the largest loss amount ever charged in a healthcare fraud case. The EDNY has an aggressive healthcare fraud enforcement posture and a deep bench of experienced prosecutors. DME suppliers operating in the New York metropolitan area face significant exposure.
Northern District of Illinois
The Northern District of Illinois was also a charging district in Operation Gold Rush. Chicago is a Strike Force city with a long history of healthcare fraud enforcement, including DME fraud prosecutions. Federal prosecutors in the Northern District coordinate closely with HHS-OIG and the FBI on DME fraud matters.
Southern District of Texas
The Southern District of Texas is a Strike Force district with aggressive DME fraud enforcement. In March 2026, a Texas DME company owner was sentenced to 90 months in prison for a $59.9 million conspiracy involving kickbacks for signed doctors’ orders and billing for medically unnecessary orthotic braces. Houston is a major DME billing market, and Strike Force prosecutors in the Southern District have extensive experience with DME fraud cases.
Central District of California
The Central District of California was a charging district in Operation Gold Rush and is a Strike Force district with significant healthcare fraud enforcement activity. Los Angeles is one of the largest DME billing markets in the country. Federal prosecutors in the Central District have experience with complex DME fraud schemes involving telemarketing, straw owners, and transnational criminal organizations.
District of New Jersey
The District of New Jersey was a charging district in Operation Gold Rush. New Jersey has a high concentration of DME suppliers and a history of DME fraud enforcement. The district coordinates with the Eastern District of New York on cross-jurisdictional DME fraud cases.
Additional Districts
DME fraud enforcement is not limited to the districts above. The Middle District of Florida, the Eastern District of Michigan, the Northern District of Texas, and the Eastern District of Virginia all have active DME fraud enforcement. CMS’s February 2026 nationwide moratorium on new DMEPOS supplier enrollment signals that federal enforcement attention is expanding beyond the traditional Strike Force footprint. Scott Armstrong and Drew Bradylyons defend DME suppliers in every federal district where DOJ, CMS, and HHS-OIG bring DME fraud cases.
Federal DME fraud prosecutions draw on several criminal statutes. The charges carry severe penalties. Understanding the statutory framework is essential to mounting an effective defense.
Healthcare Fraud (18 U.S.C. § 1347)
The primary charging statute in DME fraud cases. Healthcare fraud makes it a federal crime to knowingly and willfully execute or attempt to execute a scheme to defraud any healthcare benefit program. In DME cases, this statute targets billing for equipment never delivered, billing for medically unnecessary equipment, and billing for equipment procured through kickback arrangements. The penalty is up to 10 years of imprisonment per count. If the fraud results in serious bodily injury, the maximum increases to 20 years. If it results in death, a life sentence is possible.
Wire Fraud (18 U.S.C. § 1343)
The government frequently charges wire fraud alongside or as an alternative to healthcare fraud. Wire fraud applies to any scheme to defraud that uses interstate wire communications, which includes the electronic submission of Medicare claims. Wire fraud carries a maximum penalty of 20 years of imprisonment per count.
Anti-Kickback Statute (42 U.S.C. § 1320a-7b)
The Anti-Kickback Statute is at the heart of most DME fraud prosecutions. It prohibits offering, paying, soliciting, or receiving anything of value to induce or reward the referral of patients for services covered by federal healthcare programs. In DME cases, prosecutors target kickbacks paid to physicians for signed orders, per-lead or per-referral payments to marketers and call centers, compensation tied to referral volume disguised as marketing or consulting fees, and payments to patient recruiters. Violations carry up to 10 years of imprisonment per violation.
Money Laundering (18 U.S.C. §§ 1956, 1957)
Money laundering charges are common in DME fraud prosecutions. The government charges money laundering when it alleges that defendants conducted financial transactions involving the proceeds of the DME fraud scheme with the intent to conceal or promote the underlying fraud. Operation Gold Rush involved money laundering through shell companies, cryptocurrency accounts, and transfers to foreign jurisdictions. Money laundering carries up to 20 years of imprisonment per count.
False Claims Act (31 U.S.C. §§ 3729–3733)
The False Claims Act is the government’s primary civil enforcement tool. It imposes liability on any person who knowingly submits or causes the submission of false or fraudulent claims to the government. In DME fraud cases, the FCA targets claims for undelivered equipment, medically unnecessary equipment, and equipment procured through kickback arrangements. Penalties include treble damages and per-claim penalties. A significant number of federal DME fraud cases originate from qui tam whistleblower lawsuits filed under the FCA.
Federal Program Exclusion and Collateral Consequences
Beyond incarceration and fines, a conviction or settlement in a DME fraud case triggers mandatory exclusion from Medicare, Medicaid, and all federal healthcare programs under the authority of HHS-OIG. For physicians, exclusion effectively ends the ability to bill any federal healthcare program. For DME company owners, exclusion prevents future participation in the Medicare supplier program. CMS may also revoke the supplier’s Medicare enrollment and impose a re-enrollment bar that prevents the supplier from reapplying for years.
What Should I Do If My DME Company Is Under Federal Investigation?
Retain experienced federal defense counsel immediately. Do not speak with federal agents, CMS auditors, HHS-OIG investigators, or anyone else about the investigation before consulting a defense attorney.
Federal DME fraud investigations frequently begin with a grand jury subpoena, agent contact from the FBI or HHS-OIG, a CMS audit or prepayment review, a supplier enrollment revocation, or a sealed qui tam whistleblower lawsuit that is later unsealed. What you say and produce in the early stages of an investigation shapes the entire case.
An experienced defense attorney will communicate with the government on your behalf, advise on the scope of any subpoena or audit, protect privileged information, and develop a defense strategy before charging decisions are made. Scott Armstrong and Drew Bradylyons defend DME suppliers and their owners at the investigation stage and at trial, drawing on years of experience as senior prosecutors at DOJ’s Fraud Section.
What Types of DME Billing Practices Trigger Federal Investigations?
Federal investigators target specific billing patterns and practices in DME fraud cases. The most common triggers include billing for equipment that was never delivered to the patient, billing for medically unnecessary equipment ordered without a legitimate physician evaluation, billing for higher-cost items than what was actually provided (upcoding), sudden spikes in claims volume following enrollment or ownership changes, billing under physicians’ names without their knowledge or authorization, and marketing or referral arrangements that tie compensation to the volume of referrals or orders.
CMS and HHS-OIG use claims data analytics, AI-driven anomaly detection, and the Health Care Fraud Data Fusion Center to identify these patterns. Suppliers whose billing diverges significantly from peer averages are flagged for investigation.
What Are the Penalties for a Federal DME Fraud Conviction?
The penalties are severe. Healthcare fraud (18 U.S.C. § 1347) carries up to 10 years of imprisonment per count. Wire fraud carries up to 20 years per count. Money laundering carries up to 20 years per count. Anti-Kickback Statute violations carry up to 10 years per violation.
Beyond incarceration, defendants face substantial fines, restitution orders, and forfeiture of assets. Federal law mandates exclusion from Medicare, Medicaid, and other federal healthcare programs upon conviction. Recent DME fraud sentences include 15 years for a healthcare software CEO, 12 years for a Florida DME owner, and 90 months for a Texas DME owner.
What Is the Nationwide DMEPOS Enrollment Moratorium?
On February 27, 2026, CMS imposed a six-month nationwide moratorium on new Medicare enrollment for DMEPOS medical supply companies. The moratorium was published in the Federal Register and applies to all new supplier enrollments nationwide. CMS cited longstanding program integrity problems, HHS-OIG reports dating back to 1998, and the surge of fraudulent billing by medical supply companies.
The moratorium prevents new medical supply companies from enrolling in Medicare during the six-month period. Existing enrolled suppliers are not directly affected by the enrollment freeze, but the moratorium signals intensified enforcement scrutiny of all DMEPOS suppliers. The moratorium gives CMS time to develop additional enforcement and regulatory measures, including the proposed CRUSH Rule (Comprehensive Regulations to Uncover Suspicious Healthcare).
What Is Operation Gold Rush?
Operation Gold Rush was a federal enforcement action announced in June 2025 as part of the $14.6 billion National Health Care Fraud Takedown. It resulted in the largest loss amount ever charged in a healthcare fraud case brought by DOJ. A transnational criminal organization used foreign straw owners to acquire dozens of Medicare-enrolled medical supply companies across the United States. The organization then submitted $10.6 billion in fraudulent claims for urinary catheters and other DME using the stolen identities of over one million Americans.
Nineteen defendants were charged across five federal districts. Twelve were arrested, including four apprehended in Estonia and seven arrested at U.S. airports and the U.S.-Mexico border. DOJ’s Health Care Fraud Data Analytics Team detected the anomalous billing and prevented the organization from receiving all but approximately $41 million of the approximately $4.45 billion that was scheduled to be paid by Medicare.
Can an Ordering Physician Be Charged with DME Fraud?
Yes. Ordering physicians face federal criminal exposure in DME fraud cases. The government charges physicians who allegedly signed orders without conducting legitimate patient evaluations, signed pre-completed order forms supplied by DME companies or call centers, or received kickbacks in exchange for signing orders. Physicians who sign high volumes of orders for a single DME supplier are a primary enforcement target.
A defense attorney experienced in DME fraud understands how to challenge the government’s clinical evidence and establish the legitimate medical basis for the physician’s prescribing decisions. Scott Armstrong and Drew Bradylyons defend physicians in healthcare fraud cases based on their extensive experience at DOJ’s Fraud Section.
What Defenses Are Available in a Federal DME Fraud Case?
The available defenses depend on the specific allegations. Common defenses in DME fraud cases include the following:
Lack of intent to defraud. The government must prove willful and knowing fraud. Billing errors, compliance failures, and negligent oversight are not crimes.
Medical necessity. Defendants can challenge the government’s claim that the DME was not medically necessary. Physicians’ orders, patient records, and expert testimony support this defense.
Delivery verification. Defendants can present proof-of-delivery documentation, shipping records, and patient testimony to rebut the government’s claim that equipment was not delivered.
Legitimate marketing arrangements. In kickback cases, the defense can demonstrate that marketing agreements complied with applicable OIG Safe Harbor Regulations or that compensation was fair market value for legitimate services.
Challenging data analysis. The government relies heavily on statistical methodologies and claims data analytics. These can be challenged on their underlying assumptions, inputs, comparators, and conclusions.
Scott Armstrong and Drew Bradylyons leverage their significant federal trial experience as former prosecutors to anticipate the government’s trial strategy and develop an aggressive, evidence-based defense.
What Is the Difference Between a Civil and Criminal DME Fraud Investigation?
Civil DME fraud investigations focus on recovering money. These may involve False Claims Act actions, Civil Investigative Demands (CIDs), and penalties including treble damages and per-claim fines. Many civil DME fraud cases begin as qui tam whistleblower lawsuits.
Criminal DME fraud investigations focus on proving intentional and willful fraud beyond a reasonable doubt. Criminal cases carry the possibility of imprisonment, criminal fines, and restitution.
The government frequently runs civil and criminal investigations in parallel. Statements and concessions made in a civil matter or audit response can be used to build a criminal case. Scott Armstrong and Drew Bradylyons have years of experience navigating parallel civil and criminal healthcare fraud cases at DOJ’s Fraud Section and as defense attorneys.
Can a DME Company Owner Be Held Personally Liable for Fraud by Employees?
Yes. Federal prosecutors regularly pursue DME company owners and executives for fraud committed within their organizations. The owner does not need to have personally submitted false claims. If a provider causes another person to submit a claim with knowledge that the claim is false or fraudulent, a criminal case against that provider may be viable.
The government relies on theories of conspiracy (18 U.S.C. § 371) and aiding and abetting (18 U.S.C. § 2) to reach individuals beyond those who directly submitted the false claims. Prosecutors examine whether the owner had knowledge of, directed, or willfully ignored the allegedly fraudulent conduct.
Why Is DME Fraud Under Intensified Federal Scrutiny Now?
Several factors converged. Operation Gold Rush exposed a $10.6 billion transnational DME fraud scheme, the largest healthcare fraud case ever charged. CMS imposed a nationwide moratorium on new DMEPOS supplier enrollment in February 2026. HHS-OIG has issued multiple reports identifying billions of dollars in improper DME payments. The government has deployed AI-driven data analytics through the Health Care Fraud Data Fusion Center to detect anomalous DME billing in real time.
DME has been a fraud-prone sector for decades, but the current enforcement posture is the most aggressive in history. The combination of transnational criminal schemes, the nationwide enrollment moratorium, and the government’s investment in data analytics signals that DME fraud enforcement will intensify further in 2026 and beyond.
Does Armstrong & Bradylyons PLLC Handle DME Fraud Cases Outside of Washington, D.C.?
Yes. Armstrong & Bradylyons PLLC defends individuals in federal DME fraud investigations and prosecutions nationwide. The firm can practice in every federal district court in the country.
DME fraud enforcement is concentrated in Strike Force districts including the Southern District of Florida, the Eastern District of New York, the Northern District of Illinois, the Southern District of Texas, the Central District of California, and the District of New Jersey. Prosecutions also originate from U.S. Attorney’s Offices in districts beyond the Strike Force footprint.
Scott Armstrong and Drew Bradylyons have tried healthcare fraud cases and handled investigations in Strike Force districts and federal courts across the country. The firm is based in Washington, D.C. and represents clients in every jurisdiction where DOJ, CMS, and HHS-OIG investigate and prosecute DME fraud cases.