The U.S. Justice Department unsealed a staggering $1 billion-plus Medicare fraud case in Columbia last week, placing the owner of a web of South Carolina companies at the heart of the sprawling investigation.
It’s not the first time that lawyers with questions about medical prescriptions and overseas call centers have wanted to talk with Andrew Chmiel about his business dealings. Last year, the Mount Pleasant resident was served with subpoenas in a relatively minor dispute over, curiously enough, nuisance faxes.
His legal problems mounted exponentially Tuesday, when he and two dozen other individuals were charged as part of a months-long criminal investigation. An arraignment and bond hearing for Chmiel is scheduled for Thursday in Columbia.
It's a big enough case that it's been assigned a name, "Operation Brace Yourself," a riff on the alleged unnecessary and fraudulent sales of the sundry support devices that help stabilize the neck, back, arms and legs.
According to the indictment, Chmiel charged Medicare more than $216 million and received about $99 million through the 14 businesses he controls in six states, including operations in Mount Pleasant, North Charleston, Greer and Taylors. Private health insurer Humana paid them another $1.8 million, the court document shows.
Almost immediately, officials went to work seizing Chmiel's nearly two dozen bank accounts as well as three Mount Pleasant properties, including a $1.1 million, 3,700-square-foot waterfront home in the Hobcaw Creek Plantation neighborhood. They also snatched the keys to six automobiles, including a 2005 Ferrari 430 Spyder and a couple of Mercedes-Benz vehicles.
Prosecutors said the alleged scheme included offshore call centers that lined up prescriptions, mostly for elderly Medicare recipients who had called in after seeing targeted ads. The phone banks then sold the information to medical suppliers. Unscrupulous "telemedicine" practices and doctors were paid kickbacks for approving prescriptions, including some for patients they never examined.
Last in line were taxpayers, who footed the bills for unnecessary products valued at hundreds of millions of dollars, according to law enforcement officials.
The case originated in South Carolina and mushroomed nationwide, eventually pulling in the FBI, the Internal Revenue Service and the agency that runs Medicare.
It's unclear whether the early detective work took investigators to western Arkansas, but that's where an oddball lawsuit nudged Chmiel and his business dealings into the public spotlight.
The Pope County legal flap had nothing to do with questionable Medicare claims, at least not directly. It involved alleged violations of the Telephone Consumer Protection Act, which made it illegal to send unsolicited advertisements over fax machines and other devices. A neurology office in Russellville, Ark., felt the law wasn't working. So it went to court in 2017.
Its lawsuit hinged on documents from a Nebraska supplier of "durable medical equipment," a category that includes support braces. The company, which wasn't named in last week's indictments, had faxed medical information about a patient, along with a prescription order.
The recipient balked. In its lawsuit, the practice denied diagnosing the ailment and said it was being asked to “falsely sign” a prescription so that the supplier could seal the sale “and be paid for its products by Medicare, Medicaid, or other applicable insurers.”
Chmiel, who wasn't named in the complaint, was drawn into the dispute later.
According to transcripts, two representatives of the Nebraska supplier mentioned his name in separate depositions. They described the South Carolina entrepreneur as an independent "state-side" promoter and point-of-contact for a call center in the Philippines that they ended up hiring to drum up new business.
"I would say Andy was a middleman," one of the company representatives said. "I think he was the one who informed us that the service would be available ... that there was a company out there who would work on our behalf."
Attorneys for the neurology practice wanted to learn more. They filed papers in federal court in Charleston last May to get Chmiel to talk and turn over scads of information. He sought to quash the subpoenas, which his attorney described as "a fishing expedition."
In the end, the Arkansas lawyers never got their chance to interview Chmiel because the complaint was dismissed.
In tossing the case, U.S. District Court Judge Billy Roy Wilson referred to snippets of calls between the U.S. and the Philippines that pull back the curtain a tiny bit on a shadowy enterprise that's likely to come under intense scrutiny as "Operation Brace Yourself" unfolds.
Wilson pointed out in his order that workers at the Manila call center "quite aggressively" pitched their client's medical products as "'free' to the patient."
"So you'll be happy to know that this is all covered by your Medicare at absolutely no cost to you," a representative told a caller in one example.
In a separate back-and-forth, a beneficiary was congratulated on being approved "for your pain-relieving back brace and knee brace today, okay?"
The caller's response struck at the heart of the whole mess: "I don't need a knee brace."