Texas Medical Equipment Owner Sentenced in $59 Million Medicare Fraud Scheme

A Texas businessman who operated multiple durable medical equipment companies has been sentenced to federal prison after investigators uncovered a large-scale Medicare fraud operation that generated tens of millions of dollars in false claims through medically unnecessary orthopedic braces.

Federal prosecutors announced that Patrick Cassells, 65, of Fulshear, Texas, was sentenced to 90 months in federal prison for his role in a conspiracy that billed nearly $60 million to Medicare using fraudulent prescriptions and illegal kickback arrangements.

The case highlights one of the most common forms of health care fraud targeting federal insurance programs: the use of durable medical equipment billing networks to generate high-volume claims for orthopedic braces that patients never needed or were prescribed without proper medical evaluation.

According to federal court records, Cassells owned and operated three durable medical equipment (DME) companies that supplied orthopedic braces such as knee, back, shoulder, and wrist supports. These braces are legitimate medical devices when prescribed by physicians for patients with documented medical conditions, but investigators determined the devices were routinely billed to Medicare without legitimate medical justification.

In one of the companies involved in the operation, Cassells attempted to conceal his control by listing another individual as the official owner and manager on Medicare enrollment documents, allowing the company to continue billing federal health programs while masking his involvement.

Federal investigators determined that Cassells relied on a network of co-conspirators who supplied doctors’ orders and patient information used to generate claims. The conspirators were paid illegal kickbacks in exchange for sending paperwork authorizing braces.

To disguise the scheme, participants referred to the fraudulent prescriptions as “leads” and described the payments exchanged between conspirators as “marketing services.”

In reality, prosecutors demonstrated that many of the prescriptions were issued without physicians ever examining the patients, reviewing medical histories, or establishing legitimate doctor–patient relationships. The documentation submitted to Medicare falsely stated that the braces were medically necessary and properly prescribed.

Once the paperwork was obtained, Cassells’ companies submitted reimbursement claims to Medicare for the equipment.

Through this network, prosecutors determined that Cassells’ companies generated more than $59.9 million in fraudulent claims, leading Medicare to pay over $27 million before investigators disrupted the operation.

Orthotic brace fraud has become one of the most persistent forms of Medicare abuse in recent years. These schemes often involve telemarketing operations or referral networks that collect patient information and route it through physicians who sign prescriptions without conducting evaluations. The equipment is then shipped to patients while billing companies submit reimbursement claims to federal health programs.

Because orthopedic braces are relatively inexpensive to manufacture but can generate large reimbursement payments when billed through federal insurance programs, fraud networks often attempt to maximize profit by submitting thousands of claims in a short period.

Investigators also determined that Cassells used proceeds from the scheme to fund personal purchases, including multiple vehicles and other luxury assets. Some of the vehicles were reportedly intended for export to Nigeria, according to evidence presented during the investigation.

In June 2024, Cassells pleaded guilty in federal court in the Southern District of Texas to one count of conspiracy to commit health care fraud.

In addition to the prison sentence, the court ordered Cassells to pay $25,402,614.97 in restitution and forfeiture. Authorities also seized several assets connected to the scheme, including four vehicles and three properties located in the Houston area.

The investigation involved multiple federal and state agencies focused on combating health care fraud, including the Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, and the Texas Attorney General’s Office Medicaid Fraud Control Unit.

The prosecution was handled by attorneys from the Fraud Section of the Department of Justice’s Criminal Division along with federal prosecutors from the Southern District of Texas.

The case forms part of the broader Health Care Fraud Strike Force Program, a nationwide enforcement initiative established in 2007 to combat large-scale fraud targeting Medicare, Medicaid, and private insurance systems.

Since its creation, the program has brought charges against more than 6,200 defendants involved in health care fraud schemes that collectively billed over $45 billion to federal health programs and private insurers.

Investigators say cases like the Cassells prosecution demonstrate the continued focus of federal authorities on dismantling fraud networks that exploit government health care systems and misuse medical billing structures for financial gain.

Federal officials emphasized that aggressive enforcement actions will continue against individuals and companies that attempt to exploit federal health programs through fraudulent billing schemes.

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