By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, Ma.
A Health Care Provider Defense and Compliance Firm

The Department of Justice has once again taken decisive action against fraud in the durable medical equipment (DME) sector. On February 20, 2025, federal authorities charged Raju Sharma, the owner of Pharmagears, LLC and RR Medco, LLC, in connection with a nearly $30 million Medicare fraud scheme. The allegations paint a familiar picture: unnecessary medical equipment, fraudulent billing, and kickback schemes—all to fund an extravagant lifestyle.

A Classic Fraud Scheme

According to federal prosecutors, Sharma orchestrated an elaborate operation in which his companies billed Medicare for medically unnecessary DME, including back and knee braces that patients didn’t want, need, or even request. To generate fraudulent claims, Sharma allegedly worked with telemarketers who targeted Medicare beneficiaries, obtaining orders without proper medical evaluations. Some practitioners allegedly had their National Provider Identifiers (NPIs) used without their knowledge.

Sharma’s actions reportedly violated the Anti-Kickback Statute by making per-order payments to marketing companies under the guise of flat-fee contracts. His companies ultimately billed Medicare for approximately $29.6 million and received nearly $15.8 million in reimbursements.

Luxury Lifestyle Built on Fraud

Rather than investing in legitimate health care operations, Sharma allegedly spent his fraudulently obtained funds on high-end luxury items, including:

• Two Ferraris
• A Mercedes-Benz Model S
• At least three Rolex watches

Federal authorities have issued seizure warrants for these assets, reinforcing their commitment to recovering misappropriated taxpayer funds.

Government Crackdown on DME Fraud

This case highlights the ongoing scrutiny of DME suppliers and telemarketing operations that target Medicare beneficiaries. Law enforcement agencies, including the FBI and the Department of Health and Human Services Office of Inspector General (HHS-OIG), continue to aggressively investigate and prosecute fraudulent billing schemes.

What This Means for Health Care Providers

Health care providers and suppliers must be diligent in ensuring compliance with federal regulations to avoid becoming entangled in enforcement actions. This case serves as a stark warning to DME companies, physicians, and anyone involved in Medicare billing—compliance failures and kickback schemes will not go unnoticed.

Take Action Now

If your organization provides DME, contracts with third-party marketers, or engages in Medicare billing, now is the time to conduct a thorough compliance and risk assessment review. The government is intensifying its focus on fraud enforcement, and proactive compliance measures can help mitigate risk.

At Parrella Health Law, we specialize in defending health care providers against False Claims Act allegations, Anti-Kickback Statute violations, and regulatory enforcement actions. Contact us today at 857.328.0382 or reach out directly to Chris at cparrella@parrellahealthlaw.com to ensure your business stays compliant and protected.