Patient-broker gets prison in scam

The leader in a scheme to buy and sell patients in a nationwide fraud scheme is sentenced to 16 months. He must pay fines and restitution.

By JEFF TESTERMAN

© St. Petersburg Times, published April 20, 2001

TAMPA -- Two federal judges bristled Thursday at the government's request for leniency for William Demaria Jr., the ringleader of the largest illegal patient brokering network in the United States.

"What the government has asked me to do is extraordinary," said U.S. District Judge James D. Whittemore, as he prepared to sentence Demaria on conspiracy charges.

"Distasteful is the only word for this that comes to mind," U.S. District Judge Susan Bucklew said a short time later, before sentencing Demaria on a mail fraud conviction.

Demaria had headed a criminal enterprise involved in the payment of $32-million in illegal kickbacks, and had participated in shredding incriminating records subpoenaed by a grand jury.

After stating their concerns, each judge sentenced him to 16 months in prison. Both terms will be served concurrently, most likely at a minimum security facility like Eglin Air Force Base.

The light sentence had been requested through Assistant U.S. Attorney Gary Montilla, who stressed the value of Demaria's cooperation with investigators.

Montilla said Demaria's assistance resulted in the prosecution of 30 Medicare fraud cases, as well as fines and restitution to the U.S. government totaling $15-million.

Demaria was ordered to pay a fine of $250,000 and restitution of about $1.5-million to settle the government's civil claim against him.

Demaria, 41, a recovered drug addict who now makes a living day-trading stocks in Palm Beach, said Thursday that he was selling seven buildings he co-owns in Florida and New Jersey to meet the restitution order.

Demaria's defense attorney Benjamin Brafman, who helped win the acquittal on weapons charges last month of entertainer Sean "Puff Daddy" Combs, said Demaria already had paid $850,000 in restitution.

From 1989 to 1997, prosecutors say, Demaria and his partners used bribes, illegal kickbacks, phony employment contracts and false promises to clients in the operation of their Morganville, N.J., patient brokering business called Progressive Health Care.

Montilla called Demaria and his associates "the top dogs" in the illegal patient brokering business, so successful that they created scores of businesses, even setting up their own hospitals.

Demaria's companies treated patients as a commodity, "buying" psychiatric and substance abuse patient referrals and "selling" those referrals to in-patient treatment centers, many of them in Florida.

The brokered patients ended up at Sun Coast Hospital in Largo, The Manors in Tarpon Springs, Heritage Beverly Hills in rural Citrus County, Palmview Hospital in Lakeland and University Behavioral Center in Orlando.

The grand jury investigation into the illegal brokering was sparked by a 1993 St. Petersburg Times series, "The Patient Pipeline." The series told the stories of patients lured into inappropriate or unnecessary treatment by brokers who collected up to $3,000 a head for referrals.

Demaria's conspiracy charge covers the payment of thousands of dollars in kickbacks for the referral of patients covered by Medicare or other government insurance.

The mail fraud charge stems from the sending of $21,718 in secret payments to the wife of a Niles, Ohio, probation officer in return for the officer's referral of addicted probationers to Florida treatment centers run by Demaria.

Most of the treatment centers run by Demaria and Ronald W. Greenfield went out of business. Thursday, at Montilla's request, Judge Whittemore ordered Demaria to cease participating in any business with Greenfield, a convicted murderer who is to be sentenced on conspiracy charges next month.

That includes an Internet company called Harmonytechnology.com. A seller of nutrition and health products, the company's Web page bills itself as dedicated to Demaria and Greenfield's belief "in total wellness and preventive care."

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