CareCredit accused of conspiracy in Fla. insurance fraud case

Just three months after New York Attorney General Andrew Cuomo began investigating 10 dental and medical practices for alleged predatory lending practices involving CareCredit and other health credit cards, a federal conspiracy lawsuit has been filed on behalf of 20 patients who say they were overcharged for procedures by a Florida dental clinic and that CareCredit refused to investigate their complaints.

GE Money's CareCredit is a financing option that has become increasingly popular in the U.S. during the economic recession. It is one of many healthcare credit cards now available to consumers; these cards are similar to regular credit cards except they are designated for healthcare services and usually offer patients 12 months of interest-free credit.

The Florida complaint accuses Francisco Fonte, DMD, owner of Advanced Dental Innovations Management (ADIM) in Royal Palm Beach; his office manager, Martha Somohano; and his business manager, Gerardo Casal, of conspiring to enroll the patients for CareCredit cards, according to the Racketeer Influenced and Corrupt Organizations Act lawsuit filed in U.S. District Court for the Southern District of Florida, West Palm Beach Division.

The lawsuit alleges that the three fraudulently induced patients to complete applications for CareCredit cards by telling them that they were not actually applying for the cards but were told by Somohano that the office simply wanted to check to see if they would qualify for credit.

After patients received exorbitant bills that far exceeded the cost of procedures that were done, they complained to CareCredit but were ignored, said James Quick, DMD, JD, who specializes in dental malpractice cases and is co-counsel on the lawsuit.

"CareCredit did nothing about it for two years even though so many people complained," he told DrBicuspid.com. "It was a big scam, and they simply refused to investigate."

CareCredit should have known something was wrong when so many patients from the same dental clinic defaulted on their bills, Dr. Quick said.

"Most of these people couldn't afford to pay the inflated bills," he said, noting that CareCredit charges 30% interest rates on the entire amount, back to the original date of the bogus services.

Most of the patients were poor and being hit with excessive bills had devastating impact on them, Dr. Quick said. One patient was billed $23,000 for $10,000 worth of work, and others were billed for work that was never done, he said.

"The fallout was unbelievable," Dr. Quick said. "It ruined their credit, they couldn't buy cars and other credit cards were cancelled because of this."

CareCredit has now offered to remove the balances because they want the lawsuit dropped, he said.

"We took action against ADIM several months ago by terminating them from our network," said Cristy Williams, spokesperson for CareCredit. "As this is now the subject of ongoing civil litigation, we don't have any comments at this time."

Identity fraud, drug trafficking

Office manager Somohano is accused of posing as a dentist, giving patients illegal drugs, and stealing dentists' identities that she used to write prescriptions for several painkillers, including Vicodin and oxycodone, according to a report by the Palm Beach County Sheriff's Department. She allegedly took the drugs herself but also doled them out to patients as they waited to be seen, police said.

Somohano has been charged with practicing medicine without a license, identity fraud, and drug trafficking. She even did a root canal on one patient, Dr. Quick said.

Somohano gave patients drugs, then had them sign applications for CareCredit cards, he said. She then opened accounts in their names and charged their accounts for the maximum credit limit with treatment plans and bogus procedures to substantiate the charges, unbeknownst to the patients, he said. Somohano then transferred the money from CareCredit to an offshore account, he added.

Dr. Fonte, Somohano, and Casal are charged with 22 counts of fraud, including insurance fraud and grand theft, according to Lt. Col. Mark Schlein of the Division of Insurance Fraud for the Florida Department of Financial Services. The three "manipulated clients' payments to benefit themselves," according to the arrest affidavit. In addition, ADIM and its management team are being investigated by the state's insurance fraud division, according to Lt. Gregory Whipple, crime intelligence analyst supervisor with the insurance fraud division.

The Florida Board of Dentistry has already revoked Dr. Fonte's license.

More patients are coming forward with similar complaints about ADIM's billing and CareCredit, according to Dr. Quick.

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