Telemarketing-Fed Brace Scheme Ends in 14-Year Sentence for Oklahoma DME Owner

The bottom line: according to DOJ and the indictment in United States v. Loftis, the patients in this scheme were recruited by phone.

Here is what happened

According to DOJ, Loftis and his co-conspirators did not disclose to Medicare who actually owned and managed the DME company Back Pain Home Supplies LLC, which did business as EZ Medical Supply. They hid from Medicare that unenrolled entities were billing claims through the company.

DOJ says Loftis paid over a million dollars in illegal kickbacks, including through a shell marketing company. The payments went to marketers, purported telemedicine companies and a call center that persuaded elderly and disabled Americans to disclose their personal information and receive DME they did not need.

Loftis and his co-conspirators also bought sham doctors' orders generated by telemedicine doctors and nurse practitioners who never examined, and often never spoke to, the beneficiaries. In one example, they billed for eight braces for a single beneficiary. In total, they submitted over $30 million in false and fraudulent claims and were paid over $8 million.

The conviction followed a 12-day jury trial that ended in July 2026. In addition to a prison term, Loftis was ordered to pay over $8 million in restitution and to forfeit over $560,000.

The Department of Health and Human Services Office of Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), the Defense Criminal Investigative Service (DCIS) and the Department of Veterans Affairs Office of Inspector General (VA-OIG) investigated the case.

What the indictment describes

The indictment was filed in the U.S. District Court for the Middle District of Florida, case No. 6:25-cr-350. It charged a conspiracy running from about September 2017 through about October 2020. Its description of the "manner and means" of the conspiracy includes three steps that matter to anyone in outbound marketing:

1. Telemarketing recruitment. Marketers caused Medicare beneficiaries "to be recruited using telemarketing" and referred to Back Pain.
2. Kickbacks for orders. Loftis paid kickbacks to co-conspirator marketers in exchange for doctors' orders for braces and other DME.
3. Phone-only telehealth. Loftis paid co-conspirators to arrange purported telehealth consultations in which medical providers signed brace orders even though they had no pre-existing relationship with the beneficiaries, did not examine them, and "only had a telephonic conversation with the beneficiaries, if any contact."

The indictment also alleges that Loftis falsely told Medicare, on its enrollment forms, that he was the sole owner of Back Pain and had sole managing control.

The law

This was a criminal health care fraud and wire fraud prosecution under 18 U.S.C. § 1349, not a Telephone Consumer Protection Act (TCPA) case. As the indictment notes, Medicare will not reimburse claims procured through kickbacks and bribes. The overlap with TCPA risk is the front end: a phone campaign that turns consumers into beneficiaries for equipment they did not need.

Why it matters

The chain described here is simple. Telemarketing recruited beneficiaries, a call center persuaded them to share personal information, telemedicine providers signed orders, and the supplier billed federal programs. Prosecutors followed the kickbacks from the supplier back through the marketers and the call center.

For lead generators and call centers, the risk is not limited to the supplier that bills Medicare. Paying or accepting per-lead or per-order fees in federal health care programs can itself be the crime.

Practical takeaways

1. Know where your health care leads come from. If a vendor cannot show how consumers opted in, do not buy the leads.
2. Never price health care referrals per order. Per-order or per-patient payments for federal program business are a core kickback risk.
3. Treat phone-only consultations as a red flag. A prescriber who signs orders after a short call, or no call at all, is not a compliance program.
4. Audit your scripts. Calls that pitch braces or glucose monitors to Medicare beneficiaries invite scrutiny.
5. Keep records. Consent, call recordings and vendor contracts are your first line of defense.

A call center may be one step removed from the claim. That distance did not protect anyone here.

Source: DOJ, Medical Supply Company Owner Sentenced to 14 Years in Prison for $30M Medicare, TRICARE, and CHAMPVA Fraud.