UPDATE: Federal prosecutors on Tuesday asked that the U.S. magistrate’s decision to allow Melgen to return home be put on hold until the matter is reviewed by U.S. District Judge Kenneth Marra. Magistrate James Hopkins granted the request which means Melgen will have to call off the moving vans.
After spending more than a year living in his daughter’s Palm Beach Gardens condo, Dr. Salomon Melgen is headed back to his sprawling house on the Intracoastal Waterway to await trial on charges that he defrauded Medicare out of as much as $105 million.
In an order signed this week, U.S. Magistrate James Hopkins said he is no longer concerned that living along the waterway increases the chances the ophthalmologist will flee to his native Dominican Republic. Further, Hopkins ruled that Melgen, who also faces corruption charges in New Jersey with his longtime friend U.S. Sen. Robert Menendez, can leave his house near Juno Beach from 9 a.m. to 9 p.m. without an escort. But, he said, he must continue to wear an ankle monitor.
In his order, Hopkins noted that Melgen would have gone to trial last month had federal prosecutors shared their witness list with the Melgen’s attorneys as they were required to do under court rules. U.S. District Judge Kenneth Marra in August reluctantly delayed the trial until next year saying the failure to share the information could have denied Melgen a fair trial.
Melgen and Menendez, a New Jersey Democrat, were indicted in April 2015 on corruption charges. Prosecutors claim Melgen showered Menendez with campaign contributions, hotel stays, free trips and other gifts. In exchange, they claim, Menendez lobbied federal agencies to help Melgen in an ongoing dispute over his Medicare billing and other matters, including bringing girlfriends into the country.
Weeks after he was charged in New Jersey, Melgen was charged here with more than 70 health-care related fraud charges in connection with clinics he operated in West Palm Beach, Wellington, Delray Beach and Port St. Lucie. Prosecutors claim he falsely diagnosed and treated scores of elderly patients for macular degeneration. They claim he double-billed Medicare by using one vial of Lucentis, a drug used to treat the malady that causes blindness, to treat multiple patients.
Melgen denies the charges. Before his release from the Palm Beach County jail in July 2015, he was forced to pledge all of his family’s assets – then estimated at $18 million – to secure his release. Since he was ordered to leave his home as part of the original bond deal, Melgen has sold his boat and jet, his attorneys said.
Update 12:30 p.m.: Malachi Love-Robinson will remain without bail at the Rappahannock Regional Jail in Virginia until his next court date Nov. 18, according to Stafford General District Court records.
Original Story: A Florida judge revoked a $26,000 bond early Wednesday for Malachi Love-Robinson, the alleged fake teen doctor who police in Virginia say they caught last week trying to illegally buy a car.
Circuit Judge Krista Marx issued a warrant to return the 19-year-old to the Palm Beach County Jail, approving a request from Assistant State Attorney Mike Rachel to hold him without bail on charges of practicing medicine without a license, forgery, grand theft and other charges.
Those charges stem from a February arrest after a raid of the teen’s West Palm Beach holistic medicine practice and allegations that he used a check from a patient to try to make car payments.
According to authorities who arrested Love-Robinson in Stafford, Va., just south of Washington, D.C., last week, he tried to buy a Lexus at a dealership there accompanied by an elderly woman he said was co-signing for him.
The woman, however, said she never agreed to cosign for him, and representatives from the dealership said he presented a fake earnings statement.
Under the terms of his pre-trial release in Palm Beach County, Love-Robinson was not allowed to travel out of the state without notifying authorities, something Rachel told Marx he failed to do.
Love-Robinson as of Wednesday was still incarcerated in Virginia. Marx ruled that he will have to return to the Palm Beach County Jail upon his release.
A judge on Monday agreed to delay the upcoming trial of Malachi Love-Robinson, the now 19-year-old accused of pretending to be a doctor and stealing money from at least one patient who visited his West Palm Beach practice.
Love-Robinson case was expected to go to trial next month, but Circuit Judge Krista Marx on Monday agreed to postpone the case until November – over prosecutors’ objections – so Love-Robinson’s attorney Leonard Feuer can pursue the viability of an insanity defense.
In a request filed last month, Feuer said the results of a court-ordered mental health evaluation for Love-Robinson led him to explore the option of forming a defense surrounding the teen’s mental state.
Marx on Monday also agreed to declare Love-Robinson indigent for court costs, which means the state will pay the nearly $1,500 cost of getting his personal medical records from St. Mary’s Hospital and for mental health experts to testify on his behalf.
According to court records, Love-Robinson’s family has been paying for him to undergo mental health treatment since his arrest in February, when a narcotics task force raided his West Palm Beach holistic medicine practice after he treated an undercover officer posing as a patient.
He was later rearrested on charges he allegedly forged a patient’s checks to pay towards a car and other bills.
Love-Robinson earlier this year turned down a three-year prison plea offer. He faces a minimum eight years in prison if convicted of 10 charges that include practicing medicine without a license, forgery and grand theft from a person 65 years of age or older.
Apparently the expression “never speak ill of the dead” poses no problem for Anthony Pugliese.
Fresh off a jail sentence stemming from charges he swindled late Subway founder Fred DeLuca out of $1 million, the Delray Beach developer is now seeking $20 billion from DeLuca’s estate with claims DeLuca was the one who stole his idea for an eco-friendly development in Central Florida and used his “multi-billionaire” status to defraud him with “shady dealings.”
The motion to amend his request for damages filed Wednesday comes years after the $5 billion Pugliese demanded from DeLuca in 2009, when the two traded lawsuits over the failed 41,000 acre residential development project called Destiny.
A press release on the filing claims Pugliese is demanding $20 billion, but nothing in the complaint lists that amount.
“The Pugliese press release is a false publicity stunt. Anthony Pugliese is not entitled to any money,” DeLuca’s attorney Rick Hutchison said. “I can also say that the Court recently granted Fred DeLuca’s motion for partial summary judgment, finding that Pugliese stole from and defrauded Fred DeLuca.”
It was a deposition in the 2009 lawsuits that ultimately landed Pugliese in jail after he admitted that he created phony companies and fake invoices to get more than $1 million from DeLuca.
At the time, Pugliese said he was doing it to create a contingency fund in case DeLuca shut him out of the deal. Investigators called it fraud and arrested him for it in 2012.
He served four months of a six month sentence before he was released last month.
Pugliese’s amended lawsuit was filed Wednesday by his civil attorney, famed litigator Willie Gary.
“Today, we have taken additional steps to help right the wrongs committed by Fred DeLuca, and Subway in their partnership with our client,” Gary said in a press release.
For that, Hurley said, Schumack should spent 12 years in prison.
“I really think you got taken by this,” Hurley said. “But you had to know something was wrong.”
Unlike hearings earlier this week, when Signore and his ex-wife, Laura Grande, launched into tear-streaked appeals for leniency, Schumack simply apologized for his actions. His 12-year sentence is less than Signore’s 20-year term but more than the 7-year sentence Grande received. Craig Hipp, vice president of manufacturing, is serving a seven-year sentence.
While some investors said the sentences weren’t harsh enough, a retired aircraft mechanic who lost $192,500 in the scam said he was satisfied. “I guess I’ve got a soft heart,” said Fred Myers, who purchased 55 electronic kiosks with the hope of earning big returns. “This will give them a lot of time to think.”
Myers, who lives outside Atlanta, Ga., said Schumack was the link to him and other Delta Air Lines employees. A former Delta worker knew Schumack through his successful and legitimate ATM sales business. That worker spread the word about Schumack’s new venture, Myers said.
Looking thinner than he did in December when he, Signore and Grande were convicted of multiple counts of fraud and money-laundering, Schumack acknowledged he took advantage of contacts he made in his ATM business.
“My investors weren’t just names in a phone book. They were friends, people I knew,” he said of those he urged to buy the phony kiosks. “I promoted these machines without checking further. I didn’t see the warning signs. Maybe I just didn’t want to.”
Caddy testified that Schumack lacks basic analytical skills. “He’s gullible to a profound fault,” he said. “He wants to believe people.”
That made him easy prey for Signore. “Mr. Schumack had a successful business model, but Mr. Signore had better talents as a sociopath,” he said.
Others also took advantage of Schumack. Worried about his fading sexual prowess, Schumack began buying testosterone from a former professional wrestler. He then gave the wrestler $1 million for a dubious venture without any contract in place to assure he would share in any profits, Caddy said.
“He was available emotionally, intellectually, spiritually to be manipulated,” Caddy said.
Such blind spots don’t excuse Schumack, Hurley said. He had to realize that investors who plunked down $3,500 for each machine with the promise of $300 in monthly returns weren’t getting paid. Further, while telling investors the machines were being placed in hospitals, hotels, casinos and sports venues, Schumack had to know few had been built and few advertisements, key to generating profits, were sold.
“As chief of sales, it’s inconceivable that you would not know they were not building the machines,” Hurley said.
Of the 22,000 machines that were sold, only 84 were produced. Meanwhile, Schumack and his wife bought a $1.5 million house in Coconut Creek and rented a beachfront condo in Highland Beach for $62,000 a month.
Some early investors were paid with money from those who invested later. Others persuaded credit-card companies to reverse the charges. Still, $31 million disappeared.
With the criminal action over, except for promised appeals, attention will turn to court-appointed receiver James Sallah. He has recovered about $8 million and has filed a series of lawsuits to get more for the victims.
Myers said he knows he will get “five cents on the dollar” from Sallah’s efforts. Hurley agreed. “There’s not any real hope these folks are going to be truly compensated,” he said.
The Greenacres realtor who helped a saleswoman pilfer nearly $100,000 from a Lantana senior community will spend the next two years on probation.
The plea for Glenn Gatti, 64, came just days after Natasha Deonath accepted an 18-month prison sentence for scheme to defraud and money laundering charges for a scam she ran while a sales executive at The Carlisle Palm Beach assisted living facility.
According to arrest reports, Deonath fraudulently listed more than two dozen new residents at the facility as having been referred by Gatti, which made Gatti eligible to receive thousands of dollars under an incentive program offering payouts for steering potential residents to The Carlisle.
Carlisle, according to police, then gave Deonath and her husband split the fraudulent referral checks with Deonath, sometimes also paying Deonath’s husband.
Gatti told police he received about $100,000 in the scheme, which unraveled when Carlisle directors began calling the referred residents and found none of them had ever heard of Gatti.
Gatti is also facing unrelated burglary, battery and theft charges.
Joseph Signore’s attempts to curry favor with a federal judge by lauding himself as a bighearted champion of the underdog and blaming others for turning his virtual concierge enterprise into an $80 million scam backfired spectacularly on Monday.
“This establishes that you are either delusional or you are a major fraud artist,” Hurley said of Signore’s claims of innocence. “Your performance today … (shows) you are either deluding yourself or have such a twisted view of reality you would go out and do it again.”
The hearing took so long that Hurley again ran out of time to decide what punishment former Coconut Creek resident Paul Schumack should receive for his role in the scam that operated out of plush offices west of Jupiter. Time constraints prevented Hurley from sentencing the two men and Signore’s ex-wife last week.
Schumack, 58, who faces a maximum 19½ years in prison, is to return to court Thursday. Laura Grande, 42, a former waitress who divorced her husband of three years last month, is to learn her fate today.
Victims of the massive scheme said the sentence was too lenient. “He should have gotten more — he took away homes, retirement years and broke up marriages,” said Kristen Dalton, a New York City woman who lost thousands in the scam. “Twenty years is just not enough.”
Still, the hearing underscored the perils of testifying at length about matters that can easily be contradicted.
But despite his lengthy recitation of various good deeds, records showed that Signore in 2004 was convicted in New Jersey for forging the titles to cars that were to auctioned off for charity. Signore pocketed $11,575 that was to go to the national Muscular Dystrophy Association and another charity, said Assistant U.S. Attorney Stephen Carlton. Ultimately, the restitution Signore was ordered to pay came from those who invested in the virtual concierge scam, he said.
“That doesn’t sound like a bighearted person,” Hurley said.
Hurley also rejected Signore’s attempts to smear Schumack by claiming the West Point graduate drained the virtual concierge operation without his knowledge. Schumack, who ran a successful ATM rental business before agreeing to sell the kiosks, sent Signore all the money he took from investors, after taking out his cut for commissions, Carlton said.
“It is a blatant disregard of the truth,” Carlton said of Signore’s claims that Schumack took advantage of him when he was busy building the business.
Hurley agreed, pointing out that evidence during the two-month trial clearly showed that Signore was the mastermind of the operation while Schumack and Grande were his accomplices.
Signore concocted a plan to bilk people by promising them returns of $10,800 on a roughly $3,500 investment in an electronic kiosk, Carlton said. The purported uses for the kiosks would vary depending on whether they were placed at hotels, hospitals, casinos or sports venues. For instance, ones placed at Roger Dean Stadium on Donald Ross Road to lure investors allowed people to order food without waiting in line.
Investors were told they would earn $300 a month over 36 months from advertising that would be placed on each machine. But evidence showed, of the 22,500 kiosks that were ordered, only 84 were produced and almost no advertising was sold.
Some early investors were paid with money that came from those who invested later. Some late investors eventually persuaded their credit-card companies to reject the charges. Still, the total loss was $31 million. And, Hurley said, Signore was the prime beneficiary.
“You were siphoning off the money completely,” he said.
While Signore blamed Schumack, company employees, its lawyer and accountant for his downfall, he had kind words for his ex-wife.
Ignoring the fact that Grande, like Schumack, unsuccessfully tried to convince jurors that Signore duped her into believing the operation was legitimate, Signore urged Hurley to show her mercy. “She was my angel,” Signore insisted. “She was my life.”
But mostly, Signore said, he was just confused about his predicament.”I don’t know why I was put through this,” he said, his voice cracking. “I wish I was a guilty man. It would be a lot easier to swallow.”