Oral and Maxillofacial Surgeon and His Employees Indicted on Health Care Fraud Violations; Several Area Dentists Indicted in Related Kickback Scheme

MCALLEN, TX—Oral and maxillofacial surgeon Gary Morgan Schwarz DDS, the owner of Valley Oral and Maxillofacial Surgery (VOMS) in McAllen, Texas, and two of his employees have been indicted for health care fraud; four other Rio Grande Valley dentists have been charged in the same indictment for soliciting and receiving kickback payments from for Schwarz for referring Medicaid beneficiaries to him in a related scheme, United States Attorney José Angel Moreno and Texas Attorney General Greg Abbott announced today.

A 22-count indictment, returned under seal on June 15, 2010, was partially unsealed today following the arrests of Schwarz, 57, and two of his employees, Renee L. Thornton, 56, the VOMS office manager, and Magdalena Garza Cazares, 45, Schwartz’s treatment coordinator and personal assistant. All three were arrested today in McAllen, Texas—Schwarz at his residence and Thornton and Cazares at Valley Oral and Maxillofacial Surgery Center. Two other area dentists allegedly involved with Schwarz in a related kickback scheme, Willis David Egger DDS, 40, of McAllen, and Reynaldo Casares DDS, 53, of Mission, were also arrested today. All five defendants have appeared before U.S. Magistrate Judge Dorina Ramos and have been ordered released upon posting a $100,000 unsecured bond. All the licensed defendants—Schwarz, Egger and Casares—are prohibited from treating Medicaid and Medicare beneficiaries as a condition of their release at least until a July 7, 2010, hearing. The indictment remains sealed as to others charged but not yet in custody.

Schwarz is accused of conspiring with Thornton and Cazares of defrauding Medicaid, a federal health care benefit program, by means of false and fraudulent claims in connection with the use of unlicensed, medical personal to perform dental services and for billing for services not rendered beginning in January 2007 through April 2010. Schwarz is also charged with nine counts of health care fraud alleging he submitted claims to Medicaid for payment for services not performed, examinations not performed by him personally, for services provided by unqualified persons including the administration of anesthesia and for Medicare beneficiaries unlawfully referred to him.

The two other dentists, Egger and Casares, as independent individual owners of dental clinics in Mission, are charged separately with multiple counts of illegally referring Medicaid beneficiaries to Schwarz in exchange for 15 percent of the total payment made by Medicaid to Schwarz for all referred beneficiaries.

Schwarz, Thornton and Cazares face up to 10 years in prison without parole and up to a $250,000 fine if convicted of conspiracy to commit health care fraud and/or any substantive health care fraud counts. Egger and Casares each face a maximum punishment of up to five years in prison and a fine not to exceed $25,000 for violating the kickback statute, if convicted.

The investigation leading to the charges in this case was conducted by the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney Carolyn Ferko is prosecuting the case.

An Indictment is a formal accusation of criminal conduct, not evidence.

The defendant is presumed innocent unless and until convicted through due process of law.