California businessowner admits role in $5.8 Million Medicare fraud scheme

San Diego, California – Jacobo Melcer, a 61-year-old resident of Bonita and longtime businessowner, pleaded guilty in federal court Wednesday to his role in a multimillion-dollar Medicare fraud scheme that involved falsified prescriptions, sham ownership transfers, and a network of kickbacks for patient referrals.

According to court documents, Melcer operated two durable medical equipment (DME) companies that billed Medicare for orthotic braces—items like wrist, knee, and back supports. But rather than serving a legitimate medical need, the scheme relied on fraudulent prescriptions and payments to marketers who funneled patient referrals his way.

Federal prosecutors allege Melcer paid over $227,000 in kickbacks to third-party companies that connected him with Medicare beneficiaries, many of whom had never met or been examined by the physicians whose names appeared on the prescriptions. These so-called evaluations often took place without any meaningful contact between doctor and patient—a glaring violation of Medicare rules.

In total, Melcer submitted nearly $5.9 million in fraudulent claims. Medicare paid out more than $3.4 million before the fraud was discovered.

Melcer’s scheme wasn’t limited to billing. He also admitted to using nominee owners to conceal who really controlled the companies. At one point, after a co-conspirator had been suspended from billing Medicare, Melcer helped create and sell two DME companies under false ownership, enabling that same co-conspirator to continue submitting claims under a new identity. The deception allowed the scheme to persist even after red flags had already been raised.

As part of his plea agreement, Melcer has agreed to forfeit and repay the $3.4 million he personally received from Medicare. His sentencing is scheduled for October 10, 2025.

The case marks yet another entry in a long list of fraud prosecutions tied to Medicare’s durable medical equipment program—an area that has become a frequent target for bad actors due to high reimbursement rates and relatively low oversight. While Medicare is intended to serve seniors and individuals with disabilities, cases like this demonstrate how easily the system can be exploited when safeguards are circumvented.

What separates Melcer’s case from lower-level fraud is the scope and coordination. He operated across multiple entities, engaged in layered concealment tactics, and knowingly worked with physicians who violated basic ethical obligations. The cost, both financially and to the integrity of public health programs, is significant.

Assistant U.S. Attorney Blanca Quintero is leading the prosecution for the Southern District of California, which continues to prioritize healthcare fraud cases—especially those that involve abuse of federal programs intended to serve vulnerable populations.