Texas man sentenced to 12.5 years in $61.5 million Medicare fraud scheme

A Texas man has been sentenced to 12.5 years in federal prison for his role in orchestrating a $61.5 million health care fraud scheme that exploited thousands of Medicare beneficiaries through deceptive telemarketing, the Justice Department announced.

Robert “Bobby” Leon Smith III, 50, of Archer City, Texas, was ordered Wednesday to serve 150 months in prison followed by two years of supervised release. The court also ordered Smith to pay $30.1 million in restitution and forfeit $9.2 million, along with real estate holdings in Texas.

According to court documents and evidence presented at trial, Smith owned and operated seven durable medical equipment supply companies in Florida, Texas, and Maryland, through which he submitted millions of dollars in fraudulent Medicare claims for orthotic braces and foot baths that beneficiaries did not need. He also owned a Texas-based marketing company that ran deceptive telemarketing campaigns targeting Medicare recipients.

Working with an offshore call center in the Philippines, Smith and his co-conspirators pushed medically unnecessary orthotic braces, foot baths, and genetic tests on Medicare beneficiaries across the country. 

Audio recordings played at trial captured Smith pressuring beneficiaries to accept the products even after they protested that they had no need or desire for them.

To obtain doctors’ orders for the products, Smith paid kickbacks and bribes to illegitimate telemedicine companies, then resold the orders to other medical suppliers he knew were using them to file false Medicare claims. In one recorded conversation, Smith was heard dismissing unsellable doctors’ orders as “trash” and “junk.” A former business partner testified at trial that the scheme eventually progressed to using forged doctors’ signatures — orders that the named physicians had no knowledge of.

After four days of trial, Smith pleaded guilty in March 2025 to one count of conspiracy to commit health care fraud and wire fraud and one count of health care fraud. He subsequently absconded and failed to appear for sentencing, remaining at large for more than a month before U.S. Marshals apprehended him.

The case was investigated by the HHS Office of Inspector General and the FBI’s Miami Field Office. Trial Attorney Owen Dunn of the Justice Department Criminal Division’s Fraud Section prosecuted the case.