Man Pleads Guilty To Selling Fake 'Erectile Pump,' Defrauding Medicare of $2 Million

A former Northbrook businessman pled guilty in court Thursday to charges that he defrauded the federal government of $2 million by sending unwanted and unneeded medical supplies to Medicare recipients, including a penis enlarger he purchased on an X-rated website and repackaged as an “erectile pump.” 

Gary Winner, 49, a former resident of Northbrook who now lives in Wheeling, pled guilty in U.S. District Court in Providence, RI, to charges of healthcare fraud, money laundering and introducing an adulterated and misbranded medical device into interstate commerce, according to court documents.

Winner was president of the Buffalo Grove-based company Planned Eldercare, whose employees allegedly made telemarketing calls to elderly people around the nation, then obtained Medicare and physician information from callers who said they suffered from diabetes or arthritis, according to court documents. Winner allegedly bought telemarketing leads specifically for English-speaking, non-Hispanic people over the age of 65 — ensuring that he would be contacting people eligible for Medicare. 

Both a toll-free number and landline for Winner’s company were disconnected when Patch made attempts to call them Thursday. A man who answered the phone at Winner’s Wheeling address said he was “not interested” in talking to Patch.

Planned Eldercare employed up to 10 telemarketers between 2005 and 2008, who allegedly offered Medicare recipients products to help their ailments products “at no cost to you.” Winner allegedly instructed his employees to order as many products as possible — regardless of whether they were medically necessary or whether Medicare recipient authorized them — and bill the government’s health care program.

When employees confronted him about this practice, Winner typically responded by saying that, “It doesn’t cost the client anything as the government is paying for it, and that the government would just print more money, so order more,” according to court documents.

If the people who received items they did not order complained, Winner allegedly told them to just “put them under the sink.”

Among the products Winner’s employees peddled was an “erectile pump.” This was, in reality, one of several varieties of penis enlargers that Winner ordered from websites selling adult sexual products, then repackaged with an information sheet claiming that the device would help with bladder control, urinary flow and prostate comfort. He billed Medicare an average of $284 per “erectile pump” — which he purchased online for an average of $26, according to court documents.

Winner also illegally waived copayments for all Medicare patients, in hopes that this would induce the people whom his employees called to accept the products when they arrived and not report the fraud to Medicare. He instructed his employees to tell the recipients that they should ignore the explanation of benefits form that arrived from Medicare.

Charges of health care fraud and money laundering are punishable by up to 10 years in prison, a $250,000 fine and a 3-year term of supervised release, according to the U.S. Department of Justice. A charge of introducing an adulterated and misbranded medical device into interstate commerce is punishable by up to 3 years in prison, a $10,000 fine and a one-year term of supervised release.

All told, Winner could face up to 33 years in prison, a $760,000 fine and a four-year term of supervised release. He has agreed to forfeit $2 million in proceeds allegedly obtained by defrauding the Medicare system, according to court documents.

Among the agencies involved in the investigation were the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Internal Revenue Service’s Criminal Investigations division and the Food and Drug Administration.