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Former Employee of Walter Reed National Military Medical Center Facing Federal Indictment in Maryland

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Allegedly Failed to Report Financial Benefits He Received from Individuals and Companies Doing Business with Walter Reed
Greenbelt, Maryland – A federal grand jury has indicted David Laufer, age 63, of Pittsburgh, Pennsylvania, formerly of Bethesda, Maryland, on five counts of the federal charge of making false statements.  The indictment was returned on December 16, 2019, and was unsealed upon his arrest on January 28, 2020.  Laufer had his initial appearance yesterday in U.S. District Court in Greenbelt and was released pending trial.
The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service – Mid-Atlantic Field Office; and Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to the indictment, until May 2019, Laufer worked as the Chief of the Prosthetics and Orthotics Department at Walter Reed National Military Medical Center, the largest joint military medical center in the United States.  Walter Reed is located in Bethesda and provides medical services, including orthotic and prosthetic services to U.S. service members and their dependents, including wounded soldiers.  Laufer’s job required him to complete annual Confidential Financial Disclosure forms which required him to report: all sources of outside income greater than $200; any business outside the U.S. Government in which Laufer or his spouse was an employee or consultant, whether or not compensated; any agreements or arrangements concerning past, current, and future employment; and travel-related reimbursement or other gifts totaling more than $350 from any one source during the reporting period.
The indictment alleges that Laufer failed to report financial benefits he received from Person B and Company B, located in Germantown, Maryland and owned, operated, and controlled by Person B.  Company B provided prosthetics and orthotics materials to Walter Reed in return for payments from the government.  According to the indictment, Person B regularly interacted with Laufer about Company B’s business with Walter Reed.  Further, the indictment alleges that Laufer falsely told federal agents that he had never received money, gifts, or sporting event tickets from any vendor doing business before the Prosthetics and Orthotics Department when in fact Laufer had received financial benefits, including travel and sporting event tickets, from Person B and Company B.
In a related case that was recently unsealed, Timothy Hamilton, age 58, of Columbia, Maryland, and an employee in the Walter Reed Prosthetics and Orthotics Department from 1991 to 2017, pleaded guilty to conspiracy to commit health care fraud and to acts affecting a financial interest.  Hamilton admitted that beginning in 2009, he allowed Person A to use his Orthotist certification for Person A’s business, Company A.  Hamilton was aware that Company A used his certification to obtain national accreditation and as part of its documentation for Medicare credentialing, which allowed Company A to bill insurers for medical treatment that required the involvement of a certified Orthotist, even though Hamilton was not providing those services in the vast majority of cases.  Hamilton admitted that he received monthly financial payments from Company A from 2009 until October 2015, totaling more than $45,000.  From 2011 to 2015, Company A used Hamilton’s credentials to submit more than 225 fraudulent insurance claims of more than $150,000.
Further, Hamilton admitted receiving more than $15,000 in gift cards, checks, and other benefits such as tickets and lodging, from Company B, which was run by Person B and which had business with Walter Reed’s Prosthetic and Orthotics Department.  During the time that Hamilton was receiving payments from Company A and Company B, Hamilton ordered products on behalf of Walter Reed from both companies.
Hamilton faces a maximum penalty of 10 years in prison for conspiracy to commit health care fraud and a maximum of one year in prison for acts affecting a financial interest.  Hamilton is awaiting sentencing.
If convicted, Laufer faces a maximum sentence of five years in prison for each of the five counts of making a false statement.  Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Robert K. Hur commended the DCIS and HHS OIG for their work in the investigation and thanked the FBI, the Veterans Administration Office of Inspector General, the Army CID Major Procurement Fraud Unit, and the Office of Personnel Management Office of Inspector General for their assistance.  Mr. Hur thanked Assistant U.S. Attorneys Harry M. Gruber and Dana Brusca, who are prosecuting these cases.


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