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Two Former Walter Reed Employees Federally Charged After Allegedly Receiving Money, Gifts From Businesses That Worked With Hospital

BETHESDA, Md. (WJZ) -- Two former Walter Reed National Military Center employees were charged after they allegedly failed to report financial gains and gifts they received from people and companies doing business with the hospital.

David Laufer, age 63, of Pittsburgh, Pennsylvania was charged with five counts of making false statements. According to the indictment, Laufer worked as the Chief of the Prosthetics and Orthotics Department at Walter Reed in Bethesda until May 2019. His job required him to complete a financial disclosure form that required him to report all sources of outside income greater than $200, any business outside the U.S. government he or his spouse was an employee or consultant, any agreements about past, present or future employment, travel-related reimbursement or gifts totaling more than $350 from any one source.

Although the indictment didn't detail specific dollar amounts, it alleged Laufer failed to report money he received from a Germantown company that provided prosthetics and orthotics materials to Walter Reed. The company's owner regularly communicated with Laufer about business between the company and Walter Reed, federal officials said.

Laufer told federal agents he never received money, gifts of sporting event tickets from any vendors doing business with his department, when in fact he did from the Germantown company, the indictment alleged.

A grand jury indicted Laufer on Dec. 16, 2019 and the indictment was unsealed when he was arrested on Jan. 28, 2020.

In a related case, 58-year-old Timothy Hamilton of Columbia, Maryland was also an employee in the Walter Reed Prosthetics and Orthotics Department from 1991 to 2017. Hamilton pleaded guilty to conspiracy to commit health care fraud and to acts affecting a financial interest.

Hamilton admitted that beginning in 2009, he allowed a person to use his orthotist certification to help their business gain national accreditation as a part of the needed documentation for Medicare credentialing. This allowed that person's company 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 received monthly financial payments from the person from 2009 until October 2015 totaling more than $45,000. The from 2011 to 2015, the company used Hamilton's credentials to submit more than 225 fraudulent insurance claims of more than $150,000, the indictment said.

He also received $15,000 in gift cards, checks, and other benefits such as tickets and lodging from another company that did business with Walter Reed. While Hamilton was receiving money from the companies, he ordered products from the companies on behalf of Walter Reed.

Hamilton faces a maximum 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. he's awaiting his sentencing.

Laufer faces a maximum sentence of five years in prison for each of the five counts of making a false statement.

Walter Reed is the largest joint military medical center in the U.S. It provided medical services including orthotic and prosthetic services to U.S. service members and their dependents, including wounded soldiers.

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