Florida Couple Admits Using Phony Treatment to Attract Clients

Carol Lewis
July 4, 2002

A Florida couple who admitted using an illegal magnetic device to “treat” thousands of people suffering from the pain of arthritis and other conditions must repay the government nearly three times the amount they received in fraudulent reimbursements.

Richard Markoll and his wife, Ernestine Binder Markoll, of Boca Raton, Fla., pleaded guilty to a felony charge of conspiracy to violate the Federal Food, Drug and Cosmetic Act (FD&C; Act). Richard Markoll also pleaded guilty to a felony violation of the FD&C; Act. His wife pleaded guilty to a misdemeanor violation of the Act. In addition, Richard Markoll pleaded guilty to mail fraud on behalf of his corporation, Magnetic Therapy Scovill Street Inc.

The Markolls treated over 2,000 people with the Electro-Magnetic Induction Treatment System (EMIT device). They billed Medicare and other private insurance companies $1.5 million for the “treatments” through clinics called Magnetic Therapy Center of Waterbury, Conn., Bio-Magnetic Therapy Center of Danbury, Conn., and Bio-Magnetic Therapy Center of Melville, Long Island. All the people treated at the clinics were covered by the Medicare program.

The EMIT device, which Richard Markoll invented to treat arthritis and other physical conditions, consisted of either a small tabletop unit or a larger bed-type unit. The device directed low-frequency magnetic pulses through coils of electric wire to create a pulsed electromagnetic field. An affected joint, such as a knee, elbow, back, or shoulder area, was placed inside an attached circular unit for a selected period of treatment time.

Richard Markoll first sought approval of the EMIT device from the Food and Drug Administration in 1980. The agency denied his request, citing that it was not determined to be safe and effective. All subsequent requests also were denied for the same reasons.

Under the FD&C; Act, it is illegal to commercially use a medical device for treatment of specific illnesses if it has not been approved by the FDA. Nevertheless, between 1990 and 1994, the Markolls operated their clinics as though the device had been approved by billing Medicare and private insurance companies for reimbursement. Concurrently, they told patients at their clinics that they were conducting clinical trials on the device to determine its safety and effectiveness in order for it to be approved by the FDA.

Patients were subjected to 18 half-hour treatments with the EMIT device, blood tests, X-rays, and an evaluation by a physician at the beginning, middle, end, and one month following the end of the course of treatment. However, no state-licensed medical doctor worked at any of the clinics full time. The few licensed physicians hired to work part time were not considered to be responsible for supervising all of the services being performed. According to FDA investigators, Richard Markoll, who holds a medical degree but is not licensed to practice medicine in any state, or his unlicensed employees performed all services related to the “treatments.”

The Markolls admitted submitting claims for the treatments to Medicare and other private insurance companies, which generally do not reimburse for medical services that are investigational or are performed with medical devices not approved by the FDA. To get around this roadblock, the Markolls used the Medicare provider numbers of two licensed physicians–with their permission–to falsely bill Medicare by using the billing codes for legitimate medical services. The husband-and-wife team falsely certified that the medical services were performed or supervised by the billing physician.

Following a December 1993 letter from the FDA concerning the company’s application to market the device, which cited the agency’s concerns about reliability and safety, Markoll informed the FDA that he would immediately terminate patient enrollment in studies. But the studies continued until the FDA intervened.

In addition to the company’s $4 million payment due within 18 months of the August 14, 2001, sentencing date, Richard Markoll was placed on three years probation and ordered to pay a $4,000 fine and a special assessment fee of $100. His wife was placed on probation for two years and ordered to pay a $1,000 fine and a special assessment fee of $25. Magnetic Treatment Center, the professional corporation of a Huntington, N.Y. internist, also agreed to reimburse $600,000 to the government to settle claims that his provider number was improperly used by both his company and the clinics operated by the Markolls.

Special agents from the FDA’s Office of Criminal Investigations worked on this case with agents from the Office of Inspector General, Defense Criminal Investigative Service, the U.S. Postal Service, and the FBI’s Health Care Fraud Task Force.

THis article was originally published in the July-August 2002 issue of FDA Consumer magazine.

This article was posted on February 4, 2019.