Stamen Medical faces Medicare fraud probe

In an affidavit for a search warrant unsealed Wednesday, a federal agent laid out why a Martinez businessman is suspected of Medicare fraud and other crimes.

Agents raided Stamen Medical Systems on Aug. 19, removing records and copies of the content on the business' computers.

According to the search warrant's affidavit, Joseph Testino is suspected of fraud in billing Medicare nearly $3 million between 2007 and 2009 for vacuum erection devices, a treatment for erectile dysfunction.

Special Agent David J. Graupner of the Department of Health and Human Services wrote that Stamen Medical has been the focus of a criminal investigation since November, when another federal agent allegedly could not get a straight answer about who owned Stamen Medical.

After Mr. Testino filed for divorce, investigators contacted Tanya Testino, who told them that she was listed as the company's owner in name only and that Mr. Testino was the real owner.

As a convicted felon, Mr. Testino would be barred from the federal medical care programs for 10 years after his last conviction, which was in 2003, according to Richmond County Superior Court records.

Agent Graupner's affidavit also alleges Mr. Testino violated Medicare rules by soliciting nonclients.

A former telephone salesman told agents he was instructed to tell potential customers that they could get a replacement device for the one they obtained from Augusta Medical Systems.

Augusta Medical, which had employed Mr. Testino and his partner James R. White, filed a Columbia County Superior Court lawsuit against Mr. Testino and his company. It accused him of taking a list of Augusta Medical clients when he left.

According to the affidavit, a complaint made by a physician to the Department of Health and Human Services also accuses Mr. Testino of requesting the doctor's authorizations for vacuum erection devices for patients who were not being treated for erectile dysfunction.