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(Reuters) – The owner of a telemarketing company implicated in the largest component of a $1.2 billion Medicare fraud involving the supply of medically unnecessary orthotic braces pleaded guilty to criminal charges on Friday, the U.S. Department of Justice said.

Lester Stockett, the owner of Video Doctor USA and Telemed Health Group and chief executive of AffordADoc, also agreed to pay $200 million of restitution, as part of his plea to conspiracy to defraud the United States through kickbacks and conspiracy to commit money laundering, the department said.

Stockett, 52, of Medellin, Colombia, entered his plea before U.S. District Judge Madeline Cox Arleo in Newark, New Jersey. His sentencing is scheduled for Dec. 16.

Valentin Rodriguez, a lawyer for Stockett, in an email said his client “took full and early responsibility for his grave mistakes in this industry, and regrets what his actions caused.”

The Justice Department said Stockett was involved in a $424 million conspiracy where he obtained kickbacks and bribes from patient recruiters, pharmacies and brace suppliers, and then paid kickbacks and bribes to induce doctors to order braces for elderly and disabled patients who did not need them.

Stockett was among 24 defendants, including owners of medical equipment companies, charged in six states in April, in what prosecutors called one of the largest healthcare fraud schemes ever prosecuted in the United States.

The scheme allegedly involved the use of offshore call centers and shell companies, with laundered money used to buy exotic cars, yachts and luxury real estate.

“The extent of Mr. Stockett’s fraud and money laundering, literally, knew no bounds,” FBI Special Agent in Charge Gregory Ehrie said in a statement. “From the U.S. to Latin America, the Philippines, and the Dominican Republic, the FBI followed the trail of ill-gotten gains back to Stockett and his conspirators. They stole precious federal funds earmarked to assist the elderly.”

Criminal charges remain pending against Stockett’s co-defendants, Creaghan Harry and Elliot Loewenstern, over their alleged involvement in the Video Doctor scheme. Their lawyers did not immediately respond to requests for comment.

The U.S. Department of Health and Human Services has warned about scammers who offer braces through television and radio ads or by phone, and said Medicare might later deny needed braces to beneficiaries who accept unwanted or unneeded braces now.

Reporting by Jonathan Stempel in New York; Editing by Tom Brown

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