A Houston pharmacist and his wife were sentenced today for their roles in an approximately $21.8 million Department of Labor (DOL) - Office of Workers Compensation Programs and Federal Employees Compensation Act fraud scheme.

George Philip Tompkins, 75, of Houston, Texas, the self-proclaimed “Compound King” and former owner of Piney Point Pharmacy, was sentenced to 10 years in prison. Marene Kathryn Tompkins, 68, also of Houston, the former vice president of Piney Point Pharmacy, was sentenced to 30 days of home confinement and three years of supervised release. Both were sentenced by U.S. District Judge Sim Lake of the Southern District of Texas, who presided over the trial of George Thompkins and the guilty plea of Marene Tompkins. Judge Lake also ordered George Tompkins to pay $12,300,381.36 in restitution (and forfeiture) and Marene Tompkins to pay $950,745.10 in restitution (and forfeiture).

On March 10, 2020, after a six-day trial, George Tompkins was convicted by a jury of conspiracy to pay and receive kickbacks, conspiracy to commit health care fraud, conspiracy to commit money laundering, 11 counts of health care fraud, and three counts of wire fraud. Kathryn Tompkins pleaded guilty on Jan. 3, 2020, to one count of conspiracy to pay kickbacks.

According to the evidence at trial, George Tompkins and others billed the DOL approximately $21.8 million for medically unnecessary compound gels and creams that were predicated on illegal kickback payments. George Tompkins and Anoop Chaturvedi, 48, a legal permanent resident from India who remains a fugitive on related charges, created the scheme to generate compounded pain cream prescriptions and bill health care programs for injured state and federal employees. George Tompkins and Chaturvedi used separate entities—including George Tompkins’s company, Wellington Advisors—to receive and launder the proceeds of their crimes. Further evidence presented at trial showed that George Tompkins sought to disguise illicit kickback payments as legitimate “marketing” expenses and continued to ship patients compound gels and creams even after patients repeatedly complained they did not want them.    

Marene Tompkins pleaded guilty before trial. As part of her guilty plea, she admitted that she conspired with her husband and others to pay illegal kickbacks as part of the scheme.

George and Marene Tompkins were charged in a superseding indictment in November 2018 along with Chaturvedi. Chaturvedi is considered a fugitive and a warrant remains outstanding for his arrest in connection with the charges. Anyone with information about his whereabouts is asked to contact the U.S. Postal Service - Office of Inspector General (USPS-OIG) at 1-888-877-7644.

A federal criminal indictment is merely an accusation. Chaturvedi is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

USPS-OIG, DOL-OIG, IRS-Criminal Investigation, U.S. Department of Homeland Security-OIG, and Department of Veterans Affairs-OIG, conducted the investigation. Assistant U.S. Attorney Julie Redlinger charged the case and, with Trial Attorneys Leslie Garthwaite and Devon Helfmeyer of the Criminal Division’s Fraud Section, provided substantial assistance in its prosecution. Trial Attorneys Drew Pennebaker and Sara Clingan of the Fraud Section tried the case and continue to prosecute it.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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WINSTON-SALEM, N.C. – A man who pleaded guilty to obtaining healthcare benefits from the Department of Veterans Affairs through fraud was sentenced yesterday, announced Matthew G.T. Martin, United States Attorney for the Middle District of North Carolina.

WILLIE DOSHER CAIN, 73, of Fayetteville, North Carolina, pleaded guilty on June 17, 2020, to one count of embezzlement. On January 5, 2021, United States District Judge Thomas D. Schroeder sentenced CAIN to five years of probation and ordered him to perform 250 hours of community service. Judge Schroeder cited the ongoing Covid-19 pandemic and the defendant’s age and prior military service as factors in determining the sentence. CAIN was also ordered to pay $903,668.08 in restitution and a forfeiture money judgment in the amount of $150,000, and forfeited $155,041.30 in cash, a modified 2018 Toyota Sienna van, and a mobility scooter. In a related civil forfeiture action, CAIN forfeited a Carolina Beach condominium.

According to documents filed with the court, CAIN, a US Army and Fayetteville Police Department Veteran, represented to the VA that as a result of shrapnel wounds sustained in Vietnam in 1965, he had suffered the loss of use of both legs, as well as loss of bowel and bladder control, that he was unable to perform daily activities such as dressing and bathing without assistance, and that he was dependent on a wheelchair or motorized scooter for mobility. Filed documents further state, however, that CAIN in fact maintained an active lifestyle throughout this time, including working as a firearms and concealed carry instructor, enjoying beach activities, playing basketball, dancing, and attending social events. He also bought a condominium at Carolina Beach on the third floor of a building which had no elevator. The investigation revealed that as a result of his false claims, CAIN received hundreds of thousands of dollars of VA benefits to which he was not entitled, in the form of direct payments for aid and attendance, modifications to his home, and the purchase and adaptation of vehicles.

This case was investigated by the Veterans Affairs – Office of the Inspector General. It was prosecuted by Assistant United States Attorneys Frank J. Chut and Meredith Ruggles.

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Two Florida residents have been charged with allegedly defrauding the federal government's largest health care programs, including a man linked to the American Mafia.

The Department of Justice announced Nov. 19 that Thomas Farese, 79, of Delray Beach, and Domenic Gatto, 47, of Palm Beach Gardens, have been charged with health care fraud, conspiracy to commit health care fraud and wire fraud and other crimes totaling $25 million in losses by Medicare, Tricare and CHAMPVA, the Department of Veterans Affairs’ health program for eligible Veterans' spouses and children.

The charges mark the second time in seven months the men have faced charges for allegedly engaging in health care fraud: in April, they and others were charged with conspiracy and committing fraud, allegedly bilking government health programs of $65 million.

According to court documents, Farese and Gatto hid their ownership of several medical equipment companies and arranged orders for medical devices, namely orthotic braces.

They then supposedly arranged and paid for orders, soliciting, bribing and receiving kickbacks from physicians for braces that weren't needed by patients -- orders that in turn were billed to the federal government, according to the Justice Department.

The pair also were involved in a related kickback scheme involving prescriptions for compounded medications -- prescriptions that are prepared for individual patients by specialty pharmacies that have been a frequent target of scammers for nearly the past decade.

Farese is no stranger to the U.S. legal system: he was charged and convicted in 1980 of running a multimillion-dollar marijuana smuggling and distribution operation through a Fort Lauderdale shipping company, sentenced to 30 years in prison and released in 1994.

Two years later, Farese was charged for laundering more than $1 million in drug money through several Florida coast strip clubs.

During his sentencing hearing in that case, federal prosecutor Jeffrey Slomar called Farese "a capo regime [captain] in the Colombo organized crime family" with "contacts throughout the world to facilitate money-laundering transactions," according to court documents.

He was sentenced to 10 years in prison and released in 2005, only to return seven years later, convicted again of money laundering.

He remained in prison until 2012, according to court documents.

Gatto is the developer of a West Palm Beach hotel complex, Banyan Cay Resort and Golf. He doesn’t appear to have a record of arrest prior to April.

Since at least 2013, the Justice Department has doggedly pursued companies and individuals that have profited from fraudulent orders for medical devices and compounded medications, which are personalized prescriptions crafted for patients who can't tolerate certain ingredients.

In the case of Tricare, the Justice Department has filed charges and convicted hundreds of persons involved in the schemes, including pharmacists, doctors, marketers and salesmen, including military troops.

Farese and Gatto face up to 20 years in prison if convicted of wire fraud and 10 years per count of conspiracy and health care fraud. The charge of violating the federal Anti-Kickback Statute carries a punishment of up to 5 years of prison, according to the Justice Department.

The men also face fines up to $250,000 for each count or twice the gross profit or loss caused by the offense, whichever is greater.

Both men have posted bonds of $700,000 and were released. According to the court, Farese's bail was paid by his wife Suzanne, daughter of Alphonse Persico, an alleged underboss in the Joseph Colombo crime family who died in prison in 1989.

Neither returned phone messages left by Military.com requesting comment on their cases.

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BOSTON – A vendor for several Veterans Affairs medical facilities pleaded guilty today to a scheme to profit by billing for, but failing to perform, critical medical gas inspections at VA facilities.

Chester Wojcik, 49, of Agawam, Mass., pleaded guilty to one count of wire fraud. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Nov. 19, 2020.

From May 29, 2014, through March 5, 2015, Wojcik, as the owner of Alliance Medical Gas Corporation, engaged in a scheme to defraud the VA by creating false invoices and reports for medical gas inspections that never took place. Medical gas supply systems deliver piped gases, including compressed air, oxygen, nitrous oxide, nitrogen and carbon dioxide to operating rooms, recovery rooms and patient rooms. Medical gas supply systems must be inspected and maintained regularly to ensure the safety of patients and medical professionals. Wojcik failed to perform, and then lied about, scheduled inspections of medical gas systems at VA facilities in Sioux Falls, S.D., Tuskegee, Ala. and Montgomery, Ala. Wojcik was paid $8,981 by the VA for services that his company did not perform.

The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorney Elysa Q. Wan of Lelling’s Health Care Fraud Unit is prosecuting the case.

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BOSTON – A vendor for several Veterans Affairs medical facilities was sentenced today for defrauding the VA by creating false invoices and reports for medical gas inspections that never took place.

Chester Wojcik, 49, of Agawam, Mass., was sentenced by U.S. District Court Judge Mark G. Mastroianni to two years of probation. In August 2020, Wojcik pleaded guilty to one count of wire fraud.

Wojcik, as the owner of Alliance Medical Gas Corporation, engaged in a scheme from May 29, 2014, through March 5, 2015 to defraud the VA by creating false invoices and reports for medical gas inspections that never took place. Medical gas supply systems deliver piped gases, including compressed air, nitrous oxide, nitrogen and carbon dioxide into operating rooms, recovery rooms and patient rooms. Medical gas supply systems must be inspected and maintained regularly to ensure the safety of patients and medical professionals, and to prevent gas leaks, explosions and other safety hazards. Wojcik failed to perform scheduled inspections of medical gas systems at VA facilities in Sioux Falls, S.D., Tuskegee, Ala. and Montgomery, Ala. and later lied to VA facilities and federal investigators about the offense. Wojcik was paid $8,981 by the VA for services that his company did not perform.

United States Attorney Andrew E. Lelling; Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorney Elysa Q. Wan of Lelling’s Health Care Fraud Unit prosecuted the case.

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ALBUQUERQUE, N.M. – Susan K. Harris, 74, and William S. Harris, 60, both of Albuquerque, were sentenced today in federal court for conspiracy to defraud the United States and other financial crimes committed in connection with the operation of Ayudando Guardians, Inc., a non-profit corporation that previously provided guardianship, conservatorship and financial management to hundreds of people with special needs.

Susan Harris was sentenced to 47 years in prison, followed by three years of supervised release. William Harris was sentenced to 15 years in prison, followed by three years of supervised release. Both will be required to pay the entire amount of stolen funds as restitution to the victims.

A superseding indictment filed on Dec. 5, 2017, charged Susan Harris, William Harris, Sharon A. Moore, 64, and Susan Harris’ son, Craig M. Young, 53, with various financial crimes, including conspiracy to defraud the United States, mail fraud, aggravated identity theft and money laundering.

Susan Harris pleaded guilty on July 11, 2019, to conspiracy, mail fraud, aggravated identity theft, money laundering and conspiracy to commit money laundering. William Harris pleaded guilty on June 25, 2019, to conspiracy to defraud the United States and to commit money laundering. Both Susan Harris and William Harris were originally scheduled to be sentenced on March 2, 2020, but failed to appear for their sentencing hearing. A bench warrant was issued for their arrest and the U.S. Marshals Service arrested them in Shawnee, Oklahoma, on April 15, 2020, after they fled New Mexico.

According to their plea agreements and other court records, Susan Harris acted as president and was the 95-percent owner of Ayudando, while Moore acted as chief financial officer and was a five-percent owner. They engaged in a pattern of criminal conduct from November 2006 to July 2017 that included unlawfully transferring money from client accounts to a comingled account without any client-based justification. They wrote and endorsed numerous checks, often of more than $10,000, from these comingled accounts to themselves, family members, cash and other parties where payment would benefit their families.

Susan Harris took steps to maintain Ayudando’s appearance of legitimacy, including submitting a proposal to the New Mexico Office of Guardianship that contained numerous false representations, including a false claim that Young was a nationally certified guardian at the time of the submission.

William Harris, who worked as a guardian, admitted that he knew that Moore was siphoning payments to clients from the Department of Veterans Affairs and Social Security Administration and using the money to benefit herself, Harris, and their co-conspirators. Harris specifically admitted receiving, endorsing, and depositing dozens of checks drawn on Ayudando accounts for his own personal benefit. Harris admitted to his involvement in a money laundering scheme, using an Ayudando corporate credit card for personal expenses, knowing that it would be paid for with client money. He also admitted his role in a loan application for the stated purpose of expanding the Ayudando business with the actual intent of using the money to “pay back” clients whose money had been taken without authorization.

The stolen funds were used to fund an extravagant lifestyle, including the purchases of homes, vehicles, luxury RVs and cruises, as well as a private box at “the Pit” at the University of New Mexico. The stolen funds were also used to pay for more than $4.4 million in American Express charges incurred by the defendants and their families.

“The sentences that the defendants have received today are just, and the defendants are fully deserving of them,” said Fred J. Federici, Acting U.S. Attorney for the District of New Mexico. “The defendants’ conduct in preying upon individuals with special needs, who they were entrusted to protect, was both loathsome and contemptible. We hope that these sentences serve as a warning to others that we will seek to hold accountable anyone who chooses to violate federal law by abusing any similar position of trust for personal enrichment.”

“Taking advantage of disabled Veterans and other vulnerable Americans deserves a harsh penalty, especially when those entrusted with their finances instead use the money for vacations and other expensive perks,” said Raul Bujanda, Special Agent in Charge of the FBI Albuquerque Field Office. “The FBI will never stop trying to hold such criminals accountable and making sure their victims get justice.”

“This final phase of the investigation will hopefully give some closure to the many victims who have suffered as a result of the selfish acts of the defendants,” said Sonya K. Chavez, United States Marshal for the District of New Mexico. “We at the United States Marshals Service will continue to work diligently with our partners to protect the citizens of New Mexico, particularly those who are most vulnerable.”

“The criminal actions by these defendants were truly brazen and egregious,” stated IRS - Criminal Investigation Special Agent in Charge Albert Childress. “Instead of helping people who placed their trust in them, the defendants were greedy and helped themselves to their clients’ money. They must now pay the consequences for their bad deeds.”

“Today's sentencing reflects the egregious crimes committed by the defendants, who not only violated the public’s trust but also the trust of a vulnerable population who relied upon them to manage their benefits. We will continue to join our law enforcement partners in investigating organizations and individuals who misuse Social Security benefits that they agreed to manage on behalf of beneficiaries,” said Adam Schneider, Special Agent-in-Charge of the Social Security Administration Office of the Inspector General, Dallas Field Division. “I thank our law enforcement partners for their outstanding investigative work and the District of New Mexico U.S. Attorney’s Office for their efforts in bringing these individuals to justice.”

“Criminal acts by would-be fiduciaries are most heinous because they violate Veterans’ trust and put in jeopardy the benefits on which they are dependent,” said Special Agent in Charge Rebeccalynn Staples, Veterans Affairs, Office of Inspector General. “This sentence should send a clear message that the VA OIG will continue to work with our law enforcement partners to ferret out those who would defraud VA and steal the benefits of deserving Veterans.”

Young pleaded guilty on Nov. 12, 2019, and was sentenced on June 11, 2020, to five years and 11 months in prison, followed by three years of supervised release. Young was ordered to pay approximately $6.8 million in restitution to the victims of the fraud scheme.

Moore pleaded guilty on July 11, 2019, and was sentenced on March 2, 2020, to 20 years in prison, followed by three years of supervised release. Moore was ordered to pay the entire amount of stolen funds as restitution to the victims.

The Albuquerque Field Office of the FBI and the Phoenix Field Office of IRS Criminal Investigation conducted the investigation with the assistance of the Complex Assets Unit and the U.S. Marshals Service, the Criminal Investigations Division of the Department of Veterans Affairs Office of Inspector General, and the Dallas Field Division of the Social Security Administration Office of Inspector General. Assistant U.S. Attorneys Jeremy Peña and Brandon L. Fyffe prosecuted the case.

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BAY CITY - A vascular surgeon from Bay City, Michigan pleaded guilty today to participating in a scheme to defraud Medicare, Medicaid, and Blue Cross/Blue Shield out of approximately $19.5 million, announced United States Attorney Dawn N. Ison.

Ison was joined in the announcement by Acting Special Agent in Charge Joshua Hauxhurst of the FBI’s Detroit Division and Special Agent in Charge Mario Pinto of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

Pleading guilty was Dr. Vasso Godiali, 59.

According to the plea agreement, Godiali began knowingly defrauding the three medical insurers in approximately 2009 and did so by causing the submission of false billing to all three insurers. As evidenced in the plea agreement, Godiali’s false and fraudulent billing includes admissions related to claims for the placement of stents in dialysis patients and for the treatment of arterial blood clots. Godiali admitted that he billed for the placement of multiple stents in the same vessel, and prepared medical records purporting to document the medical necessity justifying that billing. In fact, Godiali did not place those stents, and he admitted to billing the insurers for services never rendered while preparing materially inaccurate medical records to justify the fraudulent billing. With respect to arterial blood clots, the plea agreement documents a similar pattern of misconduct. Godiali acknowledged that his medical records would describe encountering occluded arteries that would appear to justify the performance of arterial thrombectomies. In fact, as Godiali admitted that he often encountered no such occlusions, performed no such thrombectomies, and thus billed insurers for services never rendered while preparing false medical records to justify the fraudulent claims.

“The scale of Dr. Godiali’s fraud is stunning and his willingness to illegally enrich himself at the expense of our district’s taxpayers and policyholders is egregious.” said U.S. Attorney Ison. “Brazen schemes like this have no place in our district, and today’s guilty plea reflects my office’s commitment to holding medical providers accountable when they abuse society’s trust by engaging in such misconduct.”

“When Dr. Godiali submitted claims for medical services that were never provided, he violated the trust of his patients and defrauded taxpayer-funded health care programs,” said Special Agent in Charge Mario M. Pinto. "HHS-OIG agents will continue to work with our law enforcement partners to identify and investigate medical providers who prey on beneficiaries and steal from federal health care programs."

“Today’s guilty plea should send a clear message to all health care providers that health care fraud is a federal crime that carries serious consequences and will not be tolerated,” said Josh P. Hauxhurst, Acting Special Agent in Charge of the FBI in Michigan. “In partnership with federal, state, and private sector partners, the FBI will work diligently to identify these fraud schemes and hold parties who execute them accountable.”

Sentencing is set for September 15, 2022. Godiali faces up to ten years’ imprisonment and the forfeiture of $19.5 million. Under the terms of the plea agreement, Godiali will be required to pay $19.5 in restitution to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan. A civil forfeiture case against approximately $39.9 million seized from accounts controlled by Godiali remains pending.

The case was investigated by Special Agents of the HHS and FBI, with cooperation and assistance from the Michigan Attorney General’s Office, Michigan Department of Health and Human Services - Office of Inspector General.

The case is being prosecuted by Assistant U.S. Attorneys John K. Neal, Philip A. Ross, and Craig F. Wininger with assistance from the Michigan Attorney General’s Health Care Fraud Division.

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ALEXANDRIA, Va. – An Arlington businessman pleaded guilty today to making false statements to multiple federal agencies in order to fraudulently obtain multimillion-dollar government contracts, COVID-19 emergency relief loans, and undeserved military service benefits.

According to court documents, Robert S. Stewart, Jr., 35, was the owner and president of Federal Government Experts (FGE) LLC, an Arlington-based company that purported to provide various services to the U.S. government. In this capacity, Stewart made false statements to the Federal Emergency Management Agency (FEMA) and the Department of Veterans Affairs (VA) in order to obtain lucrative contracts to provide COVID-19 personal protective equipment (PPE). In addition, Stewart fraudulently obtained loans under the federal Paycheck Protection Program and the Economic Injury Disaster Loan Program, and he also defrauded the VA by falsely claiming to be entitled to Veteran’s benefits for serving in the U.S. Marine Corps when, in fact, he never served in the Marines.

“Stewart’s fraudulent conduct during a critical time in our Nation’s fight against COVID-19 undermined the government’s ability to provide much needed PPE to the community, including to the front-line health care workers serving our military Veterans,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “In addition, by fraudulently obtaining government-backed loans intended to be lifelines to keep businesses afloat, Stewart unlawfully took and misused resources devoted to help struggling Americans.”

As part of his PPE scheme, Stewart falsely stated to procurement officials from FEMA and the VA that he was in possession of large quantities of PPE, including N95 masks. Based on Stewart’s false statements, the VA and FEMA awarded FGE contracts valued at $35,000,000 and $3,510,000, respectively. The VA intended to use the PPE purchased from FGE to protect employees and patients at various Veterans Health Administration facilities, which serve the medical needs of over nine million Veterans each year. FGE failed to supply any PPE to the VA and FEMA. The U.S. government suffered no financial loss because the contract called for payment upon delivery and inspection of the goods.

“Exploiting COVID-19 relief efforts for personal gain, to receive lucrative contracts with no intention of fulfilling them, is unconscionable,” said DHS Inspector General Joseph V. Cuffari. “I am proud of everyone at DHS OIG who worked on this case. I am also thankful to our law enforcement partners who helped us bring a swift end to this scheme.”

Stewart also applied for various loans on behalf of FGE under the federal Paycheck Protection Program and the Economic Injury Disaster Loan Program. These programs were designed to provide emergency financial assistance to the millions of people suffering the economic effects of the COVID-19 pandemic. The loan applications submitted by Stewart falsely overstated the number of FGE employees and the amount of FGE’s payroll, two factors that were important in determining loan eligibility and the proper amount of the loan. In addition, Stewart used some of the loan proceeds for personal expenditures rather than to pay employees or for other appropriate business expenses. The loss to the U.S. government from this fraud is approximately $261,500.

In a separate fraudulent scheme, Stewart, an Air Force Veteran, submitted an application for benefits to the VA. The application was fraudulent in that Stewart falsely claimed that he also served in the U.S. Marine Corps. Stewart created fraudulent documents that stated he attained the rank of Corporal in the Marine Corps and was honorably discharged after receiving several awards and commendations, including the Rifle Expert Badge, Pistol Expert Badge, Meritorious Mast, National Defense Service Medal, Sea Service Deployment Ribbon, Southwest Asia Service Medal, Certificate of Appreciation, and the Kuwaiti Liberation Medal. Stewart, in fact, never served in the Marines. Based on his fraudulent application, he received excess benefits in the amount of $73,722.45.

“By falsely claiming to have served in the U.S. Marine Corps to unlawfully increase his Veteran’s benefits, Stewart stole money dedicated to providing resources and services to American military Veterans and their families. This was an affront to those who honorably served,” said Acting U.S. Attorney Parekh. “We thank our law enforcement partners for bringing Stewart to justice.”

Stewart pleaded guilty to making false statements, wire fraud, and theft of government funds and is scheduled to be sentenced on June 16, 2021. He faces a maximum penalty of 35 years in prison. 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.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; James A. Dawson, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division; Joseph V. Cuffari, Inspector General for the Department of Homeland Security (DHS); and Michael J. Missal, Inspector General for the U.S. Department of Veterans Affairs, made the announcement after U.S. District Judge Rossie D. Alston, Jr. accepted the plea.

Assistant U.S. Attorney William Fitzpatrick is prosecuting the case.

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RALEIGH, N.C. – A Morehead City woman was sentenced today to 30 months in federal prison, followed by three years of supervised release on a charge of Making Material False Statements Relating to Healthcare Matters, in violation of Title 18, United States Code, Section 1035(a)(2). Shelly Phillips Bandy, 41, was also ordered to make restitution of $374,809.92, jointly and severally with her company, A Perfect Fit For You, Inc. (APFFY). Bandy is also liable for a civil judgment of $34,708,945.42 arising from the same conduct.

According to court documents, APFFY was a durable medical equipment provider located in Morehead City, North Carolina.Durable medical equipment includes items such as powered wheelchairs, orthotic braces, diabetic shoes, powered air flotation beds, osteogenesis stimulators, pneumatic compressors, etc. Between March 2015 and November 2016, one or more employees of APFFY submitted fraudulent billings claims to Medicaid for providing durable medical equipment to Medicaid recipients. These fraudulent claims contained the personal identifying information of Medicaid recipients who had never ordered nor received any durable medical equipment from APFFY.In fact, some of the patients had been deceased years before the false claims were even submitted. This scheme resulted in an estimated loss to Medicaid of approximately $10,069,361.35.

After appointment of a receiver, APFFY self-reported suspected fraudulent activity to the North Carolina Medicaid Investigations Division. Thereafter, the company cooperated throughout the investigation.

On December 13, 2017, and based on the conduct described above, the United States and State of North Carolina filed a civil complaint under the federal and state False Claims Acts against APFFY and its owners Margaret Gibson, and Bandy. The federal and North Carolina False Claims Acts mandate that the Governments recover triple the money falsely obtained, plus substantial civil penalties for each false claim submitted. To resolve those claims, the APFFY agreed to pay $20,138,722.70, while Gibson has agreed to pay $4,000,000. As for Bandy, the United States and State of North Carolina obtained a $34,708,945.42 default judgment against her in the civil action. It should be noted that the civil claims against A Perfect Fit for You, Inc. and Gibson are allegations only and were resolved by settlement. There was no judicial determination or admission of liability as to them in the civil case.

In addition to the civil case, APFFY pled guilty to a Criminal Information charging Health Care Fraud, in violation of Title 18, United States Code, Section 1347. On March 2, 2021, the company was sentenced to 5 years’ probation and ordered to pay a $2,000,000 fine in addition to paying $10,069,361.35 in restitution to the North Carolina Medicaid Program on a charge of Healthcare Fraud, in violation of Title 18, United States Code, Section 1347.

On December 29, 2020, Bandy pled guilty to making false statements relating to health care matters in violation of Title 18, United States Code, Section 1035. Bandy admitted to submitting fraudulent claims to Medicaid on behalf of APFFY. Specifically, Bandy admitted that on January 1, 2016, she billed Medicaid for 43 fraudulent claims, totaling $626,773.79. Medicaid subsequently paid $374,809.92 for those claims.

Today, in ordering Bandy to serve 30 months in federal prison, the court noted that as a society, citizens have decided to provide healthcare for the very poorest among us. In doing so, the Court noted that the Medicaid program is a system of trust. “The whole system is built on honesty,” the court stated. “If you break faith with the honor system that we built to care for the least among us, a person who does that needs to know … you will go to a penitentiary.” In stating this, the Court expressly rejected the defendant’s argument for a probationary sentence.

G. Norman Acker, III, Acting United States Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The investigation of this case was conducted by the North Carolina Department of Justice’s Medicaid Investigations Division (MID) and the United States Department of Health and Human Services Office of the Inspector General.Assistant United States Attorney William M. Gilmore is the prosecutor on the criminal case, while Assistant United States Attorney C. Michael Anderson represented the United States in the civil case. Special Deputy Attorneys General F. Edward Kirby, Jr. and Michael M. Berger, who also serve as a Special Assistant United States Attorneys, represented the United States and the State of North Carolina in the civil case.

The MID investigates and prosecutes health care providers that defraud the Medicaid program, patient abuse of Medicaid recipients, patient abuse of any patient in facilities that receive Medicaid funding, and misappropriation of any patients’ private funds in nursing homes that receive Medicaid funding. To report Medicaid fraud or patient abuse in North Carolina, call the MID at 919-881-2320.

The MID receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,160,252 for Federal fiscal year (FY) 2020. The remaining 25 percent, totaling $2,053,414 for FY 2020, is funded by the State of North Carolina.

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Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael J. Missal, the Inspector General of the United States Department of Veterans Affairs, Office of the Inspector General (“VA-OIG”), announced that SHAWN PIERRE HOBBS, a soldier for the Connecticut Army National Guard (“Army National Guard”) and a Rikers Island correction officer employed by the New York City Department of Correction (“NYC DOC”), was arrested yesterday in El Paso, Texas, on wire fraud and aggravated identity theft charges. HOBBS is alleged to have defrauded the Department of Veterans Affairs (“VA”) and NYC DOC in order to receive financial and other benefits to which he was not entitled. HOBBS is expected to be presented in federal court in El Paso this afternoon.

U.S. Attorney Audrey Strauss said: “Shawn Pierre Hobbs, a National Guard soldier and correction officer at Rikers Island, allegedly submitted false certifications to receive Veterans benefits for hundreds of hours of work he did not perform. Moreover, Hobbs allegedly forged the signatures of his colleagues to make the fraudulent paperwork appear to be authentic. Hobbs’s alleged conduct certainly does not befit that of a sworn officer of two government agencies, and thanks to the assistance of Veterans Affairs, he is now charged criminally for fraud and identity theft.”

VA-OIG Inspector General Michael J. Missal said: “The charges unsealed today are the result of the hard work and dedication of the VA Office of Inspector General’s special agents working with our law enforcement partners. The VA OIG will seek to hold accountable those who perpetrate fraud and steal benefits that are intended for deserving Veterans.”

According to the Complaint[1] unsealed today in Manhattan federal court:

From at least in or about April 2015, up to and including at least on or about April 8, 2021, SHAWN PIERRE HOBBS served as a soldier in the Army National Guard. Army National Guard soldiers hold civilian jobs or attend school while maintaining their military training part-time. The VA provides certain benefits to United States Veterans, including Army National Guard soldiers, who work in approved on-the-job training programs (“VA Benefits”). From at least in or about January 2019, up to and including at least on or about April 8, 2021, HOBBS was employed by NYC DOC as a correction officer at Rikers Island, a VA-approved on-the-job training program. NYC DOC employees who are members of the military are entitled to paid leave, with certain limitations, while they are engaged in the performance of ordered military duty.

From at least in or about January 2019, up to and including at least in or about March 2021, HOBBS defrauded the VA and NYC DOC in order to obtain VA Benefits and paid military leave from NYC DOC, among other things. Specifically, HOBBS submitted eight fraudulent military memoranda purportedly from the Army National Guard to NYC DOC in order to obtain paid leave. The fraudulent military memoranda each bore the seal of the United States Department of Defense and the letterhead of the Army National Guard, and falsely represented that HOBBS had served military duty on hundreds of days on which he, in fact, had not served. At the same time, HOBBS transmitted by fax 16 fraudulent employment certifications to the VA that were purportedly from NYC DOC and falsely represented that he had worked for NYC DOC for hundreds of hours, which he had not worked. To effectuate this scheme, HOBBS used the names, identities, and signatures of an Army National Guard Platoon Leader, an Army National Guard Readiness Noncommissioned Officer, and a NYC DOC employee without their knowledge or authorization on the fraudulent military memoranda and employment certifications.

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SHAWN PIERRE HOBBS, 34, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison. The statutory maximum and mandatory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

Ms. Strauss praised the outstanding investigative work of VA-OIG.

This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorney Jane Kim is in charge of the prosecution.

The charges contained in the Complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.

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Two Texas construction company owners have pleaded guilty in a long-running scheme to defraud the United States.

Michael Wibracht of San Antonio, Texas, the former owner of several companies in the construction industry, conspired to defraud the United States in order to obtain valuable government contracts under programs administered by the U.S. Small Business Administration (SBA) for which neither his nor his co-conspirators’ companies were eligible. One co-conspirator, Ruben Villarreal, also of San Antonio, pleaded guilty on Nov. 20, 2020, to participating in the same conspiracy.

“For many years, this conspiracy undermined the integrity of the federal procurement process,” said Acting Assistant Attorney General Richard A. Powers of the Department of Justice Antitrust Division. “This conduct robbed opportunities from honest businesses, especially those owned by historically disadvantaged individuals and service-disabled Veterans.”

According to court documents filed in the Western District of Texas in San Antonio, Wibracht, Villarreal, and other co-conspirators conspired to defraud the United States by interfering with the function of the SBA and fraudulently obtaining money from agencies of the United States as early as 2004 continuing at least through 2017. As part of this scheme, the conspirators installed Villarreal, a service-disabled Veteran, as the ostensible owner of a general construction company held out as a Service-Disabled Veteran-Owned Small Business (SDVOSB). Wibracht and other co-conspirators, however, exercised disqualifying financial and operational control over the construction company. The conspirators concealed that control in order to secure over $250 million in government contracts that were “set aside” for SDVOSBs in order to benefit their larger, non-qualifying businesses. The SBA administers the SDVOSB program, which is designed to increase the number of government contracts awarded to small businesses owned and controlled by service-disabled Veterans. To qualify as an SDVOSB, a company, among other things, must be owned and controlled by a service-disabled Veteran.

“Conspiring to fraudulently gain access to federal contracts set aside for small businesses owned and operated by disadvantaged individuals or service-disabled Veterans is unacceptable,” said Inspector General Hannibal “Mike” Ware. “The guilty pleas send a strong message that those responsible will be held accountable. I want to thank the Antitrust Division and our law enforcement partners for their support and dedication to pursuing justice in this case.”

“These plea agreements showcase the unique expertise of the U.S. Army CID’s specialized unit, the Major Procurement Fraud Unit,” said Special Agent in Charge Ray A. Rayos of the Southwest Fraud Field Office of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “Together, with our partner agencies and the Department of Justice Antitrust Division, those individuals responsible for engaging in a complex and long running scheme to defraud the United States government have been brought to justice.”

“The General Services Administration Office of Inspector General is committed to working with its law enforcement partners and the Department of Justice Antitrust Division to ensure that individuals and companies who fraudulently obtain contracts meant for legitimate small and disadvantaged businesses are investigated and prosecuted to the full extent of the law,” said Inspector General Carol Ochoa of the General Services Administration.

“The defendants conspired to fraudulently obtain multi-million dollar government contracts under a program designed to benefit service-disabled Veterans,” said Inspector General Michael J. Missal of the Department of Veterans Affairs. “These guilty pleas send a clear message that individuals and companies who defraud the government contracting process for service-disabled Veterans will be held accountable. The VA OIG thanks the Department of Justice Antitrust Division and our law enforcement partners for their joint efforts to achieve justice in this case.”

“This outcome is a testament to the commitment of the Defense Criminal Investigative Service (DCIS) and our Law Enforcement partners in safeguarding the integrity to the DoD contracting process,” said Acting Special Agent-in-Charge Gregory P. Shilling of the DCIS Southwest Field Office. “DCIS will utilize all available resources to pursue allegations of fraud and corruption, bringing to justice those who seek to enrich themselves through the exploitation of Small Business Administration programs designed to help disadvantaged groups.”

Wibracht pleaded guilty to one count of conspiring to commit wire fraud and defraud the United States. Villarreal pleaded guilty to conspiracy to defraud the United States and is scheduled to be sentenced before Judge Xavier Rodriguez on June 23, 2021. Both men face a maximum penalty of five years in prison and a $250,000 fine. The maximum fine for an individual may be increased to twice the gain derived from the crime, or twice the loss suffered by victims of the crime, if either of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The SBA Office of Inspector General, Army Criminal Investigation Command’s Major Procurement Fraud Unit, General Services Administration Office of Inspector General, Department of Veterans Affairs Office of Inspector General, and DCIS are investigating the case, with assistance from the U.S. Attorney’s Office for the Western District of Texas and the Army Audit Agency.

The Department of Justice Antitrust Division’s Washington Criminal II Section is prosecuting the case. Special thanks are extended to Assistant U.S. Attorney William F. Lewis, Jr. of the U.S. Attorney’s Office for the Western District of Texas.

Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal II Section at 202-598-4000, or visit https://www.justice.gov/atr/contact/newcase.html.

In November 2019, the Department of Justice created the Procurement Collusion Strike Force, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact procurement and grant and program funding at all levels of government — Federal, state, and local. For more information, visit https://www.justice.gov/procurement-collusion-strike-force.

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A construction company owner who is neither a Veteran nor a minority has been sentenced to 28 months in prison for defrauding the government out of $346 million in contracts meant for service-disabled Veterans and minorities.

Matthew C. McPherson, 45, of Olathe, Kansas, was also ordered to pay the government back $5.5 million, which was his share of profits from the scheme, the Justice Department said in a news release.

"This contractor not only defrauded the government, but cheated to get contracts that should have gone to firms led by disabled Veterans and minority owners," U.S. Attorney Teresa Moore said in the release Wednesday, the day McPherson was sentenced in federal court. "His greed and deception allowed him to enrich himself at the expense of disabled Veterans and minority owners."

McPherson had pleaded guilty in June 2019 to one count of conspiracy to commit wire fraud and major program fraud after admitting he participated in a plot from September 2009 to March 2018 to get federal contracts meant for small businesses owned and controlled by Veterans, service-disabled Veterans and certified minorities, according to the Justice Department.

McPherson's sentencing "sends a clear message that contractors unjustly enriching themselves at the expense of our nation's Veterans will not be tolerated," Gavin McClaren, acting special agent in charge with the Department of Veterans Affairs inspector general's central field office, said in a statement.

McPherson and his co-conspirators were accused of setting up two companies using straw owners to fraudulently win the contracts.

The first was Zieson Construction Company in July 2009. Stephon Ziegler, 61, of Weatherby Lake, Missouri, a Black service-disabled Veteran, was listed as the "nominal owner" of the business, but McPherson and his co-conspirators actually ran the company and received most of its profits, according to the Justice Department.

Zieson was awarded 199 federal contracts worth about $335 million meant for small businesses, minority-owned small businesses and Veteran-owned small businesses, according to the news release. McPherson and his co-conspirators each got about $4.2 million through Zieson by using false and fraudulent invoices, the Justice Department said.

When Zieson grew too big for small business contracts in 2014, McPherson and his co-conspirators set up another company using the name of a Native American employee at Zieson, Rustin Simon, 45, of Smithville, Missouri.

Much like Zieson, the second company, called Simcon Corp., was actually controlled by McPherson and his co-conspirators, according to the Justice Department. Simcon also used the same office space and employees as Zieson, and Zieson falsely claimed to subcontract work to Simcon so Simcon would have a track record that made it able to better compete for federal contracts, the department said.

Simcon won a $4.4 million contract in July 2016 from the Air Force and a $6.9 million contract in September 2016 from the Army. McPherson and his co-conspirators each got about $319,866 from Simcon using false and fraudulent invoices, according to the Justice Department.

One of McPherson's co-conspirators, Patrick Michael Dingle, 50, of Parkville, Missouri, pleaded guilty to one count of conspiracy to commit wire and major program fraud and is awaiting sentencing. A third conspirator, Matthew L. Torgeson, of Topeka, Kansas, had been indicted as well, but died in November 2019.

Ziegler has pleaded guilty to making a false statement to the VA and is scheduled to be sentenced Jan. 20. Simon has pleaded guilty to two counts of making material false statements to the Small Business Administration and is awaiting sentencing.

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Defrauding Veterans of their benefits would be its own federal crime under a bipartisan bill recently reintroduced in the Senate.

Under the bill from Sens. Catherine Cortez Masto, D-Nev., and Marco Rubio, R-Fla., fraud schemes that target Veterans benefits would be punishable by up to five years in prison, a fine or both.

"Anytime the federal government provides essential benefits to our constituents, there's going to be predators out there to take it away," Cortez Masto said in a phone interview with Military.com on Tuesday. "So we have to make sure that we are imposing the appropriate enforcement to protect those individuals so that their benefits are not taken."

The bill, which Cortez Masto and Rubio formally reintroduced Friday, has been introduced in previous Congresses and has even passed the House several times. Most recently, in 2021, the House overwhelmingly approved the bill in a 416-5 vote. But it has never been taken up by the Senate, meaning the legislative process has to start from scratch again this year.

According to data released by the FTC in February 2022, reports of fraud against Veterans, service members and spouses jumped 69% in 2021 compared to the previous year. Within that group, Veterans and military retirees reported being targeted the most, with 87,343 fraud reports. The total 110,827 fraud cases reported by military consumers resulted in an estimated $266 million lost.

Concerns have also been raised that scammers could target Veterans more in the wake of the passage of the PACT Act, the sweeping legislation that expanded benefits for millions of Veterans exposed to toxins.

While fraud is already a crime regardless of whether the target is a Veteran, Cortez Masto, who previously served as Nevada's attorney general, said creating a new offense specifically addressing Veterans benefits fraud will give prosecutors more tools to go after criminals. For example, she said, "pension poachers" may escape mail or wire fraud charges if they present themselves as an investment specialist trying to help a Veteran.

"If a defendant cloaks themselves as some sort of professional that was just trying to help for a fee, even though their intention all along was to defraud these individuals out of their money and not necessarily help them and still get to a fee, sometimes it's difficult for prosecutors to use the existing offense," she said.

While the bill, called the Preventing Crimes Against Veterans Act, has stalled in the Senate in previous years, Cortez Masto vowed to continue pushing until it gets across the finish line.

"This is something we can all get behind, so I think we're both going to do everything we can to get it going and get it passed on the Senate side," she said, referring to her and Rubio. "It is important for our Veterans, not only to protect them and their benefits, but [to] hold people accountable that want to defraud them and scam them."

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PITTSBURGH - A Pittsburgh-area physician has been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotics laws and health care fraud, Acting United States Attorney Stephen R. Kaufman announced today.

The 242-count Indictment, returned on May 5 and unsealed yesterday, named John Keun Sang Lee, age 78, of Venetia, Pennsylvania, as the sole defendant.

According to the Indictment, the defendant was a medical doctor and owner of the medical practice Jefferson Pain and Rehabilitation Center, with a principal office located at 4735 Clairton Blvd, Pittsburgh, Pa 15236. The indictment alleges that on multiple dates between May 2016 and October 2020, Lee knowingly distributed Schedule II controlled substances to five patients outside the usual course of professional practice and not for a legitimate medical purpose. The Indictment further alleges that from May 2016 to October 2020, Lee executed a scheme and artifice to defraud health care benefit programs Medicare and Medicaid by knowingly and willfully submitting claims for steroid injections that were neither reasonable nor medically necessary.

The law provides for a maximum total sentence of not more than 20 years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Karen Gal-Or is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation, the Department of Health & Human Services – Office of Inspector General, the Drug Enforcement Administration, and the Pennsylvania Office of Attorney General conducted the investigation leading to the Indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

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EL PASO – An El Paso businesswoman and her nephew were arrested today on criminal charges for their alleged roles in committing health care fraud.

According to court documents, Zenia Chavez, 45, and Raul Alejandro Fuentes, 23, of El Paso, conspired together to commit health care fraud. Chavez is the owner and Fuentes is an employee of Nursemind Home Health, Inc. (Nursemind), which provides hospice care services. The defendants sought out people in boarding homes and senior living facilities for enrollment in a Nursemind hospice program although they did not need hospice care or have a terminal illness. The defendants then created false and fraudulent medical records for the individuals, forged health personnel signatures, and submitted fraudulent claims to Medicare. In addition, Chavez is also charged with offering kickbacks for client referrals to Nursemind.

Chavez and Fuentes are charged with one count of conspiracy to commit health care fraud, and 14 counts of health care fraud. Chavez is also charged with one count of conspiracy for illegal remunerations regarding a federal health care program and 11 counts of illegal remunerations regarding a federal health care program. If convicted, Chavez and Fuentes face a maximum penalty on each of the health care fraud counts of 10 years in prison. Chavez faces an additional five years in prison on the conspiracy for illegal remunerations charge and 10 years in prison on each of the illegal remuneration counts. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Ashley C. Hoff of the Western District of Texas; FBI Special Agent in Charge Jeffrey Downey, El Paso Division; and U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) Special Agent in Charge Miranda Bennett made the announcement.

The FBI and HHS OIG are investigating the case.

Assistant U.S. Attorneys Chris Skillern and Debra Kanof are prosecuting the case.

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John H. Durham, United States Attorney for the District of Connecticut; Christopher Algieri, Special Agent in Charge of the Department of Veteran Affairs, Office of the Inspector General, Northeast Field Office; and James M. Noble, Special Agent in Charge, Coast Guard Investigative Service, Northeast Region, announced that DERRICK BREWER, 35, of Enfield, was arrested today on a criminal complaint charging him with offenses related to his submission of altered documents to the Department of Veterans Affairs (“VA”).

As alleged in the criminal complaint, in March 2018, Brewer submitted paperwork to the VA offices in Hartford as part of an application for service-connected disability benefits. Specifically, Brewer submitted a form known as a “DD-214,” which indicated that his discharge from his former service in the U.S. Coast Guard was characterized as “Honorable.” The DD-214 had been altered prior to its submission, as official Coast Guard records show that Brewer’s discharge was characterized as “Other Than Honorable Conditions” following Brewer’s convictions under the Uniform Code of Military Justice. There is no record of the discharge characterization ever having been upgraded. As a result of this submission, Brewer collected approximately $69,584.16 in VA benefits up until September 30, 2020.

The complaint charges Brewer with theft of government funds, which carries a maximum term of imprisonment of 10 years, and making false statements, which carries a maximum term of imprisonment of five years.

Brewer appeared today via videoconference before U.S. Magistrate Judge Robert A. Richardson and was released on a $10,000 bond.

U.S. Attorney Durham stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Department of Veterans Affairs, Office of the Inspector General, Northeast Field Office, and the Coast Guard Investigative Service. The case is being prosecuted by Assistant U.S. Attorney Margaret Maigret Donovan.

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The owner of a for-profit trade school has been charged with defrauding the U.S. Department of Veterans Affairs and student veterans, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

Jonathan Dean Davis, the 43 year-old owner of Retail Ready Career Center, was indicted Wednesday on seven counts of wire fraud, two counts of aggravated identity theft, and four counts of money laundering. Mr. Davis voluntarily surrendered and made his initial appearance before U.S. Magistrate Judge Rebecca Rutherford Monday.

According to the indictment, Mr. Davis owned and operated Retail Ready Career Center, Inc., a for-profit corporation that marketed its six-week HVAC training course to veterans, whose tuition and fees would be covered by the Veteran’s Educational Assistance Act of 2008, also known as the post-911 GI Bill.

In order to receive GI Bill approval and funding from the VA, Mr. Davis allegedly lied to the Texas Workforce Commission (TWC), the Texas Veterans’ Commission (TVC), and the VA, stating that Retail Ready had been continuously operating as an educational institution for at least two years, when in truth, Retail Ready had never trained any students. He also certified that there were no criminal or civil actions against him, when in fact he was facing a criminal charge and multiple civil judgements. He also mislead a CPA and lied to the TWC, the TVC, and the VA about Retail Ready’s financial condition.

Mr. Davis allegedly concealed Retail Ready’s fraudulently-obtained VA approval from veteran applicants, to whom he also allegedly misrepresented graduates’ career prospects.

Mr. Davis typically charged the VA $18,000 to $21,000 per student-veteran per course. In total, he received over $71 million in GI Bill benefits from the VA.

The indictment alleges that Mr. Davis used the proceeds from his fraud to purchase a home on Lake Forest Drive, in Dallas, Texas, a Lamborghini Aventador, Ferrari 488, and Bentley Continental GT.

An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Davis is presumed innocent until proven guilty in a court of law.

If convicted, he faces up to 184 years in federal prison.

The VA’s Office of Inspector General conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the United States Postal Inspection Service’s Fort Worth Field Office. Assistant U.S. Attorneys Douglas Brasher and Fabio Leonardi are prosecuting the case.

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HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Theodore Martin, age 57, formerly of York County, Pennsylvania, was sentenced today to 13 months’ imprisonment to be followed by two years of supervised release by Chief United States District Court Judge John E. Jones III, for conspiring to commit mail fraud. The sentence represents a downward adjustment of approximately twenty-eight months to account for prison time that Martin has served for a related fraud scheme in Ohio.

According to United States Attorney David J. Freed, Martin, along with his wife Arminda Martin, owned and operated Suburban Memorial Gardens Cemetery in Dover, Pennsylvania. The Martins previously pleaded guilty to conspiring to defraud hundreds of their customers out of approximately $500,000. The Martins admitted that instead of applying customer payments to cemetery services and products, they embezzled the money for their own personal gain, including for gambling.

Arminda Martin is scheduled to be sentenced on July 28, 2020.        

The case was investigated by the United States Department of Veterans Affairs Office of Inspector General, the Federal Bureau of Investigation, and the Northern York County Regional Police Department. Assistant U.S. Attorneys Carlo D. Marchioli and Joseph J. Terz prosecuted the case.

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ALEXANDRIA, Va. – An Arlington businessman was sentenced today to 21 months in prison with three years of supervised release for making false statements to multiple federal agencies in order to fraudulently obtain multimillion-dollar government contracts, COVID-19 emergency relief loans, and undeserved military service benefits.

“In the early stages of the global pandemic, the defendant engaged in three egregious fraudulent schemes that he brazenly concocted to enrich himself,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “He falsely represented to the federal government that he could provide $38 million in life-saving N95 masks, and simultaneously, he fraudulently obtained over $1 million in pandemic assistance intended for deserving families and businesses. The defendant also continued an offensive seven-year scheme to obtain unearned Veterans benefits by falsely claiming to have served as a Marine. This case underscores our commitment to holding accountable those who exploit essential government programs at the expense of Veterans, front-line medical personnel, and vulnerable members of our communities.”

According to court documents, Robert S. Stewart, Jr., 35, was the owner and president of Federal Government Experts (FGE) LLC, an Arlington-based company that purported to provide various services to the U.S. government. In this capacity, between April 1, 2020 and May 14, 2020, Stewart made false statements to the Federal Emergency Management Agency (FEMA) and the Department of Veterans Affairs (VA) in order to obtain lucrative contracts to provide COVID-19 personal protective equipment (PPE). In addition, Stewart fraudulently obtained loans under the federal Paycheck Protection Program and the Economic Injury Disaster Loan Program. He also defrauded the VA by falsely claiming to be entitled to Veteran’s benefits for serving in the U.S. Marine Corps when, in fact, he never served in the Marines.

As part of his PPE scheme, Stewart falsely stated to procurement officials from FEMA and the VA that he was in possession of large quantities of PPE, including N95 masks. Based on Stewart’s false statements, the VA and FEMA awarded FGE contracts valued at $35,000,000 and $3,510,000, respectively. The VA intended to use the PPE purchased from FGE to protect employees and patients at various Veterans Health Administration facilities, which serve the medical needs of over nine million Veterans each year. FGE failed to supply any PPE to the VA and FEMA. The U.S. government suffered no financial loss because the contract called for payment upon delivery and inspection of the goods.

“These were crimes against the American people. Stewart fraudulently pursued contracts that were needed to supply VA hospital patients and staff with critical personal protective equipment during the COVID-19 pandemic, and stole taxpayer dollars intended to help local businesses stay afloat during the pandemic. In addition, he lied about his service in the military and received Veterans benefits for which he was not entitled,” said VA Inspector General Michael J. Missal. “This sentence should send a clear message that the VA Office of Inspector General will work diligently with its law enforcement partners to ensure those who would defraud the nation’s Veterans and the public will be caught and prosecuted.”

“We continue to collaborate with our law enforcement partners to pursue and dismantle schemes aimed at exploiting critical COVID-19 resources, and we are grateful for today’s sentencing decision, which sends a strong message to help deter potential fraudsters,” said Joseph V. Cuffari, Inspector General for the Department of Homeland Security (DHS).

“Today’s sentencing shows that we will not allow criminals to get away with exploiting government relief efforts that were designed to assist millions of Americans during the COVID-19 pandemic. Stewart fraudulently obtained government-backed loans, and his nefarious and unethical actions were for his own personal gain,” said Robert E. Bornstein, Acting Special Agent in Charge of FBI’s Washington Field Office Criminal Division. “The FBI and our partners are committed to protecting the American people and the integrity of government assistance programs and will work to identify, arrest, and prosecute those who choose criminal activity and greed over principle and the law.”

Stewart also applied for various loans on behalf of FGE under the federal Paycheck Protection Program and the Economic Injury Disaster Loan Program. These programs were designed to provide emergency financial assistance to the millions of people suffering the economic effects of the COVID-19 pandemic. The loan applications submitted by Stewart falsely overstated the number of FGE employees and the amount of FGE’s payroll, two factors that were important in determining loan eligibility and the proper amount of the loan. In addition, Stewart used some of the loan proceeds for personal expenditures rather than to pay employees or for other appropriate business expenses. As a result of these fraudulent loan applications, Stewart obtained approximately $1,066,000 in government-backed loans during the pandemic.

In a separate fraudulent scheme, Stewart, an Air Force Veteran, submitted an application for benefits to the VA. The application was fraudulent in that Stewart falsely claimed that he also served in the U.S. Marine Corps. Stewart created fraudulent documents that stated he attained the rank of Corporal in the Marine Corps and was honorably discharged after receiving several awards and commendations, including the Rifle Expert Badge, Pistol Expert Badge, Meritorious Mast, National Defense Service Medal, Sea Service Deployment Ribbon, Southwest Asia Service Medal, Certificate of Appreciation, and the Kuwaiti Liberation Medal. Stewart, in fact, never served in the Marines. Based on his fraudulent application, he received excess benefits in the amount of $73,722.45 between September 2013 and October 2020.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Robert E. Bornstein, Acting Special Agent in Charge of FBI Washington Field Office Criminal Division; Joseph V. Cuffari, Inspector General for the Department of Homeland Security (DHS); and Michael J. Missal, Inspector General for the U.S. Department of Veterans Affairs, made the announcement after sentencing by U.S. District Judge Rossie D. Alston, Jr.

Assistant U.S. Attorney William Fitzpatrick prosecuted the case.

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WASHINGTON – Mahsa Azimirad, the former office manager for Universal Smiles, a Washington, D.C.-based dental practice, was sentenced today to 12 months in prison on a federal charge of health care fraud stemming from a scheme in which she was paid over $813,000 by defrauding the District of Columbia’s Medicaid program.

The announcement was made by Acting U.S. Attorney Channing D. Phillips; Wayne A. Jacobs, Special Agent in Charge, FBI Washington Field Office, Criminal Division; Maureen R. Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General for the region that includes Washington, D.C., and Daniel W. Lucas, Inspector General for the District of Columbia.

Azimirad, 41, of Rockville, Md., was indicted in January 2019, along with Bilal Ahmed, the dentist who ran the dental practice. She pleaded guilty in May 2021 in the U.S. District Court for the District of Columbia. She was sentenced by the Honorable Colleen Kollar-Kotelly. Following completion of her prison term, Azimirad will be placed on three years of supervised release. The Court entered a $813,184 forfeiture money judgment and also ordered her to pay $813,184 in restitution.

According to the statement of offense submitted to the Court and admitted by Azimirad, she was the marketing and operations manager for Universal Smiles, a dental practice in Northwest Washington. Through Universal Smiles, she and Ahmed engaged in a scheme to enrich themselves by defrauding D.C. Medicaid, a health care benefits program jointly funded by the federal government and the District of Columbia to provide health care services to residents who meet the income qualifying requirements. As part of the scheme, Ahmed applied to be a Medicaid provider. Once approved to bill Medicaid, Azimirad and Ahmed then billed D.C. Medicaid for thousands of provisional crowns, a significant number of which were not provided to the Medicaid patients. From Aug. 9, 2012, through Feb. 26, 2014, D.C. Medicaid paid Universal Smiles approximately $5.4 million for provisional crowns. Of the $5.4 million that D.C. Medicaid paid for provisional crowns, Azimirad received approximately $813,184.

In a related case, Ahmed, 49, pleaded guilty in 2017 to sexually assaulting five former dental patients and one former employee and improperly touching another former employee. The victims were attacked in separate incidents between 2010 and 2014. He was sentenced to 16 ½ years in prison for those offenses and is serving a concurrent sentence after pleading guilty in 2019 to a federal health care fraud charge in this case.

In announcing the sentence, Acting U.S. Attorney Phillips, Special Agent in Charge Jacobs, Special Agent in Charge Dixon, and Inspector General Lucas commended the work of those who investigated the case from the FBI’s Washington Field Office, the U.S. Department of Health and Human Services Office of Inspector General, and the District of Columbia Office of Inspector General. They also expressed appreciation for the work of Paralegal Specialist Chad Byron and Forensic Financial Analyst Bryan Snitselaar. Finally, they commended the work of Criminal Division Trial Attorney Gary Winters, Assistant U.S. Attorney Melissa Jackson, Assistant U.S. Attorney Emily Miller, and former Assistant U.S. Attorneys Denise A. Simmonds, Michelle Bradford, and Lionel André, who prosecuted the case.

The FBI, the Department of Health and Human Services’ Office of Inspector General, the District of Columbia’s Office of the Inspector General’s Medicaid Fraud Control Unit, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the D.C. Medicaid program. The government relies on the public for tips and assistance in helping stop health care fraud. If you have information about individuals committing health care fraud, please call the Department of Health and Human Services’ Office of Inspector General hotline at (800) HHS‑TIPS [(800) 447-8477.

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BOSTON – A former Department of Veteran Affairs (VA) employee was sentenced today for embezzling nearly $70,000 in VA funds.

Michael Donaher, 41, of Lakeville, was sentenced by U.S. District Court Judge Indira Talwani to time served (approximately one day), three years of supervised release with the first six months to be served in a sober house, and ordered to pay $69,720 in restitution. The government recommended a sentence of one year and one day incarceration. In May 2020, Donaher pleaded guilty to one count of embezzlement and theft of public money, property or records after being arrested and charged in January.

Donaher worked as an Inventory Management Specialist for the Veterans Affairs Medical Facility in Brockton and was responsible for purchasing various equipment necessary for use in the facility. Donaher conducted fraudulent transactions using his government-issued purchase cards and routed the proceeds to his personal bank account. He attempted to conceal these fraudulent purchases by making it appear as if the purchases were made through a large company that the VA frequently used for legitimate business, when, in fact, they were actually made through a company Donaher created through a mobile payment company. These purchases were not for actual items ever received by the VA. Furthermore, Donaher attempted to hide this fact by annotating the items as having been received within the VA’s accountability system. Donaher fraudulently routed approximately $70,000 of VA funds to his personal account since the scheme began in 2016.

United States Attorney Andrew E. Lelling and Christopher Algieri, Special Agent in Charge of the Department of Veteran Affairs, Office of the Inspector General, Northeast Field Office made the announcement today. Assistant U.S. Attorney Eugenia M. Carris of Lelling’s Public Corruption & Special Prosecutions Unit prosecuted the case.

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Yakima – Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced today that Kentey Ramone Fielder, age 42, of Atlanta, Georgia, was sentenced today in federal court in Yakima, Washington. Chief Judge Stanley A. Bastian sentenced Fielder to 40 months in federal prison, followed by a 3-year term of supervised release. Chief Judge Bastian also ordered that Fielder pay restitution of $14,220.17.

In December 2021, Fielder pled guilty to wire fraud and aggravated identity theft in connection with a fraudulent scheme that he perpetrated concerning a contract with the United States Army’s Yakima Training Center (YTC), which is used by the Army for maneuver training, Land Warrior system testing and as a live fire exercise area. According to court documents, in 2015, Fielder obtained a contract to perform janitorial services at the YTC in the name of his company, Clean Contracting Services, (CCSI). Because Fielder had been disqualified from federal contracting in 2014, neither he nor CCSI were eligible to receive any federal contracts. Fielder obtained the YTC contract by misrepresenting that he was not affiliated with CCSI.

After obtaining the YTC contract, Fielder contacted Yakima Specialties, a Yakima-based nonprofit that employs individuals with disabilities to perform janitorial and other services at federal facilities, according to court documents. Fielder posed as a government contracting official and told Yakima Specialties that it had received the YTC contract. Posing as a government official, Fielder sent Yakima Specialties a fake YTC contract to perform the work, and included the name and signature of a real government contracting official that Fielder stole from a different contract. Believing it had been awarded the contract, Yakima Specialties performed the work, but was unable to obtain payment because it did not have the real YTC contract. Fielder then billed for and received payment for the work under CCSI.

According to court documents, the YTC contract was one of many contracts that CCSI and Fielder received using the fraudulent scheme described above. In July 2020, Fielder was indicted in the Eastern District of Washington for the fraud on the YTC contract. While Fielder was initially released from custody pending trial, in May 2021, he was subsequently ordered detained by the court for perpetrating a similar scheme in Georgia while on pretrial release, and will remain in custody until his sentence is served.

“Mr. Fielder’s fraud was as brazen as it was widespread, involving dozens of government contracts around the United States,” said U.S. Attorney Waldref. “Through our investigation and prosecution here in the Eastern District of Washington, we were able to hold Mr. Fielder accountable and to protect the public from his fraud, which not only stole from public funds, but harmed non-profit entities such as Yakima Specialties, which exists to employ individuals with disabilities and to perform vital services for the public. Fraud devastates our community’s critical resources. My office will continue to work proactively with our law enforcement partners to stop fraudulent schemes, and I commend the exceptional investigative work and collaboration by this talented and hardworking team of case agents.”

“This sentencing is the result of the Defense Criminal Investigative Service’s commitment to ensuring that Department of Defense programs and missions are protected from fraudulent actions throughout the procurement process,” stated Special Agent in Charge Cynthia A. Bruce, Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Southeast Field Office. “Individuals who shamelessly violate the integrity of the defense contracting system for their own personal gain will be thoroughly investigated and brought to justice.”

“We will continue working with our law enforcement partners to uncover such deceitful schemes involving federal contracts,” said Special Agent in Charge Terry Pfeifer of the GSA Office of Inspector General.

“Today’s sentencing should serve as a stark reminder that our agents, and those of our partner law enforcement agencies, are unrelenting in their pursuit of those who choose to victimize government contractors through deceit and defrauding the US Army and its Soldiers of full, open, and secure competition within its procurement efforts,” said Special Agent in Charge L. Scott Moreland, Major Procurement Fraud Field Office, US Army Criminal Investigation Division.

The settlement was the result of a joint investigation conducted by the U.S. Attorney’s Office for the Eastern District of Washington; the Defense Criminal Investigative Service; the United States Army Criminal Investigation Division; the Small Business Administration Office of Inspector General; the General Services Administration Office of Inspector General; the U.S. Department of Veterans Affairs Office of Inspector General; the Department of Homeland Security Office of Inspector General; the Department of Health and Human Services Office of Inspector General; the Department of Justice Office of Inspector General; the Department of State Office of Inspector General; the Department of Commerce Office of Inspector General; and the Internal Revenue Service, Criminal Investigation Division.

Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene of the Eastern District of Washington handled this matter on behalf of the United States.

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Schneider Electric Buildings Americas Admits to Fraudulent Scheme to Overcharge Government Agencies on Federal Energy Savings Performance Contracts

UPDATE

The SEBA Civil Settlement Agreement has been attached to this Press Release.

BURLINGTON – Schneider Electric Buildings Americas, Inc. (Schneider Electric), a nationwide provider of electricity solutions for buildings and data centers with its principal place of business in Carrollton, Texas, will pay $11 million to resolve criminal and civil investigations relating to kickbacks and overcharges on eight federally-funded energy savings performance contracts (ESPCs), the Department of Justice announced today. Under the contracts, Schneider Electric was to install a variety of energy saving upgrades such as solar panels, LED lighting, and insulation in federal buildings.

As part of the criminal resolution with the United States Attorney’s Office for the District of Vermont (USAOVT), Schneider Electric admitted that it fraudulently charged the Government nearly $1.7 million in design costs incurred on three ESPCs funded by the Department of the Navy (DON), General Services Administration (GSA), and Department of Agriculture (USDA) by disguising those costs and spreading them across un-related pricing components. Schneider Electric employees described this process as “burying” or “hiding” the costs. Schneider Electric specifically spread costs across various line items in these federal projects so that the agencies would pay the amounts without knowing they were design costs that Schneider Electric was prohibited from charging the Government. Schneider Electric admitted that its conduct constituted wire fraud in violation of 18 U.S.C. § 1343. Schneider Electric executed a non-prosecution agreement related to this conduct and agreed to pay nearly $1.7 million in criminal forfeiture.

Schneider Electric further admitted that former convicted Senior Project Manager Bhaskar Patel solicited and received over $2.5 million in kickbacks from various subcontractors who worked on ESPCs issued by the DON, Coast Guard, GSA, USDA, and Department of Veterans Affairs (VA). Schneider Electric admitted that this conduct violated the Anti-Kickback Act, 41 U.S.C. § 8707.

Schneider Electric is required by its agreement with the USAOVT to cooperate fully in any and all matters relating to relevant conduct for a period of three years, to report to the USAOVT any evidence or allegation of a violation of U.S. fraud, anti-corruption, procurement integrity, or anti-kickback laws, to implement and comply with an updated corporate compliance program, and to report annually to the USAOVT on remediation and implementation of its required compliance enhancements.

In the separate civil settlement announced today, Schneider Electric agreed to pay $9.3 million to resolve False Claims Act and Anti-Kickback Act liability for Patel’s kickback scheme and for including inflated estimates and improper costs in proposals, and overcharging federal agencies under the eight ESPCs.

“These cases are complex and challenging, and I commend the dogged work of our Assistant U.S. Attorneys and their law enforcement agency partners to ensure that Schneider Electric’s conduct was brought to light and that it was held to account,” said United States Attorney Christina E. Nolan. “I am proud that our small office not only successfully convicted Bhaskar Patel, but went further and unraveled Schneider Electric’s broader criminal scheme of fraudulently inflating costs to boost its profits and steal from taxpayers. In reaching this resolution, we considered that Schneider Electric terminated two employees involved in the schemes and overhauled its compliance program. We also considered the shortcomings of Schneider Electric’s cooperation and its failure to timely accept responsibility.”

“ESPC projects can only be successful where contractors are forthright and honest with federal agencies,” said Acting Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “We will not tolerate attempts by contractors to mislead the government and line their own pockets at the expense of the very energy savings the government seeks to achieve.”

Michael Wiest, Special Agent in Charge of the Northeast Field Office of the Naval Criminal Investigative Service concurred, stating: “Fraud is not a victimless crime. It steals money from American taxpayers, damages the integrity of the Department of the Navy procurement process, degrades the readiness of the warfighter by compromising the quality of goods and services used to protect the nation, and squanders more money in the funding of criminal investigations which could have been avoided simply by individuals doing the right thing. NCIS will continue to work with our partner agencies to aggressively pursue those who perpetrate financial crimes.”

Similarly, USDA Office of Inspector General (OIG) Special Agent in Charge Bethanne M. Dinkins emphasized: “Participation in Government contracts should not involve contractors and their employees seeking financial gain to the detriment of the U.S. Government. Thanks to the hard work and tireless efforts of the investigative team, the interests and integrity of the United States and the procurement process throughout Government have been protected. The USDA Office of Inspector General appreciates the commitment of the Department of Justice and the cooperative efforts of our law enforcement partners. Our resources are well utilized when we work together to investigate those who unlawfully solicit and accept bribes and kickbacks and overcharge the U.S. Government. This resolution demonstrates that we are committed to holding contractors accountable when they choose to abuse the integrity of vital government programs designed to significantly reduce energy and operating costs and make progress toward meeting federal sustainability goals.”

Joseph Dattoria, GSA-OIG Special Agent in Charge, likewise highlighted the significance of this investigation, stating: “The GSA Office of Inspector General is committed to protecting the integrity of the GSA’s procurement process and programs. This resolution is a testament to that commitment, and should serve as a warning to other contractors who may consider engaging in similar conduct. We appreciate the collaborative efforts of the DOJ and our other law enforcement partners."

Finally, VA OIG Special Agent in Charge Christopher Algieri, Northeast Field Office, affirmed: “VA OIG is committed to protecting the integrity of energy savings performance contracts awarded by VA and other federal agencies. We appreciate the tireless efforts of the United States Attorney’s Office, the Civil Division, and our other law enforcement partners in rooting out this and other procurement fraud.”

The criminal investigation and resolution was handled by Assistant United States Attorneys Owen C.J. Foster and Michael P. Drescher of the United States Attorney’s Office for the District of Vermont. The civil investigation was jointly handled by the District of Vermont and Trial Attorneys Kelley Hauser and Alexandra Wilson of the Civil Division’s Commercial Litigation Branch (Fraud Section). The investigation was supported by the Offices of Inspector General for the VA, USDA and GSA, and the Navy Criminal Investigative Services. Schneider Electric was represented by Mark Goodman and David Sarratt of Debevoise & Plimpton LLP, and Michael Connolly, Michael Koenig, and Victoria Lane of Hinkley, Allen & Snyder LLP.

Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.

Non Prosecution Agreement (Schneider).pdf

Corporate Compliance Program (Schneider).pdf

Statement of Facts (Schneider).pdf

SEBA Civil Settlement Agreement.pdf

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LAS VEGAS, Nev. — A Las Vegas resident pleaded guilty in federal court yesterday to fraudulently obtaining nearly $1.2 million in Social Security Administration (SSA) and Department of Veterans Affairs (VA) benefits, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada.

Javier Montano, 57, of Las Vegas, pleaded guilty to one count of theft of government funds. He is scheduled to be sentenced by U.S. District Judge Jennifer Dorsey on December 14, 2020.

According to court documents, Montano — who was the branch manager of a bank in Las Vegas — received information about two accounts with large balances and no activity:

The first account (Account A) was held by a Las Vegas resident who was receiving SSA retirement benefits. The individual passed away in February 1997. The SSA was not notified about the individual’s death, and benefits continued to be paid into the account.

The second account (Account B) was held by a Las Vegas resident who was receiving both SSA retirement benefits and VA benefits. The individual passed away in June 2011. Neither the SSA nor the VA was notified about the individual’s death, and benefits continued to accumulate in the account.

Through a bank computer, Montano ordered debit cards for both accounts, using them to withdraw cash — which he either spent or deposited into his personal bank account — and to make purchases for his personal use and benefit. In addition, Montano ordered and wrote checks (for his personal use) for Account B. Montano also used his authority as a branch manager to authorize a $35,000 cashier’s check from Account B. He then used the funds to buy a luxury car, which he has agreed to forfeit to the United States.

In total, between August 2015 and June 2020, Montano fraudulently obtained: (a) approximately $436,686.80 in SSA benefits to which he was not entitled; and (b) approximately $757,985.88 in VA benefits to which he was not entitled.

The statutory maximum penalty faced by Montano is 10 years in prison and a $250,000 fine. The sentencing of a defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

This case was the product of an investigation by the Social Security Administration, Office of Inspector General, and Department of Veterans Affairs, Office of Inspector General. Assistant U.S. Attorney Jamie Mickelson is prosecuting the case.

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A Texas man was sentenced today to 27 months in prison for his role in a conspiracy at the Merida Group, a chain of hospice and home health agencies throughout Texas, to falsely convince thousands of patients with long-term incurable diseases they had less than six months to live in order to enroll the patients in hospice programs for which they were otherwise unqualified, thereby increasing revenue to the company.

According to court documents, Jose Garza, 44, of Harlingen, was the operations manager for the Merida Group and responsible for carrying out the business’s day to day operations, including overseeing the recruitment of patients at certain locations throughout the Rio Grande Valley. Garza, and others working at his direction, recruited patients at hospitals and other medical practices by touting that the Merida Group offered “hospice that you don’t have to die to use,” pursuant to the Merida Group’s corporate marketing strategy.

At the trial of co-defendants Rodney Mesquias and Henry McInnis, witnesses testified that from 2009 to 2018, the vast majority of hospice and home health patients at the Merida Group did not qualify for services. Rather, physicians were bribed with illegal kickbacks, under the pretense of medical directorships, to falsely certify unqualified patients for services. Employees were instructed to falsify medical records, making non-terminal patients appear to be terminally ill and declining. Garza admitted to participating in the scheme, facilitating kickback payments to physicians, and directing employees to falsify medical records.

Garza pleaded guilty to one count of conspiracy to commit health care fraud on Sept. 9, 2019. Garza was charged along with three others who were convicted by a federal jury in Brownsville, Texas, in one of the largest criminal hospice fraud cases tried to a jury. Mesquias, 50, the owner of the Merida Group, was sentenced to 20 years in prison in December 2020. McInnis, 50, the CEO of the Merida Group, was sentenced to 15 years in prison in February 2020.

In addition to the prison sentence, Garza was ordered to pay $4,700,000 in restitution.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Jennifer Lowery of the Southern District of Texas; said Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office made the announcement.

The Department of Health and Human Service – Office of Inspector General (HHS-OIG); FBI and Texas Health and Human Services Commission conducted the investigation.

Assistant Chief Jacob Foster and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case.

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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Defendant Falsely Claimed to Provide Services During COVID-19 Pandemic

WASHINGTON – Sikirat Adunni Brown, 59, of Upper Marlboro, Md., pleaded guilty today to defrauding the D.C. Medicaid program out of more than $340,000.

The announcement was made by Acting U.S. Attorney Channing D. Phillips; Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division; Maureen R. Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the region that includes Washington, D.C., and Daniel W. Lucas, Inspector General for the District of Columbia.

The Honorable Dabney L. Friedrich, who accepted Brown’s guilty plea, scheduled sentencing for Nov. 8, 2021. In addition to facing prison time, Brown faces financial penalties.

Brown admitted that, at various times between January 2014 and June 2020, she worked as a personal care aide for at least eight different home health agencies. The home health agencies employed her to assist D.C. Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, and eating.

Brown was supposed to document the care that she provided to the Medicaid beneficiaries on timesheets and then submit the timesheets to the home health agencies, which would in turn bill Medicaid for the services that she rendered. In her guilty plea, Brown acknowledged that between 2014 and 2020, she caused the D.C. Medicaid Program to issue payments totaling $343,539 for services that she did not provide. As part of her scheme, she submitted false timesheets to different home health agencies claiming that she provided 20 hours or more of personal care aide services. She also claimed to provide services when she was traveling outside the D.C. metropolitan area. She paid kickbacks during the scheme to at least one beneficiary. She also acknowledged that she claimed to provide services to one beneficiary during the COVID-19 pandemic even though that beneficiary said she did not.

The FBI, the U.S. Department of Health and Human Services’ Office of Inspector General, the District of Columbia’s Office of the Inspector General’s Medicaid Fraud Control Unit, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the D.C. Medicaid program.

Brown is the tenth former personal care aide in the last three years to plead guilty to defrauding Medicaid in the United States District Court for the District of Columbia. Five aides were sentenced to 13 months in prison; a sixth was sentenced to serve 15 months.

The government urges the public to provide tips and assistance to stop health care fraud. If you have information about individuals committing health care fraud, please call the Department of Health and Human Services’ Office of Inspector General hotline at (800) HHS‑TIPS [(800) 447-8477] or the D.C. Office of the Inspector General at (800) 724-TIPS [(800) 274-8477].

This case was prosecuted by Assistant U.S. Attorney Kondi Kleinman of the Fraud Section, with assistance from Paralegal Specialist Mariela Andrade.

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WASHINGTON – Folashade Adufe Horne, 52, of Laurel, Maryland, was sentenced today to 13 months in prison for defrauding the D.C. Medicaid program out of more than $370,000.

The announcement was made by Acting U.S. Attorney Channing D. Phillips; James A. Dawson, Special Agent in Charge, FBI Washington Field Office, Criminal Division; Maureen R. Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the region that includes Washington, D.C.; and Daniel W. Lucas, Inspector General for the District of Columbia.

In February, Horne pled guilty to health care fraud in the United States District Court for the District of Columbia. The Honorable Reggie B. Walton, who presided over her plea hearing, imposed the 13-month sentence. Judge Walton also ordered Horne to pay $373,564 in restitution and a $267,567 forfeiture money judgment.

At various times between January 2014 and June 2020, Horne was employed by four different home health agencies to serve as a personal care aide for D.C. Medicaid beneficiaries. Horne also was employed full-time by Howard University Hospital during this same period. The home health agencies employed Horne to assist Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, and eating. Horne was supposed to document the care she provided to the Medicaid beneficiaries on timesheets and then submit the timesheets to the home health agencies, which would in turn bill Medicaid for the services that she rendered.

Horne acknowledged that between January 2014 and June 2020, she caused the D.C. Medicaid Program to issue payments totaling $373,564 for services that she did not render. As part of her fraud scheme, she submitted false timesheets to different home health agencies purporting that she provided personal care aide services that she did not provide. She claimed she provided such services during times when she actually was working her shift as a full-time employee at Howard. She claimed to work more than twenty hours in a given day on more than 200 occasions, including 28 days when she asserted that she provided 32 hours of PCA services. She also claimed to provide personal care aide services in the District of Columbia on days when she was not even in the United States.

The FBI, the Department of Health and Human Services’ Office of Inspector General, the District of Columbia’s Office of the Inspector General’s Medicaid Fraud Control Unit, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the D.C. Medicaid program. Since October 2019, six former personal care aides have been sentenced in U.S. District Court for defrauding Medicaid. A seventh former personal care aide, Charlotte Etongwe, is scheduled to be sentenced next week. Cases against two other personal care aides remain outstanding.

The government counts on the public for tips and assistance in helping stop health care fraud. If you have information about individuals committing health care fraud, please call the Department of Health and Human Services’ Office of Inspector General hotline at (800) HHS‑TIPS [(800) 447-8477].

Assistant U.S. Attorney Kondi Kleinman of the Fraud Section prosecuted the case.

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LAS VEGAS, Nev. – Claudia Ann Merrill, 61, of Farmington Hills, Michigan, pleaded guilty today to defrauding the U.S. Department of Veterans Affairs out of more than $1.75 million in Veterans benefits, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada.

According to court documents, from on or about January 1, 2014, through October 1, 2019, Merrill devised and executed a scheme to defraud and to obtain money and property from the U.S. Department of Veterans Affairs (VA). Merrill admitted that she submitted false applications in the names of Veterans, as well as the surviving spouses of Veterans, in connection with VA health care programs known as Veterans Pension and VA Aid and Attendance. In furtherance of the scheme, Merrill altered medical records to ensure that the Veteran or surviving spouse’s physical or mental condition rendered them eligible for the benefits. She then fraudulently directed benefit payments into bank accounts she controlled, and concealed the benefits from the Veterans and surviving spouses. As a result of the scheme, Merrill fraudulently caused the VA to pay out $1,755,412 in benefits that it otherwise would not have paid but for the scheme.

This case was the product of a joint investigation by the U.S. Department of Veterans Affairs, Office of Inspector General and the FBI’s Las Vegas Field Office. Assistant U.S. Attorney Patrick Burns is prosecuting the case.

Merrill is scheduled to be sentenced by U.S. District Judge James C. Mahan on May 15, 2020. Merrill faces a maximum penalty of 20 years in prison and a $250,000 fine. As part of her guilty plea, Merrill agreed to pay approximately $1,755,412 in restitution. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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LAS VEGAS, Nev. – A Michigan woman was sentenced today to three years and five months in prison after pleading guilty to carrying out a scheme to defraud the U.S. Department of Veterans Affairs (VA) of more than $1.7 million in veterans benefits, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada.

“The defendant orchestrated a million dollar scheme to defraud the VA and to deceive the elderly veterans and surviving spouses whose names she used,” said U.S. Attorney Trutanich. “As part of the Department of Justice’s Elder Justice Initiative, our office and our partners are committed to safeguarding our seniors and prosecuting those who take advantage of them.”

Claudia Ann Merrill, 62, of Farmington Hills, MI, pleaded guilty in January 2020 to one count of mail fraud. In addition to the prison term, U.S. District Judge James C. Mahan sentenced Merrill to three years of supervised release. Merrill agreed to pay a criminal forfeiture money judgment of $1,775,271.61 and was ordered to pay $1,755,412.79 in restitution to the U.S. Department of Veterans Affairs.

According to court documents, from January 1, 2014, through October 1, 2019, Merrill carried out a scheme to defraud the VA. Merrill approached elderly veterans and surviving spouses, and falsely told them they were eligible for VA benefits. Merrill offered to fill out applications for them, and she also convinced them to sign blank application forms and provide identification documents. Merrill then submitted false applications for Veteran’s Pension and Aid and Attendance benefits in the names of these beneficiaries. As part of the scheme, Merrill altered medical records so that the beneficiaries would appear to be eligible for the benefits.

Merrill fraudulently directed benefit payments into bank accounts she controlled, without informing the beneficiaries. When veterans or their surviving spouses reached out to the VA to inquire about their benefits, Merrill often ceased contact with them, leaving the elderly veteran or surviving spouse to unravel Merrill’s fraud. In one case, Merrill sued a veteran, demanding that he pay Merrill the proceeds of her fraudulent scheme. Through the scheme, Merrill defrauded the VA of $1,755,412 in benefit payments.

This case was a joint investigation by the U.S. Department of Veterans Affairs Office of Inspector General and the FBI. Assistant U.S. Attorney Jessica Oliva prosecuted the case.

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MOBILE, Ala. (WPMI) — Heritage Compounding Pharmacy, based in Mobile on Midtown Park East, has settled a federal fraud case for more than $1.9 Million.

A federal complaint filed in October alleged that Heritage and its owners Christopher and Marti Burgess defrauded TRICARE and CHAMPVA, both of which provide healthcare benefits for U.S. Military members, of more than $2.8 Million between January 2013 and May 2015.

The settlement agreement filed in November requires Heritage and the Burgesses to pay $450,000 within 10 days of the agreement being accepted and $2,500 per month beginning in December until the settlement amount of $1,910,392 is fulfilled.

Online records indicate that Heritage Compounding Pharmacy closed in June 2018 and that in 2015 Christopher Burgess formed Rockwell Pharmaceuticals, LLC located in Daphne.

Marti Burgess’ Facebook page indicates she has been a pharmacist for Walmart since July 2016.

According to the Alabama Board of Pharmacy website, both Burgesses have valid state licenses with no disciplinary actions listed.

Federal prosecutors allege that between January 2013 and Mid-2015 the defendants would submit “false claims to TRICARE and CHAMPVA that were tainted by illegal kickbacks.”

Court documents also show that federal authorities believe that the defendants used pre-printed prescriptions for Ketamine, a Schedule III controlled substance, that “were not medically necessary or prescribed by a physician who had a legitimate physician-patient relationship.”

U.S. Magistrate Judge Sonja Bivens signed the Stipulation of Settlement and Consent Judgement Monday.

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NEWARK, N.J. – A Monmouth County, New Jersey, man today admitted he defrauded the Department of Veterans Affairs of over $200,0000 in survivor’s pension benefits over 12 years, Acting U.S. Attorney Rachael A. Honig announced.

Melvin Greenspan, 72, of Perrineville, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Newark federal court to an information charging him with conversion of government funds.

According to documents filed in this case and statements made in court:

The Department of Veteran’s Affairs provided survivor’s pension benefits to Greenspan’s mother because of Greenspan’s father’s prior military service. Those benefits, intended only for surviving spouses of military members, were made through electronic funds transfers into Greenspan’s mother’s bank account beginning in September 1971 and continuing after that date. After Greenspan’s mother died in 2006, Greenspan did not notify the Department of Veterans Affairs about his mother’s death and made withdrawals of the survivor’s pension benefits from his mother’s bank account between 2006 and 2018, totaling $201,166.

The charge of conversion of government funds carries a maximum sentence of up to 10 years in prison and a fine of up to $250,000 or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Nov. 22, 2021.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Benjamin Levin of the Violent Crimes Unit in Newark.

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GRAND RAPIDS, Michigan -- A Newaygo woman was sentenced today in U.S. District Court for engaging in a fraudulent scheme that targeted children’s benefits programs administered by the Social Security Administration and the United States Department of Veterans Affairs.

On October 27, 2021, Terrie Lynn Christian, 58, pled guilty to defrauding the Social Security Administration (“SSA”) of over $550,000 by obtaining benefits for two fictitious children. The fraud began in 2002 and was not discovered until 2019. She also admitted to perpetrating the same fraud against the United States Department of Veterans Affairs (“VA”). This scheme netted her over $109,000 between 2003 and 2019.

Christian appeared before U.S. District Judge Hala Jarbou today for sentencing. The judge imposed a sentence of 30 months in prison, supervised release for three years after release, and an order of restitution. Judge Jarbou stated that Christian deserved this sentence because she had stolen benefits from money earmarked to help the children of military benefits and the poor.      

U.S. Attorney Andrew Birge stated, “This was a brazen long-term fraud that succeeded as long as it did only because Christian knew how to exploit the safeguards built into these two child-welfare programs for years. Fortunately, law enforcement caught up with her and now she must face the consequences.”

Gail S. Ennis, Inspector General for the SSA, said: “Ms. Christian created fictitious identities and falsified documents to obtain Social Security benefits for non-existent people for nearly 17 years. Her egregious acts resulted in a fraud loss of over $540,000. My office will continue to uphold the integrity of SSA and investigate those who defraud and misuse its programs. I thank the Newaygo County Sheriff’s Office and the Veterans Affairs Office of the Inspector General for their assistance in this investigation. I also thank the U.S. Attorney’s Office for holding her accountable for her criminal actions.”

“The VA OIG will continue to vigorously pursue those who would steal from VA benefits programs and taxpayers,” said Special Agent in Charge Greg Billingsley of the Department of Veterans Affairs Office of Inspector General’s Central Field Office. “We thank the U.S. Attorney’s Office and our law enforcement partners for their efforts in this joint investigation.”

The Inspector General offices of the SSA and VA investigated this case. Assistant U.S. Attorney Timothy VerHey prosecuted it.

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A nurse from Raeford, North Carolina was sentenced Oct. 15 to more than a year imprisonment and ordered to pay more than $90,000 in restitution after committing wire fraud on the account of an elderly Veteran in her care.

Tracey McNeill, 51, pled guilty to one count of wire fraud on July 6. The remaining 25 counts of wire fraud and one count of mail fraud were dismissed at her sentencing hearing as a result of a plea agreement.

According to court documents, McNeill was given access to Veterans Affairs and Office of Personnel Management benefits by fraudulently obtaining a power of attorney over the disabled Veteran.

The Veteran was only identified by the initials “W.R.” However, it was noted in court documents that the Veteran had served in the Army and worked for the U.S. Postal Service for more than 40 years.

From April 2015 to February 2016, McNeill funneled the Veteran’s benefits to her personal accounts, according to court documents. This included monthly payments from the VA ranging between $445 to $587 and around $3,065 a month from OPM.

McNeill’s indictment also accused her of arranging for the Veteran — who had dementia —to move in with her in February 2015. She then had the VA and OPM deposit W.R.’s benefits into her bank account for the next 20 months.

According to McNeill’s indictment, by the time W.R. passed away Dec. 7, 2016, she had received more than $72,469 in stolen benefits. The Veteran was 68 years old at the time of death from complications stemming from dementia.

Court documents also show that after the Veteran’s death, McNeill filed beneficiary forms putting herself as the sole beneficiary for what was left of the Veteran’s retirement benefits and life insurance.

A financial analysis conducted during the prosecution’s investigation showed McNeill spent the stolen funds on rent, utilities, credit card payments and personal purchases.

OPM sent McNeill $17,533 in life insurance proceeds after subtracting funeral costs.

McNeill ultimately defrauded the VA and OPM of $90,003, according to the Eastern District of North Carolina’s news release.

Assistant U.S. Attorney Ethan Ontjes prosecuted the case and U.S. District Judge James C. Dever III oversaw McNeill’s sentencing. Ontjes was not immediately available for comment.

The Offices of Inspector General from both the VA and OPM assisted in the investigation.

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LANSING – An Oakland County woman was arraigned recently on multiple charges after she allegedly stole more than $70,000 from an elderly Veteran.

Margaret Risdon, 60, of Bloomfield Hills, was arraigned July 16 in 48th District Court before Magistrate Andra Richardson on one count of embezzlement from a vulnerable adult between $50,000 and $100,000, a 15-year felony, and two counts of failing to file taxes, both five-year felonies.

The case was referred to the Michigan Department of Attorney General by the U.S. Department of Veterans Affairs Office of the Inspector General, which began its investigation after the victim raised concerns that someone was stealing from him.

Between Nov. 6, 2016 and July 20, 2017, Risdon allegedly wrote checks from the victim’s bank account to herself and her business, Electronic Creations, totaling nearly $56,800 and made ATM withdrawals totaling more than $16,000. Risdon would then deposit the checks into her bank account and withdraw the money in cash.

During the time of the alleged theft, the victim was unable to care for himself as he suffered from physical and mental ailments and resided in nursing homes and hospitals. Risdon did not have power of attorney for the victim, nor serve as his guardian or conservator.

Risdon also did not file State of Michigan income tax returns to account for the roughly $72,000 she received from the victim in 2016 and 2017.

“My office is not only committed to enforcing the laws of this state, but to ensuring Michigan’s vulnerable populations are not taken advantage of,” Nessel said. “Even before my time as Attorney General began, I understood the important role my office should play in protecting our senior populations. That’s why I helped to create the Elder Abuse Task Force – to advance protections for our senior citizens and advocate for real change and meaningful legislation to improve their lives well into the twilight years.”

Risdon was given a $5,000 personal recognizance bond and is currently scheduled to appear in court for a probable cause conference at 10 a.m. July 30, followed by a preliminary hearing at 10 a.m. Aug. 6.

More than 73,000 older adults in Michigan are victims of elder abuse. The Attorney General’s Elder Abuse Task Force was established in March 2019 with dozens of organizations including law enforcement, state agencies, lawmakers and advocacy groups committed to being part of the task force.

To learn more about the Elder Abuse Task Force and its initiatives, visit the Attorney General’s website.

To file a report of elder abuse, call the Michigan Department of Health and Human Services Adult Protective Services at 855-444-3911.

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Audrey Strauss, the United States Attorney for the Southern District of New York, announced that AMEET GOYAL, an ophthalmologist in Rye, New York, pled guilty yesterday to perpetrating a seven-year healthcare fraud scheme by falsely billing for millions of dollars of procedures he did not perform, and also to fraudulently obtaining two Government-guaranteed loans intended to help small businesses during the COVID-19 pandemic while facing charges on pretrial release for the healthcare fraud scheme. GOYAL pled guilty before U.S. District Judge Cathy Seibel to all charges in a six-count superseding Indictment.

U.S. Attorney Audrey Strauss said: “Dr. Ameet Goyal was an experienced eye doctor who became blinded by greed and routinely defrauded patients who trusted him to heal their eyes. He grossly overbilled minor ophthalmological procedures, billed for tests and procedures that were never performed, falsified medical records, attempted to corrupt others in his practice to abet the scheme, and sent patients who refused to pay his fraudulent charges to collections. Already facing charges for defrauding patients and insurers of millions of dollars, Goyal committed a new fraud in applying for Paycheck Protection Program loans on behalf of two separate businesses and lying on the applications. Goyal looted over $630,000 in federal funds earmarked for legitimate small businesses affected by the COVID-19 pandemic. Goyal has now admitted to both fraudulent schemes, agreed to forfeit $3.6 million, and faces the possibility of a significant term of incarceration.”

According to the allegations contained in the Indictment, court filings, and statements made during court proceedings:

At all relevant times, GOYAL owned and operated the ophthalmology practice Ameet Goyal M.D. P.C., doing business as Rye Eye Associates, with offices in Rye, Mt. Kisco, and Wappingers Falls, New York, and Greenwich, Connecticut (the “Practice”). Between 2010 and 2017, GOYAL engaged in widespread healthcare fraud by consistently “upcoding” simpler, lower-paying surgical procedures and examinations as complex, higher-paying major operations in fraudulent billings submitted to Medicare, private insurance companies, and patients. As a result, GOYAL fraudulently obtained at least $3.6 million in payments for procedures he did not perform. As part of the scheme, GOYAL routinely falsified patient medical records, authoring fictitious templated operative reports that matched the complex operation he billed rather than the different minor procedure he actually performed. GOYAL also pressured other employees in the Practice to engage in the scheme, and threatened the livelihood of employees who refused to comply. GOYAL caused patients to pay thousands of dollars out of pocket for fraudulently billed charges, and initiated debt collection proceedings against patients who did not pay the full amounts of those false charges.

For example, GOYAL and others at the Practice routinely treated patients for an excision of a chalazion, a small bump on an eyelid, typically removed in less than 15 minutes. An excision of chalazion, when billed truthfully under its associated code, paid the Practice approximately $200 on average from patients and insurance programs. However, GOYAL systematically billed an excision of chalazion and other similar superficial eyelid procedures as if he had performed an orbitotomy together with a conjunctivoplasty, which are complex surgeries into the orbit of the eye, often to remove an orbital tumor together with grafting to close the resulting wound, that typically take an hour or more to perform. These substantial surgeries, as billed, paid the Practice approximately $1,400 on average from a combination of insurance and patient out-of-pocket payments. GOYAL also upcoded certain superficial procedures as an excision and repair of eyelid, a type of higher-paying eyelid surgery involving reconstruction or removal of certain lesions other than chalazions. During the relevant time period, GOYAL billed less than 40 chalazions under the billing code designated for excision of chalazion, while billing over 1,400 orbitotomies, over 700 bundled conjunctivoplasties, and over 1,600 excision and repair of eyelid surgeries, all of which he claimed to have personally performed. The scheme involved numerous other CPT codes for procedures and examinations not performed or upcoded, resulting in at least $3.6 million of ill-gotten gains for GOYAL.

On November 21, 2019, an indictment (the “Indictment”) was returned in the action United States of America v. Ameet Goyal, 19 Cr. 844 (CS) (S.D.N.Y.), charging GOYAL with healthcare fraud, wire fraud, and making false statements relating to healthcare matters. On November 22, 2019, GOYAL was arraigned on the Indictment and placed on pretrial release pursuant to an order that notified GOYAL of the potential effect of committing a criminal offense while on pretrial release.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). Applicants with pending criminal charges are ineligible for PPP loans. The PPP also limits each eligible borrower to one loan, and a maximum loan amount calculated based on a business’s average monthly payroll expenses.

In or about April 2020, GOYAL applied to the SBA and Bank-1, a federally insured institution, for over $630,000 in Government-guaranteed loans through the SBA’s PPP Program. Specifically, on or about April 21, 2020, GOYAL applied for a loan in the amount of $358,700 for the business “Ameet Goyal,” with his own social security number and email address. On or about April 29, 2020, GOYAL applied for a second loan in the amount of $278,500, with a business name “Rye eye associates,” using the Employer Identification Number for Ameet Goyal M.D. P.C and a different email address controlled by GOYAL. To substantiate each loan, however, GOYAL submitted the exact same underlying payroll expense report, showing the same employees and payroll costs.

On both applications, GOYAL falsely answered that he was not facing any pending criminal charges, and electronically placed his initials “AG” directly under his “No” response. GOYAL also falsely certified, among other things, that his business would not receive another PPP loan until the end of the year. After obtaining approval from Bank-1 and the SBA through his fraudulent misrepresentations, GOYAL executed loan notes for two loans. On May 4, 2020, GOYAL received the first loan of $358,700, and on May 11, 2021, GOYAL received the second loan of $278,500. GOYAL used the business checking account into which these funds were deposited to pay business and personal expenses, including by making a $1,800 payment to a country club in Westchester, New York, within days of receiving the first loan.                    

*                     *                     *

GOYAL, 58, of Rye, New York, pled guilty to all six counts in the Superseding Indictment. The first count charged healthcare fraud, which carries a maximum sentence of 10 years in prison; the second count charged wire fraud, which carries a maximum sentence of 20 years in prison; and the third count charged making false statements relating to health care matters, which carries a maximum sentence of five years in prison. Counts four, five, and six charged that while on pretrial release, the defendant committed the following offenses, respectively: bank fraud, which carries a maximum sentence of 30 years in prison; making false statements on a loan application, which carries a maximum sentence of 30 years in prison; and making false statements in a matter within the jurisdiction of the executive branch of the Government of the United States, which carries a maximum sentence of five years in prison. Additionally, a conviction under counts four, five, and six, if committed while on pretrial release, provides for an additional maximum sentence of 10 years in prison consecutive to any other sentence of imprisonment.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

GOYAL is scheduled to be sentenced by Judge Seibel on January 6, 2022, at 2:30 p.m.            

Ms. Strauss praised the work of the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the Office of the Inspector General of the SBA, whose expertise and diligence were integral to the development of this investigation and the guilty plea.

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A federal judge in San Antonio today sentenced 49-year-old Bradley Lane Croft, owner of Universal K-9, Inc., to 118 months of imprisonment for scheming to defraud the federal government of more than $1.5 million in Veterans Affairs GI Bill benefits to train service canines and their handlers.

In addition to the prison term, Senior U.S. District Judge David A. Ezra ordered that Croft pay $1,506,758.31 in restitution and be placed on supervised release for a period of three years after completing his prison term.

“Today’s sentence demonstrates what can happen to you if you choose to rip off one of the most important benefit programs we have for our Veterans. My thanks goes to the prosecutors and our law enforcement partners who worked so hard to see justice served,” said U.S. Attorney Ashley C. Hoff.

After a bench trial in November 2019, Judge Ezra found Croft guilty on eight counts of wire fraud, four counts of aggravated identity theft, two counts of money laundering and two counts of making a false tax return. Testimony during trial revealed that beginning in 2015, Croft provided false information in applications to the Texas Veterans Commission, including instructors’ names, certifications and training documents to receive GI Bill educational benefit payments. Croft and others solicited Veterans as students indicating that they could use their GI Bill benefits to pay for a dog handler’s courses that cost between $6,500.00 and $12,000.00.   During the scheme, Universal K-9 filed approximately 185 fraudulent claims relating to the education of about 132 Veterans totaling over $1.5 million.

“The FBI is committed to working with our partners to protect important federal programs, like the GI Bill, which serves to improve the lives of men women who sacrifice so much to serve our nation,” said FBI Special Agent in Charge Christopher Combs, San Antonio Division. “Thanks to the hard work of IRS CI, VA-OIG, the U.S. Attorney’s Office and the lead FBI investigator, a task force officer with the Texas Department of Public Safety, Croft’s fraud scheme and his betrayal of Veterans has ended.”

Trial testimony also revealed that Croft submitted fraudulent income tax returns showing his 2016 reported income as $2,000 and his reported income as $2,000 for 2017. Evidence showed that Croft actually received substantially more income than what he reported to the IRS in 2016 and 2017.

“Defrauding programs such as the GI Bill, is particularly disturbing and a slap in the face to all the U.S. Service men and women who count on these programs to help improve their futures. Today’s stiff sentencing of Bradley Lane Croft, owner of Universal K-9, Inc., shows once again how harmful ‘white collar’ fraud can be,” said IRS Criminal Investigation (IRS CI) Special Agent in Charge Rick Goss, of the Houston Field Office. “IRS CI is proud to have worked with our FBI and VA-OIG counterparts to investigate and ultimately bring down Mr. Croft’s illicit scheme involving wire fraud, aggravated identify theft, money laundering, and the filing of false Federal Income tax returns.”

Judge Ezra also ordered Croft to forfeit: his San Antonio business property; approximately $239,825.73 seized from his bank accounts; approximately $4,372 seized on site at Universal K-9; a 2017 American Eagle 45T Motorhome (valued at over $450,000); a 2018 Ford F-150 King Ranch Lariat; a 2017 Dodge Ram 1500 Laramie; a 2016 Yamaha Superjet Ski; a 2008 Yamaha Waverunner Jet ski; and a 2012 Rocket International Trailer. Judge Ezra also granted the government’s motion for a money judgment in the amount of $1.3 million.

“The Post-911 GI Bill program provides critical educational and job benefits to Veterans who served their country. This sentence sends a strong message that anyone who defrauds that program or Veteran students will be held accountable in a court of law,” said U.S. Department of Veterans Affairs Office of Inspector General (VA-OIG) Special Agent in Charge Jeffrey Breen, South Central Field Office. “VA-OIG thanks the U.S. Attorney’s Office, the FBI, and IRS CI for collaborating on this important case to achieve justice.”

On August 8, 2018, federal authorities executed a search warrant at Croft’s business in San Antonio. A total of 26 canines at the business were placed into the custody of the city’s Animal Care Services.

Croft has remained in federal custody since the verdict.    

The FBI, VA-OIG and IRS CI investigated this case. Assistant U.S. Attorneys Gregory J. Surovic and Fidel Esparza III prosecuted this case.

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Assistant U. S. Attorney Michelle L. Wasserman (619) 546-8431

SAN DIEGO – Nimesh Shah, owner of Blue Star Learning, a technical training school in San Diego, was sentenced in federal court today to 45 months in custody as a result of a multi-year scheme that defrauded the Department of Veterans Affairs out of almost $30 million in Post-9/11 G.I. Bill benefits.

As laid out in Shah’s plea agreement and court documents, Shah took extraordinary efforts to deceive regulators from the Department of Veterans Affairs (VA) to ensure the school continued to receive VA funds. Shah provided the VA with false documents, invented fake students and created fake student files. He provided spreadsheets with false employment information and fraudulent contact information for purported graduates of the school and their made up employers. He purchased cellular telephones so that he and his employees could field VA regulator calls to purported employers of school graduates, and hired individuals overseas to pretend to be satisfied Blue Star Learning students in response to VA regulator emails. As laid out in court records, Shah’s scheme appears to be one of the largest Post-9/11 G.I. Bill fraud cases that has been prosecuted around the country.

Shah was also ordered to forfeit $3,076,361.77 and to pay the VA $29,350,999 in restitution. Shah’s wife Nidhi Shah, who was the vice president and director of education at the school, was sentenced to two years of probation as a result of lying to investigators in the course of the investigation into the school.

The Post-9/11 G.I. Bill provides Veterans and other eligible individuals educational assistance, including tuition, housing costs, and other educational costs and fees. The VA pays tuition and fees directly to the school where the Veteran is enrolled, and if the Veteran is enrolled on more than a half time basis, the VA additionally provides a monthly housing allowance directly to the Veteran, as well as money for books, supplies, equipment and other educational expenses. In October 2011, the VA began paying Post-9/11 G.I. Bill benefits for individuals pursuing non-institute of higher learning, non-degree programs, including non-accredited, non-college degree schools like Blue Star Learning.

In order to receive funds from the VA under the Post-9/11 G.I. Bill, Blue Star Learning was required to have at least 15 percent non-Veterans for each course for which the VA was paying educational benefits - a rule called the “85/15 Rule.” As laid out in court records, the “85/15 Rule” is designed to minimize the risk that Veterans’ benefits are wasted on educational programs of little value and to ensure that the cost of a course is acceptable and paid on the open market by non-Veterans. As part of its yearly accreditation process, Blue Star Learning was also required to provide vocational attainment data for graduates of the school to VA regulators that corroborated employment statistics posted on the Blue Star website. This data was requested to ensure that individuals attending the school were getting jobs in the fields in which they were receiving training, as a measure of quality.

As part of his multi-year fraud scheme, between March 2016 and June 2019, Shah lied to the VA about the percentage of non-Veteran students at the school, and made up fake non-Veteran students – when in fact nearly all of their business came from Veteran students. He also created spreadsheets of fraudulent employment data, including false emails, phone numbers, jobs and employers to support made-up graduate employment data. And he falsely claimed that all of the students at the school were enrolled full-time. Shah’s lies ensured that Blue Star Learning received millions of dollars in VA education benefits that the school was not entitled to.

Blue Star Learning, which charged up to $20,560 per course, had close to 100% Veteran students. Shah nonetheless repeatedly misrepresented to the California State Approving Agency for Veterans Education (“CSAAVE”) and the VA that Blue Star Learning was in compliance with the “85/15 Rule.” Shah took extraordinary efforts to deceive VA regulators regarding non-Veteran students at the school, including creating fake enrollment agreements and student files for the purported non-Veterans in each program. Shah emailed the VA 48 fraudulent enrollment agreements for fictitious people he represented were non-Veteran students at Blue Star Learning, complete with fraudulent dates of birth, social security numbers, addresses, phone numbers and emails for each fraudulent non-Veteran student.

Shah knew that the vast majority of Blue Star Learning graduates did not obtain jobs in the fields in which they were purportedly receiving training, and that the employment statistics on Blue Star Learning’s website were false. Shah nonetheless submitted fraudulent spreadsheets to CSAAVE claiming that all of the Blue Star Learning students listed were employed in the informational technology field. On these spreadsheets, Shah provided fraudulent phone numbers, email addresses, employers, and employer contact information for each student. Shah then took his fraud a step further: Because he knew CSAAVE could contact the students/employers to verify the data submitted, Shah hired individuals to create the fraudulent email addresses for the Blue Star Learning students, and directed these individuals, who resided overseas, to answer emails received at the fraudulent email addresses pretending to be satisfied Blue Star Learning graduates working in the information technology field. Shah additionally created 30 fictitious companies that he listed as the employers on the fraudulent spreadsheets, and hired individuals to create fraudulent email addresses and domain names for each fictitious company. Shah directed a Blue Star Learning employee to purchase 30 cellular telephones, one for each fictitious employer, and had employees of Blue Star Learning create voicemail greetings on each cellular telephone so that it would appear that the fraudulent businesses were legitimate if CSAAVE called to check.

“This was an extraordinary fraud in terms of the elaborate deception, the years-long duration and the amount of money involved,” said U.S. Attorney Robert Brewer. “This defendant knowingly violated the rules to enrich himself, and for that he will go to prison.” Brewer commended prosecutor Michelle Wasserman and agents from the Department of Veterans Affairs Office of Inspector General and Federal Bureau of Investigation for excellent work on this case.

“The FBI worked with our partners at the VA-OIG to investigate this elaborate fraud scheme resulting in a loss of over $29 million dollars,” said FBI Special Agent in Charge Suzanne Turner. “Fraud affecting educational benefits meant for our military Veterans will not be tolerated. Today, justice was served against the Shahs, the owners of Blue Star Learning, who put greed and deceit above the men and women of our U.S. military.”

Rebeccalynn Staples, Special Agent-in-Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Western Field Office, stated, “This case demonstrates VA OIG’s commitment to aggressively pursuing individuals and schools who seek to exploit the education benefits earned by Veterans. VA OIG will continue to protect the integrity of the VA education benefits program by identifying unscrupulous schools who take advantage of Veteran students. VA OIG urges anyone with knowledge of possible fraud against VA to contact the VA OIG Hotline Division at 1-800-488-8244.”

As a result of Shah’s fraud, the VA issued over $11 million in tuition payments to Blue Star Learning, and over $18 million in housing allowances and stipends. In total, as a result of Shah’s fraud, the VA lost $29,350,999.

DEFENDANT                                              Case Number 19CR4551-JAH; 19CR4550-JAH

Nimesh Shah                                       Age: 37                                   San Diego, CA

Nidhi Shah                                         Age: 35                                  San Diego, CA

SUMMARY OF CHARGES

Nimesh Shah: Wire Fraud – Title 18, U.S.C., Section 1343

Maximum penalty: Twenty years in prison and $250,000 fine

Nidhi Shah: False Statement – Title 18 U.S.C., Section 1001

Maximum penalty: Five years in prison and $250,000 fine

AGENCY

Department of Veterans Affairs Office of Inspector General

Federal Bureau of Investigation

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BOSTON – Three men were sentenced today in federal court in Boston for conspiracy to defraud the United States and mail fraud in connection with a scheme to obtain government contracts.

Frank Apicella, 63, of Groveland, Mass.; Michael Sforza, 59, of Alpharetta, Ga.; and James Apicella, 37, of Kingston, N.H., were sentenced by U.S. District Court Senior Judge Douglas P. Woodlock to two years of probation, two years of supervised release and ordered to pay forfeiture of $300,000 each. In addition, Frank Apicella and Michael Sforza were also ordered to each pay a $300,000 fine. The defendants pleaded guilty in February 2020 to one count of conspiracy to defraud the United States and one count of mail fraud.

Beginning in 2011 the defendants used Tactical Office Solutions (TOS), a company run by James Apicella, as a front to bid on government contract work that was set aside for Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Historically Underutilized Business Zone (HUBZone) companies. Although the contracts were bid on and awarded to TOS through SDVOSB and HUBZone set-aside programs, TOS never performed the work. Rather, the work was actually mostly performed by a company called FENS, which was owned and operated by Frank Apicella and Michael Sforza, and which was not eligible to compete for contracts through the set-aside programs.

United States Attorney Andrew E. Lelling; Christopher F. Algieri, Special Agent in Charge of the Department of Veterans Affairs Office of Inspector General, Criminal Investigations Division, Northeast Field Office; Luis Hernandez, Special Agent in Charge of the General Services Administration Office of Inspector General, New England Regional Office; and Michael Conner, Resident Agent in Charge of the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, made the announcement. The U.S. Treasury Inspector General for Tax Administration provided assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Securities, Financial & Cyber Fraud Unit and Annapurna Balakrishna of Lelling’s Civil Division prosecuted the case.

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SACRAMENTO, Calif. — Liana Karapetyan, 41, of El Dorado Hills, pleaded guilty today to one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive health care kickbacks, Acting U.S. Attorney Phillip A. Talbert announced.

According to court documents, Karapetyan and another individual owned and controlled home health care and hospice agencies in the greater Sacramento area: ANG Health Care Inc., Excel Home Healthcare Inc., and Excel Hospice Inc. On behalf of the agencies, Karapetyan and another individual certified to Medicare that they would not pay kickbacks in exchange for Medicare beneficiary referrals to the agencies.

Despite their certifications, from at least July 2015 through April 2019, Karapetyan and another individual paid and directed others to pay kickbacks to multiple individuals for beneficiary referrals, including employees of health care facilities, as well as employees’ spouses. The kickback recipients included John Eby, a registered nurse who worked for a hospital in Sacramento; Anita Vijay, the director of social services at a skilled nursing and assisted living facility in Sacramento; Jai Vijay, Anita Vijay’s husband; and Mariela Panganiban, the director of social services at a skilled nursing facility in Roseville.

In total, Karapetyan and others caused the agencies to submit over 8,000 claims to Medicare for the cost of home health care and hospice services. Based on those claims, Medicare paid the agencies approximately $31 million. Of that amount, Medicare paid the agencies at least over $2 million for services purportedly provided to beneficiaries referred in exchange for kickbacks paid to, among others, Eby, Anita Vijay, Jai Vijay, and Panganiban. Because the agencies obtained the beneficiary referrals by paying kickbacks, the agencies should not have received any Medicare reimbursement.

This case is a product of an investigation by the Federal Bureau of Investigation and the Department of Health and Human Services’ Office of Inspector General. Assistant U.S. Attorney Matthew Thuesen is prosecuting the case.

U.S. District Judge Troy L. Nunley is scheduled to sentence Karapetyan on Aug. 26. Karapetyan faces maximum statutory penalties of 10 years in prison for the health care fraud conspiracy charge and five years in prison for the kickback conspiracy charge. She also faces a maximum fine of $250,000 or twice the gross gain or loss for each charge. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

In separate cases, Eby, Jai Vijay, Anita Vijay, and Panganiban pleaded guilty for their roles in the kickback scheme. They await sentencing.

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A San Diego psychiatrist has been sentenced to prison for fraudulent claims to Tricare, and ordered to pay $783,764 in restitution.

Marco Antonio Chavez “used these ill-gotten gains to buy himself luxuries including a red 2016 Jaguar and thousands of dollars’ worth of David Yurman jewelry,” stated a press release from the U.S. Attorney’s Office in the Southern District of California.

The 40-year-old Chavez was sentenced in federal court to 21 months in prison. The maximum penalty for health care fraud is 10 years in prison and a $250,000 fine. In August, 2019, Chavez pleaded guilty to felony health care fraud.

Over time, Chavez submitted about $928,800 in false and fraudulent claims to Tricare , and Tricare paid $783,764 on those claims.

Chavez became a Tricare network provider in April, 2013, providing psychiatry services, including therapy and prescription medications for children and adults. According to prosecutors, he used his access to the web-based system to submit fraudulent claims to Tricare using his unique personal security code to avoid review by other billing staff, according to the release. He then arranged for those federal funds to be paid directly into his personal account.

Chavez used information from patients to submit claims for nonexistent care, according to prosecutors. In one example, he billed Tricare for 80 dates of service, when he actually saw the patient on just three different occasions. His office staff submitted the claims for those three occasions; Chavez submitted the other 77 claims directly, according to the release. Of those claims, 21 included dates for service before that patient’s initial visit. Another patient saw Chavez on five occasions, yet Chavez submitted another 71 claims for service when he didn’t actually see the patient. Those two incidents cited by prosecutors happened in 2013 and 2014.

Prosecutors said Chavez tried to avoid detection through a variety of means. He told patients that they might see entries on their Explanation of Benefits forms from Tricare that they wouldn’t recognize.

When the Tricare contractor conducted an audit and asked for certain patient files, he claimed he had already sent the files, when he knew the files didn’t exist, according to the release.

In addition to Assistant U.S. Attorney Valerie Chu, the FBI and Defense Criminal Investigative Service worked on the case.

“Dr. Chavez’ conduct is a particularly egregious example of fraud against the TRICARE program in that his greed clearly took priority over his patients’ trust and well-being,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office, in a statement in the release.

“The doctor’s sentencing should serve notice to other unscrupulous healthcare providers that any unprincipled actions that corrupt the integrity of the Tricare program and ultimately degrade the quality of health care provided to military service members and their families will be vigorously investigated by DCIS and its law enforcement partners.”

In a separate action on June 23, the Medical Board of California issued an order revoking Chavez’s medical license, related to allegations that Chavez was treating patients while under the influence of a drug or alcohol, according to Board documents.

In May, 2018, NBCSanDiego.Com reported that a judge had suspended Chavez’s license after he admitted to drinking a pint of vodka before treating patients.

In Board documents, an investigator who visited Chavez’s office stated Chavez had told him he drank two eight ounce glasses of vodka mixed with cloves at 6 a.m. and 7 a.m. that morning, because it was his mother’s home remedy to stop his drinking. There were patients in the waiting room when the investigator visited.

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A Maryland man was sentenced Monday to 30 months in prison and ordered to pay $150,000 in restitution for defrauding a U.S. Department of Veterans Affairs (VA) program dedicated to rehabilitating military Veterans with disabilities.

According to court documents, Francis Engles, 65, of Bowie, was the owner and operator of Engles Security Training School (Engles Security). In August 2015, Engles Security became an approved vendor of the VA’s Vocational Rehabilitation & Employment program, which provides disabled U.S. military Veterans with services. Thereafter, Engles Security obtained over 80% of its total revenue from the VA in exchange for purporting to provide certain courses to disabled military Veterans.

To further the scheme, Engles falsely represented to the VA that his company was providing Veterans with months-long courses for 40 hours per week and over 600 total hours. In fact, as Engles knew, Engles Security offered Veterans far less than what Engles represented to the VA. In some instances, it offered only a few hours of class per day for several weeks. Some Veterans did not attend more than one day of class. Engles nevertheless sent to the VA “Certificates of Training” stating that Veterans had completed courses that they had not completed or, in some instances, had not taken at all. Similarly, Engles submitted letters to the VA falsely stating that the Veterans were employed by Engles’ private security business. Engles also instructed Veterans to sign attendance sheets for classes that he knew they did not in fact attend. In total, Engles Security obtained $337,960 from the VA for the purported education of military Veterans.

Engles also attempted to obstruct the investigation into his fraud. During an interview with federal agents, Engles lied about Veteran students’ attendance at the school and later, when Engles Security was served with a grand jury subpoena, Engles prevented his employee from producing responsive documents that she had gathered. Some of these documents were later discovered in the government’s search of Engles Security’s office.

In February 2019, four other individuals were sentenced in related cases following their guilty pleas. James King, a former VA employee, was sentenced to 11 years in prison for committing bribery, defrauding the VA and obstructing justice. Albert Poawui, the owner of Atius Technology Institute, was sentenced to 70 months in prison for committing bribery. Sombo Kanneh, Poawui’s employee, was sentenced to 20 months in prison for conspiracy to commit bribery. Michelle Stevens, the owner of Eelon Training School, was sentenced to 30 months in prison for committing bribery.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Channing D. Phillips for the District of Columbia; Special Agent in Charge James A. Dawson of the FBI’s Washington Field Office’s Criminal Division; and Special Agent in Charge Kim Lampkins of the VA Office of Inspector General’s Mid-Atlantic Field Office made the announcement.

Trial Attorney Lauren Castaldi of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Peter Lallas of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.

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SAN ANTONIO, Texas (KWTX) - A Dripping Springs woman was sentenced in a federal court in San Antonio on March 23 to 46 months in prison and ordered to pay $501,709.54 in restitution for defrauding the Department of Veterans Affairs (VA) and the Social Security Administration (SSA) of more than $500,000.

Josephine Casandra Perez-Gorda, 40, defrauded the VA and SSA by overstating the severity and extent of her spouse’s disability from October 2011 through August 2017. Mr. Perez-Gorda, now deceased, was an Army Veteran who participated in the fraud.

The couple claimed Mr. Perez-Gorda was paralyzed from the waist down from an injury he suffered while on active duty. The ruse included applying for and receiving a specially equipped vehicle, a specially adapted home, and additional compensation based on his disability rating.

The investigation began after San Antonio news station, KENS 5, aired a story titled, “Homes for Our Troops Questions Veteran’s Paralysis after Video.”

The story involved a specially adapted house in Dripping Springs that was gifted to the Perez-Gordas in December 2013 by the non-profit foundation Homes for Our Troops.

Although Mrs. Perez-Gorda claimed her husband was “paralyzed from the belly button down,” Mr. Perez-Gorda was seen walking around the neighborhood and playing basketball.

VA Office of Inspector General (OIG) agents videotaped Mr. Perez-Gorda walking around without assistance. Mrs. Perez-Gorda furthered the scheme by completing all the VA and SSA paperwork claiming Mr. Perez-Gorda was paralyzed in both legs.

Mrs. Perez-Gorda was found guilty on Sept. 22, 2022, of 11 counts of wire fraud; one count of mail fraud; one count of healthcare fraud; three counts of false statements related to a healthcare matter; one count of conspiracy to commit healthcare fraud; and one count of theft of government funds.

In addition to the imprisonment and restitution, Perez-Gorda is responsible for a $100 special assessment on each of the 18 counts and $100,000 for trial expenses.

“Fraudulently obtaining benefits from VA diverts valuable resources intended for the care of deserving Veterans,” said Deputy Assistant Inspector General for Investigations Carl Scott of the Department of Veterans Affairs Office of Inspector General’s Office of Investigations. “The VA OIG is grateful to the U.S. Attorney’s Office and the Social Security Administration OIG for their efforts in this joint investigation.”

The VA-OIG and SSA-OIG investigated the case.

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Ocala, Florida – Miller Wilson, Jr. (50, Sparr), his daughter, Myoshi Wilson (26, Citra), and his ex-wife, Erica Wilson (43, Ocala) were sentenced today by Senior United States District Judge James D. Whittemore for their roles in a scheme to defraud the U.S. Department of Veterans Affairs health care benefits. Each had previously pleaded guilty.

Miller Wilson, Jr. was sentenced to 18 months in federal prison for conspiracy to commit health care fraud and wire fraud and solicitation and receipt of a health care kickback.

Erica Wilson was sentenced to 5 years’ probation for conspiracy to commit health care fraud and wire fraud.

Myoshi Wilson was re-sentenced to 6 months’ imprisonment, followed by 30 months of supervised release, including 6 months’ home confinement, for a violation of probation. Myoshi Wilson had previously been sentenced to 5 years’ probation for making false statements to law enforcement. She was arrested on a violation of that probationary sentence on November 4, 2020.

According to court documents, Miller Wilson, Jr. was an employee at the Department of Veterans Affairs (“VA”) Clinic located in The Villages. As part of his employment, he provided transportation arrangements for veterans needing medical treatment. From 2014 through 2016, Miller Wilson, Jr. obtained cash kickbacks from the transportation vendors in exchange for awarding them health care contracts from the VA. Thereafter, from 2016-2017, Miller Wilson, Jr. conspired with Erica and Myoshi Wilson to open and manage two different transportation companies to conduct similar schemes. Miller Wilson, Jr. used his official position at the VA to funnel health care contracts to the companies that he had formed with Erica and Myoshi Wilson. During a 17-month period, the two companies billed the federal government $305,673. Myoshi Wilson admitted to making false statements to a federal agent in 2019, to conceal the conspiracy.

“VA employees are public servants with a solemn duty to care for our nation’s veterans,” said David Spilker, Special Agent in Charge of the VA OIG’s Southeast Field Office. “The sentencing of these three defendants demonstrates the VA OIG’s commitment to holding accountable anyone who abuses their position to enrich themselves. The VA OIG thanks the U.S. Attorney’s Office for its strong partnership in sending a clear message that VA employees will be held to the highest ethical standards, which preserves the public trust in VA.”

This case was investigated by the Department of Veterans Affairs – Office of Inspector General. It was prosecuted by Assistant United States Attorney Michael P. Felicetta.

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Miami, Florida – Two South Florida residents have pleaded guilty to running a mental health care fraud scheme that over-billed Medicaid for hundreds of thousands of dollars.

During the change of plea hearing in federal court in Fort Lauderdale, Florida, Lorena Osella, 44, of Ft. Lauderdale, Florida, pleaded guilty to one count of conspiracy to commit health care fraud, and Juan Luis Matos, 59, of Miami, Florida, pleaded guilty to one count of conspiracy to defraud the United States and to pay health care kickbacks. U.S. District Judge William P. Dimitrouleas, who sits in Ft. Lauderdale, Florida, will sentence both defendants on January 10, 2022.

As part of their guilty pleas, Osella and Matos admitted that they paid kickbacks of $400 in cash per month to Medicaid beneficiaries in exchange for the beneficiaries receiving psychosocial rehabilitation (PSR) services at Lighthouse Community Center LLC, in Doral, Florida. In addition, Osella admitted that she fraudulently billed Medicaid for at least $350,206 in psychosocial rehabilitation (PSR) services that were not provided as claimed. Psychosocial rehabilitation (PSR) services are a type of mental health group counseling designed to help people with depression, anxiety, and other mental disorders cope with their conditions and improve their ability to conduct daily life activities. Medicaid allowed these services to be administered via telemedicine beginning in April 2020 because of the COVID-19 pandemic. Osella and Matos also admitted to illegally receiving Florida unemployment benefits during the time they committed the health care fraud.

HHS-OIG investigated the case. Assistant United States Attorney Timothy Abraham is prosecuting the case. AUSA Emily Stone is handling asset forfeiture.

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Knoxville, Tenn. – Southeastern Retina Associates ("SERA") has paid $1.5 million to resolve False Claims Act allegations in the United States District Court for the Eastern District of Tennessee.

As part of the settlement, SERA entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), requiring the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks. The CIA requires training, auditing and monitoring designed to address the conduct at issue in the case. Southeastern Retina Associates has over 250 employees in offices throughout eastern and middle Tennessee, northern Georgia, and southwestern Virginia.

The settlement resolves allegations that, from 2009 through 2016, the practice improperly used the Modifier 25 billing code to charge Medicare and Medicaid for exams that were not separately billable from other procedures performed on the same day. The settlement also resolves allegations that certain Medicare and Medicaid billings during the same period included charges for exams at higher levels than appropriate.

"It is important that medical providers present appropriate and reasonable charges for services that are paid for by the taxpayers. This office remains committed to ensuring that publicly funded healthcare systems are not charged more than what the billing rules prescribe," said U.S. Attorney J. Douglas Overbey.

"Healthcare fraud and abuse impacts every American. The critical resources that are removed from our health care system due to exploitation results in higher health care cost for everyone. The FBI will continue to work closely with federal, state, and local partners to investigate those who abuse federally funded healthcare programs," said Joseph E. Carrico, Special Agent in Charge of the Knoxville Division of the Federal Bureau of Investigation.

"We will continue to pursue doctors that use deceptive billing practices to make more money. These types of schemes cost federal health care programs millions of dollars and cheat taxpayers in the process," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.

"The Department of Veterans Affairs Office of Inspector General is committed to working with our law enforcement partners to identify and investigate those who defraud or abuse VA’s healthcare system. This settlement shows that VA-OIG will continue to aggressively investigate anyone who overbills VA programs intended to care for our nation’s Veterans," said Kim R. Lampkin’s, Special Agent in Charge of VA-OIG’s Mid-Atlantic Field Office.

"False claims that overbill the federal healthcare programs undermine the integrity of the Federal Employees Health Benefits program and increase the cost of medical care for us all. OPM-OIG thanks the U. S. Attorney’s Office and our law enforcement partners. Today’s settlement demonstrates joint commitment to investigating and prosecuting fraudulent billing practices that waste taxpayer dollars," said Thomas W. South, Deputy Assistant Inspector General, Office of the Inspector General (OPM-OIG).

This investigation was the result of a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Tennessee, U.S. Department of Health and Human Services Office of Inspector General, U.S. Office of Personnel Management, Knoxville Division of the FBI, and the Tennessee Attorney General’s Office. The investigation was prompted by a lawsuit filed in 2015 under the qui tam or "whistleblower" provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The relator’s share of the recovery in this case will be $270,000.

Assistant United States Attorneys Jessica Sievert, Jeremy Dykes, and Rob McConkey, represented the United States.

The claims settled by this agreement are allegations only; there has been no determination of liability.

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A Michigan woman pleaded guilty to defrauding nearly $1.8 million in benefits from the U.S. Department of Veterans Affairs, federal prosecutors said.

Claudia Ann Merrill, 61, admitted to submitting false applications in the names of Veterans, as well as the surviving spouses of Veterans, in connection with the VA health care programs known as Veterans Pension and VA Aid and Attendance, according to U.S. Attorney Nicholas A. Trutanich for the District of Nevada.

Court documents state that the scheme began on or about Jan. 1, 2014 through Oct. 1, 2019, Trutanich said in a news release.

Merrill also altered medical records to ensure that the Veteran or surviving spouse’s physical or mental condition would be eligible for the benefits, Trutanich said. She then directed benefit payments into bank accounts she controlled and were hidden from the Veterans and surviving spouses, according to the news release.

“As a result of the scheme, Merrill fraudulently caused the VA to pay out $1,755,412 in benefits that it otherwise would not have paid but for the scheme,” the news release states.

This case was investigated by the VA’s Office of the Inspector General, the FBI Las Vegas Field Office and prosecuted by Assistant U.S. Attorney Patrick Burns.

Merrill faces a maximum penalty of 20 years in prison and a $250,000 fine and is scheduled to be sentenced on May 15.

As part of her guilty plea, Merrill agreed to pay approximately $1,755,412 in restitution, officials said.

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