Just two months after being charged, all 11 defendants implicated in the $300 million Spectrum/Reliable healthcare fraud have pleaded guilty, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Ten defendants, including two medical doctors, were indicted February 9. An eleventh defendant was charged on March 16.

Six of the original ten defendants – Laredo-based internal medicine doctor Eduardo Canova, family medicine doctor Jose Maldonado, nurse practitioner Keith Wichinski, Reliable Labs cofounder Abraham Phillips, marketing firm owner Juan David Rojas, and marketing employee Laura Ortiz – filed plea papers on February 11, just two days after being indicted. The final defendant – Reliable Labs cofounder Biby Kurian – filed plea papers on April 6 and entered her plea on April 13.

“The swift resolution of this case is a testament to both our office and to the investigative agencies that worked diligently to ensure our case was airtight,” said U.S. Attorney Chad Meacham. “We cannot allow physicians’ judgement to be clouded by financial considerations.”

“This proactive investigation identified an illegal kickback conspiracy that resulted in substantial evidence and a guilty plea from each defendant,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “I commend our partners and the Northern District of Texas for their meticulous work in unraveling the schemes perpetrated by these defendants, and for their work to protect American taxpayers and the integrity of our healthcare system.”

According to court documents, the founders of several lab companies, including Unified Laboratory Services, Spectrum Diagnostic Laboratory, and Reliable Labs LLC, paid kickbacks to induce medical professionals to order medically unnecessary lab tests, which they then billed to Medicare and other federal healthcare programs.

The medical professionals -- including Dr. Canova, Dr. Maldonado, and Mr. Wichinski – accepted the bribes and ordered millions of dollars’ worth of tests.

Meanwhile, Unified, Spectrum, and Reliable disguised the kickbacks as legitimate business transactions, including as medical advisor agreement payments, salary offsets, lease payments, and marketing commissions.

The labs, through marketers, paid doctors hundreds of thousands of dollars for “advisory services” which were never performed in return for lab test referrals. They also paid portions of the doctors’ staff’s salaries and a portion of their office leases, contingent on the number of lab tests they referred each month. In some instances, lab marketers even made direct payments to the provider’s spouse. (When the labs threatened one provider that payments would cease if he didn’t refer more tests, he immediately increased his lab referrals, averaging approximately 20 to 30 referrals per day.)

Knowing they could disguise additional kickbacks using a provider-ownership model, the founder of Spectrum and Unified, Jeffrey Madison, convinced the co-founders of Reliable to convert Reliable into a physician-owned lab. Reliable offered physicians ownership opportunities only if those physicians referred an adequate number of lab tests. In some cases, they made advance disbursement payment to physicians in an effort to appease the physician and ensure he would not send samples to other labs.

As a result of these kickbacks, laboratories controlled by the defendants were able to submit more than $300 million in billing to federal government healthcare programs.

In plea papers, Dr. Maldonado admitted he received more than $400,000 in kickbacks for ordering more than $4 million worth of lab tests; Dr. Canova admitted he received more than $300,000 in kickbacks for ordering more than $12 million worth of lab tests.

Defendants’ pleas are as follows:

• Jeffrey Paul Madison, founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory – conspiracy to pay and receive healthcare kickbacks and a substantive count of paying and receiving healthcare kickbacks (two counts)

• Mark Christopher Boggess, chief operating officer for Spectrum and Unified – misprison (concealment) of a felony

• Biby Ancy Kurian, co-founder of Reliable Labs, LLC – conspiracy to pay kickbacks

• Abraham Phillips, co-founder of Reliable Labs, LLC – conspiracy to pay kickbacks

• Dr. Jose Roel Maldonado, family medicine doctor based in Laredo – conspiracy to solicit and receive illegal kickbacks

• Dr. Eduardo Carlos Canova, internal medicine specialist based in Laredo – conspiracy to solicit and receive illegal kickbacks

• Keith Allen Wichinski, board-certified nurse practitioner based in San Antonio – conspiracy to solicit or receive kickbacks

• David Michael Lizcano, owner of DCLH, a marketing firm engaged by Unified, Spectrum, and Reliable – conspiracy to pay and receive healthcare kickbacks and a substantive count of paying and receiving healthcare kickbacks (two counts)

• Laura Ortiz, sister of David Lizcano and employee at his marketing firm – conspiracy to pay and receive healthcare kickbacks

• Juan David Rojas, owner of Rojas & Associates, another marketing firm engaged by Unified, Spectrum, and Reliable – conspiracy to pay and receive healthcare kickbacks

• Sherman Kennerson, investor in Unified (charged via criminal information) – conspiracy to pay kickbacks

Under the applicable statutes, Mr. Madison and Mr. Lizcano face up to 15 years each in federal prison. Mr. Kennerson, Ms. Ortiz, Mr. Phillips, Ms. Kurian, Dr. Maldonado, Dr. Canova, Mr. Wichinski, and Mr. Rojas face up to five years; Mr. Boggess faces up to three years.

“The expeditious resolution of this matter is a testament to the thorough investigation and valuable collaboration between investigative partners and prosecutors,” said Miranda L. Bennett, Special Agent in Charge for the Office of Inspector General of the U.S. Health and Human Services. “We will continue working with our partners to protect federal health care programs and the beneficiaries who depend on these programs for treatment and care.”

“As the investigative arm of the DoD Office of Inspector General, the Defense Criminal Investigative Service (DCIS) and our colleagues work hard to hold accountable those who undermine Federal health care programs such as TRICARE, “said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. "Safeguarding TRICARE not only protects our warfighters, their families, and retirees, but it also preserves valuable taxpayer resources."

The Federal Bureau of Investigation’s Dallas Field Office – Fort Worth Resident Agency conducted the investigation with the assistance of the U.S. Department of Health and Human Services’ Office of Investigations, the Defense Criminal Investigative Service (DCIS), and the Veterans Affairs’ Office of Inspector General. Assistant U.S. Attorney P.J. Meitl is prosecuting the case.

Source

{jcomments on}

Acting United States Attorney W. Anders Folk today announced charges against 13 defendants in a multi-million dollar health care fraud conspiracy. The defendants made their initial appearances yesterday before Magistrate Judge David T. Schultz in U.S. District Court.

According to the allegations in two separate indictments, 13 defendants are charged with participating in a scheme to defraud the Medicaid program. The scheme involved mental health practitioners and interpreters who were associated with Live Better, LLC, a patient services company with offices in Roseville and Minneapolis, and Multicultural Counseling Clinic (“MMCC”), a counseling clinic with offices in St. Paul, Brooklyn Park, and Burnsville. As part of the scheme, the health practitioners and interpreters would submit fraudulent claims through their respective employers for services purportedly provided to Medicaid recipients. In reality, neither the mental health services nor the ancillary interpretation services were rendered. Some defendants participated in this scheme for nearly three years. As a result of the false and fraudulent claims, the Medicaid program paid Live Better and MMCC a total of more than $5.4 million.

The two separate indictments charge defendants OKACH OKWAYOO KWOT, 51, ELIJAH S. KOLLIE, 62, ABDIRAHMAN YONIS, 33, ALPHONSO VASCO JOHNSON, 58, ILYAS ABDI FARAH, 38, ANAB ARTAN AWAD, 50, AYAN ALI MOHAMUD, 41, ELIFAA HENRY KINYAIYA, 45, VARBAR B. KANNEH, 30, ESKENDER M. YOUSUF, 39, HODAN ABDI HASHI, 52, OMAR ALI OSMAN, 28, and UBAH HASSAN HAGI, 43, with conspiracy and wire fraud.

This case is the result of an investigation conducted by the FBI, the U.S. Department of Health and Human Services Office of Inspector General, and the Minnesota Attorney General Office’s Medicaid Fraud Control Unit.

This case is being prosecuted by Assistant U.S. Attorney Angela M. Munoz.

The charges contained in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Source

{jcomments on}

Sought TRICARE Beneficiaries to Receive Expensive Compounded Drugs

LITTLE ROCK-United States District Judge Brian S. Miller sentenced Bradley Fly, 36, of Germantown, Tenn., to 20 months in federal prison for violating the Anti-Kickback Statute. In July 2019, Fly pleaded guilty to offering two TRICARE beneficiaries’ money in exchange for signing up to receive expensive compounded drugs.

At sentencing, the United States introduced evidence that Fly bribed two people: his longtime friend (then a Marine reservist), plus an Army National Guardsman, whom Fly solicited while seated courtside at a Memphis Grizzlies game. Fly then facilitated prescriptions for both men and their wives, for which TRICARE paid over $500,000, earning himself over $180,000 in commission.

Judge Miller heard testimony from the Marine reservist and from a Special Agent with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) that the prescriptions were part of a larger network of prescription generation, including recruiters whom Fly paid for TRICARE beneficiary information and a group of doctors whom Fly used to sign prescriptions without consulting patients.

“There is no room for kickbacks in the healthcare marketplace,” said Acting United States Attorney Jonathan D. Ross. “Serious penalties and prison await those, like Mr. Fly, who fail to abide by the law. This office and its partners at the FBI and HHS-OIG are committed to rooting out such criminal conduct.”

“Mr. Fly paid kickbacks generating fraudulent claims to line his pockets without concern for the health and welfare of the patients,” said Miranda L. Bennett, Special Agent in Charge of the HHS-OIG Dallas Region. “We will continue working with our law enforcement partners to pursue individuals defrauding federal health care programs.”

“By defrauding TRICARE, Mr. Fly disgracefully cheated U.S. Veterans, their families, and American taxpayers,” said FBI Little Rock Acting Special Agent in Charge Jason Van Goor. “We are grateful for our state and federal partners who help us both investigate these cases and protect the financial integrity of our nation’s health care systems.”

In addition to the 20-month prison sentence, Fly was sentenced to three years of supervised release. The investigation was conducted by HHS-OIG and the FBI and prosecuted by Assistant United States Attorney Alexander D. Morgan.

Source

{jcomments on}

Leader of Scheme Also Charged with Fraudulently Obtaining COVID-19 Unemployment Benefits

Audrey Strauss, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced the unsealing today of an indictment charging acupuncturists JUNYI LIU, a/k/a “Jenny,” and HONGXING WANG, as well as physical therapists GLEEN ANCIRO, NOEMI ALGODON, MOHAMED ELMANDOUH, GERARD ESTRELLA, RAMON GARCIA III, and HENLER DATU TAHIL, and cashier ZIHAO CHEN with operating an over $20 million health care fraud scheme at fraudulent medical offices in Manhattan, Brooklyn, and Queens. As part of the fraud scheme, CHEN and other of the defendants’ co-conspirators paid cash kickbacks to patients (the “Paid Patients”) who were insured by Medicare and/or other insurance providers (collectively, the “Insurance Providers”), and the defendants and their co-conspirators then billed Medicare and the insurance providers for physical therapy and acupuncture services related to the Paid Patients that were unnecessary or never performed. LIU was additionally charged with unlawfully enriching herself and a family member through a COVID-19 unemployment benefit scheme.

The defendants were arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Gabriel W. Gorenstein. The case is assigned to Chief U.S. District Judge Laura Taylor Swain.

U.S. Attorney Audrey Strauss said: “As alleged, the defendants perpetrated a multimillion-dollar health care fraud scheme in which they billed Medicare and other insurers for physical therapy and acupuncture services that were either not rendered in the manner purported or not rendered at all. Large-scale insurance frauds of the type alleged here impose hidden but very real costs on the public as well as insurers. Thanks to our partners in this case, the defendants are in custody and facing serious federal charges.”

HHS Special Agent in Charge Scott Lampert said: “These allegations describe a greed-fueled scheme that undermined our health care system and the people it serves. Health care providers participating in the Medicare program are trusted to furnish medically necessary services and to make beneficiaries collaborators in their care, not conspirators in fraud. HHS-OIG and our law enforcement partners proudly work to protect federal health care funds by identifying and quelling fraudulent billing of providers.”

According to the allegations contained in the Indictment[1] and statements made during court proceedings:

Between 2018 and 2021, LIU, a licensed acupuncturist, operated medical offices (the “Offices”) from which LIU and her partners fraudulently billed the Insurance Providers for physical therapy and acupuncture services that were not rendered in the manner represented or not rendered at all. During the scheme, LIU partnered with other licensed medical professionals, including ANCIRO, ALGODON, ELMANDOUH, ESTRELLA, GARCIA, and TAHIL, all of whom were licensed physical therapists, and WANG, who was a licensed acupuncturist (collectively, the “Partners”). The Partners’ roles in the scheme typically included: (i) allowing the Offices to use their enrollments with the Insurance Providers to submit to the Insurance Providers materially false and fraudulent claims for reimbursement for physical therapy and acupuncture services that were not rendered in the manner represented or were not rendered at all; (ii) creating materially false medical documentation, which stated that certain physical therapy and acupuncture services had been rendered, when such services in fact were not rendered in the manner represented or were not rendered at all; and (iii) contributing financing for the Offices, including for the payment of cash kickbacks to the Paid Patients to induce those patients to provide their insurance information and receive medically unnecessary and/or non-existent services at the Offices. LIU and certain of the Partners also agreed to give kickbacks, including cash and expensive wine, to employees of Insurance Providers to enable the scheme to continue.

In furtherance of the scheme, LIU employed receptionists, cashiers, marketers, financial and billing personnel, acupuncturists, massagists, and other personnel. The cashiers included CHEN, who on numerous occasions distributed tens of thousands of dollars in cash kickbacks to the Paid Patients. In some instances, these Paid Patients visited the Offices, signed in, and received unnecessary physical therapy and acupuncture services. In other instances, the Paid Patients visited the Offices, signed a sign-in sheet and other documents, and then left without receiving any services at all. In yet other instances, the Paid Patients did not visit the Offices at all and instead signed sign-in sheets and other documents brought to them elsewhere. Regardless of whether the Paid Patients received any services or even visited the Offices at all, the Partners used the Paid Patients’ insurance information to fraudulently bill the Insurance Providers for unnecessary and/or never rendered services.

While LIU and her Partners were defrauding the Insurance Providers of millions of dollars, from April 2020 through September 2021, LIU also engaged in a scheme to obtain COVID-19 unemployment benefits for herself and a family member (the “Family Member”) by fraudulently submitting and causing to be submitted to the New York Department of Labor materially false online applications and certifications for COVID-19 benefits. Among other things, the applications and/or certifications represented that LIU was unemployed when, in fact, she continued to operate the Offices for all or nearly all of this period, and that LIU’s Family Member was unable to work because of COVID-19 during a five-month period when the Family Member was in China.

*               *               *

JUNYI LIU, 67, of Great Neck, New York, GLEEN ANCIRO, 50, of Floral Park, New York, NOEMI ALGODON, 49, of Mineola, New York, MOHAMED ELMANDOUH, 48, of Staten Island, New York, GERARD ESTRELLA, 39, of West Hempstead, New York, RAMON GARCIA III, 39, of Merrick, New York, HENLER DATU TAHIL, 38, of East Meadow, New York, HONGXING WANG, 61, of Brooklyn, and ZIHAO CHEN, 20, of Queens, are each charged with: (1) conspiring to commit health care fraud, which carries a maximum sentence of 20 years in prison; (2) conspiring to violate the Anti-Kickback Statute, which has a maximum penalty of five years in prison; and (3) conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison. LIU is also charged with wire fraud, which has a maximum penalty of 20 years in prison, and theft of Government funds, which has a maximum penalty of 10 years in prison.

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

Ms. Strauss praised the outstanding investigative work of HHS-OIG’s New York Office and the New York Field Office of the Internal Revenue Service, Criminal Investigation. Ms. Strauss also thanked the New York State Attorney General’s Medicaid Fraud Control Unit and the U.S. Department of Labor, Office of Inspector General, for their assistance.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Source

{jcomments on}

Progenity Inc. Admits to Fraudulently Using Wrong Billing Code, Paying “Draw Fees” to Physicians, and Providing Meals and Happy Hours to Physicians and Their Staff

Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health, Office of Inspector General (“HHS OIG”), Leigh-Alistair Barzey, Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense - Office of Inspector General’s Defense Criminal Investigative Service (“DCIS”), and Christopher Algieri, Special Agent in Charge of the Department of Veterans Affairs (“VA”), Office of Inspector General, Northeast Field Office (“VA OIG”), announced today a $49 million settlement with PROGENITY, INC. (“PROGENITY”), a San Diego-based biotechnology company that provides molecular and diagnostic tests. The settlement resolves claims that PROGENITY fraudulently billed federal healthcare programs for prenatal tests and provided kickbacks to physicians to induce to them to order PROGENITY tests for their patients. The Office’s lawsuit filed in Manhattan federal court alleges that PROGENITY overbilled Medicaid and the VA by fraudulently using a billing code that misrepresented the tests provided. The lawsuit further alleges that PROGENITY provided illegal kickbacks in the form of excessive “draw fees” to physicians, meals and happy hours for physicians and their staff, and the improper reduction or waiver of patient coinsurance and deductible payments.  

Under the settlement approved today by U.S. District Judge Loretta A. Preska, PROGENITY will pay $19,449,316 to the United States to resolve the kickback claims and the Medicaid and VA fraudulent billing claims, and also makes extensive admissions regarding the company’s conduct. PROGENITY will also pay $13,150,684 to various states to resolve these claims. In addition, PROGENITY will pay $16.4 million to resolve similar fraudulent billing claims related to TRICARE and the Federal Employees Health Benefits Program through a separate civil settlement with the United States Attorney’s Office for the Southern District of California (“USAO SDCA”), and has entered into a Non-Prosecution Agreement with that office.

Acting U.S. Attorney Audrey Strauss said: “Progenity received millions of dollars from federal healthcare programs through its fraudulent billing and kickback schemes. The company misrepresented the tests it performed, and tried to get doctors to order Progenity tests by paying them excessive fees and providing meals and happy hours for them and their staff. Our Office will continue to hold healthcare providers accountable when they engage in fraud and other illegal conduct.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “Kickbacks and fraudulent billing schemes undermine the integrity of our healthcare system, compromise patient care, and increase the financial burden on taxpayers. Along with our law enforcement partners, HHS-OIG will continue to ensure that those billing federal health insurance programs do so in an honest manner.”

DCIS Special Agent in Charge Leigh-Alistair Barzey said: “Ensuring the integrity of TRICARE, the U.S. Defense Department's healthcare system for military members and their families, is top priority for the DCIS. This settlement agreement is the result of a joint effort and demonstrates the DCIS’s commitment to work with the USAO-SDNY and its law enforcement partners to investigate and prosecute kickbacks and other fraudulent schemes that impact TRICARE.”

VA-OIG Special Agent in Charge Christopher Algieri said: “VA OIG will vigorously pursue those who engage in unjust kickback and billing schemes, which generate profits at the expense of Veterans and taxpayers. We appreciate the United States Attorney’s Office and our agency partners for this collaborative effort.”

As alleged in the Complaint filed in Manhattan federal court:

Fraudulent Billing

When submitting claims for payment, healthcare providers use Current Procedural Terminology (“CPT”) codes to identify the nature of the medical procedure or services rendered.   Government healthcare payors rely on the CPT code to determine whether the procedure or service is covered, as well as the level of reimbursement. From March 2014 through April 2016, PROGENITY fraudulently used CPT code 88271 to seek reimbursement for noninvasive prenatal tests (“NIPTs”) that screen for genetic disorders and abnormalities when this code misrepresented the services PROGENITY actually provided. As a result, PROGENITY received payments for non-reimbursable tests, or received substantially higher payments than it was entitled to receive. PROGENITY knew that many patients did not meet the medical necessity criteria for NIPTs, and that it could circumvent those requirements by billing under the incorrect billing code.

Kickbacks

PROGENITY induced physicians to order PROGENITY tests by engaging in three kickback schemes. First, from January 2012 through March 2016, PROGENITY paid “draw fees” to physicians or physician offices for blood specimens collected for PROGENITY tests. These fees exceeded the fair market value of the services performed. The total draw fees paid to physicians depended on the volume of blood specimens collected, so physicians would receive more money if they ordered more PROGENITY tests.

Second, from 2012 through 2018, PROGENITY sales representatives provided food and alcohol to physicians and their staff at gatherings, including happy hours and birthday or holiday parties, that often involved little or no educational content. For the vast majority of the relevant period, PROGENITY did not limit or even monitor the total amount its sales representatives spent on a physician. One former sales representative spent $65,658 on meals and alcohol for physicians during a single year.

Third, from January 2012 through April 2018, to market its expensive tests, PROGENITY routinely reduced or waived coinsurance and deductible payments without making the required individualized determination of financial need or reasonable collection efforts. Sales representatives informed physicians and their staff, as well as patients, that PROGENITY would waive coinsurance and deductibles, or limit the patient’s payment to a certain maximum out-of-pocket amount. And PROGENITY had agreements with several physicians that it would not collect any payments from their patients.

As part of the settlement approved today by Judge Preska, PROGENITY admits, acknowledges, and accepts responsibility for the following conduct:

Miscoding:

From March 2014 through April 2016, PROGENITY knowingly submitted false claims for payment to Medicaid and the VA by using CPT code 88271 to obtain reimbursement for NIPTs.

PROGENITY improperly used CPT code 88271, which applies to fluorescence in situ hybridization (“FISH”) procedures, knowing that its genetic tests were cell-free DNA sequencing-based NIPTs that are not FISH procedures and that CPT code 88271 did not accurately represent the tests performed.

As a result of fraudulently using CPT code 88721 and misrepresenting the type of test performed when submitting claims for payment to Medicaid and the VA for NIPTs, PROGENITY received payments for non-reimbursable tests, or received substantially higher payments than it was entitled to receive for the genetic testing services provided.

Kickbacks:

From January 2012 through March 2016, PROGENITY knowingly made “draw fee” payments to physicians or physicians’ offices for the collection of blood specimens for PROGENITY tests performed on federal healthcare program beneficiaries. In total, PROGENITY paid over $1.7 million in draw fees during this period.

The draw fees paid by PROGENITY exceeded the fair market value of the services performed when collecting blood specimens. PROGENITY frequently paid physicians $20 or more for each blood draw. PROGENITY paid dozens of physicians and physician offices thousands of dollars in above fair market draw fee payments during the relevant time period.

From 2012 through 2018, PROGENITY knowingly provided meals and happy hours to physicians who ordered PROGENITY tests for federal healthcare program beneficiaries, as well to individuals who worked in physicians’ offices. The value of these meals and happy hours exceeded Stark Law limits. In total, PROGENITY expended millions of dollars on food and drinks for physicians and their staff during this period.

During the vast majority of the relevant period, PROGENITY did not have effective systems in place to ensure that the company’s expenses for meals and happy hours for physicians and their employees complied with the Stark Law and the Anti-Kickback Statute. For example, PROGENITY did not (i) reliably track the amount it spent on meals and happy hours for physicians or their staff, (ii) maintain accurate sign-in sheets reflecting attendance at PROGENITY-sponsored gatherings, (iii) keep records of materials or topics that were discussed during PROGENITY-sponsored gatherings, and (iv) implement and enforce limits on the total nonmonetary compensation that could be provided to physicians.

From January 2012 through April 2018, PROGENITY knowingly routinely reduced or waived federal healthcare program beneficiaries’ coinsurance and deductible payments without making the required individualized determinations of financial need or reasonable collection efforts. PROGENITY offered to reduce or waive coinsurance and deductible payments as part of its sales efforts.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act, which alleged that PROGENITY engaged in illegal kickback schemes. PROGENITY has also entered into a Corporate Integrity Agreement (“CIA”) with HHS-OIG. The CIA promotes compliance with the statutes, regulations, program requirements, and written directives of federal healthcare programs. Among other things, the CIA requires that for the next five years PROGENITY must retain an Independent Review Organization to annually review the accuracy of the company’s claims for services furnished to federal healthcare program beneficiaries and monitor its arrangements with other individuals and entities.

Ms. Strauss thanked HHS-OIG, VA-OIG, DCIS, USAO SDCA, and the Medicaid Fraud Control Unit of the New York State Attorney General’s Office for their assistance with the case.

The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jeffrey K. Powell and Kirti Vaidya Reddy are in charge of the case.

Source

{jcomments on}

GREENSBORO, N.C. – Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina, and North Carolina Attorney General Josh Stein today announced a $330,000 settlement to resolve allegations that Dr. George Osei-Bonsu, M.D., Palladium Primary Care, P.A., and Premiere Health Care Plus, P.A., of Greensboro and High Point, submitted false claims to Medicaid and Medicare.

“Medicare and Medicaid lay out specific coverage guidelines for diagnostic studies to ensure that taxpayer dollars are only spent on medically necessary exams,” said Acting U.S. Attorney Hairston. “The United States will not allow practitioners to run unnecessary exams at the expense of the American people.”

“Health care providers must be responsible stewards of taxpayer funds,” said Attorney General Josh Stein. “When they cheat the Medicaid program and waste resources, my office will hold them accountable. I’m grateful for Acting U.S. Attorney Hairston’s partnership in prosecuting health care fraud in North Carolina, and I’m pleased that we’ve won back more than $1 million for North Carolina taxpayers through Operation You’ve Got Nerve.”

Between January 2015 and May 2020, the defendants allegedly submitted false or fraudulent claims for nerve conduction studies and arterial studies that were not medically reasonable or necessary, not supported by clinical documentation within the patient records, and not covered by the Medicare and/or North Carolina Medicaid program. As a result, they were reimbursed for funds that they were not entitled to.

The federal and North Carolina False Claims Acts authorize the governments to recover triple the money falsely obtained, plus substantial civil penalties for each false claim submitted. It should be noted that the civil claims resolved by settlement here are allegations only, and that there has been no judicial determination or admission of liability. The investigation and prosecution of this case was the result of a coordinated effort by the United States Attorney’s Office for the Middle District of North Carolina and the Medicaid Investigations Division of the North Carolina Attorney General’s Office.

Today’s settlement is the fourth in Operation You’ve Got Nerve, an ongoing effort by the Attorney General’s Medicaid Investigations Division (MID) to identify and hold accountable providers billing Medicaid fraudulently for nervous system testing. Including today’s settlement, Operation You’ve Got Nerve has won back $1,190,000 for taxpayers.

About the Medicaid Investigations Division (MID)

The Attorney General’s 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 date, the MID has recovered more than $900 million in restitution and penalties for North Carolina. 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. MID and United States Attorney’s Offices (USAO) frequently collaborate on investigations concerning Medicaid fraud such that MID attorneys are designated as Special Assistant United States Attorneys in the USAOs throughout North Carolina.

The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Middle District of North Carolina, the U.S. Department of Health and Human Services, Office of Counsel to the Inspector General, and the North Carolina Department of Justice, Medicaid Investigations Division. Assistant U.S. Attorney Rebecca Mayer represented the United States.

Source

{jcomments on}

Veterans are twice as likely as non-Veterans to be targets of online scams

The internet is a powerful tool for Veterans. It allows them to keep up with friends, access their hard-earned benefits and shop for the things they need. Unfortunately, former service members are more likely than civilians to be targeted by online scammers while doing these things. Veterans are twice as likely to lose money to fraud because of identity theft, phishing, impostor scams, and investment, loan, or donation deceptions.

Many of these scammers target Veterans to alter or access their government-provided aid, swindling them out of the money or benefits they have earned. This is a widespread issue. Nearly 80% of Veterans say they have been targeted by scams due to their service, according to an AARP survey. These scams are diverse and range from phishing attempts to solicitations for fraudulent Veteran-focused charities.

“Help the Vets” is one example of a fraudulent charity targeting Veterans. It claimed to fund medical care and mental health services for Veterans. An investigation found that “Help the Vets” spent 95% of donations on administrative costs and compensation for its founder. Just 5% of proceeds were actually used to benefit Veterans.

Scammers and identity thieves also target financially stressed Veterans with promising investment opportunities. Recently, a man defrauded about 2,600 people—many of whom are pension-holding Veterans—in a Ponzi scheme. The investor told these pension holders to make monthly payments and disguised them as cash flows.

Identity thieves have developed both low-tech and high-tech ways to steal Veterans’ data, like shoulder surfing and skimming. Shoulder surfing requires that someone physically look over your shoulder to steal your password, PIN, or credit card number. Skimming utilizes a device that fits onto regular credit card machines, allowing scammers to steal your credit card information.

How to protect your information

Veterans can take simple actions to better protect their information:

• Use unique passwords for your online accounts. Re-using passwords increases the risk of cyber theft.
• Use multi-factor authentication (MFA). This combines more than one authenticator type based on information users know and information users receive. It also adds another level of security when Veterans log in to access and manage VA services and benefits.

VA works hard to prevent Veteran identity theft. VA delivers cybersecurity awareness training for all VA employees. It ended the use of Social Security numbers in its business processes. Lastly, VA gives free credit monitoring to Veterans and beneficiaries whose data was compromised by a VA breach. Veterans or beneficiaries of identity theft not caused by a VA breach can contact the toll-free Identity Theft Help Line at 1-855-578-5492 from 8 a.m. to 8 p.m. ET, Monday through Friday.

Veterans can also find additional information on protecting their identity and what VA is doing to help by visiting the More Than a Number website.

Source

{jcomments on}

OLYMPIA — Attorney General Bob Ferguson today announced that Boston Scientific, a medical device manufacturer, will pay more than $8.8 million to Washington for misrepresentations and failure to include serious risks in the instructions and marketing materials for surgical mesh devices.

Ferguson’s office led the multistate case against Boston Scientific, Washington’s third resolution in the last three years against companies that produce surgical mesh devices. Including today’s funds, Ferguson has garnered approximately $20 million for Washington women who received transvaginal mesh.

“Boston Scientific’s deception caused women to suffer in deeply personal ways,” Ferguson said. “I hope this money will provide some measure of relief to the thousands of Washington women who live with the undisclosed side effects of these devices every day.”

In addition to the monetary payment, Boston Scientific must implement legally enforceable corporate reforms that will prevent the company’s harmful conduct from continuing in the future. These corporate reforms include mandatory training for independent contractors, agents, and employees that sell, market or promote mesh, clear disclosures about complications to health care providers, and clear descriptions of complications in terms reasonably understandable to a patient in marketing materials intended to reach patients.

Washington led a coalition of 48 attorneys general in filing today’s resolution. Washington’s $8.83 million is part of a total nationwide recovery of nearly $188.7 million.

The money will be added to a larger restitution fund for women who received transvaginal mesh devices, established after Johnson & Johnson paid $9.9 million to Washington on the eve of trial in April of 2019 over the company’s failure to disclose the serious risks of their surgical mesh devices. Ferguson added to that fund in September of 2020 when mesh device manufacturer Bard paid $2.38 million to Washington for similar conduct.

All women who received transvaginal mesh implants in Washington are eligible to receive funds from the recovery. Between all major transvaginal mesh manufacturers in the United States, tens of thousands of Washingtonians were implanted with transvaginal mesh devices and will be eligible to receive restitution. Attorney General Ferguson’s restitution fund is separate from and not related to any recovery Washingtonians receive in a personal injury lawsuit or class action lawsuit regarding surgical mesh devices. Many lawsuits have been filed across the country regarding these devices.

So far, Washington has directed more than $11 million to Washington women who received transvaginal mesh devices as the result of an initial claims process after the Johnson & Johnson and Bard recoveries.

The Attorney General’s Office will announce a second formal claims process in the future. Due to privacy protections, the Attorney General’s Office does not know the identity of the many women implanted with transvaginal mesh in Washington state. Consequently, the Attorney General’s Office cannot reach out to all affected women directly. Affected women who would like to be part of the second claims process can submit their contact information at www.WAAGMeshSettlement.com to receive a claims form when the process opens. For questions about the mesh fund, please email This email address is being protected from spambots. You need JavaScript enabled to view it. for more information. If you have previously submitted a claim at WAAGMeshSettlement.com, we already have your information, and you do not need to do anything further. Depending on the number of new claims, those who have previously received money from the fund may be eligible for additional restitution.

Background

Boston Scientific began manufacturing transvaginal mesh devices in the early 2000s. The devices were implanted through the vagina and used to treat two conditions — pelvic organ prolapse, when organs shift from their normal position, and stress urinary incontinence. These conditions are non-life-threatening and can be treated via multiple, surgical and non-surgical methods.

The devices, made of polypropylene, are permanently implanted into the body to hold up falling organs. Removing the mesh is extremely difficult, and in some instances, impossible.

Tens of thousands of Washington women, and millions of women worldwide were implanted with devices manufactured by Boston Scientific, Bard, Johnson & Johnson and others.

Ferguson asserts Boston Scientific failed to adequately disclose serious and life-altering risks [link to complaint] of its transvaginal mesh devices, such as rigid scarring and mesh shrinkage, chronic pain, a heightened risk of infections, and voiding dysfunction, among other complications.

Boston Scientific knew that some of the most serious risks it failed to include — chronic pain, infections and more — were associated with the use of its mesh devices. It also knew that the impact of these reactions would exponentially increase due to the difficulty of removing the mesh once implanted.

Boston Scientific no longer markets or sells transvaginal mesh for pelvic organ prolapse, but continues to sell the devices for stress urinary incontinence.

Details of injunctive terms

As part of today’s resolution, Boston Scientific is legally required to meet strict injunctive terms for its transvaginal mesh devices, including the following:

• Boston Scientific must describe complications in terms reasonably understandable to a patient in marketing materials that are intended to reach patients or consumers.
• Boston Scientific must inform health care providers of significant complications when providing training regarding procedures for insertion and implantation.
• When submitting a clinical study or clinical data for publication, Boston Scientific must disclose its role as a sponsor and any author’s potential conflict of interest.
• Boston Scientific cannot cite any clinical study, clinical data, or preclinical data regarding mesh, for which it has not complied with the disclosure requirements in the injunction.
• Boston Scientific must register all company-sponsored clinical studies regarding mesh with ClinicalTrials.gov.
• Boston Scientific must adequately inform and train independent contractors, agents, and employees who sell, market, or promote mesh regarding their obligations to report all patient complaints and adverse events to the company.

Assistant Attorneys General Daniel Allen and Breena Roos and Paralegal Khalid Ali are leading the case for Washington.

Source

{jcomments on}

BOSTON – A vendor for several Veterans Affairs medical facilities was charged yesterday in connection with a scheme to profit by billing for, but failing to perform, critical medical gas inspections at VA facilities.

Chester Wojcik, 49, of Agawam, Mass., was charged with one count of wire fraud.

It is alleged that 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 allegedly failed to perform, and then lied about, scheduled inspections of medical gas systems at VA facilities in Sioux Falls, SD, Tuskegee AL, and Montgomery, AL. Wojcik was allegedly 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; Jeffrey Stachowiak, Acting 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.

The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Source

{jcomments on}

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.

Source

{jcomments on}

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.

Source

{jcomments on}

An Air Force Veteran in Portsmouth, Va., has pleaded guilty in federal court to charges of wire fraud and aggravated identity theft in connection with various schemes to scam Veterans, according to Department of Justice officials.

Rita Copeland, 59, operated an organization called “Veteran Services of the Commonwealth,” claiming to provide caregiving, contracting, and rental assistance services to Veterans from 2016 through 2020, according to a court document filed with the U.S. District Court for the Eastern District of Virginia. She also at times operated a contracting business.

Copeland is an Air Force Veteran, according to court documents and the Department of Veterans Affairs Office of Inspector General, which was involved in the investigation. According to the National Guard Bureau, her last period of service was from August, 1990 to October, 1996, when she was a teletype operator in the Air National Guard. She served briefly in the Air Force Reserve from February to August, 1990. Before that, she was on active duty from 1984 to 1990, serving in a communications squadron.

She’s accused of convincing a number of Veterans to apply for grants through the Department of Veterans Affairs that are supposed to be used for designated improvements to the Veterans’ residences, then failing to complete some of the work and failing to return the funds. The court document states she used expired or falsified contractor’s licenses in order to entice victims to hire her for home improvements.

Copeland, who is scheduled to be sentenced on Aug. 27, faces a maximum sentence of 20 years for wire fraud; and a mandatory consecutive term of two years for aggravated identity theft, according to Justice officials.

“This defendant has been brought to justice for orchestrating numerous fraudulent schemes against Veterans who honorably served their country,” said Raj Parekh, acting U.S. Attorney for the Eastern District of Virginia, in a statement announcing the guilty plea. “For those who steal, misappropriate, and divert funds that belong to our country’s Veterans, this case sends a strong message that you will be prosecuted and held accountable for your inexcusable conduct.”

Parekh, the FBI’s Norfolk Field Office and the VA Inspector General made the announcement after Senior U.S. District Judge Henry E. Hudson accepted the plea.

In one case, according to the court document: Copeland began a “purported caregiver relationship” with a Veteran and moved in to a residence with the Veteran. She convinced the Veteran, described only as “B.E.” to apply for a Home Improvements and Structural Alterations grant from the VA, and it was approved. Copeland used some of the grant money for her own benefit, contrary to the designated purpose. She also diverted some of B.E.’s income and retirement payments to her checking account, and applied for and received a $10,000 loan in B.E.’s name, without permission.

In another case, according to the court document: A married couple paid Copeland about $95,938 in checks, and she fraudulently got other money from the couple, including payments for travel, credit card purchases and bank account transfers. The Veteran applied for grant money from the VA and received $3,400, and signed a contract with Copeland to do the work. She received the money but failed to complete all the work, and didn’t return any money.

Copeland, according to court documents, offered to help Veterans find housing; and Veterans paid rent and deposits to Copeland, who agreed to act as intermediary with owners. However, Copeland used the money for herself, and this resulted in eviction of various tenants. In some cases, she gave landlords checks for rent or other payments, and then stopped payment on the checks.

Copeland “used or purported to use actual, perceived or fabricated programs of the Department of Veterans Affairs in order to entice victims to provide the defendant with funds,” the court document stated.

A search of Charity Navigator and the Better Business Bureau website found no references to Veteran Services of the Commonwealth.

Source

{jcomments on}

ROANOKE, Va. – Acting United States Attorney Daniel P. Bubar and Virginia Attorney General Mark G. Herring announced today the finalization of a $2.1 million civil resolution with Allergy and Asthma Associates Inc. [AAA], a Roanoke-based, family-owned medical practice that billed Medicare and Virginia Medicaid more than $600,000 for expensive asthma treatments in did not purchase or improperly administered to patients. In June 2020, AAA pleaded guilty in U.S. District Court in Roanoke to one count of criminal health care fraud.

“When a medical practice fraudulently bills our Medicare and Medicaid programs, it diverts funds from the most vulnerable in our communities and must be held accountable,” said Acting U.S. Attorney Bubar. “Today’s civil resolution coupled with AAA’s criminal conviction in June marks the end of a lengthy investigation and demonstrates that we will work closely with our federal and state partners to hold providers responsible for healthcare fraud.”

“Individuals and health care providers who defraud our health care system are not only stealing from Medicare and Medicaid, but they are also stealing from taxpayers and they must be held accountable,” said Attorney General Herring. “I want to thank both our state and federal partners, as well as my hardworking Medicaid Fraud Control Unit, for their dedication and partnership on this case.”

“Every Medicare or Medicaid dollar paid wrongfully is money no longer available for crucially needed health services,” said Maureen R. Dixon, Special Agent in Charge at the Office of Inspector General for the U.S. Department of Health and Human Services. “Working with our law enforcement partners we will continue protecting these valuable program funds.”

According to court documents, between January 2010 and September 2017, AAA submitted improper billings to Medicare and Medicaid for Xolair, an expensive asthma treatment sold in single-use vials. Due to the nature of the drug, many patients receive doses of the drug that require health care providers to administer a partial vial of the drug. This results in leftover amounts of Xolair that are not administered to the patient. At relevant times, Medicare and Medicaid allowed providers to bill Medicare Part B and Medicaid one time for an entire single vial of Xolair, which includes both the administered quantity, as well as the discarded quantity of the drug from a single-use vial, up to the amount listed on the vial’s label.

In situations where a patient’s dose resulted in a leftover partial vial of Xolair, AAA administered the leftover amount to another patient and the billed Medicare and Medicaid for administering this amount as if it were the entire single-use vial.

From January 2010 to September 2017, AAA billed Medicare $627,540 for Xolair that AAA did not purchase. In addition, AAA received 129 vials of Xolair from Medicaid which is not documented as being used for a Medicaid patient. These 129 vials represent an approximate loss to Medicaid of $88,878.

Under the terms of the civil resolution finalized last week, AAA will pay a total of $2,149,607 to settle claims they violated the false claims act. Broken down, $1,994,607 will be paid to United States government and $154,648 will be paid to the Commonwealth of Virginia.

The investigation of the case was conducted by the Department of Health and Human Services- Office of the Inspector General, Virginia Office of the Attorney General’s Medicaid Fraud Control Unit, and the Federal Bureau of Investigation. Special Assistant United States Attorney and Virginia Assistant Attorney General Nicole S. Terry prosecuted the criminal case for the United States. Assistant United States Attorney Justin Lugar handled the civil matter.

Source

{jcomments on}

Anchorage, Alaska – U.S. Attorney Bryan Schroder announced today that U.S. District Court Judge Sharon L. Gleason sentenced Michael Don Robertson, 68, a former Anchorage psychiatrist, to 12 months home confinement and 5 years of probation for conspiracy to commit controlled substance fraud and one count of health care fraud. Robertson knowingly and intentionally distributed controlled substances outside the usual course of professional practice and without a legitimate medical purpose.

According to court documents, from May 2015 to March 2018, Robertson issued 465 prescriptions of meperidine to 30 different recipients, totaling 32,109 meperidine pills, knowing that the recipients did not truly need the medication for a legitimate medical purpose. The investigation revealed that Robertson issued the meperidine prescriptions as part of a conspiracy in which the recipients filled the meperidine prescriptions and, then, distributed the meperidine to Robertson. In exchange for the recipients diverting the meperidine to Robertson, Robertson provided prescriptions for controlled substances, including fentanyl and oxycodone, to the recipients. Meperidine, commonly known as Demerol, is a Schedule II controlled substance, and is an opioid with an abuse liability similar to morphine.

The investigation further revealed that Robertson failed to make and preserve accurate records regarding approximately 790 prescriptions for controlled substances and failed to keep any medical records whatsoever regarding five patients to whom he wrote prescriptions for controlled substances. In a scheme to obtain money from Medicaid, Robertson caused claims to be submitted to Medicaid regarding these 790 prescriptions, resulting in Medicaid paying $3,286.87 to Robertson’s medical practice. Further, Medicaid paid $3,601.52 to pharmacies for these 790 controlled substance prescriptions.

Robertson pleaded guilty to the charges on July 31, 2019. At sentencing today, Robertson apologized to the people that he involved in the scheme, the medical profession, and his family. Robertson surrendered his medical license and DEA Registration after being questioned by law enforcement.

The Court held that 12 months of home incarceration was appropriate due the COVID pandemic and the need to impose a just sentence due to the severity of the crime, while also avoiding disparity with sentences for other similar drug crimes. In addition to the 12-month home confinement, Robertson was ordered to complete 5 years of probation and pay restitution in the amount of $6,888.39 to Medicaid to reimburse the cost of the illegally prescribed drugs.

United States Attorney Bryan Schroder commended the law enforcement team that investigated this case. “This conviction is a reminder that COVID is not the only pandemic confronting America and Alaska; fighting the opioid epidemic remains an important priority for the Department of Justice. Federal law enforcement investigates and prosecutes unlawful drug distribution, including that crime committed by doctors.”

The U.S. Drug Enforcement Administration (DEA), the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG), the State of Alaska Medicaid Fraud Control Unit (MFCU), and the Federal Bureau of Investigation (FBI) conducted the investigation leading to the successful prosecution in this case. This case was prosecuted by Assistant U.S. Attorney Jonas M. Walker.

Source

{jcomments on}

HAMMOND- Justyn Arch, age 34, and Trystan Arch, age 31 both of Valparaiso, Indiana were charged with healthcare fraud by way of a single count Grand Jury Indictment which was unsealed today, announced Acting U.S. Attorney Gary T. Bell.

According to documents in this case, Arch Complete Family Dentistry, with offices located in Chesterton, Crown Point, and briefly in Knox, Indiana, was an authorized Indiana Medicaid provider of dental procedures. In October 2017, Justyn Arch, Vice President of Arch Complete Family Dentistry, also managed the Crown Point office. Trystan Arch managed the Chesterton office.

The Indictment alleges that Justyn and Trystan Arch executed a scheme to defraud Indiana Medicaid by causing false and fictitious entries in patient files. The false entries showed that Arch dentists performed dental surgery when in fact no surgery had been performed. The claims totaled more than $350,000 in false and fictitious claims to Indiana Medicaid.

The United States Attorney’s Office emphasizes that an Indictment is merely an allegation and that all persons are presumed innocent until, and unless proven guilty in court.

If convicted, any specific sentence to be imposed will be determined by the Judge after a consideration of federal statutes and the Federal Sentencing Guidelines.

This case is a result of an investigation by the Federal Bureau of Investigation, Indiana Attorney General’s Office Medicaid Fraud Control Unit, Internal Revenue Service-Criminal Investigation Division and U.S. Department of Health and Human Services with the assistance of the Porter County Prosecutor’s Office. This case is being prosecuted by Assistant United States Attorney Philip C. Benson.

Source

{jcomments on}

A federal grand jury in the Western District of Arkansas returned an indictment yesterday charging an Arkansas man who owned or managed numerous diagnostic testing laboratories with health care fraud in connection with over $100 million dollars in false billings for urine drug testing, COVID-19 testing, and other clinical laboratory services.

According to court documents, Billy Joe Taylor, 42, of Lavaca, engaged in a scheme between February 2017 and May 2021 in connection with diagnostic laboratory testing, including urine drug testing and tests for respiratory illnesses during the COVID-19 pandemic, that were medically unnecessary, not ordered by medical providers, and/or not provided as represented. According to the indictment, Taylor controlled and directed multiple diagnostic laboratories, and used those labs to submit more than $100 million in false and fraudulent claims to Medicare. The indictment alleges that Taylor obtained medical information and private personal information for Medicare beneficiaries, and then misused that confidential information to repeatedly submit claims to Medicare for diagnostic tests that were not ordered by medical providers and were not actually performed by the laboratories. Taylor allegedly then used the proceeds of the fraud to live a lavish lifestyle, including purchasing numerous luxury automobiles, including a Rolls Royce Wraith, as well as real estate, jewelry, guitars, and other luxury clothing and items.

Taylor is charged with 16 counts of health care fraud, and one count of engaging in a monetary transaction in criminally-derived property. Taylor was previously charged by criminal complaint in May 2021. The defendant is scheduled for his arraignment on Nov. 23 before U.S. Magistrate Judge Mark E. Ford of the U.S. District Court for the Western District of Arkansas. Each of the counts is punishable by a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney David Clay Fowlkes for the Western District of Arkansas; Special Agent in Charge James A. Dawson, of the FBI’s Little Rock division; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services-Office of Inspector General (HHS-OIG), Dallas Regional Office; and Special Agent in Charge Christopher Altemus of the IRS-Criminal Investigation, Dallas Field Office, made the announcement.

The FBI, HHS-OIG, and IRS-Criminal Investigation are investigating the case.

Senior Litigation Counsel Jim Hayes and Trial Attorney D. Keith Clouser of the Criminal Division’s Fraud Section’s National Rapid Response Strike Force and Assistant U.S. Attorney Kenneth Elser of the U.S. Attorney’s Office for the Western District of Arkansas are prosecuting the case.

Source

{jcomments on}

Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced Howard Hoffberg, M.D., age 65, of Reisterstown, Maryland, today, to eight months in federal prison, followed by one year of supervised release, for conspiracy to violate the anti-kickback statutes, in connection with a scheme to accept payments from a pharmaceutical company in exchange for prescribing a fentanyl-based drug.

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; and Chief Melissa R. Hyatt of the Baltimore County Police Department.

According to his guilty plea, Howard Hoffberg, is a doctor and was licensed to practice medicine in the State of Maryland. He served as the Associate Medical Director and part-owner of Rosen-Hoffberg Rehabilitation and Pain Management (the “Practice”). The Practice’s Medical Director was Norman Rosen, who worked primarily at the Practice’s Towson, Maryland locations. Hoffberg principally worked at the Practice’s location in Owings Mills, Maryland, but at times also was at the Practice’s locations in Towson, Maryland.

Hoffberg was a Medicare provider and submitted claims to Medicare, which is federal healthcare program. In September 2011, Hoffberg certified to Medicare that he would comply with Medicare rules and regulations, including that he would refrain from violating the federal anti-kickback statute. Further, in August 2013, Hoffberg certified to the U.S. Food and Drug Administration (“FDA”), as part of his ability to prescribe drugs known as Transmucosal Immediate Release Fentanyl (“TIRF”) drugs, that: (a) he understood TIRF drugs are indicated only for the management of breakthrough pain in cancer patients; (b) he understood that TIRF drugs can be abused by patients; and (c) he understood that one TIRF drug is not interchangeable with another TIRF drug.  

As detailed in his plea agreement, starting in June 2012, Hoffberg solicited and received kickbacks and bribes for himself in the form of payments from Insys Therapeutics, Inc. (“Insys”) (a pharmaceutical company) and related entities. In January 2012, the FDA approved Insys’s application to sell and market a TIRF drug named Subsys to treat cancer patients experiencing break-through pain, which is a sudden onset of pain in cancer patients that cannot be controlled with their usual treatment regimen. Subsys is a potent opioid designed to rapidly enter a patient’s bloodstream upon being sprayed under the tongue. Subsys contains fentanyl, which is a synthetic opioid pain reliever that has a high potential for abuse and addiction.

According to the plea agreement, because of the limited number of cancer patients experiencing breakthrough pain who fit the FDA-approved criteria, Insys devised an illegal kickback and bribery scheme to induce Hoffberg and others to prescribe Subsys off-label for conditions other than breakthrough pain in cancer patients. In order to conceal and disguise that kickbacks and bribes were being paid to Hoffberg to prescribe Subsys, Insys falsely designated the payments to Hoffberg as “honoraria” for purportedly providing educational programs about Subsys (the “Speakers Bureau Program”). Hoffberg admitted that his participation in the Speakers Bureau Program was a sham. Hoffberg often made these presentations at high-end restaurants, and to staff at the Practice and/or to persons who could not even prescribe controlled substances. Hoffberg knew that these presentations were not designed to promote any bona fide educational initiative about Subsys but rather were required to receive the honoraria.

Hoffberg was paid $66,600 by Insys and knew that these payments were kickbacks and bribes that were paid, at least in part, to induce Hoffberg to prescribe, or in exchange for Hoffberg prescribing, Subsys. As part of the scheme, through January 2018 Hoffberg prescribed Subsys to patients of the Practice who were not suffering from cancer, some of whose insurance coverage was paid for, in whole or in part, by a federal healthcare program. Further, Hoffberg admitted that he switched several other patients to Subsys from another fentanyl-based drug because of the kickbacks he received from Insys, even though he previously certified that TIRF drugs were not interchangeable.

United States Attorney Erek L. Barron commended the FBI, the DEA, HHS-OIG, and the Baltimore County Police Department for their work in the investigation.   Mr. Barron thanked Assistant U.S. Attorney Jason D. Medinger, who prosecuted the case.

Source

{jcomments on}

ATLANTA – William Dorsey, Jr., has been arraigned for embezzling over $200,000 from his father’s beneficiary account funded by the U.S. Department of Veterans Affairs (VA.)

“We must be diligent in protecting our elderly citizens, especially our veterans,” said U.S. Attorney Byung J. “BJay” Pak. “We are focused on preventing and punishing the exploitation and abuse of our most vulnerable citizens.”

“Fiduciaries assume a solemn duty to care for veterans who served their country through their military service and now are unable to care for themselves. The VA Office of Inspector General is dedicated to working with our law enforcement partners to ensure that any fiduciary who embezzles VA funds intended to provide necessary support to our nation’s disabled veterans is held responsible,” said David Spilker, Special Agent in Charge, VA Office of Inspector General.

According to U.S. Attorney Pak, the charges, and other information presented in court: On May 10, 2010, William Dorsey, Jr., signed a fiduciary agreement agreeing to manage the benefit payments provided by the VA to his father, William Dorsey Sr., a 67-year-old disabled Vietnam veteran diagnosed with Alzheimer’s Disease and dementia. According to medical records from the secure medical center where he resides, William Dorsey, Sr., is wheel-chair bound, cannot communicate, and requires total assistance with his daily activities.

As part of the fiduciary agreement, Dorsey, Jr., agreed to spend the VA benefit funds only for his father’s daily needs, to never comingle funds, to never withdraw cash from the account, and to keep accurate records and receipts. However, by the time he was removed as fiduciary seven years later in May 2017, banking records indicate all of these conditions had been violated, including the direct transfer of money from his father’s account to his own personal account. According to a financial analysis conducted by the VA, over $200,000 remains unaccounted for.

During this same time period, nursing staff reported that Dorsey, Sr., only needed approximately $50-$100 to cover expenses each month, and that William Dorsey, Jr., commonly provided items of inferior quality, such as used oversized clothing and half empty bottles of shampoo. According to one social worker supervisor, the attending nurses felt compelled on occasion to buy “basic necessities” for Dorsey, Sr., out of their own pocket.

William Dorsey, Jr., 42, ofAtlanta,Georgia, was arraigned before U.S. Magistrate Judge Alan J. Baverman. Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.    

This case is being investigated the U.S. Department of Veterans Affairs, Office of the Inspector General, Criminal Investigations Division.

Assistant U.S. Attorney Scott McAfee is prosecuting the case.

Source

{jcomments on}

Michael Erber was also Convicted of Stealing Approximately $200,000 in Lottery Winnings

From a Veteran Who Sought Housing Assistance

BROOKLYN – Attorney General Letitia James announced the sentencing of Michael Erber (“Erber”), 62, of Brooklyn for stealing money intended to pay the rent of homeless New York City Veterans from four Community Based Organizations. Erber was sentenced to a term of imprisonment of 10 ½-21 years. On January 21, 2020, Erber was convicted after a jury trial of four counts of Grand Larceny in the third Degree and one count of Scheme to Defraud in the First Degree. Erber was also convicted of one count of Grand Larceny in the Second Degree for stealing lottery winnings from a disabled Veteran.

“Stealing money that is earmarked for our homeless Veterans is truly an immoral and reprehensible act,” said Attorney General James. “This individual stole money directly from the hands of non-profits, and denied homeless Veterans access to desperately-needed shelters and a safe place to call home. We will never tolerate such actions, and I will continue to do everything within my power to hold those who take advantage of vulnerable communities accountable."

According to evidence produced during trial in Supreme Court, Kings County, Erber operated an organization known as MAG-V, a New York not-for-profit. MAG-V recruited homeless Veterans with promises of housing and job training, posting fliers with numerous homeless shelters and community based organizations. Erber also personally recruited Veterans and case managers from these organizations.

As the evidence proved, after selecting Veterans in need of housing, MAG-V entered into master lease agreements with landlords in Brooklyn and The Bronx, and then Mag-V subleased with the Veterans. MAG-V then obtained federal funding intended for homeless Veterans or Veterans at risk of becoming homeless, for their rental payments from Community Based Organizations (“CBOs”) in New York City. Unbeknownst to the CBOs or the Veterans, Erber did not pay the landlords any of the funds provided by the CBOs to pay the rent where the Veterans were housed. As a result of this scheme Erber stole more than $3,000 each from four separate CBOs, more than $67,000 in total.

In addition to stealing money from the CBO’s, the Attorney General’s Office presented evidence that the defendant stole money directly from the individual Veterans who were being housed by Mag-V. The federal funding from the CBO’s was meant as start-up money to help get the Veterans out from the streets and shelters and into stable housing, enabling them to eventually start paying rent on their own. After the CBO’s ended their funding assistance, the Veterans paid rent money directly to Erber, but again, Erber pocketed the rent money and did not pay the landlords. As a result, all of the Veterans were evicted for non-payment of rent.

The jury also convicted Erber of Grand Larceny in the Second Degree, for stealing $200,000 from John Pickett, a disabled Veteran, who won a lottery jackpot in 2015. According to Mr. Pickett’s testimony and evidence, after he won the lottery, Mr. Pickett was constantly pressured by Erber to invest the lottery winnings with MAG-V. In exchange, Erber promised the Veteran a paid position on MAG-V’s board of directors and offered to help him find permanent housing, as well as a paid job with Mag-V, none of which Erber ever did. Based on these false pretenses, Erber stole approximately $200,000 from the Veteran.

Based on bank records produced at trial, the Attorney General’s Office demonstrated Erber spent more than $110,000 on rental cars and more than $41,000 to buy a car.

The defendant was sentenced by Judge Donald Leo in Kings County Supreme Court Part 16. The defendant has two prior felony convictions.

The Attorney General’s Office thanks the Veterans Affairs Office of the Inspector General (VA OIG) for their assistance on this case.

“This sentencing sends a clear message that VA OIG and our law enforcement partners will vigorously pursue anyone who seeks to victimize vulnerable Veterans and their families who are deserving of VA benefits,” said VA OIG Acting Special Agent in Charge Jeffrey Stachowiak. “We appreciate the efforts of the VA’s Management Review Service for referring this matter to us and the New York State Office of Attorney General for successfully prosecuting this case to achieve this important outcome.”

The investigation was conducted by Investigator Walter Lynch, under the supervision of Deputy Chief John McManus, and with the assistance of Deputy Chief Auditor Sandy Bizzarro. The Investigations Division is led by Chief Investigator John Reidy.

The case was prosecuted by Assistant Attorney Generals Nazy Modiri from the Real Estate Enforcement Unit and Russell Satin from the Public Integrity Bureau, under the supervision of Public Integrity Chief Travis Hill. Assisting on the case was Legal Support Analyst Jack Jones and Senior Legal Support Analyst Rachel Demma. The Criminal Justice Division is led by Chief Deputy Attorney General for Criminal Justice José Maldonado.

Source

{jcomments on}

A Fayetteville man was sentenced Tuesday to five years on probation and ordered to repay more than $900,000 he fraudulently obtained to the Department of Veterans Affairs, authorities said.

Willie Dosher Cain, 73, a U.S. Army Veteran and former Fayetteville police officer, told VA officials 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. He said he was unable to perform daily activities, such as dressing and bathing, without assistance and was dependent on a wheelchair or motorized scooter for mobility.

Federal investigators determined, however, that Cain played basketball, danced and attended social events when he was supposedly injured. He even bought a condominium at Carolina Beach on the third floor of a building with no elevator, they said.

Cain pleaded guilty last June to embezzlement. In addition to repaying the benefits he wasn't entitled to, U.S. District Judge Thomas Schroeder ordered that he forfeit $155,000, a modified 2018 Toyota Sienna van and a mobility scooter and perform 250 hours of community service. In a related civil forfeiture action, he also forfeited the Carolina Beach condo, authorities said.

Source

{jcomments on}

The Medicare Fraud Strike Force (“MFSF”) is part of a joint initiative between the U.S. Department of Justice, U.S. Department of Health and Human Services and state Medicaid Fraud Control Units to reduce and prevent Medicare and Medicaid fraud through enhanced interagency cooperation. Its purpose is to focus on the worse offenders in fraud, in the highest intensity regions, using data analysis techniques to identify abnormal billing levels in health care fraud “hot spots,” i.e., cities with unusually high levels of billing and other fraud. The U.S. Department of Justice currently maintains 15 strike forces operations in 24 federal districts and has charged more than 4,600 defendants who have collectively billed federal health care programs and private insurers for approximately $23 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

As part of the recent National Enforcement Action, Acting United States Attorney Ellison C. Travis announced new charges against two individuals for health care related crimes in Baton Rouge. On September 9, 2021, a federal grand jury returned a seven-count indictment charging Terry Steven Wilks, Jr., age 39, of Greenwell Springs, Louisiana, and Leslie Amanda McHugh, age 36, of Riverview, Florida, with conspiracy to defraud the United States and to pay and receive kickbacks, offering and paying kickbacks, and soliciting and receiving kickbacks.

According to the indictment, Wilks was the owner of Acadian Diagnostic Laboratories, LLC, a clinical laboratory based in Baton Rouge that provided diagnostic testing services, including urine drug testing. Acadian was enrolled as a Medicare and a TRICARE provider. McHugh was formerly a registered nurse licensed in the State of Florida. The indictment alleges that in 2015, the Florida Board of Nursing revoked McHugh’s nursing license, and in 2016, Medicare excluded her from participation in all federal health care programs. According to the indictment, despite her exclusion and subsequent purported termination from Acadian, Wilks continued to pay McHugh to refer doctors’ orders and specimens to Acadian for urine drug testing in exchange for kickback payments. These payments were allegedly made in cash, as well as funneled through a company created by Wilks. The indictment alleges that from August 2017 to April 2018, Wilks and McHugh caused Acadian to submit approximately $549,580 in claims to Medicare and $17,612 in claims to TRICARE for laboratory testing services that were referred by McHugh in exchange for kickback payments.

Acting U.S. Attorney Ellison Travis stated, “My office will continue to work tirelessly with our outstanding federal, state and local partners to identify and bring justice to those who commit healthcare related crimes. This takedown was a team effort, and I commend the excellent work performed by our prosecutors and the men and women of the agencies involved.”

“Today's indictment sends a clear message to individuals like Terry Wilks and Leslie McHugh who engage in kickback schemes which defraud health care programs that they will be held accountable. Mr. Wilks and Ms. McHugh took advantage of a system set up to help patients get much-needed government assistance and instead benefitted themselves," said FBI New Orleans Special Agent in Charge Douglas A. Williams, Jr. "We would like to thank our state and federal partners with the Medicare Fraud Strike Force for their strong partnership and unrelenting pursuit of justice."

Miranda L. Bennett, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General, Dallas Region, stated: “Today’s indictment is yet another example of our commitment to vigorously defend the Medicare Trust Fund. Paying and receiving kickbacks for referrals undermines federal health care programs. We will continue to pursue those who conduct fraudulent kickback schemes to safeguard the beneficiaries of these programs.”

“I applaud my Medicaid Fraud Control Unit and our partners at the U.S. Attorney’s Office for their efforts to end criminal activity, especially when it is being perpetuated by people who are supposed to be taking care of our State’s vulnerable,” said Attorney General Jeff Landry.

This matter is being investigated by HHS-OIG, the FBI, and the Defense Criminal Investigative Service and was brought as part of the MFSF, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana. The case is being prosecuted by Assistant United States Attorney Kristen L. Craig and Department of Justice Trial Attorney Justin M. Woodard.

NOTE: An indictment is an accusation by a grand jury. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.

Source

{jcomments on}

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.

Source

{jcomments on}

CHARLESTON, W.Va. – Julie M. Wheeler, 43, of Beckley, was sentenced by Senior United States District Judge John T. Copenhaver, Jr. to 42 months in federal prison for federal health care fraud, announced United States Attorney Mike Stuart. After serving her prison sentence, she will be placed on supervised release for three years. She was further ordered to pay restitution in the amount of $289,055.07, an amount calculated by the Veterans Administration (VA) and approved by the court.

In imposing a sentencing enhancement for obstruction, Judge Copenhaver found that Wheeler attempted to obstruct and impede the administration of justice by staging an “elaborate hoax” to fake her own death to avoid federal sentencing. On May 31, 2020, Wheeler and other family members staged her fall from the Grandview State Park overlook. Wheeler’s family members then falsely reported to law enforcement her fall off of Grandview Ledges at the New River Gorge. This report led to an extensive search effort in the New River Gorge by state, federal and local authorities, assisted by numerous volunteers. The West Virginia State Police eventually located Wheeler at her own home, hiding in a closet. Wheeler and her husband are presently charged in Raleigh County Magistrate Court for numerous felony and misdemeanor offenses relating to the false reporting of an emergency. The court found that this scheme contributed to Wheeler’s failure to accept responsibility for her criminal conduct and enhanced her federal sentence accordingly.

“Absolutely despicable. Wheeler’s egregious fraud scheme denied much needed spina bifida care for her own sister while she fleeced the Veteran’s Administration of almost $300,000,” said United States Attorney Mike Stuart. “Then she faked her own disappearance to evade sentencing, risking the lives and resources of first responders and emergency personnel. Outrageous. Terribly tragic case all around.”

Wheeler pled guilty on February 11, 2020, and admitted that she submitted fraudulent applications to the VA Spina Bifida Health Care Benefits Program where she overbilled for providing spina bifida care for a family member, K.L. Wheeler was the owner of a homecare services company, JRW Homecare Support Services. Wheeler was hired to provide services to K.L. due to K.L.’s spina bifida condition at the VA approved rate of $736 a day to provide eight hours of daily services. Wheeler’s care was supposed to include bathing, grooming, changing K.L.’s clothes and other issues associated with K.L.’s hygiene, food intake and lifestyle.  

Wheeler did not provide K.L. the care for and during the time period described. Wheeler submitted claims to the VA stating that she provided care for K.L. eight hours a day, seven days a week, from October 2016 to April 2018 at the full daily rate of $736 a day. Wheeler gave a statement to the VA and the FBI admitting that she greatly inflated the rate and quality of the care that she provided to K.L. This was corroborated by other witnesses who provided statements that Wheeler did not provide eight hours of daily care. Wheeler further admitted that her conduct defrauded the VA of hundreds of thousands of dollars and deprived the victim of services. The victim of the spina bifida diagnosis, K.L., has since passed away.

Assistant United States Attorney Erik S. Goes handled the prosecution.

Stuart praised the work of the Veterans Affairs - Office of Inspector General (VA-OIG), the Federal Bureau of Investigation, the Office of Veterans Affairs (VA), and the United States Department of Health and Human Services - Office of Inspector General (HHS-OIG) for the investigation of the underlying fraud, and the National Park Service and the West Virginia State Police for their work in locating Wheeler.

The fraud investigation was conducted by members of the United States Attorney’s Healthcare Fraud Abuse, Recovery and Response Team (ARREST), an innovative approach linking civil and criminal enforcement efforts together in a comprehensive attack on the opioid epidemic and healthcare fraud. United States Attorney Mike Stuart announced the formation of ARREST in February 2019. All health care related cases in the Southern District of West Virginia, whether they are the subject of criminal or civil investigation or enforcement, are directed through ARREST. Included within the purview of the team are the Opioid Fraud and Abuse Detection Unit, Affirmative Civil Enforcement Unit, Appalachian Regional Prescription Opioid (ARPO) Strike Force, Medicare and Medicaid Fraud, and Asset Forfeiture efforts related to all healthcare matters.

Source

{jcomments on}

Leonard C Boyle, Acting United States Attorney for the District of Connecticut, today announced that TODAY’S YOUTH LLC and its owners, Maurice Stuckey and Joyce Anderson, have entered into a civil settlement agreement with the federal and state governments in which they will pay $273,000 to resolve allegations that they caused overpayments to be paid by the Connecticut Medicaid Program.

Today’s Youth is a healthcare organization that provides in-home family therapy and counseling in the greater Hartford area. The government’s allegations against Today’s Youth, Stuckey and Anderson arise out of improper billing for behavioral health services.

Today’s Youth is enrolled in the Connecticut Medical Assistance Program (“CMAP”), which includes Connecticut’s Medicaid program, as a “Behavioral Health Clinician Group.” The State of Connecticut Department of Social Services (“DSS”) contracted with Today’s Youth to provide behavioral health services to Medicaid beneficiaries. DSS does not allow licensed behavioral health clinicians in independent practice to submit claims for services provided by unlicensed individuals, even if the individuals are working toward licensure and supervised by a licensed individual. The DSS Provider Manual for Licensed Behavioral Health Clinicians in Independent Practice explicitly states, “The department shall not pay for…services provided by anyone other than the provider.”

The government alleges that despite clear guidance from the Medicaid program, Today’s Youth, Stuckey and Anderson routinely submitted claims to Medicaid for behavioral health services as if a licensed behavioral health clinician performed the services when, in fact, an unlicensed provider performed the services. As a result, Medicaid paid Today’s Youth for behavioral health services that the U.S. and Connecticut would not have paid for had they known unlicensed individuals provided the services.

To resolve its liability, Today’s Youth will pay $273,000 to the federal and state governments for conduct occurring between January 1, 2014 and September 1, 2019.

This matter was investigated by the Office of Inspector General for the U.S. Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Anne F. Thidemann and by Assistant Attorney General Michael E. Cole of the Connecticut Office of the Attorney General.

Source

{jcomments on}

PORTLAND, Ore.—A Bend, Oregon resident and his residential care company have agreed to pay $2.9 million to settle allegations by United States and the State of Oregon that the company submitted false reimbursement claims to the Oregon Medicaid program.

Kevin Cox, 51, and At Home Care LLC, doing business as At Home Care Group (AHCG), will pay $1.86 million to the United States and $1.04 million to the State of Oregon.

AHCG also waived indictment and pleaded guilty today in Deschutes County Circuit Court to two counts of making a false claim for health care payment.

“Individuals and companies who submit false claims to federally-backed state health care programs increase health care costs for everyone,” said Scott Erik Asphaug, Acting U.S. Attorney for the District of Oregon. “We take health care fraud very seriously and will continue to hold accountable those who undermine the integrity of these important programs.”

“This national pandemic has put an unprecedented strain on our health care system. There is never a time for Medicaid providers to enrich themselves with fraudulent schemes—but now is certainly not the time. This case shows you that we will work aggressively with our federal law enforcement partners to investigate and prosecute providers that victimize our most vulnerable Oreognians and the programs that serve them,” said Attorney General Ellen F. Rosenblum.

“Health care providers should regard Medicaid as a lifeline for vulnerable beneficiaries in need of wellness services, not as a financial reserve for personal enrichment,” stated Steven Ryan, Special Agent in Charge with the U.S. Department of Health and Human Services. “To assist in preserving Federal health care programs, our agency and law enforcement partners investigate and cease wrongful activity that compromises their funds.”

AHCG provided in-home medical and non-medical care to individuals in Oregon. The United States and State of Oregon contend that, between March 2013 and September 2018, AHCG altered caregiver scheduling calendars and billed the Oregon Medicaid program for hours of in-home care not actually performed.

As part of the settlement, AHCG and Cox will be excluded from participating in Medicare, Medicaid, and all other federal health care programs for 15 and 8 years, respectively.

Acting U.S. Attorney Asphaug and Attorney General Rosenblum made the announcement.

This settlement was the result of a coordinated investigation by the U.S. Attorney’s Office for the District of Oregon, U.S. Department of Health and Human Services Office of Inspector General, Oregon Department of Justice Medicaid Fraud Unit, and Oregon Health Authority. The United States was represented in this matter by Alexis Lien, Assistant U.S. Attorney for the District of Oregon. Senior Assistant Attorney General Elizabeth Ballard Colgrove led this case for the Oregon Department of Justice.

Source

{jcomments on}

The Office of the United States Attorney for the District of Vermont announced that Bhaskar Patel, 69, of Horseheads, New York, was sentenced Friday in federal district court in connection with a kickback and bribery scheme conducted in connection with federal energy savings performance contracts (“ESPCs”). While employed by Schneider Electric Buildings America (“Schneider”), Patel unlawfully solicited and accepted $2,536,119.19 in bribes and kickbacks associated with ESPCs from subcontractors to Schneider. According to the Information filed in the case, the scheme ran from June 6, 2011 through April 19, 2016, involved dozens of bribes and kickbacks from eight subcontractors to Schneider, and included amounts ranging from $6,231 to $136,990.19.

“Mr. Patel’s conduct was motivated by a corrupt culture and greed, and I am proud of our prosecutors, staff, and federal law enforcement partners that investigated this complex fraud and convicted Mr. Patel,” said Christina E. Nolan, United States Attorney for the District of Vermont. “This scheme ran for years, swindled millions of dollars, and betrayed the trust expected of government contractors when they receive American taxpayer dollars and have the honor of working with the federal government. The U.S. Attorney’s Office is committed to fighting the financial scourge imposed by procurement fraud and will vigorously enforce our criminal laws against those responsible for this conduct.”

According to the Information, Patel accepted illegal kickbacks and bribes in connection with a $70 million project for the United States Coast Guard (“USCG”) in Aguadilla, Puerto Rico; a $24.7 million project for the United States Department of Agriculture (“USDA”) in Albany, California; a $12.6 million project for the United States General Services Administration (“GSA”) in St. Croix, U.S. Virgin Islands; a $21.8 million project for GSA in San Juan, Puerto Rico and St. Thomas, U.S. Virgin Islands; a proposed project of $42.4 million for work on the VA medical centers in Vermont, Massachusetts, Rhode Island, and Maine; and a $114.3 million project for the U.S. Navy for work on the Naval base in Coronado, California.

For each contract named in the Information, Patel, a Senior Project Manager, was authorized and directed by Schneider to obtain bids from subcontractors and recommend for selection the subcontractors that would be awarded a contract under an ESPC. Schneider further authorized and directed Patel to -- post-selection of a subcontractor -- negotiate change orders, price changes, and oversee and manage subcontractors. Patel knew subcontractors provided gratuities with the intent of obtaining favorable treatment from Patel and Schneider in connection with existing and/or future ESPC contracts awarded by various government agencies to Schneider.

Patel pleaded guilty to one count of accepting illegal kickbacks in connection with federal contracts, a violation of 41 U.S.C. §§ 8702 and 8707, and one count of accepting bribes in connection with federal contracts, a violation of 18 U.S.C. § 666. Chief Judge Geoffrey W. Crawford on Friday sentenced Patel to a term of three years of probation with conditions of supervised release and entered a forfeiture judgment of $2,536,119.19.

“Federal energy savings performance contracts are intended to save VA money. Bribery and other corrupt acts by contractors instead divert and waste precious dollars intended for our nation’s Veterans,” said VA-OIG Special Agent-in-Charge Christopher F. Algieri. “The VA Office of Inspector General will continue to work with our partners in the law enforcement community to prevent this type of fraud and hold any wrongdoers accountable.”

USDA-OIG Special Agent-in-Charge Bethanne M. Dinkins commented, “We appreciate the commitment of the U.S. Attorney’s Office and the cooperative efforts of our law enforcement partners throughout this significant investigation. Mr. Patel’s sentence sends a strong message regarding the benefit of working across agency lines to protect the integrity of the procurement process throughout Government. The USDA Office of Inspector General will continue to dedicate resources to investigate those who unlawfully solicit and accept bribes and kickbacks involving USDA contracts.”

Acting Special Agent-in-Charge, Tim Westfall, Naval Criminal Investigative Service, Northeast Field Office said: “Fraud is not a victimless crime, and puts our armed forces at greater risk. The American taxpayers are also victims as the flagrant and wrongful misuse of American taxpayer dollars not only erodes the public trust but also jeopardizes the Department of Navy’s efforts to obtain the best technology, services, and equipment for our brave men and women in uniform.   By conspiring to manipulate the contracting process through lies and deceit, those involved have drained significant resources from the Navy and have made it harder for legitimate companies that play by the rules.”

“Federal contractors must be above board in their dealings. The U.S. General Services Administration Office of Inspector General will continue to aggressively pursue those who engage in bribery and kickback schemes,” added Special Agent-in-Charge, Luis Hernandez.

The United States is represented in this matter by Assistant U.S. Attorney Owen C.J. Foster. Bhaskar Patel is represented by David Haas, Esq., of Haas Law in Orlando, Florida; and Heather Ross, Esq., of Sheehey, Furlong & Behm PC in Burlington, Vermont.

Source

{jcomments on}

ABINGDON, Va. – A Bristol, Tennessee man was sentenced today to three months of home confinement for conspiring with another man to pay and receive kickbacks. In addition to home confinement, he will pay $56,000 in monetary penalties and will be permanently excluded from participating in federal healthcare programs.

According to court documents, John Paul Linke, 58, conspired to receive and pay kickbacks to encourage urine drug screen testing performed by a lab in Florida. Some of the testing referred to the lab was paid for by Medicare, Virginia Medicaid, and TennCare. Co-conspirator Michael Olshavasky, of Miami, Florida, will be sentenced on September 22, 2021.

“The defendant’s diversion of critical federal and state funds that were needed to target the opioid crisis for his own greed is unconscionable,” Acting U.S. Attorney Bubar stated today. “We will continue to prioritize prosecuting health care fraud cases, and that we will continue to work closely with the Virginia Attorney General’s Office, and our other critical federal and state partners, to bring such providers to justice.”

“Healthcare providers who use kickback schemes like this one are not only defrauding our healthcare system, but they’re also stealing from Virginia taxpayers just to line their own pockets,” said Attorney General Herring. “Virginians trust their healthcare providers to make the best decisions for their patients without monetary gain or outside influence. I want to thank my Medicaid Fraud Control Unit for their work on this case as well as our local, state, and federal partners for their ongoing collaboration on cases where individuals try and defraud our Medicaid and Medicare systems.”

“Those who seek to profit off the opioid crisis through illegal schemes make the problem worse,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to investigate and bring to justice those who, through their dishonesty, jeopardize the public health.”

Between November 30, 2015, and May 30, 2016, Linke was employed at an office-based opioid treatment program that used medication-assisted treatment for patients suffering from substance use disorder. In exchange for being paid $5,000 per month, Linke arranged for the clinic to send urine drug screen samples to the laboratory in Florida where Olshavasky worked. These payments were disguised as commissions paid to Linke as an “independent sales representative” for Olshavsky’s company, Encore Holdings LLC. Olshavasky paid Linke at least $16,000 through Encore Holdings to direct WRC’s drug screening business to the Florida lab, although Linke was not actually an independent sales representative for Encore, and he did not act as such.

The Virginia Medicaid Fraud Control Unit, the Drug Enforcement Administration, the Food and Drug Administration Office of Criminal Investigations, the Department of Health and Human Services—Office of Inspector General, the Tennessee Bureau of Investigation, and the Virginia State Police investigated the case.

Special Assistant United States Attorney Janine M. Myatt and Assistant United States Attorneys Randy Ramseyer and Whit Pierce prosecuted the case for the United States.

Source

{jcomments on}

Physician practice located in North Easton

BOSTON – The U.S. Attorney’s Office has reached a $100,000 settlement with Brockton Urology Clinic LLC (Brockton Urology), a physician practice located in North Easton, to resolve allegations that it violated federal health care laws resulting in false claims to Medicare.

As detailed in the settlement agreement, in 2011, Brockton Urology entered into an agreement with a Massachusetts hospital which obligated Brockton Urology to administer a “Prostate Cancer Center of Excellence” at said hospital. However, as Brockton Urology admits, the hospital never created a Prostate Cancer Center of Excellence and Brockton Urology never provided a physician to serve as the director of a Prostate Cancer Program. Yet from April 2011 through December 2017, the hospital paid Brockton Urology purportedly pursuant to the agreement and Brockton Urology referred patients to the hospital.

The United States contends that this course of conduct constitutes an unlawful financial relationship between Brockton Urology, a party that referred health services, and the hospital, the entity that billed Medicare for those services. Through this violation of the law, Brockton Urology caused the submission of false claims to Medicare.

“Strict adherence to federal laws and regulations concerning the administration of our health care system is critical,” said United States Attorney Rachael S. Rollins. “These safeguards are designed to protect the United States government from waste, fraud, and abuse. Our Office and its law-enforcements partners are vigilant in our efforts to stop anyone—hospitals, corporations, and even physician practices—that might be cutting corners and failing to follow our health care laws.”

“This settlement sends a clear message that these types of financial arrangements will not be tolerated. We will continue to work with our law enforcement partners to ensure that all medical providers properly follow health care rules and regulations,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General. “I appreciate the partnership with the Massachusetts U.S. Attorney’s Office in identifying and prosecuting this type of fraud.”

“The False Claims Act exists to protect the wallets of hard-working taxpayers,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “This settlement with Brockton Urology is a result of our continued efforts to protect the integrity of our health care programs for the patients who depend on them.”

U.S. Attorney Rollins, HHS-OIG SAC Coyne and FBI SAC Bonavolonta made the announcement today. The Department of Defense’s Office of the Inspector General also provided assistance. Assistant U.S. Attorneys Charles B. Weinograd and Jessica J. Weber of Rollins’s Affirmative Civil Enforcement Unit handled the matter.

Source

{jcomments on}

SYRACUSE, NEW YORK – Muhammad Z. Aabdin, age 32, of the Bronx, New York, pled guilty today to offering a bribe to a public official, announced United States Attorney Carla B. Freedman and Special Agent in Charge Christopher F. Algieri, Veterans Affairs Office of Inspector General, Northeast Field Office.

In pleading guilty, Aabdin admitted that in September 2020, he offered a bribe to a contracting officer with the Veterans Administration (“VA”) in Syracuse. Specifically, Aabdin offered to share profits with the VA contracting officer in exchange for her awarding VA contracts to him for personal protective equipment (“PPE”). Aabdin made the initial bribe offer by email and then reiterated it in subsequent text messages and in a recorded phone conversation with an undercover agent posing as the contracting officer. In text messages dated October 15, 2020, Aabdin offered a bribe of $8,333.33 in the event he received a VA contract for N-95 masks leading to a total profit of $25,000.

The defendant will be sentenced on March 8, 2023 by United States District Judge Glenn T. Suddaby. Aabdin faces up to 15 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

This case was investigated by VA Office of Inspector General, and it is being prosecuted by Assistant U.S. Attorney Michael F. Perry.

Source

{jcomments on}

Construction Firms Received $346 Million for Contracts Set Aside for Veterans, Minorities

KANSAS CITY, Mo. – An Olathe, Kansas, man who conspired with others to control construction businesses that received hundreds of millions of dollars in federal government contracts, was sentenced in federal court today for defrauding the government with respect to contracts set aside for service-disabled Veterans and certified minorities.

“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,” said U.S. Attorney Teresa Moore. “His greed and deception allowed him to enrich himself at the expense of disabled Veterans and minority owners. After forfeiting more than $5.5 million to the government and being sent to prison, he has learned the hard way that crime doesn’t pay.”

Matthew C. McPherson, 45, was sentenced by U.S. District Judge Roseann Ketchmark to two years and four months in federal prison without parole. McPherson also has forfeited to the government $5,516,786, which represents his share of the fraud proceeds.

“Today’s outcome demonstrates the commitment of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protect the integrity of the DoD procurement process and the Small Business Administration set-aside programs intended to help smaller and/or disadvantaged businesses," said Special Agent in Charge Michael C. Mentavlos, DCIS Southwest Field Office. “We will continue to aggressively investigate and hold those accountable that take advantage of the U.S. government and taxpayer.”

“Today’s sentencing sends a clear message that contractors unjustly enriching themselves at the expense of our nation’s Veterans will not be tolerated,” said Acting Special Agent in Charge Gavin McClaren with the VA Office of Inspector General’s Central Field Office. “We thank the U.S. Attorney’s Office and our outstanding law enforcement partners for their efforts in this joint investigation.”

“McPherson’s sentence sends a strong message that IRS-Criminal Investigation and its federal partners are committed to leveling the playing field when federal contracts are involved,” said IRS-CI Special Agent in Charge Tyler Hatcher, St. Louis Field Office. “The government established unique programs designed to help small disadvantaged businesses gain a foothold in the awarding of government contracts. McPherson lied about being qualified for these contracts and used nominees to further his crime.” Hatcher added, “These crimes have a significant negative impact on small disadvantaged businesses.”

On June 3, 2019, McPherson pleaded guilty to one count of conspiracy to commit wire fraud and major program fraud. McPherson admitted that he participated in a conspiracy from September 2009 to March 2018 to obtain contracts set aside by the federal government for award to small businesses owned and controlled by Veterans, service-disabled Veterans, and certified minorities. McPherson, who is neither a certified minority nor a Veteran, was the owner of an established construction company in Topeka, Kan. (identified in court documents as Business C) that was not entitled to compete for those federal contracts.

McPherson and his co-conspirators controlled and operated Zieson Construction Company. The business was formed on July 9, 2009, with Stephon Ziegler, 61, of Weatherby Lake, Mo. – an African-American service-disabled Veteran – as the nominal owner. Zieson’s primary business was obtaining federal construction contracts set aside for award to small businesses owned and controlled by service-disabled Veterans or certified minorities. However, Ziegler did not control the day-to-day operations or the long-term decision making of Zieson. McPherson and his co-conspirators actually controlled and operated Zieson, and received most of the profits from Zieson through the respective business entities.

Between 2009 and 2018, Zieson was awarded approximately 199 federal contracts set aside for award to small businesses, minority-owned small businesses, and Veteran-owned small businesses for which the government paid Zieson approximately $335 million. McPherson and his co-conspirators, through their business entities, received approximately $4,183,920 each from Zieson by using false and fraudulent invoices.

Ziegler pleaded guilty on May 21, 2019, to making a false statement to the U.S. Department of Veteran Affairs. Ziegler is scheduled to be sentenced on Jan. 20, 2022.

In 2014, when Zieson was growing too large to compete for small business contracts, McPherson and his co-conspirators used the minority status of another Zieson employee, Native American Rustin Simon, 45, of Smithville, Mo., to set up Simcon Corp as a small business in the state of Missouri. Simcon’s business, like Zieson’s, was to obtain federal construction contracts set aside for award to qualified small businesses. In reality, McPherson and his co-conspirators managed and controlled Simcon. Simcon was awarded a $4,423,638 contract in July 2016 from the U.S. Air Force and a $6,911,404 contract in September 2016 from the U.S. Army.

Zieson and Simcon used the same employees and shared office space and equipment. Zieson and Simcon were located in a building owned by an LLC that was controlled by McPherson and his co-conspirators. Zieson purported to subcontract work to Simcon (which Simcon did not actually perform) to establish alleged past performance and profitability. This allowed Simcon to claim experience and financial strength to successfully compete for federal set-aside contracts. McPherson and his co-conspirators each received approximately $319,866 from Simcon using false and fraudulent invoices.

Simon pleaded guilty on June 19, 2019, to two counts of making material false statements to the Small Business Administration and awaits sentencing.

McPherson also caused Business C to submit false and fraudulent invoices to Zieson in order to hide and receive profits from the scheme.

Co-defendant Patrick Michael Dingle,50 of Parkville, Mo., pleaded guilty on Sept. 13, 2020, and awaits sentencing. Dingle pleaded guilty to one count of conspiracy to commit wire and major program fraud. Dingle also pleaded guilty, in a separate case, to one count of filing a false tax return.

This case was prosecuted by Assistant U.S. Attorney Paul S. Becker and former Assistant U.S. Attorney Stacey Perkins Rock. It was investigated by the Department of Veterans Affairs, Office of Inspector General; the Department of Defense Criminal Investigative Service; the U.S. General Services Administration, Office of Inspector General; the U.S. Small Business Administration, Office of Inspector General; the Army Criminal Investigation Command, Major Procurement Fraud Unit; the Department of Agriculture, Office of Inspector General; IRS-Criminal Investigation; the U.S. Secret Service; the Air Force Office of Special Investigations, Procurement Fraud; the Naval Criminal Investigative Service; the Defense Contract Audit Agency - Operations Investigative Support (OIS); the U.S. Department of Labor, Office of Inspector General; and the Department of Labor, Employee Benefits Security Administration (EBSA).

Source

{jcomments on}

NEWARK, N.J. – Caldwell University has agreed to pay the United States more than $4.8 million to resolve allegations that it engaged in a fraudulent scheme to defraud a federal education benefit program, U.S. Attorney Craig Carpenito announced.

“Caldwell University tried to hoodwink the Department of Veterans Affairs and, worse, Veterans themselves, by claiming to offer online classes developed and provided by Caldwell that were in fact marked-up offerings by an online correspondence school,” U.S. Attorney Carpenito said. “Our Veterans should never be treated this way, and we will continue to work to ensure that they receive all of the benefits that they deserve as a result of their service to the country.”

“Caldwell University’s civil settlement, along with the previous criminal convictions, sends a clear message to other educational institutions that VA OIG is dedicated to holding those accountable who would take advantage of VA programs that are intended to assist Veterans and their families,” Jeffrey K. Stachowiak, Acting Special Agent in Charge, U.S. Department of Veterans Affairs Office of Inspector General, said. “Our Veterans sacrificed to serve our country and they deserve to receive the full education benefits that they earned through their military service. VA OIG is committed to working closely with our fellow law enforcement partners and thanks the U.S. Attorney’s Office, District of New Jersey, for its dedication to this investigation.”

According to the settlement agreement:

From Jan. 1, 2011, through Aug. 8, 2013, Caldwell University submitted false claims for payment to the Department of Veterans Affairs (VA) in order to receive education benefits and funds pursuant to the Post-9/11 Veterans Education Assistance Act (Post 9/11 GI Bill) to which it was not entitled. The Post 9/11 GI bill was designed specifically to help Veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001.

Three individuals previously pleaded guilty to separate informations charging them with one count of conspiracy to commit wire fraud related to this scheme to defraud the VA. Lisa DiBisceglie, the university’s former associate dean of the Office of External Partnership; David Alvey, founder and president of Ed4Mil LLC; and Helen Sechrist, a former employee of Ed4Mil, admitted their respective roles in the conspiracy to fraudulently obtain millions of dollars in tuition assistance and other education-related benefits from the Post-9/11 GI Bill. Alvey was sentenced on June 4, 2018, to five years in prison. DiBisceglie and Sechrist were each sentenced on June 5, 2018, to three years of probation. All three defendants were also ordered to pay $24 million in restitution.

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

Caldwell contracted with Ed4Mil to recruit and enroll eligible military Veterans in non-degree fully online classes that were purportedly provided by Caldwell. DiBisceglie helped get approval from Caldwell’s administration to develop and administer a series of non-credit online courses for Veterans in Caldwell’s name. In order for the courses to be eligible for education benefits under the Post-9/11 GI Bill, DiBisceglie, Alvey, and others prepared and submitted an application to the VA stating that the courses were developed, taught, and administered by Caldwell faculty and met Caldwell’s stringent educational standards. The VA approved the online courses for education benefits under the Post-9/11 GI Bill based upon the representations in Caldwell’s application.

However, Caldwell did not participate in developing or teaching the online courses. The courses were developed, taught, and administered by a sub-contractor of Ed4Mil, an online correspondence school in Pennsylvania that was not approved to receive education benefits under the Post-9/11 GI Bill.

Thousands of Veterans were ultimately enrolled in the unapproved online correspondence courses without their knowledge while Caldwell and Ed4Mil profited. Even though Caldwell contributed no content or value to the courses, Caldwell charged the Post 9/11 GI Bill 10 to 30 times the prices charged by the online correspondence school for the same courses. As a result, the government paid over $24 million in tuition benefits to the university.

Allegations of fraud involving a separate government education benefit program were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The qui tam complaint alleges that Caldwell and Ed4Mil fraudulently obtained education benefits under the Department of Defense Tuition Assistance program. This settlement resolves federal allegations that Caldwell defrauded the Post-9/11 GI Bill administered by the VA, along with the qui tam action.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast Field Office, under the direction of Acting Special Agent in Charge Stachowiak; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and the U.S. Department of Education, Office of Inspector General Eastern Regional Office, under the direction of Special Agent in Charge Geoffrey Wood, with the investigation.

The government is represented by Assistant U.S. Attorney David M. Eskew, Chief of the U.S. Attorney’s Office’s Health Care Fraud Unit, and Assistant U.S. Attorney Nicole F. Mastropieri of the Opioid Abuse Prevention and Enforcement Unit in Newark.

The claims settled by this agreement are allegations only, and there has been no admissions of liability.

Defense counsel: Henry E. Klingeman Esq., Newark

Relator’s counsel: Jesse Hoyer Esq., Tampa, Florida

Source

{jcomments on}

BOSTON – A California woman was sentenced yesterday for her role in a multi-million-dollar Medicare fraud scheme.

Stefanie Hirsch, 51, of Los Angeles, Calif., was sentenced by U.S. Senior District Court Judge George A. O’Toole Jr. to three years of probation. Hirsch was also ordered to pay a fine of $2,500. On Feb. 24, 2021, Hirsch pleaded guilty to violating the HIPAA statute.

Hirsch sold access to a Medicare eligibility tool that allowed Juan C. Perez Buitrago and Nathan LaParl to improperly access patients’ detailed personal, demographic, medical and insurance information. Hirsch owned EI Medical, Inc., a Medicare-enrolled wheelchair and scooter repair company that qualified for access to a health care clearinghouse that contains Medicare patients’ personal, medical and insurance information. Hirsch improperly gave Perez Buitrago and LaParl access to that clearinghouse and charged them about $0.25 per patient eligibility check. Using Hirsch’s credentials, LaParl accessed the personal and medical data of more than 350,000 patients and Perez Buitrago’s credentials were used for 150,000 patients.

Perez Buitrago and LaParl pleaded guilty to federal health care crimes in October 2020 and January 2021, respectively.

Acting United States Attorney Nathaniel R. Mendell; Johnnie Sharp Jr., Special Agent in Charge of the Federal Bureau of Investigation, Birmingham Field Division; Phillip Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General, Boston Division; and Joshua McCallister, Acting Inspector in Charge of the U.S. Postal Inspection Service made the announcement. Assistant U.S. Attorney Elysa Q. Wan of Mendell’s Health Care Fraud Unit prosecuted the case.

Source

{jcomments on}

BOSTON – Ohio-based pharmaceutical distributor, Cardinal Health, Inc., has agreed to pay $13,125,000 to resolve allegations that it violated the False Claims Act by paying “upfront discounts” to its physician practice customers, in violation of the Anti-Kickback Statute.

The Anti-Kickback Statute prohibits pharmaceutical distributors from offering or paying any compensation to induce physicians to purchase drugs for use on Medicare patients. When a pharmaceutical distributor sells drugs to a physician practice for administration in an outpatient setting, the distributor may legally offer commercially available discounts to its customers under certain circumstances permitted by the Office of Inspector General for the Department of Health and Human Services (HHS-OIG). HHS-OIG has advised that upfront discount arrangements present significant kickback concerns unless they are tied to specific purchases and that distributors maintain appropriate controls to ensure that discounts are clawed back if the purchaser ultimately does not purchase enough product to earn the discount. According to facts that the company has acknowledged in the settlement agreement, Cardinal Health, Inc. failed to meet these requirements because the upfront discounts it provided to its customers were not attributable to identifiable sales or were purported rebates which Cardinal Health’s customers had not actually earned.

“Cardinal Health recruited new customers by offering and paying cash bonuses in violation of the Anti-Kickback Statute and False Claims Act. Kickback schemes, such as this one, have the potential to pervert clinical decision-making and are detrimental to our federal health care system and taxpayers,” said United States Attorney Rachael S. Rollins. “We commend Cardinal Health for resolving this matter cooperatively.”

“Pharmaceutical distributors are expected to play by the rules and not engage in illegal arrangements,” said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Working with our law enforcement partners, we will continue to investigate kickback schemes that threaten the integrity of our federal health care system, no matter how those schemes are disguised.”

“Cardinal Health thought it hit upon a surefire moneymaker by paying kickbacks to doctors, which cost health benefit programs millions of dollars in potentially fraudulent claims,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “Anyone involved in, or entertaining, similar activity should know that health care fraud is a priority for the FBI, and we will pursue anyone trying to profit from this country’s vital health care system.”

The False Claims Act settlements resolve allegations originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. In connection with today’s announced settlement, the relators will receive approximately $2.6 million of the recovery.

U.S. Attorney Rollins, HHS-OIG SAC Coyne and Boston FBI SAC Bonavolonta made the announcement today. Assistant U.S. Attorneys Evan Panich and Lindsey Ross of Rollins’ Affirmative Civil Enforcement Unit handled the matter.

Source

{jcomments on}

DETROIT - An Oakland County Cardiologist, Dinesh M. Shah, M.D. and his practice, Michigan Physicians Group, P.C. (MPG) have paid the United States $2 million to resolve allegations that they violated the False Claims Act by knowingly billing federal healthcare programs for diagnostic testing that was either unnecessary or not performed. MPG is a Michigan professional corporation with primary offices located in Berkley and Livonia, Michigan, and with administrative offices, labs, and testing sites at other locations within the metropolitan Detroit area. Shah is a practicing cardiologist and the sole owner of MPG.

This settlement resolves allegations that from 2006 to 2017, Shah and MPG knowingly billed government programs, including Medicare, Medicaid, and TRICARE, for unnecessary diagnostic testing. The investigation focused on the provision of a group of diagnostic tests, which included Ankle Brachial Index and Toe Brachial Index tests, known as ABI/TBIs, which were routinely performed on patients without first being ordered by a physician and without regard to medical necessity. The ABI compares blood pressure in the ankle to blood pressure in the arm to determine how well blood is flowing from the heart to the feet. The TBI is an additional measure to assess blood pressure readings at the toes.

The investigation also focused on the provision of unnecessary Nuclear Stress Tests. The United States alleged that Shah was routinely ordering, and MPG was providing, unnecessary Nuclear Stress Tests to some patients. During a Nuclear Stress Test, a small amount of radioactive tracer is injected into a vein, after which it is detected by a special camera that produces images used to evaluate blood flow to the heart.

This settlement comes after a years-long investigation by the Office of Inspector General for the United States Department of Health and Human Services and the Defense Health Agency acting on behalf of the TRICARE Program. The State of Michigan Attorney General’s Office participated in the settlement as the State of Michigan was a named plaintiff in one of the cases.

“Subjecting patients to unnecessary testing in order to fill one’s pockets with taxpayer funds will not be tolerated. Such practices are particularly concerning because overuse of some tests can be harmful to patients,” said Acting U.S. Attorney Saima Mohsin. “With these lawsuits and the accompanying resolution, Dr. Shah and Michigan Physicians Group are being held to account for these exploitative and improper past practices.

“Physicians commit to providing and billing for only medically necessary services when they choose their profession and participate in federally funded health care programs,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & human Services, Office of Inspector General – Chicago Region. “To deviate from that commitment and potentially place their patient’s health and safety at risk as well as limited tax payer resources is unacceptable. The OIG will continue to work with our federal, state and local partners to ensure that patients and tax payer dollars are protected.”

In addition to the civil settlement agreement, Dinesh Shah and MPG simultaneously entered into an Integrity Agreement with the Office of Inspector General for the United States Department of Health and Human Services, which provides for some oversight of Shah and MPG’s billing practices for a three-year period.

The settlement resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by two separate whistleblowers, Arlene Klinke and Khrystyna Mala, both former employees of MPG. The False Claims Act permits private parties to file suit on behalf of the United States and to share in any recovery.

The matter was handled by Assistant United States Attorneys Leslie Wizner and Lynn Dodge.

The two qui tam cases are docketed as United States ex rel. Arlene Klinke v. Dinesh Shah, M.D. and Michigan Physicians Group, Civil Action No. 10-cv-10726 (E.D. MI), and United States and State of Michigan ex rel. Khrystyna Mala v. Michigan Physicians Group, P.C. Dinesh Shah, M.D. Alka Shah, M.D., Rita Shah, M.D. and Tatiana Shcherbich, Civil Action No. 12-cv-10732 (E.D. MI).

Source

{jcomments on}

Asim Hameedi Provided False Patient Medical Information and Used Identities of Doctors Who Did Not Work at the Clinic to Submit Fraudulent Health Care Claims

Ilan T. Graff, the Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced today that cardiologist ASIM HAMEEDI was sentenced to 20 months in prison for orchestrating a widespread healthcare fraud scheme from approximately 2003 to 2015. HAMEEDI owned a Queens, New York, medical clinic, City Medical Associates (“CMA”), through which he perpetrated a fraud scheme involving, among other things, fraudulent reimbursement claims and false representations to insurers regarding medical tests and procedures. HAMEEDI previously pled guilty to conspiracy to commit health care fraud before U.S. District Judge John G. Koeltl, who imposed today’s sentence.

Mr. Graff said: “Doctors and medical clinics should be focused on their patients’ wellbeing, not on fraudulently lining their own pockets. Thanks to the dogged investigative work of our partners at the FBI, HHS, and NYPD, Asim Hameedi is headed to prison for defrauding Medicare, Medicaid, and private health insurance companies.”

According to the Indictment, other court filings, and statements made in public court proceedings:

CMA, a cardiology and neurology clinic based in Bayside, Queens, conducted a multifaceted scheme spanning approximately 12 years and involving millions of dollars in falsified claims. HAMEEDI, a board-certified interventional cardiologist, was CMA’s president and owner. As HAMEEDI has acknowledged, he was a leader of this long-running, wide-ranging fraud scheme, which involved various co-conspirators and several codefendants.

HAMEEDI’s healthcare fraud scheme included, among other things: (1) making false representations to insurance providers about patients’ symptoms in order to obtain preauthorization for medical tests and procedures; (2) backdating bills in order to create the false impression that medical procedures had not been performed until after CMA received “pre”-authorization from an insurer; (3) submitting false claims to insurance providers for parts of tests that were not performed, as well as for drug items not used or provided; (4) evading scrutiny from insurers for the large volume of claims that CMA submitted by falsely representing that several doctors – who did not work at CMA – had purportedly ordered or performed tests or procedures there; and (5) violating HIPAA by accessing, without authorization, electronic health records of patients at a particular hospital on Long Island, New York, in order to identify patients to be recruited to CMA. Additionally, HAMEEDI tried to obstruct an investigation by hospital officials into misconduct by his nephew, codefendant Fawad Hameedi.

In addition to his prison sentence, HAMEEDI, 50, of New York, New York, was sentenced to two years of supervised release, restitution of $554,331, and a $100,000 fine.

*               *               *

Fawad Hameedi, 35, pled guilty on February 7, 2018, to one count of conspiracy to commit health care fraud.

Arif Hameedi, 59, pled guilty on February 6, 2018, to one count of conspiracy to commit money laundering.

Absar Haaris, 51, pled guilty on November 15, 2016, to conspiracy to commit health care fraud and wire fraud, health care fraud, false statements relating to health care matters, conspiracy to commit fraud in connection with identification information, aggravated identity theft, conspiracy to violate the anti-kickback statute, conspiracy to commit money laundering, and conspiracy to wrongfully obtain and disclose individually identifiable health information. Haaris was previously sentenced, by the Honorable Jed S. Rakoff, principally to time served, three years of supervised release, and restitution of $544,331.51.

Michelle Landoy, 40, pled guilty on January 29, 2018, to conspiracy to commit health care fraud and wire fraud, health care fraud, wire fraud, false statements relating to health care matters, conspiracy to commit fraud in connection with identification information, and aggravated identity theft.

Desiree Scott, 41, pled guilty on February 6, 2018, to conspiracy to commit health care fraud and wire fraud, health care fraud, wire fraud, false statements relating to health care matters, conspiracy to commit fraud in connection with identification information, and aggravated identity theft.

Mr. Graff praised the outstanding investigative work of the New York Field Office of the Federal Bureau of Investigation, the New York Regional Office of the United States Department of Health and Human Services Office of the Inspector General, and the New York City Police Department. Mr. Graff also thanked the New York State Department of Financial Services.

The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case. Assistant U.S. Attorneys Michael D. Neff, David M. Abramowicz, and Kristy J. Greenberg are in charge of the prosecution.

Source

{jcomments on}

BENTON, Ill. – A Carterville man was sentenced on Thursday, September 16 to four years of probation for drug diversion and health care fraud charges. Joseph M. Mattingly, 42, was also ordered to pay a $500 fine along with a $200 special assessment.

According to court documents, Mattingly diverted Schedule II controlled substance (Hydrocodone) pills from a patient and defrauded the Medicare program of the cost of the pills.

In 2018, Mattingly was employed as a nurse with Progress Port, a center for adults with intellectual disabilities in Williamson County. Between August 20, 2018 and October 30, 2018, Mattingly obtained possession of 25 Hydrocodone pills he falsely claimed he dispended to a Progress Port resident, which he diverted for his own personal use.

Mattingly took three Hydrocodone pills intended for the same Progress Port resident and replaced those pills with Tylenol, an over-the-counter medication at three separate locations.

The investigation was conducted by the United States Department of Health and Human Services, Office of Inspector General - Office of Investigations and the Illinois State Police Medicaid Fraud Control Bureau.

If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.

Source

{jcomments on}

CONCORD – United States Attorney John J. Farley announced today that Catholic Medical Center (CMC) has agreed to pay $3.8 million to resolve allegations that it violated the civil False Claims Act by providing free call coverage services to a cardiologist to induce patient referrals, in violation of the Anti-Kickback Statute.

According to the settlement agreement, the United States asserted that CMC, a hospital in Manchester, paid its own cardiologists to cover for, and to be available to provide medical services for, another cardiologist’s patients when she was on vacation or otherwise unavailable. The United States further alleged that CMC provided these call coverage services at no charge. The cardiologist who received the free call coverage referred millions of dollars in medical procedures and services to CMC over the decade in which the free services were provided. Because CMC submitted claims for payment to Medicare, Medicaid, and other federal health care programs for the services referred by the cardiologist, the United States alleged that these claims were the result of unlawful kickbacks.

“The False Claims Act and the Anti-Kickback Statute protect patients and federal health care programs from fraud and abuse by removing the corrupting influence of money,” said U.S. Attorney Farley. “When patients are referred for medical services, those referrals should be based solely on medical need and not affected by financial considerations. We work closely with our law enforcement partners to protect the integrity of federal health care programs and we will use all appropriate enforcement tools to combat health care fraud in New Hampshire.”

“Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars. As today’s settlement makes clear, the FBI will aggressively investigate those who seek to bolster their bottom line by paying illegal kickbacks—whether directly or indirectly—to circumvent safeguards designed to protect the integrity of federal health care programs,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.

“Today’s settlement sends a clear message that these types of financial arrangements will not be tolerated. We will continue to work with our law enforcement partners to ensure that all medical providers properly follow health care rules and regulations,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General. “I appreciate the partnership with the New Hampshire U.S. Attorney's Office in identifying and prosecuting this type of fraud.”

"Protecting TRICARE, the health care program for active-duty military personnel, retirees, and dependents, is a top priority for the Department of Defense Office of Inspector General's Defense Criminal Investigative Service (DCIS)," said Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office. "When health care facilities submit claims to TRICARE for services that are driven by financial reasons and not strictly medical ones, it undermines the integrity of the TRICARE program. Today's settlement agreement demonstrates the DCIS' ongoing commitment to work with the U.S. Attorney's Office, District of New Hampshire, to investigate health care fraud."

The Anti-Kickback Statute makes it illegal for a hospital to pay physicians in exchange for referrals of government insured health care programs, such as Medicare, Medicaid, or Tricare. It arose out of congressional concern that remuneration given to those who can influence health care decisions would result in the provision of medically unnecessary services, or services of poor quality or otherwise harmful to patients.

The False Claims Act permits whistleblowers to file civil lawsuits alleging that false claims have been submitted to the United States. This False Claims Act settlement resolves allegations originally brought in a lawsuit filed by a whistleblower, David Goldberg, M.D., a former CMC employee, who is represented by Douglas, Leonard & Garvey, P.C. As part of the settlement the whistleblower will receive a portion of the settlement amount.

CMC did not admit liability as part of this settlement agreement.

This case was investigated by the Office of Inspector General of the U.S. Department of Health and Human Services, the Office of Inspector General of the Department of Defense, and the Federal Bureau of Investigation. The case was handled by Assistant U.S. Attorney Raphael Katz.

Source

{jcomments on}

Government Alleges Violations of Controlled Substances Act in Connection with Two Patients

Dr. Paul Lottes, a family medicine physician in Cedar Rapids, Iowa, has agreed to pay $100,000 to resolve allegations that he violated the Controlled Substances Act by writing prescriptions for opioid medications that had no legitimate medical purpose and were not issued in the usual course of professional practice.

The United States alleges that from August 2017 to April 2019, Dr. Lottes wrote prescriptions for opioids classified as Schedule II controlled substances for two patients that had no legitimate medical purpose and were not issued in the usual course of professional practice, in violation of the Controlled Substances Act.

In addition to agreeing to pay the $100,000 settlement, Dr. Lottes has also agreed not to reapply for a controlled substances registration with the Drug Enforcement Administration (“DEA”) for a period of three years. Without the DEA registration, Dr. Lottes will not be able to prescribe controlled substances during this time.

“Overprescribing is a major factor in the devastating opioid epidemic facing our country,” said U.S. Attorney Peter E. Deegan. “As this settlement demonstrates, our office is committed to using all available tools to fight this epidemic, including civil prosecution under the Controlled Substances Act.”

“Doctors who prescribe controlled substances outside the bounds of professional practice betray their oaths as practitioners and also fail the patients who trust them for care,” DEA Omaha Division Diversion Program Manager Sarah Boblenz said. “DEA and its partners at the federal, state and local level will continue to investigate all practitioners who cause harm to the public and fuel the opioid epidemic.”

This matter was handled by Assistant U.S. Attorney Melissa Carrington and investigated by the State of Iowa’s Medicaid Fraud Control Unit and the DEA.  

The claims resolved by this settlement are allegations only, and there has been no determination of liability.

Source

{jcomments on}

PHILADELPHIA, PA – Acting United States Attorney Jennifer Arbittier Williams announced that Stephen Padnes, M.D., 79, of Glenside, Pennsylvania, a physician formerly licensed in Pennsylvania, entered a guilty plea before United States District Court Judge Gene E.K. Pratter on criminal charges of illegally distributing controlled substances and filing false tax returns.

Williams also announced that Padnes has agreed to pay $2 million to settle a civil lawsuit brought by the United States seeking penalties and damages against him. The settlement resolves allegations that Padnes prescribed opioids without a legitimate medical purpose in violation of the Controlled Substances Act and False Claims Act (the “Civil Action”). The resolution of the Civil Action also excludes Padnes from participating in the Medicare program for at least ten years.

Padnes has also entered into a settlement agreement with the United States whereby he has agreed to the civil forfeiture of over $1.8 million in cash seized from his home as proceeds of unlawful prescribing (the “Forfeiture Action”).

The Drug Enforcement Agency has also rescinded Padnes’s licenses to prescribe controlled substances.

Criminal Guilty Plea

Earlier today, Padnes pled guilty to the criminal indictment, which charged him with illegally prescribing Schedule II controlled substances, oxycodone and methadone, on seven occasions between December 21, 2015 and June 29, 2016, without any medical necessity and outside the usual course of medical practice. It also charged that Padnes underreported the income earned by his medical practice, the Psychosomatic Medicine and Pain Rehabilitation Center, Inc., to the Internal Revenue Service by more than $700,000 for calendar years 2012, 2013, and 2014. Padnes faces a maximum possible sentence of 149 years’ imprisonment and has agreed to pay $301,219 in restitution to the IRS.

$2 Million Settlement of the Civil Action and Exclusion from Medicare

Padnes has agreed to pay an additional $2 million to settle the government’s allegations against him in the Civil Action brought pursuant to the Controlled Substances Act and the False Claims Act. Padnes has also agreed to be excluded from participating as a provider in the Medicare program for at least ten (10) years.

The Civil Action alleges that Padnes violated the Controlled Substances Act by issuing prescriptions on hundreds of occasions for Schedule II opioids in 2014, 2015, and 2016 without a legitimate medical purpose. The government alleges numerous instances where Padnes accepted cash payments, hundreds of dollars each, in exchange for prescriptions for high doses of opioids without maintaining medical records in the normal course of medical practice, physical exams, reevaluations, and/or monitoring of the effectiveness of the opioids he prescribed.

The government alleges numerous examples where Padnes regularly prescribed the equivalent of over 1,000 milligrams of morphine per day to certain purported patients in exchange for cash. In one example, the government alleges that Padnes issued prescriptions for so many opioids to a patient that the patient would have needed to consume nearly 70 pills, the equivalent of 4,000 milligrams of morphine, every day. For reference, the Centers for Disease Control and Prevention’s guidance on opioid prescribing for chronic pain patients urges caution when patients are prescribed more than the equivalent of 50 milligrams of morphine per day and should usually not be prescribed greater than the equivalent of 90 milligrams of morphine every day. https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fmmwr%2Fvolumes%2F65%2Frr%2Frr6501e1er.htm#recommendations

The government also alleges that Padnes violated the False Claims Act because Medicare and Medicaid paid to fill thousands of prescriptions that Padnes issued without a legitimate medical purpose, causing a loss to these programs exceeding $1 million.

The Controlled Substances Act provides for penalties for each prescription issued without a legitimate medical purpose up to $25,000 for violations on or before November 2, 2015 and up to $64,820 per violation after November 2, 2015. The False Claims Act allows for damages treble the government’s loss and civil penalties between $5,500 and $11,000 for each false claim presented on or before November 2, 2015 and between $11,181 and $22,363 for each false claim presented after November 2, 2015.

Civil Forfeiture of $1,864,545

On August 12, 2019, the United States filed a civil forfeiture complaint seeking the forfeiture of $1,864,545 cash seized from the defendant’s home during the execution of a search warrant in 2016. The government alleges that cash was the proceeds from Padnes’s unlawful medical practice from at least 2010 to 2016. The government alleges that, during that time, the vast majority of the defendant’s “patients” paid up to approximately $500 in cash for prescriptions for controlled substances, including Schedule II opioids such as oxycodone and methadone, that he wrote outside the usual course of medical practice and without a legitimate medical purpose. The cash was discovered in suitcases and a dresser located in a bedroom in the defendant’s home.

* * *

“Our community continues to cope with the tragic and deadly consequences of the opioid epidemic,” said Acting United States Attorney Williams. “A small number of corrupt doctors put greed before their oath, abused their positions of trust, and fanned the flames of the epidemic by pumping untold millions of illicit opioid pills onto our streets without a legitimate medical purpose simply to enrich themselves. As this case demonstrates, we will bring the full force of the federal government to find, investigate, and prosecute such wrongdoing criminally and civilly,” said Williams. “To any prescriber who may be tempted to sell opioid prescriptions without a legitimate medical purpose, be warned: it is not worth it. We will find you, we will prosecute you, and we will make you pay,” said Williams.

Williams continued, “This parallel criminal and civil prosecution represents exceptional professionalism and teamwork of the Criminal, Civil, and Forfeiture units of this Office and our dedicated law enforcement partners over the course of this complex case. I wish to specifically commend the FBI, DEA, the Department of Health and Human Services, and the Internal Revenue Service for their investigative work,” said Williams.

“Dr. Padnes routinely prescribed dangerous amounts of opioids without any medical necessity in exchange for cash, making him no different than a drug dealer on the street,” said Thomas Hodnett, Acting Special Agent in Charge of the DEA’s Philadelphia Field Division. “I want to thank our partners at HHS, IRS, and the FBI; working together we were able to pursue criminal charges and civil violations against rogue doctors like Padnes that have contributed to the opioid epidemic.”

“As a consequence, for prescribing opioids without medical necessity, Mr. Padnes will be excluded from participating in the Medicare program for at least ten years,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services. “Working closely with our law enforcement partners and the criminal and civil divisions of the U.S. Attorney’s Office, HHS-OIG will continue to protect the integrity of government health care programs.”

“Today’s guilty plea sends a message to all professionals that no one is above their responsibility to pay taxes,” said Yury Kruty, Acting Special Agent in Charge, Philadelphia Field Office. “All income, legally or illegally earned, is taxable. IRS-Criminal Investigation will always work with our law enforcement partners and provide our financial expertise to stop individuals from illegally distributing controlled substances to the American public.”

“Stephen Padnes admits abusing his prescribing privileges for profit,” said Bradley S. Benavides, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Doctors willing to illegally distribute and prescribe opioids to enrich themselves only deepen the drug epidemic that continues to ravage our area. That’s why the FBI is so determined to shut down unscrupulous medical professionals engaged in drug diversion. I encourage the public to report any information about prescription abuse to us or our law enforcement partners.”

The investigation was conducted by the Philadelphia Field Division of the Drug Enforcement Administration, the U.S. Department of Health and Human Services, Office of Inspector General, Internal Revenue Service Criminal Investigation, and the Federal Bureau of Investigation Health Care Fraud Task Force, which includes agents from the FBI, Pennsylvania Attorney General’s Office, and HHS-OIG.

For the United States Attorney’s Office, the criminal case is being prosecuted by Assistant United States Attorney Jerome Maiatico, the civil Controlled Substances Act and False Claims Act matter was prosecuted by Assistant United States Attorney Charlene Keller Fullmer and former Assistant United States Attorney John T. Crutchlow, and the civil forfeiture matter is being prosecuted by Assistant United States Attorney Maria M. Carrillo.

Except for those facts admitted to in the guilty plea, the claims resolved by the civil settlements are allegations only, and there has been no determination of liability.

Source

{jcomments on}

Orlando, FL –United States Attorney Roger B. Handberg announces today that Central Medical Systems, LLC, Joan Harley, and Alan Trent Harley have agreed to pay the United States $600,000 to resolve allegations that they violated the False Claims Act by participating in a scheme to defraud Medicare.

The United States previously intervened in a civil whistleblower lawsuit against Central Medical Systems and Alan Trent Harley on January 18, 2018, and later filed an amended complaint adding Joan Harley, Arthur Wright, and Meddex Solutions, LLC, as defendants, alleging the defendants conspired to make false claims to the United States in violation of the False Claims Act.

The civil lawsuit and settlement relate to the submission of claims for wound care supplies sold by Central Medical Systems. According to the lawsuit, Alan Trent Harley would routinely change quantities of items while billing and manipulated orders in Central Medical Systems’ billing software. This allegedly resulted in Central Medical Systems seeking and receiving inflated Medicare payments for more expensive products than were provided to patients or for products that were never provided at all.

The government’s suit also alleges that, after the United States intervened in the lawsuit, Central Medical Systems and Alan Trent Harley conspired with Joan Harley (his wife), Arthur Wright, and Meddex Solutions to fraudulently submit Central Medical Systems’ claims through Meddex Solutions in an attempt to bypass Medicare’s suspension of payments to Central Medical Systems.

Alan Trent Harley pleaded guilty to one count of wire fraud on November 30, 2020, and was sentenced to 15 months’ imprisonment. According to court documents in that criminal case, Harley co-founded Central Medical Systems in 1986. As president and sole active owner of the business, Harley was responsible for submitting claims to Medicare on behalf of Central Medical Systems. From at least 2011 through 2015, Harley knowingly defrauded the government of more than $870,000 by submitting fraudulent claims to Medicare. Although his employees provided him with accurate data about which wound care supplies were sent, and in what quantities, Harley frequently changed that data (with respect to both product type and quantities) before submitting claims to Medicare, in order to obtain fraudulently higher reimbursements from Medicare.

The United States previously entered into a civil settlement agreement with Arthur Wright and Meddex Solutions, effective June 1, 2021, under which they agreed to pay the United States $77,741.93, to resolve the False Claims Act allegations against them in this case.

“This is another example of our office’s commitment to prosecute those – individual or corporate – who seek to exploit Medicare for their personal gain, and at the expense to taxpayers,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “We will continue to use all available resources at our disposal to pursue those who defraud our nation’s federal healthcare programs.”

“Health care professionals are required to follow Medicare rules and accurately bill for services provided. Fraudulently billing Medicare for personal gain cheats millions of people who fund the program and contributes to the soaring cost of health care,” stated Omar Perez Aybar, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General. “Working closely with our law enforcement partners, we will continue to pursue those who exploit government health care programs.”

The settlement resulted from a lawsuit originally filed in the United States District Court for the Middle District of Florida by Relator Jael Cancel. Ms. Cancel sued under the qui tam, or whistleblower, provisions of the False Claims Act that permit a private citizen to sue on behalf of the United States for false claims and to share in the recovery. The Act also allows the United States to intervene and prosecute the action. The United States intervened in this matter and litigated the case. Ms. Cancel will receive $144,000 of the proceeds from the civil settlement with Central Medical Systems, Alan Trent Harley, and Joan Harley.

The United States’ intervention in and settlement of this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

This settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Middle District of Florida and the HHS Office of Inspector General. Assistant United States Attorney Jeremy R. Bloor led the investigation.

The case is captioned United States ex rel. Cancel v. Central Medical Systems, LLC et al., Case No. 6:14-cv-512-ORL-28TBS. The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source

{jcomments on}

Proceeds of the fraud were used to fund private jet flights, courtside tickets to the NBA Finals, and purchase of luxury automobiles, jewelry and real estate

The chief executive officer of a Michigan and Ohio-based group of pain clinics and other medical providers was sentenced today to 15 years in prison for developing and approving a corporate policy to administer unnecessary back injections to patients in exchange for prescriptions of over 6.6 million doses of medically unnecessary opioids.

Mashiyat Rashid, 40, of West Bloomfield, Michigan, was the CEO of the Tri-County Wellness Group of medical providers in Michigan and Ohio. In addition to the prison sentence, Rashid was also ordered to pay over $51 million in restitution to Medicare, as well as forfeiture to the United States of property traceable to proceeds of the health care fraud scheme, including over $11.5 million, commercial real estate, residential real estate, and a Detroit Pistons season ticket membership.

Rashid pleaded guilty in 2018 to one count of conspiracy to commit health care fraud and wire fraud, and one count of money laundering. Twenty-one other defendants, including 12 physicians, have been convicted thus far, including four physicians who were convicted after a one-month trial in 2020. Rashid is the second defendant to be sentenced.

According to court documents, from 2008 to 2016, Rashid was the CEO of the Tri-County Wellness Group, where the clinics had a policy to offer patients, some of whom were suffering from legitimate pain and others of whom were drug dealers or opioid addicts, prescriptions of Oxycodone 30 mg, but forced the patients to submit to unnecessary back injections in exchange for the prescriptions.

Testimony at the trial established that in some instances the patients experienced more pain from the shots than from the pain they had purportedly come to have treated; that audible screams from patients were observed throughout the clinics; and that some patients developed adverse conditions, including open holes in their back. Patients, including patients who were addicted to opioids, who told the doctors that they did not want, need, or benefit from the injections, were denied medication by the defendants and their co-conspirators until they agreed to submit to the expensive and unnecessary injections. The evidence further established that the defendants repeatedly performed these unnecessary injections on patients, as Tri-County was paid more for facet joint injections than any other medical clinic in the United States.

The evidence at trial showed that the Tri-County clinics valued making money over patient care. The Tri-County clinics intentionally targeted the Medicare program and recruited patients from homeless shelters and soup kitchens. Evidence at trial indicated that Rashid only hired physicians who were willing to disregard patient care in the pursuit of money. Rashid incentivized the physicians to follow the Tri-County protocol of offering opioid prescriptions and administering unnecessary injections by offering to split the Medicare reimbursements for these lucrative procedures. The specific injections used had nothing to do with the medical needs of the patients but were instead selected to be administered because they were the highest-paying injection procedures. A former Tri-County employee testified at the trial of Rashid’s co-defendants that the practices at the clinic were “barbaric.”

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Saima Shafiq Mohsin of the Eastern District of Michigan; Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services’ Office of Inspector General’s (HHS-OIG’s) Chicago Region; Special Agent in Charge Timothy Waters of the FBI’s Detroit Field Office; and Special Agent in Charge Sarah Kull of IRS Criminal Investigation (IRS-CI) Detroit made the announcement.

HHS-OIG, FBI, and IRS-CI conducted the investigation. Assistant Chief Jacob Foster of the National Rapid Response Strike Force and Trial Attorney Tom Tynan of the Criminal Division’s Fraud Section prosecuted 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, the 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.

Source

{jcomments on}

Last of Four Individuals Sentenced in this Conspiracy

An Illinois woman was sentenced yesterday in the Northern District of Illinois to 56 months in prison and ordered to pay $6.3 million in restitution for her participation in a conspiracy to commit health care and wire fraud.

According to court documents, and the evidence presented at trial, Angelita Newton, 43, of Chicago, worked at Care Specialists, a home health care company owned by Ferdinand Echavia and later his wife, Ma Luisa Echavia. While operating between 2011 and 2017, Care Specialists fraudulently billed Medicare at least $6.3 million. At trial, the government demonstrated that around 90% of the patients were not homebound and did not qualify for the types of care that Care Specialists billed Medicare for. Further, many patients received cash bribes to receive home health “visits,” some of which were performed in the visiting nurse’s car. Newton facilitated the conspiracy by falsifying patient visit records which were used to support claims billed to Medicare and was convicted by a federal jury on Feb. 14, 2020.

In addition to issuing Newton’s sentence today, Judge Virginia Kendall previously sentenced three others involved in the conspiracy. On Oct. 21, 2021, Ferdinand Echavia was sentenced to 84 months’ confinement and three years’ supervised release. On Nov. 5, 2021, Ma Luisa Echavia was sentenced to 60 months’ confinement and three years’ supervised release. Another participant in the conspiracy, Reginald Onate, who pleaded guilty and cooperated with the government throughout the investigation, was sentenced to a term of three years’ probation.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division, and Special Agent in Charge Mario Pinto of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) made the announcement.

The FBI Chicago Field Office and HHS-OIG investigated the case.

Trial Attorney Leslie S. Garthwaite of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Patrick Mott (formerly of the Fraud Section) prosecuted the case.

Source

{jcomments on}

HOUSTON – A 46-year-old local chiropractor and her medical group have been named in a civil suit under the False Claims Act alleging fraudulent billing, announced Acting U.S. Attorney Jennifer B. Lowery.

Suhyun An owns and manages Campbell Medical Group PLLC and Johnson Medical Group PLLC dba Campbell Medical Clinic in the Spring Valley area of Houston.

The civil complaint, filed today, alleges An fraudulently obtained over $3.9 million from the Medicare and TRICARE programs by billing for the implantation of neurostimulator electrodes. These are surgical procedures usually requiring use of an operating room, and Medicare pays thousands of dollars for this procedure, according to the complaint.  

The complaint alleges that neither An nor her clinic’s employees performed surgery. Instead, they allegedly applied inexpensive devices used for electro-acupuncture. This procedure involves inserting needles into patients’ ears with a neurostimulator taped behind the ears with an adhesive, according to the complaint.

The lawsuit alleges nurse practitioners working for An learned how to apply the devices by watching YouTube videos and participating in trainings with sales representatives.

The complaint alleges An knew the devices were not billable or recklessly disregarded that fact. She allegedly read specific guidance from a Medicare contractor stating Medicare did not cover the devices because they only provided acupuncture. The suit further claims she ignored emailed warnings from employees and outside billing companies including warnings that the devices were being labeled as “possible fraud.”

The Department of Health and Human Services – Office of Inspector General and Defense Criminal Investigative Services assisted with the investigation. Assistant U.S. Attorney Brad Gray is handling the matter.

Source

{jcomments on}

SAN JUAN, P.R. – Samuel Pérez-Rivera was sentenced to three years of probation by United States District Judge Silvia L. Carreño-Coll for conspiracy to commit wire fraud, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. Pérez-Rivera plead guilty to the sole count of an Information on March 12, 2020.

As part of the sentence imposed, Pérez-Rivera paid $150,000 in restitution in favor of the Social Security Administration (SSA) and was excluded, in perpetuity, from participating as a Non-Attorney Representative before the SSA. Pérez-Rivera, as a Non-Attorney Representative, submitted fraudulent psychiatric medical reports to the Social Security Administration. The fraudulent reports were prepared by him and signed by Dr. Américo Oms-Rivera. Dr. Oms was sentenced on February 5, 2021, for conspiracy to commit wire fraud.

On March 12, 2020, the United States Attorney charged Samuel Pérez-Rivera for fraud in the application process for SSA disability insurance benefits in Puerto Rico. As part of this scheme, Samuel Pérez-Rivera admitted that even though he was not a physician, he would prepare psychiatric medical reports, using as a go-by a template report and adding fictitious medical appointments that never took place. This was done to create the appearance of a longer history of medical treatment and for the purpose of deceiving the SSA into approving disability insurance benefits. These reports were eventually signed by the psychiatrist, Dr. Américo Oms-Rivera and submitted to the SSA.

The SSA is responsible for the implementation of the Disability Insurance Benefits Program. The SSA provides monetary benefits to workers with severe, long-term disabilities, who have worked in SSA covered employment for a required length of time. Spouses and dependent children of disabled workers may also be eligible to receive benefits. Fraud schemes, such as the one perpetrated in this case, compromise the SSA’s limited funding and its ability to reach those in need of benefits.

“This defendant defrauded the SSA for personal gain. The U.S. Attorney’s Office will continue to work with our law enforcement partners to investigate and prosecute this type of cases to the fullest extent of the law,” said U.S. Attorney Muldrow.

“This sentence represents another major milestone in this fraud scheme that our OIG investigators and the U.S. Attorney’s Office have worked diligently for several years to dismantle,” said Gail S. Ennis, Inspector General of the Social Security Administration. “This individual knowingly conspired to submit false information in support of disability claims to defraud SSA. We will continue to pursue those who facilitate Social Security fraud. I thank our law enforcement partners, the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Vanessa D. Bonano-Rodriguez, for their outstanding efforts in support of this case.”

Special Assistant United States Attorney Vanessa D. Bonano-Rodríguez from the Social Security Administration was in charge of the prosecution of the case. This case was investigated by the Social Security Administration Office of the Inspector General, New York Field Division, under the supervision of Special Agent-in-Charge John Grasso, jointly with the Drug Enforcement Administration and the Puerto Rico Police Bureau. The Federal Bureau of Investigation and the Office of Inspector General Health and Human Services also assisted during the investigation.

Source

{jcomments on}

An indictment was unsealed Wednesday in Denver charging a Colorado man with stealing nearly $300,000 in government funds from three different COVID relief programs and with making false statements in connection with bankruptcy proceedings.

According to court documents, Francis F. Joseph, 56, of Highlands Ranch, allegedly transferred approximately $118,000 in COVID relief funding from a medical clinic’s account into his personal bank account, after which he spent the money on, among other things, travel and home improvements. The stolen funds came from two programs that were designed to aid medical providers during the COVID-19 pandemic — the Accelerated and Advance Payment Program and the Provider Relief Fund.

The Accelerated and Advance Payment Program provides necessary funds in national emergencies in order to accelerate cash flow to impacted Medicare providers. The Provider Relief Fund, through which $50 billion was allocated to providers for the coronavirus response, was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted March 29, 2020 and designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.

Today’s indictment constitutes the nation’s second set of criminal charges related to the misuse of Provider Relief Fund moneys and the first time that charges have been brought in connection with fraud on the Accelerated and Advance Payment Program.

The indictment further alleges that following his termination from the clinic, Joseph applied for a $179,999 loan under the Paycheck Protection Program (PPP) on behalf of the medical practice, which he then directed into his personal bank account. Finally, the indictment alleges that Joseph filed for bankruptcy on behalf of (but unbeknownst to) the clinic following his termination and submitted documents containing materially false statements regarding his misappropriation of funds from the clinic in connection with that proceeding.

In April 2020, Congress authorized over $300 billion in additional PPP funding through the CARES Act. The PPP allows qualifying small business and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

Joseph is charged with theft in connection with health care, theft of government property, wire fraud, and making a false statement in connection with a bankruptcy proceeding. Joseph is scheduled to make his initial court appearance on May 25 before U.S. Magistrate Judge S. Kato Crews of the U.S. District Court for the District of Colorado. If convicted, he faces maximum penalties of 10 years in prison for each theft count, 20 years for wire fraud, and five years for the bankruptcy proceeding false statement. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Special Agent in Charge Curt Muller of the U.S. Department of Health and Human Services’ Office of Inspector General’s (HHS-OIG) Kansas City Region; and Special Agent in Charge Weston King of the U.S. Small Business Administration’s Office of Inspector General’s (SBA-OIG) Western Region made the announcement.

Trial Attorney Emily Gurskis of the Justice Department’s Fraud Section is prosecuting the case.

This case was brought in coordination with the Health Care Fraud Unit’s COVID-19 Interagency Working Group, which organizes efforts to address illegal activity involving health care programs during the pandemic. The Department of Justice also thanks the U.S. Attorney’s Office for the District of Colorado and the Colorado State Medicaid Fraud Control Unit for assistance they provided.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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 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.

Source

{jcomments on}

Hattiesburg, Miss. – A Columbia, Mississippi woman pled guilty in U.S. District Court to one count of health care fraud.

According to court documents, beginning in 2016 and continuing for well over two years, Joy Beth Harden, 51, executed a scheme to defraud Medicare and other health care benefit programs. Specifically, Harden submitted fraudulent bills for durable medical equipment on behalf of her business, BZB LLC doing business as Duracare Home Medical Equipment in the Hattiesburg area. As a result, Medicare and other benefits programs paid Harden for durable medical equipment that was never prescribed for patients and for medical equipment that was never delivered to the patients.

Harden pled guilty on Tuesday, August 10, 2021. She will be sentenced on November 23, 2021, and faces a maximum penalty of 10 years in federal prison and a $250,000 fine. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Harden remains in federal custody awaiting sentencing.

The announcement was made by Acting U.S. Attorney Darren J. LaMarca, Acting Special Agent in Charge Paul W. Brown of the Federal Bureau of Investigation in Mississippi, Special Agent in Charge Derrick L. Jackson of U.S. Department of Health & Human Services, Office of Inspector General (HHS OIG) Atlanta Regional Office, Special Agent in Charge Cynthia A. Bruce of the DoD OIG, Defense Criminal Investigative Service (DCIS) Southeast Field Office, and Inspector General Martin J. Dickman of U.S. Railroad Retirement Board, Office of Inspector General (RRB OIG).

The case was prosecuted by Deputy Criminal Chief Dave Fulcher.

Source

{jcomments on}

Hattiesburg, Miss. – A Columbia, Mississippi woman was sentenced to 57 months in prison for defrauding health care insurance providers.

Joy Beth Harden, 51, pled guilty on August 10, 2021, to executing a scheme to defraud Medicare and other health care benefit programs. Specifically, Harden submitted fraudulent bills for durable medical equipment on behalf of her business, BZB LLC doing business as Duracare Home Medical Equipment in the Hattiesburg area. As a result, Medicare and other benefits programs paid Harden for durable medical equipment that was never prescribed for patients and for medical equipment that was never delivered to the patients.

United States District Judge Taylor B. McNeel sentenced Harden on April 15, 2022, to serve a term of 57 months in federal prison, followed by a term of 3 years of supervised release. Harden was also ordered to pay full restitution to all of the health care insurers she defrauded.

The announcement was made by United States Attorney Darren J. LaMarca, Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation in Mississippi, Special Agent in Charge Tamala Miles of the U.S. Department of Health & Human Services, Office of Inspector General (HHS OIG) Atlanta Regional Office, Special Agent in Charge Cynthia A. Bruce of the DoD OIG, Defense Criminal Investigative Service (DCIS) Southeast Field Office, and Inspector General Martin J. Dickman of the U.S. Railroad Retirement Board, Office of Inspector General (RRB OIG).

“Submitting claims for unsubstantiated services threaten the integrity of the Medicare program and increases the financial burden on taxpayers,” stated Tamala Miles, Special Agent in Charge with the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working closely with our partners, HHS-OIG will continue to safeguard the integrity of federal health care programs by investigating individuals who seek to exploit them.”

“Health care fraud threatens the most vulnerable of our citizens by endangering the programs which provide care for them," stated Jermicha Fomby, Special Agent in Charge of the FBI in Mississippi. “It is imperative we proactively root out such acts as this fraud which erode the fabric of our healthcare system upon which our citizens depend. I want to commend the investigators and prosecutors who worked together on this case. We look forward to continued partnerships such as this among the law enforcement community in Mississippi.”

“There are no victimless crimes. Stealing money from the Defense Health Agency (DHA) and Medicare is stealing money from all taxpayers,” stated Special Agent in Charge Cyndy Bruce, Office of the Inspector General (DoD-OIG), Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS and our investigative partners will continue to come after those who seek to illegally enrich themselves and hold them accountable for their actions.”

“The U.S. Railroad Retirement Board, Office of Inspector General (RRB-OIG) is committed to fighting Medicare fraud, waste, and abuse and is proud to be part of this collaborative effort with the FBI, HHS-OIG, and DoD-OIG,” said Inspector General Martin J. Dickman. “The sentencing of Joy Beth Harden sends a loud and clear message that combating Medicare fraud is a top federal law enforcement priority and unscrupulous Medicare providers will not be tolerated.”

This case was investigated by the HHS-OIG, FBI, DCIS, and RRB-OIG. The case was prosecuted by Deputy Criminal Chief Dave Fulcher.

Source

{jcomments on}

NASHVILLE, Tenn. – April 21, 2021 – Acting U.S. Attorney Mary Jane Stewart and Tennessee Attorney General Herbert H. Slatery III announced today that they have entered into agreements with Anesthesia Services Associates, PLLC d/b/a Comprehensive Pain Specialists (“CPS”), its four majority owners, Dr. Peter B. Kroll, Dr. Steven R. Dickerson, Dr. Gilberto A. Carrero, and Dr. Richard J. Muench (collectively, the “Owners”), and Russell S. Smith, D.C. – a former CPS executive – whereby they agreed to pay a total of $4,121,663.94 to settle all claims by the United States and Tennessee involving allegations of wrongdoing at CPS.

CPS, which was based in Brentwood, Tennessee, at one point operated over 40 pain clinics and had operations in 12 states, until it shut down in 2018. On July 22, 2019, the United States and Tennessee filed a Consolidated Complaint in Intervention in the United States District Court for the Middle District of Tennessee against CPS, its former CEO, John Davis, who was convicted in April 2019 of health care fraud, as well as three of the four principal Owners, Drs. Kroll, Dickerson, and Carrero, and, Dr. Smith, a former manager of certain CPS clinics in East Tennessee (the “Civil Action”). The Complaint alleged, among other things, that the defendants submitted false claims for medically unnecessary and/or non-reimbursable testing and acupuncture. Dr. Muench, the only owner not a party to the lawsuit, agreed to settle with the United States and Tennessee prior to the filing of the Complaint.

The agreements with CPS and the Owners resolve the United States’ and Tennessee’s claims for violations of the False Claims Act and the Tennessee Medicaid False Claims Act that arose from the submission of false claims to federal health care programs and TennCare specifically for medically unnecessary and/or non-reimbursable urine drug, specimen validity, genetic and psychological testing, as well as claims for electro-auricular acupuncture during the period from May 2011 through when CPS ceased operating in 2018. The settlement also resolves claims relating to CPS’s submission of false claims under Dr. Kroll’s provider number for services he did not render and testing he did not order. In addition, the agreements resolve common law claims for fraud, payment by mistake, and unjust enrichment against CPS, the Owners and Dr. Smith.

To resolve the Civil Action, CPS agreed to release $2,196,663.94 million in funds held by Medicare in a suspension account and will contribute an additional $750,000 in cash. The Owners will pay a total of $1.05 million to resolve claims against them. Dr. Smith also agreed to pay $125,000 to resolve potential liability for common law claims that could be brought against him by the United States and Tennessee. As part of the settlements, the United States and Tennessee agreed to dismiss the Civil Action, except for their claims against John Davis.

“Even though CPS ceased operations before the United States and Tennessee filed the Civil Action, the United States and Tennessee were still able to recover millions of dollars in damages through litigation and utilizing administrative remedies available through our partners at the Centers for Medicare & Medicaid Services,” said Acting U.S. Attorney Stewart. “The United States will not hesitate to use all of its resources to protect taxpayer dollars, including by going after the individuals who reap the benefits, directly or indirectly, from health care fraud.”

“This type of purposeful, illegal conduct takes money from TennCare that otherwise would be used to pay legitimate claims of others,” said General Slatery. “This settlement should send a message. If you do this, State and federal authorities are coming after you.”

“When physicians and health care companies engage in questionable business practices and unnecessary services, it compromises patient care and the integrity of HHS programs,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Our agency will continue to investigate and hold accountable providers that put profits before patients.”

“We are fortunate to have this strong partnership between state and federal agencies in the pursuit of false claims, to hold accountable those responsible,” said TBI Director David Rausch. “Health care fraud impacts the quality of our health care, in addition to costing consumers and taxpayers.”

The allegations resolved by this settlement were originally raised in lawsuits filed under the qui tam, or whistleblower, provisions of the FCA, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. The whistleblowers will receive $610,684.62 as their share of the Governments’ settlement proceeds from the CPS settlement and will dismiss their individual actions.

The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office, and investigated by the Department of Health and Human Services, Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Kara F. Sweet represented the United States. Assistant Attorney General Philip H. Bangle represented Tennessee.

The Civil Action is captioned United States and the State of Tennessee ex. rel. Suzanne Alt, et al. v. Anesthesia Services Associates, PLLC, et al., Case No. 3:16-cv-00549 (M.D. Tenn.). The claims resolved by the settlements are allegations only, and there has been no determination of liability.

Source

{jcomments on}

WILMINGTON, Del. – U.S. Attorney David C. Weiss announced today that Connections Community Support Programs, Inc. (“CCSP”) has agreed to the entry of consent judgments totaling over $15,300,000 to resolve two lawsuits brought by the federal government alleging health care fraud arising under the federal False Claims Act and violations of the Controlled Substances Act. Prior to the sale of its assets in bankruptcy, CCSP provided a variety of mental health and addiction treatment services at numerous locations throughout Delaware.

CCSP has agreed to the entry of a judgment in the amount of $13,757,520.60, plus interest, to resolve claims that CCSP violated the False Claims Act by billing for mental health services performed by individuals whose professional qualifications did not allow them to bill Medicare or Medicaid for reimbursement and by billing Medicaid for mental health services using incorrect procedure codes for the person performing the service, resulting in higher payments than were permitted. CCSP has also agreed to the entry of a judgment in the amount of $1,621,571, plus interest, to resolve claims that it violated the federal Controlled Substances Act by negligently failing to keep proper records of its use of controlled substances, including methadone and buprenorphine, in its treatment of patients with substance use disorders and by transferring controlled substances between locations without proper documentation.

On April 19, 2021, shortly after the filing of these two lawsuits by the United States, CCSP filed for bankruptcy. On June 15, 2021, CCSP completed a sale, overseen by the Bankruptcy Court, of its assets and operations to Conexio Care, Inc. and Coras Wellness and Behavioral Health, which are now providing the mental health and addition treatments services formerly provided by CCSP. The settlement agreements and consent judgments agreed to by CCSP and the United States must still be approved by the Bankruptcy Court and the final amount of any recovery by the United States will be limited by the availability of funds in the bankruptcy estate to pay the United States and other creditors of CCSP.

“For many years, Connections was improperly billing government programs for mental health services and failing to properly monitor and document its controlled substances inventory,” said U.S. Attorney Weiss. “These settlements, together with the transfer of all of Connections’ services and operations to providers, finally resolve Connections’ long history of poor legal and regulatory compliance which jeopardized the provision of important mental health and substance abuse treatment to the residents of the State of Delaware.”

“These allegations depict CCSP as a health care provider that truly disserved patients and their Federal health care programs,” said Maureen Dixon, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Falsely billing Medicare and Medicaid demonstrates a lacking regard for the stability of these programs and the beneficiaries who depend on their services. With our law enforcement partners, HHS-OIG continuously strives to swiftly combat such fraud.”

“Narcotics treatments programs such as Connections were entrusted with dispensing drugs such as methadone and buprenorphine to assist people with substance use disorder. However, with that responsibility comes the obligation to properly document the use and transfer of these same drugs,” said Thomas Hodnett, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “This civil judgement serves as notice to ensure compliance with the Controlled Substances Act and the requirements to safeguard drugs used for medication assisted treatment.”

The False Claims Act settlement announced today partially resolves a lawsuit filed under the whistleblower provision of the False Claims Act. The government’s claims are based on a whistleblower suit filed by two former CCSP employees. A whistleblower suit, or qui tam action under the False Claims Act, is commenced by an individual, known as a “relator,” filing a complaint under seal in the U.S. District Court, and providing a copy of the complaint and other evidence to the local U.S. Attorney. The United States then has an opportunity to investigate the claims. The False Claims Act provides the whistleblower with a share of the government’s recovery. Separate from the settlement announced today, the qui tam relators are continuing to pursue additional claims against CCSP and its former CEO Catherine Devaney McKay.

The United States is also continuing to pursue its claims for violations of the Controlled Substances Act against McKay as well as two other corporate executives, William Northey and Steven Davis, which are not part of the settlement announced today.

Assistant U.S. Attorneys Jesse S. Wenger and Laura D. Hatcher represented the United States in the False Claims Act matter. Assistant U.S. Attorneys Dylan J. Steinberg and Laura D. Hatcher represented the United States in the Controlled Substances Act matter.

Related court documents and information from the civil lawsuit are on PACER by searching for Case Nos. 1:19-cv-475-CFC for the False Claims Act matter and 1:21-cv-00514-MN for the Controlled Substances Act matter.

Source

{jcomments on}

Leonard C Boyle, United States Attorney for the District of Connecticut, announced that CORTNEY DUNLAP, 37, of Burlington, was sentenced today by U.S. District Judge Kari A. Dooley in Bridgeport to 57 months of imprisonment, followed by three years of supervised release, for operating a wide-ranging scheme that defrauded the Connecticut Medicaid Program of more than $1.3 million.

According to court documents and statements in court, from 2014 to 2020, Dunlap was a Licensed Professional Counselor with offices located on Brainard Road in Hartford. Dunlap also owned two entities, Inspirational Care and KEYS Program Inc., through which he managed group homes in Hartford, Bristol, Cromwell and Waterbury, including residences for women and children who were victims of domestic abuse.

From August 2018 through October 2020, Dunlap engaged in a scheme to defraud the Connecticut Medicaid Program by submitting claims for psychotherapy services that were purportedly provided to Medicaid clients. The vast majority of the claims were for occasions and dates of service when no psychotherapy services of any kind had been provided to the Medicaid clients identified in the claims. On a limited number of occasions, some of the services were rendered by unlicensed individuals who were not qualified or licensed to provide psychotherapy.

The Connecticut Medicaid program suspended Dunlap as a Medicaid provider on approximately April 28, 2020, and, on May 7, 2020, federal law enforcement agents executed a court-authorized search of Dunlap’s Hartford offices. Dunlap subsequently billed Medicaid for psychotherapy services through Inspirational Care for services that which were not provided, using the provider number of a licensed clinical social worker who did not provide the services and was not aware that her provider number was being used to bill for the nonexistent services.

Dunlap required tenants of the group homes operated or managed by Inspirational Care and KEYS program to provide copies of the Medicaid member cards for the tenants and their children as a condition of the tenants residing at the group homes. Dunlap then used these Medicaid member numbers to bill Medicaid for psychotherapy services that were not provided to the tenants or their children. Dunlap used the Medicaid member numbers of approximately 65 tenants or their children to bill Medicaid for fraudulent services, and Medicaid paid Dunlap approximately $543,117 for psychotherapy services that were not provided to these individuals.

In February 2019, the New Haven Public Schools hired Dunlap as a guidance counselor at the New Haven Adult and Continuing Education Center. In February 2020, Dunlap accessed a database containing personal identifying information of students and former students enrolled at New Haven Adult and Continuing Education, many of whom Dunlap did not have any professional relationship with and had never met. Dunlap used the information he acquired to determine whether the students were insured by Medicaid and, if so, identified the students’ Medicaid member identification numbers. He then billed Medicaid for fraudulent psychotherapy services that were never provided to the students. Dunlap used the personal identifying information and Medicaid member numbers of approximately 135 New Haven Adult and Continuing Education students to bill Medicaid for fraudulent services, and was paid a total of approximately $593,383 by Medicaid for these claims.

Dunlap also fraudulently billed Medicaid for psychotherapy services purportedly provided to employees of Inspirational Care when no such services were provided, and submitted fraudulent claims to Medicaid for psychotherapy services purportedly provided to members of his family when no such services were provided.

Judge Dooley ordered to Dunlap to pay restitution to Medicaid in the amount of $1,313,322.

U.S. Attorney Boyle noted that Connecticut Department of Social Services, working in close cooperation with law enforcement, suspended Medicaid payments to Dunlap and recovered $337,777.63 that Dunlap was slated to receive from Medicaid. The U.S. Attorney’s Office’s Civil Division also seized and forfeited $412,415.20 from Dunlap’s bank accounts. Dunlap has made an additional restitution payment of $20,000, leaving a restitution obligation of $543,129.17.

Dunlap was arrested on a criminal complaint on October 14, 2020. On June 4, 2021, he pleaded guilty to one count of health care fraud.

Dunlap, who is released on bond, is required to report to prison on April 25.

This investigation has been conducted by the Office of the Inspector General of the U.S. Department of Health and Human Services and the Federal Bureau of Investigation, with the assistance of the Office of the Inspector General for the U.S. Department of Housing and Urban Development, the Office of the Inspector General for the U.S. Department of Education, the Medicaid Fraud Control Unit of the Connecticut Chief State’s Attorney’s Office, the Connecticut Attorney General’s Office and the Connecticut Department of Social Services.

This case is being prosecuted by Assistant U.S. Attorney David J. Sheldon with the assistance of Auditor Susan N. Spiegel.

Source

{jcomments on}

ST. LOUIS – The United States has reached a civil settlement with Olive Street Pharmacy, LLC (Olive Street) and pharmacy technician Irina Shlafshteyn (Shlafshteyn) resolving a civil complaint bringing claims under the False Claims Act (FCA) and Controlled Substances Act (CSA) for damages, statutory penalties, and injunctive relief related to the unlawful dispensing of controlled substances, including controlled substances that were submitted to Medicaid or Medicare for reimbursement. As part of the settlement, Olive Street and Shlafshteyn agreed to pay $1,507,808.50, an amount that was based in part on their ability to pay.

According to the civil complaint filed by the United States, Olive Street, a retail pharmacy located in Creve Coeur, Missouri, and Shlafshteyn, its 25 percent owner and managing employee, repeatedly dispensed prescriptions for controlled substances while disregarding warning signs of diversion, or “red flags,” indicating the prescriptions were not legitimate. The United States alleged that the types of red flags that Olive Street and Shlafshteyn ignored included clear instances of tampering with written prescriptions; dangerous combinations of drugs commonly sought after for recreational purposes; and amounts of opioids that exceeded CDC guidance by as much as 17.5 times the recommended maximum daily dosage.

In the complaint, the United States further accused Olive Street of routinely dispensing prescriptions for Subsys, an oral fentanyl spray, which is subject to heightened FDA restrictions and indicated only for opioid-tolerant patients experiencing breakthrough pain due to cancer. The United States contended that Olive Street and Shlafshteyn knowingly dispensed high dosages of Subsys to patients who did not qualify for the drug, and that the vast majority of the Subsys Olive Street dispensed was prescribed by Philip Dean, M.D. Dean, a Warrenton, Missouri neurologist, pleaded guilty to illegally distributing prescription opioids in 2018, including to women with whom he had lived and with whom he had had personal relationships.

The United States alleged that even though Shlafshteyn knew Dean was having intimate relationships with at least one of the women for whom he was prescribing controlled substances, Shlafshteyn and others at her direction continued to dispense Dean’s controlled substance prescriptions to that patient and to other patients of Dean. Further, according to the civil complaint, as the managing employee of Olive Street, Shlafshteyn had the control and authority to effect compliance with the FCA and CSA.

According to the settlement agreement, effective September 30, 2021, Shlafshteyn surrendered her Missouri pharmacy technician license and Olive Street terminated its enrollment in the Transmucosal Immediate Release Fentanyl Risk Evaluation and Mitigation Strategy (TIRF REMS) Program, the FDA-mandated program that had allowed Olive Street to dispense immediate-release fentanyl drugs like Subsys. The parties further agreed to enter into a consent decree of permanent injunction prohibiting Shlafshteyn from participating in the dispensing of controlled substances or being employed by any establishment that does so, prohibiting Olive Street from seeking enrollment in the TIRF REMS Program, and detailing many additional specific parameters limiting the circumstances under which Olive Street is permitted to continue dispensing controlled substances.

“Medical professionals have the legal obligation to ensure the dispensing of prescriptions are for legitimate medical purposes,” said Inez Davis, the Drug Enforcement Administration’s Diversion Program Manager for the states of Missouri and Kansas, and southern Illinois. “In this case, the pharmacy abandoned its corresponding responsibility and ignored the clear signs that powerful medications, like oral fentanyl spray, were being prescribed far beyond the recommended guidance. This settlement sends a message that DEA will not accept actions that put people’s lives at risk.”

Under the settlement agreement, Shlafshteyn is excluded from participating in the federal healthcare programs for a period of 10 years, and Olive Street is bound by the terms of a corporate integrity agreement governing its ability to continue participating in the federal programs.

“Health care providers who unlawfully dispense controlled drugs risk the health of their patients and pose a threat to society,” said Curt L. Muller, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General. “We will continue to work with our law enforcement partners to protect the integrity of federal health programs and hold accountable individuals who endanger beneficiaries.”

“The Missouri Attorney General’s Medicaid Fraud Control Unit aids in conducting complex investigations and prosecutions to ensure that those who game the Medicaid system for personal gain are held accountable,” added Missouri Attorney General Eric Schmitt. “We’re proud of our work in this case, and our work across the state to hold bad actors accountable and save taxpayer money.”

The Office of Inspector General of the Department of Health and Human Services, Drug Enforcement Administration, Federal Bureau of Investigation and the Missouri Attorney General’s Medicaid Fraud Control Unit investigated the case. Assistant United States Attorney Amy Sestric handled the case.

Source

{jcomments on}

HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Rodney L. Yentzer, age 52, of Cumberland County, Pennsylvania was charged in a criminal information with one count of conspiracy to commit health care fraud, one count of conspiracy to commit money laundering, and one count of theft of public money for defrauding Medicare and the U.S. Department of Health and Human Services between 2016 and 2020.

According to United States Attorney John C. Gurganus, the information alleges that Yentzer agreed with others to defraud Medicare by submitting bill for medically unnecessary urine drug tests for chronic opioid patients at medical clinics he controlled, including a group of clinics known as Pain Medicine of York or “PMY” (also known as All Better Wellness).

It is alleged that PMY billed Medicare for more than $10 million in urine drug tests from mid-2017 through the end of 2019. As a result, Medicare paid out over $4 million for these urine drug tests. Pennsylvania’s Medicaid program was also billed for urine drug tests during this same time period. The urine drug tests ordered by PMY were sent to an in-house laboratory at PMY whenever possible. As a result, when medically unnecessary tests were billed to Medicare, the proceeds from them went to PMY itself.

The information also alleges that Yentzer received over $191,000 in U.S. Department of Health and Human Services stimulus money that was intended for health care providers who had health care related expenses and lost revenues attributable to COVID-19. Yentzer obtained these funds in April 2020, even though he had resigned from PMY the prior month and PMY had been closed since late 2019.   Yentzer allegedly used these funds on various things unrelated to COVID-19 relief, including personal expenses.

Search warrants were executed at PMY’s various locations in November 2019, and PMY ceased operations soon thereafter.

The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, Federal Bureau of Investigation, Drug Enforcement Administration, and the Pennsylvania Office of Attorney General. Assistant U.S. Attorney Ravi Romel Sharma and Special Assistant U.S. Attorney Robert Smultkis are prosecuting the case.

The maximum penalty under federal law for conspiracy to commit health care fraud is 10 years’ imprisonment. The maximum penalty law for conspiracy to commit money laundering is 20 years’ imprisonment. The maximum penalty law for theft of public money is 10 years’ imprisonment. These charges may also carry a fine and a term of supervised release following imprisonment. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

Source

{jcomments on}

SACRAMENTO, Calif. — Owen Hughes, the sole proprietor of Eon Research Corporation in Davis, agreed to pay the United States $635,000 to resolve allegations that he knowingly submitted false statements to the National Institute of Environmental Health Sciences to secure Small Business Innovation Research grant funds, Acting U.S. Attorney Phillip A. Talbert announced.

According to court documents, in 2007, Hughes applied for and received a Small Business Innovation Research grant to conduct environmental research, certifying that he had implemented financial safeguards to ensure the proper use of grant funds.

The settlement resolves allegations that despite his certifications, Hughes had no financial policies in place. As a result, Hughes could not substantiate how he had actually used the federal funds he received. The settlement also resolves claims that Hughes commingled grant funds in his personal accounts and then used the commingled funds for his aviation hobby, by paying aircraft hangar rental fees and buying aircraft parts.

“This settlement sends a clear message that recipients of federally funded grants must strictly adhere to the regulations applicable to those grants and fully account for their use of federal funds,” Acting U.S. Attorney Talbert said. “Recipients who fail to do so risk significant consequences.”

“Establishing required financial policies is a key component to proper accounting of SBIR grants. Therefore, it is imperative that individuals and entities implement sound policies to avoid mismanagement of these limited funds,” said Steven J. Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Working with our auditors and law enforcement partners, we will continue preserving the integrity of all our grant programs.”

“It is vital that agencies work together to hold grantees accountable for the use of taxpayer funds,” said Lori Pilcher, Regional Inspector General for Audit Services at the U.S. Department of Health and Human Services. “In this case, using forensic tools, our auditors identified suspicious grant disbursements and partnered closely with investigators and the United States Attorney’s Office throughout the investigation.”

The National Institute of Environmental Health Sciences is a component of the National Institutes of Health, which is itself a component of U.S. Department of Health and Human Services.

This case was the result of an investigation by the HHS Office of the Inspector General. Assistant U.S. Attorneys Colleen Kennedy, Rachel Muoio, and Steven Tennyson handled the matter for the United States. The claims settled by this agreement are allegations only, and there has been no determination of liability.

Source

{jcomments on}

DAYTON, Ohio – Access Hospital Dayton, LLC and its owner, Dr. John Johnson, have agreed to pay the United States $374,780 to resolve False Claims Act allegations that they knowingly caused the submission of false claims to Medicare and Medicaid for diagnostic testing. Access Dayton and Johnson have also agreed to pay the State of Ohio approximately $50,219 to resolve State of Ohio Medicaid claims.

The government alleged that, between January 2014 and December 2019, Access Dayton and Johnson knowingly caused the submission of false claims to Medicare and Ohio Medicaid for diagnostic laboratory testing (prolactin and ammonia) that was (1) performed during patients’ inpatient stays at Access Dayton, (2) not used in the management of the patients’ condition, and (3) not medically necessary.

Prolactin testing measures the level of prolactin in a person’s blood, which providers use to diagnose pituitary tumors or to determine causes for conditions unrelated to psychosis or substance abuse. Providers use ammonia testing to diagnose liver dysfunctions or hyperammonemia.

Medicare pays for diagnostic testing ordered by the physician who uses the results in the management of the beneficiary’s specific medical problem. Medicare and Ohio Medicaid generally prohibit separate payment for diagnostic testing performed during an inpatient admission.

“It is crucial that every public dollar available go to treat the drug-addicted and mentally ill,” Ohio Attorney General Dave Yost said. “I am proud of the work by my Health Care Fraud Section and our federal partners to claw back the money to help us continue this fight.”

False Claims Act tips and complaints about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The resolutions obtained in this matter were the result of a coordinated effort between the Department of Justice Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of Ohio, the Department of Health and Human Services Office of Inspector General and Ohio Attorney General Dave Yost’s Medicaid Fraud Control Unit. Trial Attorney Christopher Wilson of the Department of Justice’s Civil Division and Andrew Malek, Deputy Civil Chief of the U.S. Attorney’s Office, are representing the United States in this matter.

Source

{jcomments on}

Miami, Florida – A 29-year-old Georgia man who redirected the benefits of veterans and social security beneficiaries to accounts that his co-conspirators set up and controlled has been sentenced to 78 months in prison by a South Florida federal district judge. In addition, the man must pay more than $900,000 in restitution to his victims.

Defendant Ronaldo Green was a member of a conspiracy that obtained the personal information (including names, dates of birth and social security numbers) of disabled veterans and social security beneficiaries. The co-conspirators used this information to fraudulently open bank accounts and prepaid debit cards in the victims’ names. They also forged documents in the victims’ names that directed the U.S. Department of Veterans Affairs and the Social Security Administration to deposit benefit payments into those fraudulent accounts, instead of the victims’ legitimate bank accounts. Green and his co-conspirators withdrew the diverted money from ATMs and banks in South Florida and Georgia. They used it on personal expenses. Much of the money was ultimately funneled to architects of the scheme, located in Jamaica.

From 2012 to 2017, members of the conspiracy attempted to redirect over $1.8 million in benefits from more than 100 disabled veterans and social security beneficiaries. Although several of the attempts failed, the defendants’ actually stole more than $1 million. The victims have been reimbursed for their losses.

Green’s co-defendants, Omar Bailey and Jamare Mason, were sentenced during prior hearings. Bailey received 24 months’ imprisonment. Mason received 78 months’ imprisonment and was ordered to pay over $1 million in restitution. U.S. District Judge James Cohn, who sits in Ft. Lauderdale, imposed the sentences.

Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida; David Spilker, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General’s (VA-OIG) Southeast Field Office; and Rodregas Owens, Special Agent in Charge, Social Security Administration, Office of the Inspector General (SSA-OIG), made the announcement.

U.S. Attorney Juan Antonio Gonzalez commended the investigative efforts of the Transnational Elder Fraud Strike Force, including partners from VA-OIG, SSA-OIG, United States Postal Inspection Service, and Homeland Security Investigations.

The case was prosecuted by Assistant U.S. Attorneys Lois Foster-Steers and Sajjad Matin.

Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. The mission of the Department’s Elder Justice Initiative is to support and coordinate the Department’s enforcement and programmatic efforts to combat elder abuse, neglect and financial fraud and scams that target our nation’s seniors. To learn more visit https://www.justice.gov/elderjustice. The public is encouraged to report suspected elder victimization and fraud by visiting https://www.justice.gov/elderjustice/roadmap or calling the victim connect hotline at 1-855-484-2846.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 19-cr-60313.

Source

{jcomments on}

Miami, Florida – Foot Care Store, Inc. d/b/a Dia-Foot (Dia-Foot), a diabetic shoe company based in Wellington, Florida, and its President and CEO Robert Gaynor, have agreed to pay $5,538,338 to settle allegations that the company sold custom diabetic shoe inserts that were not actually custom-fabricated in accordance with Medicare standards. The agreement is part of a civil settlement that resolves claims brought under the False Claims Act.

The United States alleged that between 2013 and 2018, Dia-Foot sold diabetic shoe inserts to customers nationwide, representing that many of those inserts were custom-made for an individual’s foot, when the inserts were actually made using generic foot models. The inserts were dispensed to diabetic patients who had a prescription from a health care provider and who believed they were getting a custom product. According to the government, despite fabricating the inserts using generic models, Dia-Foot billed Medicare and Medicaid for the custom version, or sold the inserts to other providers who then billed government health care programs for custom inserts. This allowed Dia-Foot to produce and sell more inserts and increase profits by cutting corners. The government also alleged that Dia-Foot advertised to customers that it was proud to be Medicare-compliant and had received Medicare approval for its custom diabetic shoe inserts, even though Dia-Foot received the Medicare approvals based on false information.

Individuals with diabetes can in some cases suffer from foot problems, including nerve damage, ulcers, and poor circulation. In severe cases, untreated problems can even lead to amputation. Foot orthotics such as custom shoe inserts are prescribed to help diabetic patients prevent such problems and are covered by Medicare and Medicaid.

In connection with the settlement, Dia-Foot and Robert Gaynor entered into a three-year Integrity Agreement (IA) with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). The IA requires, among other things, that Dia-Foot implement updated policies and procedures as part of its compliance program, and hire an Independent Review Organization to review quarterly Dia-Foot’s claims to Medicare and Medicaid.

The allegations were brought under the qui tam or whistleblower provisions of the False Claims Act by a former Dia-Foot employee. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The whistleblower who brought the allegations in this case will receive a share of the settlement amount. The case is captioned U.S. ex rel. Newman v. Foot Care Store, Inc. d/b/a Dia-Foot, No. 9:18-CV-80702 (S.D. Fla.).

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Southern District of Florida, with assistance from the HHS-OIG. Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and Omar Pérez Aybar, Special Agent in Charge, HHS-OIG, announced the settlement.

The investigation and resolution of this matter illustrate the government’s emphasis on combatting health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477) or at http://tips.hhs.gov/.

The matter was handled by Assistant U.S. Attorney Clarissa Pinheiro Schild of the Southern District of Florida. The integrity agreement was negotiated by OIG Senior Counsel Tonya Keusseyan.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Source

{jcomments on}

Six Charged in New Jersey in $100 Million Telemedicine Scheme; Three Men Admit Guilt in Unrelated Frauds

NEWARK, N.J. – Six individuals have been charged in New Jersey for their roles in a massive nationwide prescription medication and durable medical equipment telemedicine scheme, and three others admitted their roles in three other health care fraud cases. The announcements are part of a federal law enforcement effort to crack down on health care fraud nationwide.

U.S. Attorney Craig Carpenito, District of New Jersey, announced charges against six people: Mark Belter, 46, of North Ridgeville, Ohio; David C. Laughlin, Jr., 46, of Buckeye, Arizona; Stephen Luke, 52, of Phoenix, Arizona, were charged by complaint with conspiracy to violate the Anti-Kickback Statute. In a separate complaint, Ethan Welwart, 32, of North Brunswick, New Jersey; William “Ben” Welwart, 66, of Staten Island, New York; and Elan Yaish, 51, of Tel Aviv, Israel, also were charged with conspiracy to violate the Anti-Kickback Statute for their roles in the same scheme. Ethan Welwart, William Welwart, and Yaish had their initial appearances before U.S. Magistrate Judge James B. Clark III on Sept. 3, 2020, and Belter, Laughlin, and Luke had their initial appearances before U.S. Magistrate Judge Leda Dunn Wettre on Sept. 10, 2020.

Attorney for the United States Rachael A. Honig, District of New Jersey, announced guilty pleas from three defendants in three cases:

Andrew McCubbins, 39, of Draper, Utah, the owner of a telemedicine company, pleaded guilty by videoconference on Sept. 24, 2020, before U.S. District Judge Kevin McNulty to an information charging him with one count each of conspiring to commit wire fraud, conspiracy to commit health care fraud, and conspiring to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.

Christian Mohases, 38, of Santa Ana, California, pleaded guilty by videoconference on Sept. 24, 2020, before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiring to commit health care fraud and one count of conspiring to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.

Luis Roa, 51, of Santiago, Chile, pleaded guilty by videoconference on Sept. 24, 2020, before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiring to commit health care fraud and one count of conspiring to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.

The announcements are part of a nationwide federal law enforcement effort to combat telemedicine fraud, prescription fraud and durable medical equipment fraud. As part of this effort, the Department of Justice is announcing today the largest amount of alleged fraud loss ever charged – $4.5 billion in allegedly false and fraudulent claims submitted by more than 86 criminal defendants in 19 judicial districts around the country – related to nationwide schemes involving telemedicine: the use of telecommunications technology to provide health care services remotely.

Belter et al.

Beginning in January 2016 and continuing for more than three years, the six defendants exchanged kickbacks and bribes with each other and others. Belter, who owned and operated a marketing company in Ohio called Health Pain Solutions, identified Medicare beneficiaries and targeted them for specific prescription medications or durable medical equipment (DME) like braces. He then sent the beneficiaries’ information to Laughlin and Luke, who owned RediDoc. Belter paid Laughlin and Luke kickbacks for each signed prescription and doctor’s order for those beneficiaries that Laughlin and Luke collected from doctors under contract with RediDoc. Laughlin and Luke in turn paid those doctors kickbacks for each prescription and doctor’s order they signed. Laughlin and Luke transmitted the prescriptions to Apogee, a pharmacy owned and run by Ethan Welwart, William Welwart, and Yaish, and doctor’s orders to DME providers, who submitted claims for reimbursement to Medicare and other insurers. Ethan Welwart, William Welwart, and Yaish at Apogee subsequently paid Belter kickbacks from the reimbursements they received, in exchange for Belter’s actions in originating the beneficiaries’ claims.

After identifying target beneficiaries, Belter or his employees telephoned them, purportedly to obtain their medical history and consent to receive medications or DME. The purpose of these calls was so that Belter could record the conversations with the beneficiaries and convince them to try certain medications or DME. Belter had no medical licenses or training.

Belter purposely did not tell the beneficiaries what doctor would prescribe the medication or DME. The conspirators believed that the beneficiaries may not consent to receive medication or DME from an unknown doctor. In an email to William Welwart and another Apogee employee on Jan. 15, 2018, Belter wrote that, when he called beneficiaries, he did not provide specifics: “I think you might lose some people [beneficiaries] when you mention a Doctor name they have never heard of.”

After obtaining the beneficiary’s medical history and purported consent, Belter transmitted a beneficiary intake form, the recorded call, and a pre-filled prescription for medication or DME order to Laughlin and Luke at RediDoc. Under a contract, Belter paid Laughlin and Luke a fee of approximately $95 for each prescription that RediDoc obtained from one of its contracted doctors; $100 for each DME order; and $115 for a prescription and a DME order.

RediDoc recruited and contracted with doctors around the country to sign prescriptions and DME orders. RediDoc paid its contracted doctors anywhere from $7 to $30 per “consultation,” depending on whether they prescribed medication, DME, or both. For example, according to one RediDoc contract, RediDoc agreed to pay a doctor $15 per “consultation” by telephone with no prescription; $20 per “consultation” resulting in a medication prescription or DME order; and $30 per “consultation” resulting in a medication prescription and DME order. RediDoc had similar contracts with doctors across the country and paid them over $5.5 million during the scheme.

The defendants and other conspirators caused the submission of false and fraudulent claims to health care benefit programs, including Medicare, in excess of $100 million for prescription medication and DME.

The charge of conspiracy to violate the Anti-Kickback Statute is punishable by a potential penalty of five years in prison and a fine of $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater.

The government is represented in this case by Senior Trial Counsel Jason S. Gould and Assistant U.S. Attorneys Nicole Mastropieri and Hayden Brockett of the Health Care Fraud Unit in Newark, as well as Senior Trial Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit in Newark.

The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

McCubbins

McCubbins owned and operated a telemedicine company based in Utah that purported to provide health care services through health care professionals to Medicare beneficiaries. McCubbins and others paid kickbacks and bribes to various parties in exchange for referrals and orders for medically unnecessary genetic cancer screening tests (CGX Tests) for Medicare beneficiaries, ultimately leading to approximately $89 million in Medicare payments.

In order to generate referrals of Medicare beneficiaries to the telemedicine company, McCubbins and others paid kickbacks and bribes to individuals operating call centers targeting Medicare beneficiaries for CGX Tests. Once the telemedicine company received the referrals, health care professionals acting on its behalf wrote medically unnecessary orders for CGX Tests for the Medicare beneficiaries. McCubbins bribed medical doctors, nurse practitioners, and physician assistants to prescribe the CGX Tests for Medicare beneficiaries. These health care professionals wrote medically unnecessary orders for CGX Tests without performing legitimate medical consultations and after only cursory telephonic interactions with the Medicare beneficiaries. In addition, the Telemedicine Company also bribed doctors to purportedly “supervise” nurses and other health care professionals in order to legitimize the their prescriptions for CGX Tests. In reality, however, the supervising physicians had no legitimate clinical or collaborative relationship with the health care professionals they claimed to supervise.

Mohases

Mohases and his conspirators owned and operated multiple call centers through which they obtained doctors’ orders for DME, namely orthotic braces, and patient referrals for genetic CGX tests for Medicare beneficiaries. Mohases and his conspirators provided these orders and referrals in exchange for bribes from certain companies that provided the braces and performed the CGX Tests, ultimately leading to approximately $8.5 million in Medicare payments for medically unnecessary DME and CGX Tests.

Mohases and his conspirators obtained the DME orders and CGX Test referrals through the use of marketing call centers and telemedicine companies. Mohases used telemedicine companies to generate DME orders that were medically unnecessary because they were generated without any legitimate physician-patient relationship and without complying Medicare’s telemedicine requirements. In order to conceal the kickback arrangements, Mohases and his conspirators entered into sham contracts that made it appear that they were providing legitimate services. Mohases generated false invoices to match the sham contracts and to conceal the kickback scheme.

Roa

Roa and his conspirators owned and operated multiple call centers through which they obtained doctors’ orders for DME, namely braces, and patient referrals for CGX tests for Medicare beneficiaries. Roa and his conspirators provided these orders and referrals in exchange for bribes from certain companies that provided the braces and performed the CGX tests, ultimately leading to approximately $6.9 million in Medicare payments for medically unnecessary DME and CGX tests.

Roa and his conspirators obtained the DME orders and CGX test referrals through the use of marketing call centers and telemedicine companies. Roa used telemedicine companies to generate DME orders that were medically unnecessary because they were generated without any legitimate physician-patient relationship and without complying with Medicare’s telemedicine requirements. In order to conceal the kickback arrangements, Roa and his conspirators entered into sham contracts that made it appear that they were providing legitimate services. Roa generated false invoices to match the sham contracts and to conceal the kickback scheme.

The charge of conspiracy to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charge of conspiracy to violate the federal Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater.

The government in the cases against McCubbins, Mohases and Roa is represented by Assistant U.S. Attorneys Sean M. Sherman, J. Stephen Ferketic, and Ryan O’Neill of the Opioid Abuse Prevention & Enforcement Unit, and Senior Trial Counsel Ward.

U.S. Attorney Carpenito and Attorney for the United States Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch. Jr. in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Scott J. Lampert; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri with the ongoing investigations.

Source

{jcomments on}

NEWARK, N.J. – A Pennsylvania doctor today admitted participating in two conspiracies to receive bribes and kickbacks in exchange for ordering genetic tests, Acting U.S. Attorney Rachael A. Honig announced.

Lee Besen, 65, of Waverly, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Anne E. Thompson to an information charging him with two counts of conspiring to violate the Anti-Kickback Statute.

Besen is the fourth defendant to plead guilty in bribery and kickback schemes involving doctors and medical employees in the Scranton, Pennsylvania, area.

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

Besen was a primary care physician with an office in the Scranton area. In 2018, he began accepting monthly cash kickbacks and bribes in exchange for collecting DNA samples from Medicare patients and sending them for genetic tests to clinical laboratories in New Jersey and Pennsylvania. The cash kickbacks ranged from $500 to over $8,000. Besen typically accepted the cash inside his office, at times behind locked doors.

When Besen did not receive his kickback and bribe payments, the volume of genetic tests he ordered dipped. When he accepted those payments, that volume typically increased because, as Besen said in a recorded conversation, “Greenbacks speak.” Besen was also recorded discussing the kickback and bribe payments as “vigs” – slang for fees collected by bookies.

Besen frequently sought ways to make more money. At one point, he proposed adding to the scheme by collecting “CGx” cancer screening tests from Medicare patients, sending the tests to a new lab, and then splitting lucrative sales commissions that the lab paid out – ranging up to $2,500 per test. Although Besen had not previously ordered CGx tests for any of his patients, once he realized there was money to be made, he said in a recording that his office was “totally open now for CGx.” He was also recorded saying that he hoped the money he made from CGx tests would help him “retire early.”

Even as the ongoing COVID-19 pandemic substantially reduced in-patient visits, Besen worked with his staff to generate more genetic tests from Medicare patients. Before one illicit payoff that Besen accepted in the parking lot of a fast-food restaurant, he was recorded making veiled threats and expressing concern about being caught on camera accepting kickbacks and bribes. Despite such concerns, he followed through with the meeting because, as he was recorded saying, he wanted to collect “greenbacks” for his “pool house.”

Besen enlisted his employee, Kimberly Schmidt, who, in exchange for cash kickbacks and bribes, helped prepare paperwork for the genetic tests. Schmidt has previously pleaded guilty for her role in the scheme and is awaiting sentencing.

As a result of the scheme, Medicare paid $350,374 for genetic tests generated from Besen’s medical practice.

Separately, Besen and Terri Haines, of Kennett Square, Pennsylvania, entered into a different kickback and bribery scheme involving “health fairs.” Haines was not a health care provider, but made a living soliciting and collecting CGx genetic screening tests from Medicare patients at health fairs, and then sending those tests to a lab in exchange for commissions. She was not authorized to order those CGx tests without a doctor’s sign-off. Haines paid Besen a kickback and bribe to use his name and medical credentials to order CGx tests for the Medicare patients she met at fairs, even though Besen never actually attended any of the health fairs and never met the patients for whom the genetic tests were ordered. Medicare paid $713,882 for CGx genetic tests that resulted from this scheme.

Each conspiracy charge is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater. Sentencing is scheduled for July 6, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and special agents of the U.S. Department of Health and Human Services, Office of Inspector General, Philadelphia Regional Office, under the direction of Special Agent in Charge Maureen R. Dixon, with the investigation leading to the charges. She also thanked the FBI Scranton Field Office, FBI Philadelphia Division, and the Pennsylvania Attorney General’s Office for their assistance.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit and Acting Principal Assistant U.S. Attorney Rahul Agarwal.

The charges and allegations against Haines are merely accusations, and she is presumed innocent unless and until proven guilty.

Source

{jcomments on}

LITTLE ROCK, Ark. (News release)— A doctor and a medical sales representative have been charged in a scheme to pay and receive kickbacks to generate expensive prescriptions for compounded drugs. TRICARE, the military’s health insurer, paid over $12 million for the prescriptions, which the indictment alleges were rubber stamped without examining patients or regard to medical necessity. The 43-count indictment alleges the scheme also encompassed widespread efforts to obstruct the ensuing investigation.

Cody Hiland, U.S. Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the FBI Little Rock Field Office, and Latisha Cleveland, Acting Special Agent in Charge of the Dallas Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General, announced the indictment, which was handed down yesterday by a federal grand jury and included charges for conspiracy, wire fraud, mail fraud, Anti-Kickback violations, aggravated identity theft, money laundering, lying to the FBI, falsifying records, and obstruction of justice.

The indictment alleges that recruiters sought TRICARE beneficiaries to receive the drugs, promising to secure their prescriptions (without any doctor consult) and, at times, offering them money to sign up. Upon receipt of TRICARE beneficiary information from recruiters, the ringleader of the scheme sent pre-filled prescriptions—with drugs to be dispensed, refills authorized, and patient names already listed—to medical professionals who signed without consulting patients or any regard to medical necessity. Prescriptions went to a Mississippi pharmacy, which shipped drugs nationwide and billed TRICARE for reimbursement.

According to the indictment, local doctor Joe David May, also known as Jay May, of Alexander, rubber stamped pre-filled prescriptions for over 100 beneficiaries for which TRICARE paid $4.5 million. May received pre-filled prescriptions from Derek Clifton, also of Alexander. The indictment alleges the ringleader paid Clifton to get May to sign the prescriptions despite knowing Clifton shared his payout with May. Clifton also had May sign pre-filled prescriptions for beneficiaries solicited by Clifton himself and his own recruiters. Clifton received over $740,000 tied to May’s prescriptions, which he used to buy a car, fund his retirement account, and purchase a home.

The indictment alleges Clifton, who previously coached high school basketball, began by recruiting three former players who joined the military. Each agreed to receive drugs after being offered money, and one later received $1,200 cash hidden inside a Stetson cowboy hat. Together they received nearly $500,000 in drugs prescribed by May.

According to the indictment, May used a cell phone app to electronically sign batch after batch of pre-filled prescriptions, including signing 8 pre-filled prescriptions within just 3 minutes of receipt, 10 within 5 minutes, and 13 within 13 minutes. In the final days before TRICARE reimbursements were expected to plummet, May rubber stamped more than 50 pre-filled prescriptions for which TRICARE paid $1.2 million. Many of those beneficiaries were recruited during a meeting at a North Little Rock National Guard facility where attendees were each offered $1,000 for receiving drugs.

The indictment alleges the only TRICARE beneficiary May actually treated before prescribing drugs was a 91-year-old widow suffering from dementia whom May noted neither “report[ed] any pain” nor appeared to be in pain. Nevertheless, he prescribed her $40,000 in pain cream off the books, failing to log the drugs in her official hospital chart.

According to the indictment May received cash kickbacks for signing, which participants openly discussed. When the ringleader joked about being hounded for payouts by texting Clifton “Hashtag for the day… [Ringleader], is my check ready? # Lol” Clifton replied “Haha! Meeeee toooo Jay already called asking this morning too…even the rich man[.]” Later, Clifton lamented falling TRICARE reimbursement rates by texting the ringleader “$210 minus half for tax$105 [sic] then dr’s cut then patients cut….. Yikes[.]” According to the indictment May deposited over $15,000 in cash in 2015 (compared to under $500 in 2014), including $10,000 during the same three-month period at the height of the scheme during which time Clifton withdrew over $15,000 in cash.

According the indictment, following a CBS News exposé and complaints of doctors signing prescriptions “on the down low” without seeing patients, recruiters were instructed to relay prescriber names to beneficiaries so beneficiaries could behave as if they “knew and saw their doctor” if they came into contact with the pharmacy.

The indictment alleges the ruse continued once federal agents began to investigate, with May and another prescriber both falsely claiming to have consulted patients before signing prescriptions and both producing phony medical records to make it appear patients had been consulted. Records produced by May related to beneficiaries never examined and cited made-up injuries and surgeries patients never experienced. Similarly, Clifton altered records produced to the Grand Jury to conceal the names of TRICARE beneficiaries who received drugs and withheld hundreds of prescriptions, emails, and other records from the Grand Jury that the FBI would later discover when searching his email account.

“Our healthcare system relies upon the integrity of those who practice in the field. It is our mission to root out those who would prey upon such vulnerability and prosecute them to the fullest extent of the law,” said U.S. Attorney Cody Hiland. “The assembly line alleged in this case of fraudulent prescriptions fueled by kickbacks was especially concerning because it attacked TRICARE, our military’s health insurer. Equally troubling are the allegations of a widespread campaign to throw investigators off the trail by lying to the authorities, falsifying medical records, tampering with evidence, and attempting to hide material from the Grand Jury. While such tactics may prolong an investigation, today’s indictment shows that they ultimately succeed only in bringing ever more serious charges upon the accused.”

“Unscrupulous medical professionals and fraudsters allegedly stole millions of dollars from the TRICARE program which serves our Veterans, military members and their families,” said FBI Special Agent in Charge Diane Upchurch. “In an effort to further pervert the course of justice, the defendants allegedly lied, obstructed justice, and falsified records in order to conceal their crimes. The deliberate targeting of a healthcare program which solely aids our military troops and their families is appalling, and the additional alleged attempts to cover up their criminal actions show the true nature of those indicted today. Alongside our partners at HHS-OIG, we will continue to aggressively investigate fraud within the healthcare industry and we urge anyone with information about suspected healthcare fraud to contact their local FBI Field Office.”

“Fraudulently submitting claims to any federally funded health care benefit program equates to robbing all American taxpayers” said HHS-OIG Acting Special Agent in Charge Latisha Cleveland. “Working closely with our law enforcement partners, our agents are determined to protect our nation’s health care systems. We are committed to ensuring that fraudsters pay for their crimes, especially those that target our military service members and Veterans.”

A vigilant public is indispensable to rooting out fraud, waste, and abuse within the healthcare industry. Please email This email address is being protected from spambots. You need JavaScript enabled to view it. if you or someone you know may have information about the compounded drug scheme targeting TRICARE. Please call 1-800-HHS-TIPS (1-800-447-8477) or the FBI with any other tips on suspected fraud, waste, or abuse within the healthcare industry.

This case is being investigated by the FBI and HHS-OIG, and prosecuted by Assistant United States Attorneys Alexander D. Morgan and Stephanie G. Mazzanti.

An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.

Source

{jcomments on}

Case Filed Following Recent Overdose Death, Part of National Enforcement Effort

WASHINGTON – A criminal complaint was unsealed this week in the District of Columbia charging a doctor with unlawful distribution of a controlled substance outside the scope of his professional practice. As detailed in court documents, the case relates to defendant Dr. Robert M. Cao prescribing various narcotic pain medications in the months and days leading up to a man’s May 31, 2021 overdose death.

The announcement was made by Acting U.S. Attorney Channing D. Phillips and Special Agent in Charge of the FBI Washington Field Office Criminal Division Wayne A. Jacobs.

Cao, 38, of Falls Church, Va., was arrested on Sept. 14 and made his initial appearance the following day before Magistrate Judge Zia M. Faruqui in the U.S. District Court for the District of Columbia. His next hearing is scheduled for Oct. 28, 2021. The charge carries a statutory maximum of 20 years in prison and potential financial penalties.

Cao’s arrest is part of a nationwide initiative targeting health care fraud. The Department of Justice announced today that criminal charges have been filed against 138 defendants, including 42 doctors, nurses, and other licensed medical professionals, in 31 federal districts across the United States for their alleged participation in various healthcare fraud schemes that resulted in approximately $1.4 billion in alleged losses.

Nationwide, the charges target approximately $1.1 billion in fraud committed using telemedicine (the use of telecommunications technology to provide health care services remotely), $29 million in COVID-19 health care fraud, $133 million connected to substance abuse treatment facilities, or “sober homes,” and $160 million connected to other health care fraud and illegal opioid distribution schemes across the country.

“This nationwide enforcement action demonstrates that the Criminal Division is at the forefront of the fight against health care fraud and opioid abuse by prosecuting those who have exploited health care benefit programs and their patients for personal gain,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The charges announced today send a clear deterrent message and should leave no doubt about the department’s ongoing commitment to ensuring the safety of patients and the integrity of health care benefit programs, even amid a continued pandemic.”

“Health care fraud and opioid abuse have imposed enormous economic consequences and caused thousands of tragic deaths nationwide,” said Acting U.S. Attorney Phillips. “As today’s announcement shows, we are committed to using the full extent of the law to protect the public from those who illegally sell and prescribe opioids and other dangerous drugs as well as those who carry out schemes to defraud the public health system of taxpayer dollars.”

“Physicians are entrusted to care for our citizens and prescribe necessary medications in legitimate doctor-patient relationships,” said Special Agent in Charge Jacobs of the FBI Washington Field Office's Criminal Division. “The FBI and our partners will continue to investigate and stop those medical professionals who provide illegal prescriptions and distribute controlled substance medications that fuel the opioid epidemic in our country. Not only are these actions criminal, but as we have seen all too often – they have deadly consequences.”

According to court documents, Cao is a physician who is licensed to practice medicine in the District of Columbia and Virginia. Between in or around at least Jan. 9, 2021, and continuing through in or around May 30, 2021, the documents allege, Cao knowingly and intentionally wrote a man identified in court documents as “V.C.” at least five prescriptions for oxycodone and hydrocodone, Schedule II controlled substances with a high potential for abuse.

On May 31, 2021, first responders were dispatched to a Fairfax, Va. residence in response to a 911 call for assistance regarding “V.C.,” after his girlfriend found him cold and non-responsive. He was pronounced deceased under suspicious circumstances.

A subsequent autopsy report documented the cause of death as acute combined oxycodone and ethanol poisoning. On the nightstand next to where “V.C.” was found were prescription bottles, including one containing Percocet (a brand name of the narcotic analgesic oxycodone/acetaminophen) pills filled on May 23, 2021. Cao was the prescribing doctor listed on the bottle.

Court filings also detail text message exchanges between Cao and “V.C.”, including discussions about Cao prescribing narcotic pain medications to “V.C.”; “V.C.” agreeing to give Cao a kickback on some of those pills; and meetings between the two, including a meeting in a parking lot on the night before the man’s death.

The charges in criminal complaints are merely allegations and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory U.S. Sentencing Guidelines and other statutory factors.

The case is being prosecuted by Assistant U.S. Attorney Anne P. McNamara of the U.S. Attorney’s Office for the District of Columbia. The investigation into this matter was conducted by the FBI’s Washington Field Office in partnership with the Fairfax County, Va. Police Department.

Nationally, the cases announced today involving the illegal prescription and/or distribution of opioids involve a total of 19 defendants, including several charges against medical professionals and others who prescribed over 12 million doses of opioids and other prescription narcotics, while submitting over $14 million in false billings.

Prior to the charges announced as part of today’s nationwide enforcement action and 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 4,600 defendants who have collectively billed the Medicare program for approximately $23 billion. In addition to the criminal actions announced today, CMS, working in conjunction with HHS-OIG, announced 28 administrative actions to decrease the presence of fraudulent providers.

Source

{jcomments on}

A doctor licensed in the states of Oklahoma and Texas pleaded guilty Wednesday for writing and referring compounded drug prescriptions in return for illegal kickback payments, announced U.S. Attorney Clint Johnson.

Jerry May Keepers, 68, of Kingwood, Texas, pleaded guilty to one count of soliciting and receiving heath care kickback. Keepers violated the federal anti-kickback statute when he accepted the illegal payment.

If the plea agreement is accepted by U.S. District Judge Claire V. Eagan, Keepers will serve 36 months of supervised probation and pay no more than $1,518,180.46 in restitution. Judge Eagan will sentence Keepers on May 10, 2022.

In the plea agreement, Keepers admitted that OK Compounding solicited him to write prescriptions for his patients that would be filled by the pharmacy. OK Compounding was a pharmacy controlled by Christopher Parks and Dr. Gary Lee, who are also defendants in the case.

Specifically, on January 22, 2014, Keepers knowingly received $25,000 from representatives of OK Compounding. The purpose of the payment was to induce Keepers to refer prescriptions for expensive compounded drugs to the pharmacy. The compounded medications were filled, and claims were filed by the pharmacy. Those medications were in turn paid for by federal healthcare programs, including TRICARE, Medicare, CHAMPVA, and the Federal Employees Compensation Act Program.

According to the superseding indictment filed in the case, kickback payments were disguised through various sham business arrangements, including contracts where several physicians purported to serve as “medical directors” or “consulting physicians” for the pharmacy. Keepers and OK Compounding represented that Keepers had been paid for his services as a national spokesperson, medical director or national marketing director.

It is illegal to pay or receive “kickbacks” in conjunction with federal health care insurance. Prohibitions against kickbacks are crucial to ensure that financial motives do not undermine the medical judgment of physicians and other health care providers.

Keepers ran a pain clinic practice in the cities of Friendswood, Beaumont and Humble, Texas, and established a clinic in Tulsa in November 2012.

The Department of Labor- Office of Inspector General (OIG), IRS - Criminal Investigation, U.S. Postal Service- OIG, Department of Veterans Affairs- OIG, FBI, the Department of Health and Human Services-OIG, and Defense Criminal Investigative Service conducted the investigation. Assistant U.S. Attorneys Melody Noble Nelson and Richard M. Cella are prosecuting the cases.

Source

{jcomments on}

Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that JAMES SPINA was sentenced to 108 months in prison for his participation in a widespread health care fraud scheme through the fraudulent operation of Dolson Avenue Medical (“DAM” or the “Practice”), a multi-disciplinary medical clinic located in Middletown, New York. SPINA previously pled guilty before U.S. District Judge Kenneth M. Karas, who imposed today’s sentence.

U.S. Attorney Audrey Strauss said: “James Spina led a sophisticated, widespread, and callous scheme that put greed and profits ahead of patients and their well-being. In doing so, he betrayed his professional obligations and bilked insurance companies and Medicare out of millions of dollars. Thanks to the coordinated efforts of federal and state investigative agencies, Spina will now serve a lengthy sentence in federal prison.”

According to the Indictment, other court filings, and statements made during court proceedings:

From 2011 through September 2017, DAM was a registered medical service corporation in New York State that purported to provide a variety of pain management and rehabilitation services, including physical medicine and rehabilitation, chiropractic services, physical therapy, diagnostic testing, and acupuncture. DAM primarily provided treatment services from its clinic located at 201 Dolson Avenue, Middletown, New York.

In addition to DAM, at least eight other corporations, including four other medical corporations, billed Medicare and other health insurance providers (the “Insurance Providers”) from 201 Dolson Avenue (the “Associated Businesses”). On paper, DAM and the Associated Businesses appeared to be separate entities owned by multiple different qualified individuals. But in reality, JAMES SPINA, who is a doctor of chiropractic – not a medical doctor – along with his co-defendant, were the true owners and operators of the different medical service corporations.

JAMES SPINA and his co-conspirators made all corporate decisions for DAM and the Associated Businesses. In particular, JAMES SPINA ran the day-to-day operations of the businesses. JAMES SPINA and his co-conspirators controlled payroll, the hiring and firing of employees, corporate expenses such as employee compensation and rent, and billing to Insurance Providers. Further, JAMES SPINA and one of his co-conspirators were the financial beneficiaries of DAM and its Associated Businesses.

JAMES SPINA also went to great lengths to conceal his control and ownership of DAM and the Associated Businesses. In particular, JAMES SPINA and one of his co-conspirators recruited medical doctors and other professionals to serve as the nominee owners of DAM and the Associated Businesses. JAMES SPINA further concealed his ownership of DAM and the Associated Businesses by transferring revenues of these companies into other companies that he and a codefendant owned. To further disguise these transfers, JAMES SPINA drafted fake lease and marketing agreements between DAM and the Associated Businesses and purported real estate and marketing companies he owned, and referred to the payments as “rent” or “marketing fees.” JAMES SPINA and his co-conspirators also used phony and non-existent addresses for the corporations so that it would appear that DAM and the Associated Businesses were operating out of separate locations.

In operating the multiple fraudulent businesses, JAMES SPINA and his co-conspirators routinely showed little, if any, regard for which medical services or treatments were medically necessary, or even whether the services were actually provided to patients, and instead operated DAM and billed Insurance Providers to maximize DAM’s reimbursements and, ultimately, their own profits. In particular, JAMES SPINA and his co-conspirators: (a) submitted and caused to be submitted claims to Insurance Providers for medically unnecessary services and procedures; (b) submitted and caused to be submitted claims to Insurance Providers for medical services that were not rendered; (c) double billed, i.e., submitted and caused to be submitted multiple claims for the same service to two different Insurance Providers; (d) altered and fabricated medical records; and (e) obstructed and impeded audits by Medicare and other Insurance Providers to conceal their fraud.

As part of the fraudulent scheme, one of the doctors who worked at DAM and the Associated Businesses introduced a lucrative procedure called a facet injection. Because the facet joints to which the injections are applied are near the spinal cord, such procedures are high-risk, with a small margin for error. The doctor had no formal training in the procedure, and taught himself by shadowing other doctors and watching YouTube videos. JAMES SPINA was intimately involved with all billing-related aspects of the facet injections, and continued to encourage their use even after several patients suffered serious, adverse events, and one patient died of complications following a facet injection.

As a consequence of the above-described scheme, a substantial number of claims submitted by DAM and the Associated Businesses to Medicare and other Insurance Providers were false and fraudulent.

In addition to the prison term, JAMES SPINA, 63, of Middletown, New York, was sentenced to three years of supervised release. The Court also ordered JAMES SPINA to pay $9,760,555.20 in restitution, and to forfeit $9,105,741.61. On May 2, 2019, JAMES SPINA pled guilty to one count of conspiracy to commit healthcare fraud, in violation of Title 18, United States Code, Section 1349.

Ms. Strauss praised the outstanding investigative work of the FBI, the U.S. Department of Health and Human Services-Office of the Inspector General, the New York State Office of the State Comptroller, and the Orange County Sheriff’s Office.

The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Nicholas S. Bradley is in charge of the prosecution. The prosecution was previously led by former Assistant U.S. Attorney Kathryn Martin.

Source

{jcomments on}

Fox Chase-area Pharmacy was the Top Retail Purchaser of Oxycodone in Pennsylvania

PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that the United States filed an amended civil complaint against pharmacist Todd Goodman and pharmacy employees Eric Pestrack and Lee Kamp for their alleged involvement in years-long practices of illegally dispensing opioids and other controlled substances, and systematic health care fraud, at Philadelphia-based pharmacy Spivack, Inc., which previously operated under the name Verree Pharmacy. These individuals were added as defendants in the previously filed lawsuit against Verree and its former owner, pharmacist Mitchell Spivack, for the same alleged schemes. The amended complaint continues to seek civil penalties and civil damages, which could total in the millions of dollars, as well as injunctive relief.

The lawsuit, in which Goodman, Pestrack, and Kamp were added, was the culmination of a multi-year federal-state investigation. The amended complaint alleges that Verree Pharmacy, Spivack, Goodman, Pestrack, and Kamp had a responsibility to dispense opioids and other controlled substances only when appropriate. Instead, the United States alleges that Verree and these individuals dispensed the drugs, even when faced with numerous red flags suggestive of diversion—such as opioids in extreme doses, dangerous combinations of opioids and other “cocktail” drugs preferred by those struggling with addiction, excessive cash payments for the drugs, blatantly forged prescriptions, and other signs that the pills were being diverted for illegal purposes.

The amended complaint alleges that Verree—which was the top retail pharmacy purchasing oxycodone in Pennsylvania—has been a nationwide and regional outlier in its deviant purchasing, dispensing, and billing of controlled substances. To avoid scrutiny from the drug distributors that sold them the pills, Verree through Spivack allegedly made false statements to maintain the façade of legitimacy and keep the pharmacy stocked with pills critical to its profits. Behind that façade, the amended complaint alleges that Spivack drew millions of dollars from the pharmacy while the public suffered the consequences, including one patient who overdosed and died next to Verree Pharmacy bottles dispensed by Spivack.

The United States’ amended complaint also alleges that Verree, Spivack, Goodman, Pestrack, and Kamp were engaging in an expansive health care fraud scheme involving fraudulent billings for drugs not actually dispensed. The alleged cornerstone of the scheme was a code used by the pharmacy employees in their internal computer system: “BBDF” or “Bill But Don’t Fill.” Verree, Spivack, Goodman, Pestrack, and Kamp allegedly used BBDF as a means to cover their losses on other drugs and further the pharmacy’s illicit profits by falsely claiming to insurers, including Medicare, that they had dispensed a drug to a patient, when in fact they had not. According to the amended complaint, this sophisticated fraud—which one of the employees admitted to investigators—resulted in significant losses to Medicare and other federal programs.

The lawsuit seeks to impose civil penalties and damages on Verree, Spivack, Goodman, Pestrack, and Kamp under the Controlled Substances and False Claims Acts. If Verree, Spivack, Goodman, Pestrack, and Kamp are found liable, they could face civil penalties up to $68,426 for each unlawful prescription dispensed, civil penalties up to $23,607 for each false claim they submitted to federal health care programs, and treble damages for the alleged health care fraud against federal programs. The court may also award injunctive relief to prevent the defendants from committing additional controlled substance violations.

If the public has any information regarding Verree Pharmacy or any other health care fraud allegation, individuals should contact the HHS-OIG hotline at 800-HHS-TIPS.

The case is being investigated by the Philadelphia Field Division of the Drug Enforcement Administration, the Pennsylvania Department of State’s Bureau of Enforcement and Investigation, HHS-OIG, and the Pennsylvania Office of the Attorney General, with additional assistance from the Office of Personnel Management Office of Inspector General, the Defense Health Agency, and the Defense Criminal Investigative Service. The civil investigation and litigation are being handled by Assistant United States Attorney Anthony D. Scicchitano and auditors Dawn Wiggins and George Niedzwicki.

Source

{jcomments on}

Medications imported from overseas did not have FDA approval

Seattle – The U.S. Department of Justice today reached a settlement with Skagit Family Health Clinic of Mount Vernon, Washington, over the importation of birth control medications that were unlawfully imported from a foreign source and not approved by the Food and Drug Administration (FDA). Under the terms of the settlement, the clinic will pay a total of $120,000 to the state and federal governments for false claims the clinic filed with state or federal medical programs.

“FDA approval is a critical way for government medical programs to ensure patients get appropriate medicines and devices,” said U.S. Attorney Nick Brown. “We don’t have evidence that any patients were harmed from these unapproved medications, but government programs cannot pay for clients to take such a risk.”

The prelitigation settlement, claims the clinic imported and billed for the medications between 2015 and 2020. The clinic submitted claims for the birth control medications to the Washington State Medicaid Program. Of the $120,000 settlement paid by the clinic, nearly $72,000 will go to Washington State, while just over $48,000 will to the federal government for its share of the medical costs.

DOJ settled the matter on behalf of the Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Washington State Attorney General’s Office and the Washington State Health Care Authority.

Source

{jcomments on}

Criminal Charges Against Telemedicine Company Executive, Physician, Marketers, and Medical Business Owners For COVID-19 Related Fraud Schemes with Losses Exceeding $143 Million

The Department of Justice today announced criminal charges against 14 defendants, including 11 newly-charged defendants and three who were charged in superseding indictments, in seven federal districts across the United States for their alleged participation in various health care fraud schemes that exploited the COVID-19 pandemic and resulted in over $143 million in false billings.

“The multiple health care fraud schemes charged today describe theft from American taxpayers through the exploitation of the national emergency,” said Deputy Attorney General Lisa O. Monaco. “These medical professionals, corporate executives, and others allegedly took advantage of the COVID-19 pandemic to line their own pockets instead of providing needed health care services during this unprecedented time in our country. We are committed to protecting the American people and the critical health care benefits programs created to assist them during this national emergency, and we are determined to hold those who exploit such programs accountable to the fullest extent of the law.”

Additionally, the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS) separately announced today that it took adverse administrative actions against over 50 medical providers for their involvement in health care fraud schemes relating to COVID-19 or abuse of CMS programs that were designed to encourage access to medical care during the pandemic.

“Medical providers have been the unsung heroes for the American public throughout the pandemic,” said FBI Director Christopher Wray. “It’s disheartening that some have abused their authorities and committed COVID-19 related fraud against trusting citizens. The FBI, along with our federal law enforcement and private sector partners, are committed to continuing to combat healthcare fraud and protect the American people.”

The defendants in the cases announced today are alleged to have engaged in various health care fraud schemes designed to exploit the COVID-19 pandemic. For example, multiple defendants offered COVID-19 tests to Medicare beneficiaries at senior living facilities, drive-through COVID-19 testing sites, and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample. The defendants are alleged to have then misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary, and far more expensive laboratory tests, including cancer genetic testing, allergy testing, and respiratory pathogen panel tests. In some cases, and as alleged, the COVID-19 test results were not provided to the beneficiaries in a timely fashion or were not reliable, risking the further spread of the disease, and the genetic, allergy, and respiratory pathogen testing was medically unnecessary, and, in many cases, the results were not provided to the patients or their actual primary care doctors. The proceeds of the fraudulent schemes were allegedly laundered through shell corporations and used to purchase exotic automobiles and luxury real estate.

“Its clear fraudsters see the COVID-19 pandemic as a money-making opportunity — creating fraudulent schemes to victimize beneficiaries and steal from federal health care programs,” said Deputy Inspector General for Investigations Gary L. Cantrell of Health and Human Services – Office of Inspector General (HHS-OIG). “Our agency and its law enforcement partners are aggressively and effectively investigating these egregious crimes, which is made equally clear given the results of this takedown. We will continue to support the unprecedented COVID-19 public health effort by holding accountable people who use deceptive tactics to profit from the pandemic.”

In another type of COVID-19 health care fraud scheme announced today, defendants are alleged to have exploited policies that were put in place by CMS to enable increased access to care during the COVID-19 pandemic. For example, pursuant to the COVID-19 emergency declaration, telehealth regulations and rules were broadened so that Medicare beneficiaries could receive a wider range of services from their doctors without having to travel to a medical facility. The cases announced today include first in the nation charges for allegedly exploiting these expanded policies by submitting false and fraudulent claims to Medicare for sham telemedicine encounters that did not occur. As part of these cases, medical professionals are alleged to have offered and paid bribes in exchange for the medical professionals’ referral of medically unnecessary testing.

The law enforcement action today also includes the third set of criminal charges related to the misuse of Provider Relief Fund monies. The Provider Relief Fund is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted March 2020 designed to provide needed medical care to Americans suffering from COVID-19.

The Fraud Section is prosecuting the cases in the following districts: Western District of Arkansas, Northern District of California, Middle District of Louisiana, Central District of California, Southern District of Florida, District of New Jersey, and the Eastern District of New York.

Today’s enforcement actions were led and coordinated by Assistant Chief Jacob Foster and Trial Attorneys Rebecca Yuan and Gary A. Winters of the National Rapid Response Strike Force of the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in conjunction with the Health Care Fraud Unit’s Medicare Fraud Strike Forces (MFSF) in Miami, Los Angeles, the Gulf Coast, and Brooklyn, as well as the U.S. Attorneys’ Offices for the Northern District of California, Western District of Arkansas, and Middle District of Louisiana.

The MFSF is a partnership among the Criminal Division, U.S. Attorneys’ Offices, the FBI and HHS-OIG. In addition, U.S. Postal Inspection Service, Internal Revenue Service Criminal Investigation, Veterans Affairs Office of Inspector General, Department of Defense Office of Inspector General, Federal Deposit Insurance Corporation, Louisiana Medicaid Fraud Control Unit, and other federal and state law enforcement agencies participated in the law enforcement action.

The law enforcement action was brought in coordination with the Health Care Fraud Unit’s COVID-19 Interagency Working Group, which is chaired by the National Rapid Response Strike Force and organizes efforts to address illegal activity involving health care programs during the pandemic.

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 federal districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Case Summaries

Western District of Arkansas

• Billy Joe Taylor, 42, of Lavaca, Arkansas, was charged by criminal complaint with health care fraud in connection with an alleged scheme to defraud the United States of over $88 million, including over $42 million in false and fraudulent claims during the COVID-19 health emergency that were billed in combination with claims that were submitted for testing for COVID-19 and other respiratory illnesses. Taylor, the owner and operator of Vitas Laboratories LLC and Beach Tox LLC, two testing laboratories, allegedly used access to beneficiary and medical provider information from prior laboratory testing orders to submit fraudulent claims for urine drug tests and other laboratory tests, including respiratory pathogen panel and COVID-19 tests, that were not actually ordered or performed. The complaint also alleges that hundreds of claims were submitted for beneficiaries after they had died or otherwise ceased providing samples. The case is being prosecuted by Senior Litigation Counsel James Hayes and Trial Attorney D. Keith Clouser of the National Rapid Response Strike Force, and Assistant U.S. Attorney Kenneth Elser of the U.S. Attorney’s Office for the Western District of Arkansas.

Northern District of California

• Mark Schena, 58, of Los Altos, California, the president of Arrayit Corporation, is charged along with two others, the Arrayit Vice President of Marketing and the President of an Arizona marketing organization, in connection with the submission of over $70 million in false and fraudulent claims for allergy and COVID-19 testing. The superseding indictment against Schena includes new counts of health care fraud, a conspiracy to pay kickbacks, and payment of kickbacks in connection with false and fraudulent statements about the existence, regulatory status, and accuracy of an Arrayit COVID-19 test. The conspiracy allegedly sought to induce the ordering of the Arrayit COVID-19 test and to bundle, i.e., require combination with, the COVID-19 test and Arrayit’s medically unnecessary allergy test. The COVID-19 test results were not provided in a timely fashion and were not reliable in detecting COVID-19. The cases are being prosecuted by Acting Principal Deputy Assistant Chief Justin Weitz of the Market Integrity and Major Fraud Unit of the Fraud Section, Assistant Chief Jacob Foster of the National Rapid Response Strike Force, and Assistant U.S. Attorney Wil Frentzen of the U.S. Attorney’s Office for the Northern District of California.

Central District of California

• Petros Hannesyan, 36, of Burbank, California, was charged with the theft of government property and wire fraud in connection with $229,454 that he obtained from COVID-19 relief programs. Hannesyan, the owner of Hollywood Home Health Services, Inc., a home health agency located in Los Angeles, allegedly misappropriated funds from the CARES Act Provider Relief Fund and submitted false loan applications and a false loan agreement to the Economic Injury Disaster Loan Program, rather than use the funds for COVID-19 patient care and to support small businesses experiencing disruption due to the COVID-19 pandemic. The case is being prosecuted by Trial Attorney Alexis Gregorian of the Los Angeles Strike Force.

Southern District of Florida

• Michael Stein, 35, and Leonel Palatnik, 42, both of Palm Beach County, Florida, were charged in connection with an alleged $73 million conspiracy to defraud the United States and to pay and receive health care kickbacks during the COVID-19 pandemic. Stein, the owner and operator of purported consulting company 1523 Holdings, LLC, and Palatnik, an owner and operator of Panda Conservation Group, LLC, a Texas company that owned and operated testing laboratories in Dallas and Denton, Texas, allegedly exploited temporary waivers of telehealth restrictions enacted during the pandemic by offering telehealth providers access to Medicare beneficiaries for whom they could bill consultations. In exchange, these providers agreed to refer beneficiaries to Panda’s laboratories for expensive and medically unnecessary cancer and cardiovascular genetic testing. The case is being prosecuted by Trial Attorney Ligia Markman of the National Rapid Response Strike Force.

• Juan Nava Ruiz, 44, and Eric Frank, 47, both of Coral Springs, Florida, were charged for an alleged $9.3 million health care kickback scheme, along with Christopher Licata, 44, of Boca Raton, Florida, who was previously charged in a separate Indictment. Licata, an owner of Boca Toxicology, LLC, a clinical laboratory based in Boca Raton, allegedly offered and paid kickbacks to patient brokers, including Ruiz and Frank, in exchange for referring Medicare beneficiaries to Boca Toxicology for various forms of genetic testing and other laboratory testing that they did not need, including the submission of $422,748 in claims related to medically unnecessary respiratory pathogen panel testing and genetic testing that was improperly bundled with COVID-19 testing. The cases are being prosecuted by Trial Attorney Jamie de Boer of the Miami Strike Force.

Middle District of Louisiana

• Malena Lepetich, 38, of Belle Chase, Louisiana, was charged for an alleged $15 million scheme to commit health care fraud, to defraud the United States, and to pay and receive health care kickbacks. Lepetich, the owner of MedLogic, LLC, a clinical laboratory based in Baton Rouge, Louisiana, allegedly solicited and received kickbacks in exchange for referrals of urine specimens for medically unnecessary testing. Lepetich also allegedly offered to pay kickbacks for referrals of specimens for COVID-19 and respiratory pathogen testing. Finally, Lepetich allegedly caused the submission of over $10 million in claims to Medicare, Medicaid, and Blue Cross Blue Shield of Louisiana for panels of expensive respiratory testing that was medically unnecessary. The case is being prosecuted by Trial Attorney Justin M. Woodard of the Gulf Coast Strike Force and Assistant U.S. Attorney Kristen Craig of the U.S. Attorney’s Office for the Middle District of Louisiana.

District of New Jersey

• Alexander Baldonado, 65, of Queens, New York, was charged with six counts of health care fraud. Baldonado, a medical doctor, allegedly participated in an event that advertised COVID-19 testing. In addition to authorizing the COVID-19 tests, Baldonado allegedly ordered expensive and medically unnecessary cancer genetic testing for Medicare beneficiaries who attended the event. Baldonado also allegedly billed Medicare for services, including lengthy office visits, that he never provided to these beneficiaries. Approximately $2 million in claims were submitted as a result of Baldonado’s COVID-19 health care fraud scheme, and approximately $17 million in claims were submitted as a result of Baldonado’s broader health care fraud scheme. The case is being prosecuted by Trial Attorney Rebecca Yuan of the National Rapid Response Strike Force.

• Donald Clarkin, 65, of Staten Island, New York, was charged in connection with a $5.4 million conspiracy to defraud the United States and pay and receive health care kickbacks. Clarkin, a partner at a diagnostic testing laboratory, allegedly exploited the pandemic by offering kickbacks in exchange for respiratory pathogen panel tests that would be improperly bundled with COVID-19 tests and billed to Medicare. Clarkin also allegedly paid and received kickbacks and bribes in exchange for arranging for the ordering of medically unnecessary genetic tests that were ineligible for Medicare reimbursement. The case is being prosecuted by Trial Attorney Rebecca Yuan of the National Rapid Response Strike Force.

Eastern District of New York

• Peter Khaim, 41, and Arkadiy Khaimov, 38, both of Forest Hills, New York, who owned and controlled several New York pharmacies and sham pharmacy wholesaling companies, were charged in a superseding indictment for their participation in an alleged $45 million health care fraud, wire fraud, and money laundering scheme. The defendants and their co-conspirators allegedly obtained billing privileges for multiple pharmacies by using nominees to serve as the purported owners and supervising pharmacists. The defendants then allegedly submitted false and fraudulent claims to Medicare, including by using COVID-19 “emergency override” billing codes to circumvent otherwise applicable pre-authorization requirements and limits on the frequency of refills for expensive drugs (primarily, the cancer treatment gels Targretin and Panretin). The defendants allegedly used an elaborate network of international money laundering operations to conceal and disguise the proceeds of the scheme. The case is being prosecuted by Trial Attorney Andrew Estes of the Brooklyn Strike Force.

The Department of Justice needs the public’s assistance in remaining vigilant and reporting suspected fraudulent activity. To report suspected fraud, contact the National Center for Disaster Fraud (NCDF) at (866) 720-5721 or file an online complaint at: https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form. Complaints filed will be reviewed at the NCDF and referred to federal, state, local, or international law enforcement or regulatory agencies for investigation.

To learn more about the department’s COVID response, visit: https://www.justice.gov/coronavirus. For further information on the Criminal Division’s enforcement efforts on PPP fraud, including court documents from significant cases, visit the following https://www.justice.gov/criminal-fraud/ppp-fraud">website: https://www.justice.gov/criminal-fraud/ppp-fraud.

Source

{jcomments on}

PROVIDENCE – A Dominican national living in Pawtucket faces between seven and fifty-seven years in federal prison after admitting to a federal court judge that in addition to operating a drug stash house and arranging for the sale of fentanyl on at least four occasions, he used the identity of an individual unknown to him, including the person’s Social Security number and other personal identifying information, to gain Rhode Island Medicaid benefits and Rhode Island driver’s licenses and permits.

According to information presented to the court, since 2010, Jeurin Celado, a/k/a “Tony,” 30, used the name, date of birth, and Social Security number of a person he does not know to gain permits and driver’s licenses from the Rhode Island Department of Motor Vehicles (DMV). Celado’s most recent successful filing with the DMV using the stolen identity occurred on August 5, 2019.

Additionally, beginning in August 2014 and continuing through July 2018, Celado used the same stolen identity, Social Security number, and date of birth to obtain Rhode Island Medicaid benefits, health insurance that as a non-United States citizen he was not eligible to receive. Celado obtained Medicaid benefits valued at approximately $4,342.18.

In 2019, Celado was the target of an undercover drug investigation by the Woonsocket Police Department. The investigation revealed that on four occasions – August 28, September 3, September 10, and September 17, 2019, an individual contacted Celado, whom that individual knew by the name of “Tony,” to arrange the purchase of fentanyl. On each of these occasions, Celado directed the person to a location where that person was met by a “runner” who sold him the drugs in exchange for cash.

On October 7, 2019, law enforcement executed a court-authorized search of an apartment in Manville used by Celado as a stash house, where he stored, cut, and packaged fentanyl he sold as part of his drug operation. Investigators located between 40 and 400 grams of fentanyl in the apartment, along with other items consistent with a drug distribution operation.

Appearing on Friday before U.S District Court Judge William E. Smith, Celado pleaded guilty to false representation of a Social Security number, aggravated identity theft, health care fraud, and conspiracy to distribute fentanyl, announced Acting United States Attorney Richard B. Myrus, Woonsocket Police Chief Thomas Oates, Homeland Security Investigations Acting Special Agent in Charge William S. Walker, Phillip Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General.

At sentencing on July 9, 2021, Celado faces statutory penalties of 5-40 years imprisonment for conspiracy to distribute fentanyl; up to 10 years imprisonment for health care fraud; up to five years imprisonment for false representation of a Social Security number; and a mandatory sentence of two years imprisonment for aggravated identity theft, to be served consecutive to all other sentences imposed in this case. In total, Celado faces between 7 and 57 years imprisonment to be followed by five years of federal supervised release.

The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.

Acting United States Attorney Myrus acknowledges and thanks the United States Marshals Service for its assistance in locating the defendant.

Source

{jcomments on}

BOSTON – A Dominican national was sentenced today in federal court in Boston for false representation of a Social Security number and making a false statement relating to health care matters.

Ronald Lara Pena, 35, a Dominican national previously residing in Lawrence, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to 13 months in prison and three years of supervised release. Lara Pena will be subject to deportation proceedings upon completion of his sentence. On July 21, 2021, Lara Pena pleaded guilty to one count of false representation of a Social Security number and one count of making a false statement relating to health care matters.

Lara Pena used the identity of a Puerto Rican citizen to obtain Massachusetts driver’s licenses and identification cards and used the victim’s identity to apply for and fraudulently receive over $12,600 in federally funded MassHealth benefits between September 2015 and September 2020.

Acting United States Attorney Nathaniel R. Mendell; Jack Jermaine, Acting Special Agent in Charge of the Social Security Administration, Office of Inspector General, Boston Field Office; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; Phillip M. Coyne, Special Agent in Charge of U.S. Department of Health & Human Services, Office of the Inspector General, Office of Investigations, Boston Regional Office; and Suzanne M. Bump, State Auditor of the Commonwealth of Massachusetts made the announcement today. Special Assistant U.S. Attorney Karen Burzycki of Mendell’s Major Crimes Unit prosecuted the case.

Source

{jcomments on}

PROVIDENCE – A Dominican national who operated a drug stash house and arranged for the sale of fentanyl on multiple occasions, and who used the stolen identity and Social Security number of another person to gain Rhode Island Medicaid benefits and Rhode Island driver’s licenses and permits, was sentenced today to seven years in federal prison, announced Acting United States Attorney Richard B. Myrus.

Jeurin Celado, 31, was sentenced by U.S. District Court Judge William E. Smith to 96 months of incarceration to be followed by four years of federal supervised release and ordered to pay restitution in the amount of $4,726.50 to the Rhode Island Medicaid Program. Celado pleaded guilty on April 2, 2021, to false representation of a Social Security number, aggravated identity theft, health care fraud, and conspiracy to distribute fentanyl.

At the time of his guilty plea, Celado admitted to the court that from 2010 until August 2019, he used the name, date of birth, and Social Security number of a person he does not know to obtain permits and driver’s licenses from the Rhode Island Department of Motor Vehicles (DMV).

In addition, Celado admitted that beginning in August 2014 and continuing through July 2018, he used the same stolen identity and Social Security number to obtain Rhode Island Medicaid benefits, health insurance that as a non-United States citizen he was ineligible to receive. Celado obtained Medicaid benefits valued at approximately $4,726.50.

Additionally, according to information presented to the court, in August and September 2019, an undercover drug investigation by the Woonsocket Police Department included arranging for four undercover purchases of fentanyl from a person known as “Tony.” On each occasion, “Tony” directed the buyer to a location where that person was met by a “runner” who delivered the drugs in exchange for cash. The investigation determined that “Tony” was, in fact, Jeurin Celado, and that he was using an apartment in Manville as a stash house and a location to cut and prepare drugs for delivery. On October 7, 2019, during a court-authorized search of the apartment, law enforcement discovered between 40 and 400 grams of fentanyl and other items consistent with a drug distribution operation.

The case was prosecuted by Assistant U.S. Attorney Dulce Donovan.

The various investigations into Celado’s criminal activities were conducted by the Woonsocket Police Department, Homeland Security Investigations, and the U.S. Department of Health and Human Services, Office of Inspector General.

Acting United States Attorney Myrus acknowledges and thanks the United States Marshals Service for its assistance in locating and assisting in the arrest of the defendant.

Source

{jcomments on}

LOS ANGELES –SuperCare Health, Inc., a Downey-based provider of home respiratory services and durable medical equipment, has agreed to pay $3,315,308 to resolve allegations that it defrauded public health care programs by billing for ventilator services that were not medically necessary or reasonable, the Justice Department announced today.

SuperCare entered into a settlement agreement with the United States and two states – California and Nevada – in a federal False Claims Act case that a federal judge unsealed today.

The allegations in this case stem from SuperCare providing non-invasive ventilators, also known as NIVs, for home use by respiratory patients in California and Nevada. Medicare and Medicaid provide a monthly reimbursement for a patient’s rental of an NIV, so long as the NIV is necessary or reasonable for the patient’s treatment.

Between May 2013 and October 2019, according to the lawsuit, SuperCare submitted, or caused others to submit, bogus claims to Medicare and Medicaid. SuperCare allegedly billed public health programs for NIV rentals even when patients no longer needed the NIVs or were no longer using them.

The settlement resolves allegations brought in a 2018 lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by Benjamin Martinez Jr., a respiratory therapist who worked for SuperCare. These provisions permit private parties to sue on behalf of the government for false claims for government funds and to share in any recovery. Mr. Martinez will receive more than $612,000 from the federal government as his share of the settlement amount.

The U.S. Department of Health and Human Services, Office of Inspector General investigated this case.

Assistant United States Attorney Ross M. Cuff of the Civil Division’s Civil Fraud Section negotiated the settlement for the government.

Source

{jcomments on}

EL PASO – Today federal authorities arrested 60-year-old Dr. Brian James August of El Paso for allegedly committing health care fraud and distributing controlled substances that resulted in the overdose deaths of five individuals.

A 15-count federal grand jury indictment, unsealed upon his arrest, charges Dr. August with five counts of distribution of a controlled substance resulting in death or serious bodily injury, five counts of distribution of a controlled substance and five counts of health care fraud resulting in death. Upon conviction, Dr. August faces 20 years to life in federal prison for the drug charges resulting in death; up to 20 years in federal prison for each of the remaining drug charges; and up to life in federal prison for each of the health care fraud charges.

The indictment alleges that between December 2012 and March 2018, Dr. August, who practiced Physical Medicine and Rehabilitation aka “physiatry,” prescribed and dispensed controlled substances, including methadone, fentanyl, hydromorphone, morphine, hydrocodone and oxycodone, outside the usual course of medical practice and without legitimate medical purpose, resulting in the deaths of five victims. Dr. August is also alleged to have committed health care fraud by billing for services he did not perform.

U.S. Attorney Ashley C. Hoff, Special Agent in Charge Kyle Williamson of the Drug Enforcement Administration’s (DEA) El Paso Field Office and Acting Special Agent in Charge Jeffrey Coburn of the FBI’s El Paso Division made today’s announcement.

The DEA and the FBI with assistance from the Health and Human Services Office of Inspector General, Texas Department of Public Safety Special Investigation Services and the Medicaid Fraud Control Unit of Texas Attorney General’s Office conducted this Organized Crime Drug Enforcement Task Forces (OCDETF) investigation called “Operation Murder He Wrote.”

OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

Assistant U.S. Attorneys Debra Kanof and Phillip Countryman are prosecuting this case.

August remains in federal custody. His initial appearance is expected to take place at 2 p.m. tomorrow before U.S. Magistrate Judge Anne T. Berton in El Paso.

An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.

Source

{jcomments on}

A national electronic health records (EHR) technology vendor based in Watertown, Massachusetts, athenahealth Inc. (Athena), has agreed to pay $18.25 million to resolve allegations that it violated the False Claims Act by paying unlawful kickbacks to generate sales of its EHR product, Athena Clinicals, the Justice Department announced today.

In a complaint filed in conjunction with today’s settlement, the United States alleged that Athena violated the False Claims Act and the Anti-Kickback Statute through three marketing programs. First, Athena invited prospective and existing customers to “Concierge Events,” providing free tickets to and amenities at sporting, entertainment, and recreational events, including trips to the Masters Tournament and the Kentucky Derby with complimentary travel and luxury accommodations, meals, and alcohol. Second, Athena paid kickbacks to its existing customers under a “Lead Generation” program designed to identify and refer new prospective clients to Athena. Under this program, Athena paid up to $3,000 to existing customers for each new client that signed up for Athena services, regardless of how much time, if any, the existing customer spent speaking to or meeting with the new client. Finally, Athena entered into deals with competing vendors that were discontinuing their EHR technology offerings to refer their clients to Athena. Under such deals, Athena paid remuneration to the competitor based on the value and volume of practices that were successfully converted into Athena clients.

“This resolution demonstrates the department’s continued commitment to hold EHR companies accountable for the payment of unlawful kickbacks in any form,” said Acting Assistant Attorney General Brian Boynton for the Department of Justice’s Civil Division. “EHR technology plays an important role in the provision of medical care, and it is critical that the selection of an EHR platform be made without the influence of improper financial inducements.”

“Across the country, physicians rely on electronic health records software to provide vital patient data. Kickbacks corrupt the market for health care services and risk jeopardizing patient safety,” said U.S. Attorney Andrew E. Lelling for the District of Massachusetts. “We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”

“If the benefits of Electronic Health Records are to be fully realized, patients must be confident providers have selected the most effective system – not the one paying the largest kickbacks. Time and again, we’ve seen fraudulent activity undermine the integrity of medical decisions, subvert the health marketplace, and waste taxpayer dollars,” said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to hold accountable those who provide illegal incentives in order to influence the decision-making of health care providers.”

“It is illegal for companies to extend invitations to all-expense-paid sporting, entertainment, and recreational events, and other perk-filled offers to its prospective customers to win business and boost their bottom line through illegal kickback schemes,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s agreement by Athena to pay $18.25 million should send a strong message to anyone thinking about engaging in this type of illegal activity. The FBI will continue to work with our law enforcement partners to do everything in our power to safeguard our government health care programs and the taxpayers picking up the bill.”

The settlement resolves allegations in a lawsuit filed by Geordie Sanborn and a separate lawsuit filed by Cheryl Lovell and William McKusick; both matters are pending in federal court in Boston, Massachusetts. The lawsuits were filed 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 Act allows the government to intervene and take over the action, as it did in these two cases. The whistleblower share to be awarded in connection with the settlement has not been determined.

The government’s pursuit of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).

This matter is being handled by the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the Department of Veterans Affairs, Office of Inspector General; and the U.S. Postal Service, Office of Inspector General. The two lawsuits are captioned United States ex rel. Sanborn. v. athenahealth, Inc., No. 17-cv-12125 (D. Mass.) and United States ex rel. Lovell and McKusick v. athenahealth, Inc., No. 17-cv-12543 (D. Mass.). The claims resolved by the settlement are allegations only and there has been no determination of liability.

Source

{jcomments on}

SACRAMENTO, Calif. — Mariela Panganiban, 48, of Elk Grove, pleaded guilty today to conspiring with the owners of home health care agencies to pay and receive illegal kickbacks in exchange for Medicare beneficiary referrals, Acting U.S. Attorney Phillip A. Talbert announced.

According to court documents, Panganiban worked as the Director of Social Services at a skilled nursing facility in Roseville. In her role, Panganiban assisted Medicare beneficiaries in selecting home health care agencies following their discharge from the facility. Panganiban used her position to steer Medicare beneficiaries to home health agencies in Folsom and El Dorado Hills. In exchange for the referrals, the agencies’ owners paid Panganiban illegal cash kickbacks.

In her plea agreement, Panganiban admitted that the agencies’ owners paid her kickbacks in exchange for the referral of approximately 100 beneficiaries. Medicare paid the agencies over approximately $735,000 for services they purportedly provided to the beneficiaries. Because the agencies obtained the referrals by paying kickbacks, they should not have received any reimbursement from Medicare.

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 Panganiban on May 20. She faces a maximum statutory penalty of five years in prison and a fine of $250,000 or twice the gross loss or gain. 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.

Source

{jcomments on}

Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that JESSICA STUART, 38, of Fairfield, waived her right to be indicted and pleaded guilty today before U.S. District Judge Jeffrey A. Meyer in New Haven to health care fraud and identity theft offenses.

According to court documents and statements made in court, Stuart was employed by Helping Hands Academy, LLC, in Bridgeport, which provided applied behavior analysis services to children diagnosed with Autism Spectrum Disorder (ASD).   Helping Hands Academy enrolled as a participating provider in the Connecticut Medicaid Program (“Medicaid”) in approximately September 2018.

Medicaid requires that ASD treatment services be provided under the supervision of a licensed medical practitioner or a Board Certified Behavior Analyst (BCBA), a graduate-level certification in behavior analysis. BCBAs are also required to be credentialed in writing by the state. Stuart does not have a college degree, was not a BCBA or licensed medical practitioner, and did not have any formal training in applied behavior analysis for ASD. Between approximately May 2019 and September 2020, Helping Hands Academy paid Stuart at least $143,0000 and submitted to Medicaid numerous fraudulent claims for applied behavioral analysis services that Stuart performed but was not qualified to provide. Stuart used the name of an individual without the individual’s knowledge or authorization so that Stuart could impersonate a BCBA when she knew she was not a BCBA.

Medicaid suffered a loss of $369,439.96 as a result of Stuart’s conduct.

Stuart pleaded guilty to one count of health care fraud, which carries a maximum term of imprisonment of 10 years, and one count of using false identification in connection with health care fraud, which carries a maximum term of imprisonment of 15 years. Judge Meyer scheduled sentencing for August 31, 2021.

Stuart is released pending sentencing.

On April 28, 2021, Nicole Balkas, the owner of Helping Hands Academy, pleaded guilty to one count of health care fraud. She awaits sentencing.

This investigation is being conducted by the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and the Federal Bureau of Investigation.

Acting U.S. Attorney Boyle acknowledged the valuable cooperation of the Connecticut Department of Social Services in the investigation.

This case is being prosecuted by Assistant U.S. Attorney David T. Huang.

Source

{jcomments on}

Physician took cash for prescribing fentanyl spray

DENVER – The U.S. Attorney’s Office for the District of Colorado announces that Dr. Jeffrey Kesten, age 61, formerly of Evergreen, Colorado, was sentenced to 24 months in federal prison, to be followed by three years of supervised release, for conspiring to violate the Anti-Kickback Statute, in connection with a scheme to take bribes and kickbacks from a pharmaceutical company in exchange for prescribing a powerful fentanyl spray to his chronic pain patients.

According to the plea agreement, beginning in late 2012 and continuing through November 2015, the defendant conspired with pharmaceutical company employees to take approximately $344,000 in bribes and kickbacks from Insys Therapeutics, Inc., the manufacturer of Subsys, a powerful sublingual fentanyl spray approved by the FDA in 2012 to treat breakthrough pain in cancer patients. The bribes were disguised as payments or honoraria for purportedly delivering educational speaker programs to the defendant’s medical peers. In fact, the defendant often delivered no programs at all—at one point taking payments of over $40,000 from Insys for 17 “programs” he allegedly delivered to his own staff at his medical clinic. As part of the plea agreement, the defendant admitted that he entered into a quid pro quo relationship with Insys, and that the payments affected his prescribing decisions. He abused his position of trust vis-à-vis his patients and the Federal healthcare programs in which he was enrolled, becoming one of Insys’s top revenue-generating prescribers. Prescriptions for Subsys typically cost thousands of dollars each month, and Medicare and Medicaid paid millions of dollars to cover Subsys prescriptions written by Dr. Kesten.

“You have to be able to trust your doctor’s medical judgment,” said U.S. Attorney Cole Finegan. “We’ll hold physicians and medical professionals accountable for taking bribes and kickbacks, especially when they are prescribing powerful drugs to vulnerable patients.”

“As we’ve seen over the past several years fentanyl abuse has become an existential threat across the nation,” said DEA Denver Acting Special Agent in Charge David Olesky. “There is no greater threat to our community than a doctor who violates a patient’s trust with no regard to patient safety and well-being beyond what profits it can bring him. We applaud this sentencing and will continue to work with our counterparts in the U.S. Department of Health and Human Services Office of the Inspector General and the U.S. Attorney’s Office to ensure other doctors who manipulate the system will be held accountable.”

“Accepting kickbacks and bribes in exchange for prescribing medication not only compromises the integrity of Federal health care programs; it can also gravely endanger beneficiaries,” said Curt L. Muller, Special Agent in Charge with the U.S. Department of Health and Human Services Office of the Inspector General. “HHS-OIG will continue to work relentlessly alongside our law enforcement partners to ensure the health and safety of beneficiaries and the efficient use of taxpayer dollars."

Fentanyl is at least 50 times more powerful than morphine, and to ensure patient safety, the FDA requires Subsys prescribers, patients, and pharmacies to enroll in and comply with the Transmucosal Immediate Release Fentanyl Risk Evaluation and Mitigation Strategy (TIRF REMS) program. The defendant disregarded the rules imposed by this program, failing to notify his patients of the risks posed by the Schedule II controlled substance prescription.

United States District Court Judge Daniel D. Domenico sentenced Kesten on February 24, 2022.

The Department of Health and Human Services Office of the Inspector General, and the Drug Enforcement Administration conducted the investigation.

Source

{jcomments on}

GREAT FALLS — A former Indian Health Services doctor who worked on the Blackfeet Indian Reservation and admitted using his job to prescribe a diabetes drug from a pharmacy in exchange for kickbacks was sentenced today to three months in prison, two years of supervised release and fined $10,000, Acting U.S. Attorney Leif Johnson said.

Dr. Arnold Scott Devous, 68, of Billings, pleaded guilty on Sept. 10, 2020 to federal medical officer with conflict of interest.

Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris allowed Devous to self-report to prison.

“Dr. Devous used his position and ability to exploit patients in the Blackfeet community. These kinds of kickback schemes erode the public’s trust in its healthcare providers at a time when we need that trust more than ever. We will continue to prosecute these schemes to the full extent of the law,” Acting U.S. Attorney Johnson said.

"By engaging in kickback schemes, Dr. Devous committed a serious ethics violation which may result in diminished public trust of federal employees,” said Curt L. Muller, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “With our law enforcement partners, we are committed to rooting out corruption in our federal healthcare programs.”

In court documents filed in the case, the prosecution said that Devous used his position at IHS as a medical officer and in charge of the diabetes program in Browning to prescribe Farxiga, a Type 2 diabetes medication. Farxiga was not on the IHS formulary and could not be obtained at the facility. From December 2015 until June 2016, Devous solicited multiple pharmacies in Montana to fill expensive prescriptions of Farxiga in exchange for Devous receiving a "cut" of the profits and kickbacks. Government personnel are prohibited from engaging in these types of relationships.

Ultimately, a pharmacy agreed to Devous' terms and paid him $45,540 in approximately six months. Devous first hid the kickbacks by sending the money to his wife, and then he used a prospective business associate. Neither of these options was allowable under the law. When interviewed, Devous admitted that his wife received the money, which was illegal. Devous also admitted he never informed his superiors of the outside income as required by law.

Assistant U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the Office of Inspector General, Office of Investigations, U.S. Department of Health & Human Services.

Source

{jcomments on}

LOS ANGELES – The former president and chief executive officer of a Long Beach substance abuse treatment provider was sentenced today to 84 months in federal prison for participating in a scheme in which more than $18.5 million in fraudulent claims were submitted to California’s Drug Medi-Cal program for alcohol and drug treatment services for high school and middle school students.

Richard Mark Ciampa, 67, of Commerce, was sentenced by United States District Judge Philip S. Gutierrez, who also ordered him to pay $17,640,325 in restitution. Ciampa pleaded guilty on January 6 to one count of health care fraud.

Ciampa founded the non-profit Atlantic Recovery Services (ARS), later called Atlantic Health Services, in 1996 and served as its president and CEO until its closure in April 2013 following a suspension in payments. ARS provided substance use disorder treatment services to students at local high schools and middle schools through Medi-Cal and its Drug Medi-Cal program.

From March 2009 to April 2013, Ciampa participated in a scheme to defraud Medi-Cal in which ARS billed the Drug Medi-Cal program for services to students who did not medically need alcohol or drug treatment. ARS also billed Drug Medi-Cal for group and individual counseling sessions that were not provided or did not meet the requirements for reimbursement as to size, length or setting. ARS employees falsified documents to support the false claims.

In March 2009, Drug Medi-Cal ordered ARS to repay an overpayment assessed to the organization, which caused a significant amount of financial pressure on Ciampa. Ciampa, in turn, passed along this financial pressure to his employees and threatened the employees that they would lose their jobs with ARS or have their hours reduced to part-time if they did not generate significant billings.

Ciampa was aware or willfully blind to the fact that, in response to his threats, ARS employees were generating false and fraudulent claims for submission to Drug Medi-Cal. He also encouraged ARS employees to engage in fraud, telling them they should “find a way” to enroll more students in ARS’ program despite Drug Medi-Cal’s medical necessity requirement.

The scheme was executed in several ways, including ARS counselors and managers maintaining student caseloads by enrolling students in the ARS substance abuse counseling program even if they had used drugs or alcohol only occasionally or even just once.

For example, in December 2011, ARS fraudulently submitted a claim for Medi-Cal reimbursement for an individual counseling session for a student on November 23, 2011 – a school holiday and the day before Thanksgiving – when the student was absent and the counselor listed on the claim did not provide any counseling.

In total, $18,530,927 in fraudulent claims were submitted because of the scheme, resulting in an actual loss to Medi-Cal of $17,640,325.

Prosecutors have obtained a total of 19 guilty pleas in this case and related cases, including former ARS Program Manager Lori Renee Miller, 60, of Lakewood, multiple former ARS managers and counselors, and Dr. Leland Whitson, 81, of Redondo Beach, the former Medical/Clinical Director of ARS who previously pleaded guilty to making a false statement affecting a health care program.

Gregory Hearns, 65, of Long Beach, the billing supervisor for ARS who compiled the monthly billing and arranged for its submission to Medi-Cal, LaLonnie Egans, 63, of Long Beach, a former manager, and Tina Lynn St. Julian, 57, of Inglewood, a former counselor, are expected to go on trial on January 6. They are charged with multiple counts of health care fraud.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse; the United States Department of Health and Human Services, Office of Inspector General; and IRS Criminal Investigation investigated this matter.

Assistant United States Attorneys Cathy J. Ostiller and Karen E. Escalante of the Major Frauds Section, Nisha Chandran of the General Crimes Section and Victor Rodgers of the Asset Forfeiture Section prosecuted this case.

Source

{jcomments on}

MADISON, WIS. – Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin, joins Richard G. Frohling, Acting United States Attorney for the Eastern District of Wisconsin, and Karen Timberlake, Secretary-designee and Anthony Baize, Inspector General of the Wisconsin Department of Health Services (DHS) to advise the public that any act of creating, distributing, selling, or buying of fake COVID-19 vaccination record cards and any act of forging COVID-19 vaccination information is illegal and punishable under federal law.

The unauthorized use of an official government agency’s seal, such as the Centers for Disease Control and Prevention (CDC), is a crime and may be punishable under federal law under Title 18 United States Code, Section 1017, and other applicable laws.

“COVID-19 vaccines provide important protection for all of us when we are at school, attending public events, using mass transit, at the workplace, or attending a place of worship. Those who might claim to be vaccinated when they are not are putting themselves and their loved ones at risk of contracting COVID-19,” said Secretary-designee Karen Timberlake. “Get vaccinated, encourage your friends and family to do the same, and add an extra layer of protection by wearing a mask in public places including for teachers, staff and students in our schools.”

DHS also reminds Wisconsinites to not post vaccine cards on social media as the information could be stolen to commit fraud.

“If you have not been vaccinated, do not make your own cards or buy fake cards,” said Inspector General Anthony Baize. “If you were vaccinated and your card was not filled out correctly, do not fill in the card yourself. Instead, call your vaccine provider.”

“Public and private institutions, including employers, universities, schools, and businesses, need to be able to rely on the legitimacy of COVID-19 vaccine cards. Our office will use all available tools to prosecute individuals who knowingly falsify vaccine cards,” said Acting U.S. Attorney Richard Frohling.

“Legitimate COVID-19 vaccine cards—like the vaccines themselves—are crucial tools to prevent illness and death.   People who are foolish or selfish (or both) enough to supply bogus vaccination cards, allowing others to circumvent COVID-19 curtailment efforts, will be prosecuted to the full extent of the law,” said Timothy M. O’Shea, Acting U.S. Attorney for the Western District of Wisconsin.

Source

{jcomments on}

CHICAGO — A procurement supervisor at the Jesse Brown Veterans Affairs Medical Center in Chicago pocketed kickbacks from the president of a medical supply company to steer the company at least $1.7 million in product orders, many of which were never fulfilled, according to an indictment returned in federal court in Chicago.

The indictment accuses THOMAS E. DUNCAN, a supervisor in the medical center’s Central Supply department, of receiving approximately $36,250 in kickbacks paid by checks, as well as an additional amount in cash, from DANIEL DINGLE, the president of a medical supply company based in south suburban Dolton. The checks were made payable to Helping Hands Properties LLC – a third-party entity managed by Duncan – and contained false and misleading memo entries in order to conceal and disguise the existence and purpose of the kickbacks, the indictment states. In exchange for the kickbacks, Duncan used his official position at the VA to fraudulently initiate and approve purchases of products from Dingle’s company, knowing that many of the products would not be delivered to the VA, the indictment states.

The alleged fraud scheme began in 2012 and continued until 2019. In late 2018 and early 2019, while the Veterans Affairs Inspector General’s Office was investigating the matter, Duncan told Dingle to falsely tell investigators that the payments Duncan received from Dingle’s company were for work performed by Helping Hands Properties, the indictment states.

The indictment was returned Thursday in U.S. District Court in Chicago. It charges Duncan, 37, of Chicago, with five counts of wire fraud, one count of witness tampering, and one count of falsifying records. Dingle, 50, of Riverdale, is charged with four counts of wire fraud. Arraignments in federal court in Chicago have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Gregg Hirstein, Special Agent-in-Charge of the U.S. Department of Veterans Affairs, Office of Inspector General. The government is represented by Assistant U.S. Attorney Heidi Manschreck.

“These charges demonstrate the VA OIG’s commitment to protecting American taxpayers,” said Special Agent-in-Charge Hirstein. “Individuals and companies involved in corrupting the VA’s business practices will be held accountable.”

The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count in the indictment is punishable by up to 20 years in federal prison. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

Source

{jcomments on}

Case Marks First Charges Brought in District of South Carolina Related to Fraudulent Vaccine Cards

Columbia, South Carolina --- Acting United States Attorney M. Rhett DeHart announced today that a Federal Grand Jury in Columbia returned a multiple-count indictment in connection with the production of fraudulent COVID-19 Vaccination Record Cards, the first such criminal prosecution in the District of South Carolina.

Tammy McDonald, 53, of Columbia, was charged in a three-count indictment with two counts of producing fraudulent COVID-19 Vaccination Record Cards and one count of lying to federal investigators about her role in producing the cards.

“Although the indictment speaks for itself, creating fraudulent or fake vaccine cards for those who have not been vaccinated poses a direct threat to the health of the people of South Carolina,” said Acting U.S. Attorney DeHart. “I want to thank our federal and state partners for their quick work in acting on this matter. This office will continue to prosecute fraud related to the Coronavirus in all its forms, and this case speaks to those efforts.”

“The indictment alleges McDonald defrauded and endangered the public by creating and distributing fake COVID-19 vaccination cards. Engaging in such illegal activities undermines the ongoing pandemic response efforts,” stated Derrick L. Jackson, Special Agent in Charge with the Department of Health and Human Services (HHS) Office of Inspector General. “We remain committed to working with our law enforcement partners to investigate individuals who are exploiting the pandemic and people for personal gain.”

“Since the beginning of the pandemic, the FBI and its partners have been at the forefront of investigating crimes involving fraudulent COVID-19 schemes,” said Susan Ferensic, Special Agent in Charge of the Federal Bureau of Investigation (FBI) Columbia Field Office. “Producing fraudulent vaccination cards is a serious matter and is not taken lightly. Anyone leading or participating in this type of activity should know there will be consequences.”

The indictment alleges that McDonald, who worked as the Director of Nursing Services at a skilled nursing and rehabilitation center in Columbia, produced the fraudulent vaccine cards on June 20, 2021, and July 28, 2021. The indictment further alleges that on October 22, 2021, McDonald was questioned by federal agents with HHS and FBI and lied by stating she did not have access to COVID-19 Vaccination Record Cards and that she never produced a false or inaccurate vaccine card. The indictment alleges this was false because she had personally filled out vaccine cards for individuals she knew had not received a COVID-19 vaccine.

McDonald, who has pleaded not guilty on all three charges, was arraigned today by a United States Magistrate Judge in Columbia. She was granted a $10,000 bond. McDonald faces up to 15 years in prison for each count of producing a fraudulent COVID-19 Vaccination Record Card, and five years in prison for lying to federal investigators.

The case was investigated by HHS and FBI, with assistance from the South Carolina Law Enforcement Division (SLED). Assistant U.S. Attorney Derek A. Shoemake, who also serves as the District’s Coronavirus Fraud Coordinator, is prosecuting the case.

Acting U.S. Attorney DeHart stated that all charges in the indictment are merely accusations and that McDonald is presumed innocent unless and until proven guilty.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visithttps://www.justice.gov/coronavirus.

Source

{jcomments on}

On Dec. 2, a federal jury in Greeneville, Tennessee, convicted Peter Bolos, 44, of Tampa, Florida, of 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of a misbranded drug into interstate commerce, following a month-long trial.

According to court documents and evidence presented at trial, Bolos and his co-conspirators, Andrew Assad, Michael Palso, Maikel Bolos, Larry Smith, Scott Roix, HealthRight LLC, Mihir Taneja, Arun Kapoor, and Sterling Knight Pharmaceuticals, as well as various other companies owned by them, deceived pharmacy benefit managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. The PBMs processed and approved claims for prescription drugs on behalf of insurance companies. Bolos and his co-conspirators defrauded the PBMs into authorizing claims worth more than $174 million that private insurers such as Blue Cross Blue Shield of Tennessee, and public insurers such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.

Court documents and evidence at trial established that Bolos, Assad and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy agreed with Scott Roix, a Florida telemarketer operating under the name HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the scheme. The prescriptions were typically for drugs such as pain creams, scar creams and vitamins. To obtain the prescriptions, evidence showed Roix used HealthRight’s telemarketing platform as a telemedicine service, calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Because this faulty and fraudulent process made the prescriptions invalid, the drugs were misbranded under the Food, Drug and Cosmetic Act. Synergy and the other pharmacies nonetheless dispensed the drugs to consumers as part of the scheme, so that Bolos could submit fraudulent reimbursement claims.

Court documents and evidence at trial established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos paid Roix more than $30 million to buy at least 60,000 invalid prescriptions generated by HealthRight. Evidence showed Bolos selected specific medications for the prescriptions that he could submit for highly profitable reimbursements. In addition, Bolos used illegal means to hide his activity from the PBMs so that he could remain undetected. Evidence showed that Bolos was responsible for at least $89 million out of the total $174 million in fraudulently paid billings.

“The defendants deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” said Deputy Assistant Attorney General Arun G. Rao of the Justice Department’s Civil Division. “The Department will continue to investigate and prosecute individuals who use telemedicine to advance fraudulent schemes that violate the Food, Drug, and Cosmetic Act.”

“The United States Attorney’s Office for the Eastern District of Tennessee applauds the unwavering efforts of the multiple agencies involved in this collaborative investigation to bring this extensive healthcare fraud and misbranding scheme to justice,” said Acting U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “The scope and nature of this fraud and misbranding scheme shock the conscience. Patients were given medications that they neither requested nor wanted, and the trial proof demonstrated that the prescriptions were specifically chosen by Bolos to maximize the fraudulent scheme’s profits, rather than for the patients’ healthcare needs. The guilty verdict against Bolos and the guilty pleas obtained from his co-defendants should send a strong message that the Department of Justice will aggressively prosecute fraud against health insurance providers.”

“Healthcare fraud is an egregious crime problem that impacts every American,” said Special Agent in Charge Joseph E. Carrico of the FBI’s Knoxville Field Office. “The guilty verdict was a result of a multi-agency investigation into a complex health care fraud scheme that required substantial investigative resources. Along with its law enforcement partners, the FBI remains committed to investigate these crimes and prosecute all those that are intent in defrauding the American public."

“Distributing misbranded prescription drugs in the U.S. marketplace places patients’ health at risk,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations Miami Field Office. “We will continue to pursue and bring to justice those who put profits ahead of public health.”

“Bolos and his co-conspirators used their pharmacies to fraudulently bill insurance companies hundreds of millions of dollars, and that type of health care fraud impacts everyone,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “HSI will continue to work with our law enforcement partners at the federal, state and local level to investigate all fraud and bring those responsible to justice.”

“Bolos and his co-conspirators sought to increase their profits by executing a comprehensive health care fraud scheme involving innocent patients,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General. “This conviction should serve as a warning to individuals who wish to deceive the government and steal from taxpayers. Alongside our law enforcement partners, we will continue to pursue medical professionals who engage in fraudulent activity.”

“The verdict in this case sends a clear message that these types of schemes will not be tolerated,” said Special Agent in Charge Matthew Modafferi of the U.S. Postal Service Office of Inspector General in the Northeast Area Field Office. “The Special Agents of the U.S. Postal Service Office of Inspector General will continue to work closely with the U.S. Attorney’s Office and our law enforcement partners to bring to justice those who commit these kinds of offenses.”

Roix, Assad, Palso, Smith, Maikel Bolos and various associated business entities previously pleaded guilty to their roles in the conspiracy. Taneja, Kapoor, and Sterling Knight pleaded guilty to felony misbranding in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer set sentencing for Bolos for May 19, 2022, in the United States District Court for the Eastern District of Tennessee at Greeneville. Sentencings for the other defendants will be set for dates in 2022.

The trial and plea agreements resulted from a multi-year investigation conducted by the U.S. Department of Health & Human Services Office of Inspector General (Nashville); Food and Drug Administration Office of Criminal Investigations (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo); Federal Bureau of Investigation (Knoxville and Johnson City, Tennessee); Office of Personnel Management Office of Inspector General (Atlanta); and the Department of Homeland Security, Homeland Security Investigations (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.

Assistant U.S. Attorneys TJ Harker and Mac Heavener for the Eastern District of Tennessee and Trial Attorney David Gunn of the Department of Justice Civil Division’s Consumer Protection Branch in Washington, and a former Assistant U.S. Attorney in Knoxville, prosecuted and tried the case. They were assisted by Barbra Pemberton, Bryan Brandenburg and April Denard from the U.S. Attorney’s office.

Source

{jcomments on}

Fraudulent scheme involved $3 million in contracts intended for service-disabled veterans

ALBUQUERQUE – A federal jury sitting in Albuquerque on March 2 returned a verdict finding Nick L. Medeiros, 49, and Bobby D. Greaves, 62, both of San Antonio, Texas, guilty of federal fraud and false statement charges following a seven-day trial.

A federal grand jury indicted Medeiros and Greaves on June 13, 2018, charging the two men with conspiracy, major fraud against the United States, and two counts of false statements. The indictment also included forfeiture provisions. On March 10, 2020, a federal grand jury returned a four-count superseding indictment charging Medeiros and Greaves with unlawfully obtaining more than $3 million in government contracts by falsely and repeatedly representing to the United States that Medeiros, a service-disabled veteran, was operating independently from Greaves, his brother-in-law. The indictment alleged that instead Medeiros relied on Greaves, who is not a veteran, to complete all of Medeiros’ government contract work by providing the labor and equipment. The superseding indictment alleged that two of the government contracts involved in the defendants’ fraudulent scheme involved construction projects at Cannon Air Force Base in Clovis, New Mexico, and included a $1.9 million contract to build a “Drop Zone” cybercafé.

The trial began on February 22 and concluded on March 2, when the jury returned guilty verdicts on all four counts.

During the trial, the evidence established that Greaves and Medeiros agreed to create a pass-through entity to get access to programs set aside for service-disabled veterans, and that both made material false statements on which government agencies and personnel relied in awarding contracts to Medeiros’ company. Evidence also established that Medeiros altered documents, such as bank signature cards and employee resumes. and submitted the altered versions to the Air Force, the Department of Veterans Affairs, and the Small Business Administration.

The jury deliberated for three hours before returning its guilty verdicts.

“The fraudulent acquisition of contracts intended for service-disabled veterans is an abuse of the system,” said Fred J. Federici, United States Attorney for the District of New Mexico. “Such fraud not only profits unscrupulous parties, it necessarily deprives veterans, who have made a permanent sacrifice in service to our nation, of the opportunity to compete for government contracts to once again serve their country. This office will honor its duty in prosecuting these crimes to restore justice to our veterans.”

“Conspiring to gain federal contracts set aside for service-disabled veterans is reprehensible,” said Special Agent in Charge Jeffrey Breen of the Department of Veterans Affairs Office of Inspector General’s South Central Field Office. “These guilty verdicts send a clear message that anyone who attempts to do so will be held accountable. We thank the U.S. Attorney’s Office and our other law enforcement partners for their efforts in this case.”

“The collaboration between the Department of Veterans Affairs Office of Inspector General, OSI and the Department of Justice, was significant in this investigation” said Special Agent in Charge Blair Holmstrand of the Office of Special Investigations, Procurement Fraud Detachment 3, San Antonio, Texas. “The guilty verdicts reflect the results of the hard work put forth by all agencies involved.”

The investigation began when a concerned citizen brought the close association between Medeiros and Greaves to the attention of the VA OIG, who requested assistance from AFOSI when the initial investigation revealed questionable conduct on Cannon AFB in New Mexico.

Medeiros and Greaves each face up to 25 years in prison, fines of up to twice the amount of money gained by the fraud, and forfeiture of all proceeds involved in the fraud. The defendants remain on conditions of release pending sentencing, which has not been scheduled.

The Department of Veterans Affairs Office of the Inspector General and the Air Force Office of Special Investigations investigated this case. Assistant United States Attorneys Paul J. Mysliwiec and Jonathon M. Gerson are prosecuting the case.

Source

{jcomments on}

ASHEVILLE - A Buncombe County man who claimed to be blind because of his military service — but who also repeatedly got his driver's license renewed and served as a BB gun and archery instructor for a Boy Scouts troop — bilked the VA system out of nearly $1 million dollars in disability payments, federal prosecutors say.

John Paul Cook, 57, of Alexander in northern Buncombe County, pleaded guilty July 19 in federal court to defrauding the U.S. Department of Veterans Affairs, according to a press release. From 1987-2017, Cook received $978,138 in Veterans Affairs disability payments "due to his claimed blindness, to which he was not lawfully entitled," the release states.

The U.S. Attorney's Office cited court records that show Cook’s monthly VA disability payments in 1987 were $1,411 per month, but with incremental increases in his disability rating, "as well as cost-of-living adjustments and his Special Monthly Compensation, these payments steadily increased over the years. By 2016, the monthly payment had risen to $3,990."

Cook enlisted in the U.S. Army in 1985, and court documents showed that six months later he sustained an accidental injury while on duty.

"Following the incident, Cook complained that as a result of the accident and injuries he sustained, a preexisting eye condition had worsened," the press release states. "In 1987, following a medical evaluation, Cook was discharged, placed on the retired list, and began receiving VA disability-based compensation at a rate of 60%."

But over the next 30 years, Cook’s disability-based compensation increased, "following Cook’s repeated false claims of increased visual impairment and unemployability due to 'severe visual deficit,'" the press release states.

Ultimately, in 2005, the VA declared Cook legally blind, and he began receiving maximum disability compensation, which Cook admitted in court this week. He also began receiving additional benefits.

But contrary to Cook’s claims about worsening visioning, Cook "repeatedly passed vision screening tests to renew or obtain a driver’s license in North and South Carolina," the press release states.

"Furthermore, during the relevant time period, court documents show that Cook purchased and registered over 30 different motor vehicles which Cook routinely drove, including on long-distance trips and to perform errands," the release stated.

Court records show that from 2010-16 — when Cook was receiving the maximum VA benefits — he was actively involved with the Boy Scouts of America, serving as a den leader and cubmaster.

"Among the courses the defendant completed with the BSA were courses qualifying him to be a range officer for BB guns and for archery," the press release states. "He was also certified for land navigation, which involves reading maps and using a compass."

Stealing from the VA carries a maximum penalty of 10 years in prison and a $250,000 fine, according to the press release. A sentencing date has not been set.

For the 2020 fiscal year, the VA's Office of the Inspector General found the VA had reported $100.5 million in confirmed fraud.

Assistant U.S. Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville led the prosecution in the Cook case.

Acting U.S. Attorney Stetzer thanked the VA-OIG for their investigation of the case.

Source

{jcomments on}

A Florida man was sentenced today to 210 months in prison for conspiracy to commit health care fraud and wire fraud.

Alberto Orian Gonzalez-Delgado, 46, of Miami, pleaded guilty to conspiracy to commit health care fraud and wire fraud on March 4. Gonzalez-Delgado is the last remaining defendant in this case to be sentenced. Eduardo Rubal, 41, of Miami, pleaded guilty to conspiracy to commit health care fraud and wire fraud and was sentenced to 210 months; Vicente Gonzalez Acosta, 50, of Miami, pleaded guilty to conspiracy to commit health care fraud and wire fraud and was sentenced to 188 months; Alexander Fernandez, 49, of Miami, pleaded guilty to conspiracy to commit money laundering and was sentenced to 120 months; Yaxing Tapanes, 24, of Hialeah, pleaded guilty to conspiracy to commit money laundering and was sentenced to 97 months; Jose Carlos Valladares Rivera, 43, of Miami, pleaded guilty to conspiracy to commit money laundering and was sentenced to 97 months; Hector Suarez Gonzalez, 45, of Hialeah, pleaded guilty to conspiracy to commit health care fraud and wire fraud and was sentenced to 78 months; Antonio Jimenez, 54, of Hialeah, was sentenced to 48 months.

According to court documents, these eight individuals and their co-conspirators operated a fraud and money laundering organization responsible for executing a series of frauds in Florida and Michigan through which they billed Medicare for over $80 million, actually receiving approximately $53 million for fraudulent claims.

The organization recruited and directed nominee owners to fraudulently purchase home health agencies, as well as to open sham corporations in their names, along with corresponding personal and corporate bank accounts. After the acquisition of the home health agency was completed, the group began fraudulently billing Medicare for services that were never provided. The home health agencies had no medical staff and provided no services to any beneficiaries. The group, upon receiving the Medicare money, would funnel that through several layers of shell companies and bank accounts in an effort to launder the money before converting it to cash at ATMs and check cashing stores in Miami. Once the nominee owners completed their work, the group required them to permanently move to Cuba to avoid detection and live beyond the jurisdiction of the United States.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division made the announcement.

The FBI and Department of Health and Human Services-Office of Inspector General investigated the case, with assistance from the Centers for Medicare and Medicaid Services’ Center for Program Integrity.

Trial Attorney Emily Gurskis of the Criminal Division’s Fraud Section prosecuted the case.

Source

{jcomments on}

HOUSTON – Four executives of Continuum Healthcare and its various health centers have been ordered to federal prison for a massive scam perpetrated in the Houston area, announced Acting U.S. Attorney Jennifer B. Lowery.

Bobby Rouse, 81, and Steven Houseworth, 47, both of Houston; Jeffery Parsons, 62, Crockett; and David Edson, 72, Palm Harbor, Florida, had all pleaded guilty to their respective roles in the scam.

On April 22, U.S. District Judge Gray Miller sentenced Rouse to 120 months in prison. Edson received a 48-month-term of imprisonment, while Parsons and Houseworth each received 30 months in prison.

Rouse, Houseworth, Edson and Parsons were part of the executive team for Continuum Healthcare LLC, which owned Westbury Community Hospital in Houston as well as community mental health centers in the Houston area known by their locations as Hornwood, Baytown and Missouri City.

Each location operated a partial hospitalization program (PHP). The PHP was supposed to be a treatment program for individuals with mental illness, intended to closely resemble a highly structured, short-term hospital inpatient program. However, while it was a distinct and organized intensive treatment program, it offered less than 24-hour daily care.

In 2010, Continuum opened Westbury Community Hospital with Hornwood and Baytown becoming outpatient centers and continuing to operate their existing PHPs under the Westbury name. Westbury also opened a PHP.

The four men were responsible for the day-to-day operation of Continuum/Westbury and were involved in the implementation of the various kickback programs. Numerous people were referred for treatment in exchange for payment. However, the vast majority did not qualify for PHP services, because they were not experiencing an acute psychotic episode or were actually suffering from mental retardation, dementia or Alzheimer’s.

In total, Continuum billed Medicare approximately $189 million in total for fraudulent PHP services and Medicaid paid approximately $66 million on those clams.

The convictions of all 14 charged in the case were announced in 2019.

The FBI, Department of Health and Human Services - Office of the Inspector General, Texas Attorney General's Medicaid Fraud Control Unit and IRS - Criminal Investigation participated in the joint investigation. Assistant U.S. Attorneys Tina Ansari and Special Assistant U.S. Attorney Justin Blan are prosecuting the case.

Source

{jcomments on}

GREENEVILLE, Tenn.– Today, Larry Everett Smith, 50, of Tampa, Florida, pleaded guilty before Senior District Judge Ronnie Greer to one count of conspiracy to commit health care fraud. Sentencing has been set for October 25, 2021 at 3:00 p.m., in United States District Court in Greeneville. Smith faces a term of up to 10 years in prison.

The First Superseding Indictment, returned December 1, 2020, charged Smith and others with a nationwide conspiracy to defraud pharmacy benefit managers out of $174,202,105 by submitting $931,356,936 in bills to the pharmacy benefit managers for fraudulent prescriptions purchased from a telemarketing company. The indictment alleges the conspiracy began in mid-2015 and lasted through the first months of 2018.

In a written plea agreement, Smith admitted to conspiring with Scott Roix, Mihir Taneja, Arun Kapoor, Sterling-Knight Pharmaceuticals LLC, HealthRight LLC, Alpha-Omega Pharmacy LLC, Germaine Pharmacy Inc., Zoetic Pharmacy, and Tanith Enterprises, and others to defraud pharmacy benefit managers into paying for fraudulent prescriptions for topical pain creams, vitamins, and other products. Smith agreed to pay restitution of $24,919,254 and forfeit approximately $3,052,215.

On September 26, 2018, Roix and HealthRight pleaded guilty to conspiracy to commit health care fraud for their roles in the scheme and agreed to pay restitution of $5,000,000. Roix faces a term of up to 10 years in prison. Sentencing for Roix is set for October 25, 2021.

Smith’s guilty plea follows pleas by Mihir Taneja, Arun Kapoor, Maikel Bolos, and Sterling-Knight Pharmaceuticals in December 2020. In those plea agreements, Taneja, 46, of Tampa, Florida, and Kapoor, 47, of Temple Terrace, Florida, pleaded guilty to felony mis-branding. Maikel Bolos, 35, of Tampa, Florida, pleaded guilty to conspiracy to commit health care fraud and mail fraud, and Sterling-Knight Pharmaceuticals, a Nevada company operated out of Tampa, Florida, pleaded guilty to conspiracy to commit health care fraud. Taneja, Kapoor, and Sterling-Knight agreed to pay restitution of $20,981,786. Sterling-Knight also agreed to forfeit $6,168,398. Taneja and Kapoor, each, face a term of up to 3 years in prison. Bolos faces a term of up to 5 years in prison. Sentencing for Taneja, Kapoor, Bolos, and Sterling-Knight is set for October 18, 2021.

“The protection and integrity of our health care programs are vital to the citizens they serve. Many Tennesseans rely on these health care programs to maintain a healthy quality of life, and it is critical we protect the viability of these programs,” said U.S. Attorney J. Douglas Overbey.

“Telemarketing fraud is a major threat to the integrity of government and commercial insurance programs,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “After improperly soliciting patient information, these marketing companies obtained approvals through contracted telemedicine prescribers, then sold those costly prescriptions to pharmacies in exchange for kickbacks.”

“Health care fraud can affect everyone, and Homeland Security Investigations (HSI) is committed to stopping these criminals in their tracks,” said HSI Tampa acting Special Agent in Charge Kevin Sibley. “This investigation highlights the importance of law enforcement partnerships across the nation and around the world.”

“The U.S. Office of Personnel Management Office of the Inspector General is committed to protecting the federal health care programs from schemes that undermine the integrity of the program,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General. “I am very proud of our investigative staff and partners at the Department of Justice for their hard work on behalf of American taxpayer.”

“Today’s announcement demonstrates that companies and individuals who place profits above patient safety will be held accountable for their actions,” said Special Agent in Charge Justin C. Fielder, FDA Office of Criminal Investigations Miami Field Office. “We will continue to work with the Department of Justice and our law enforcement partners to bring to justice those who jeopardize the U.S. public health.”

“Health care fraud is a severe crime problem that impacts every American. The FBI, with its law enforcement partners, will continue to allocate resources to investigate these crimes and prosecute those that are intent on defrauding the health care system,” said Special Agent in Charge Joseph Carrico of the FBI Knoxville Field Office.

The trial of the remaining defendants will commence July 13, 2021, in the district court in Knoxville, Tennessee.

The prosecution and plea agreements were coordinated by Assistant U.S. Attorneys TJ Harker, Mac Heavener, Anne-Marie Svolto, and Gretchen Mohr of the U.S. Attorney’s Office for the Eastern District of Tennessee, and Trial Attorney David Gunn of the Department’s Consumer Protection Branch. Assistant U.S. Attorneys TJ Harker and Mac Heavener, and Trial Attorney David Gunn will try the matter for the government and represent the government at court proceedings.

These plea agreements resulted from a multi-year investigation conducted by the U.S. Department of Health & Human Services Office of Inspector General (Nashville); Food and Drug Administration Office of Criminal Investigations (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo, New York); Federal Bureau of Investigation (Knoxville and Johnson City, Tennessee); Office of Personnel Management Office of the Inspector General (Atlanta); and the Department of Homeland Security, Homeland Security Investigations (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.

The case is United States v. Andrew Assad et al (2:18-CR-140). Related cases are United States v. Mihir Taneja (2:20-CR-111), United States v. Arun Kapoor (2:20-CR-110), United States v. Sterling-Knight Pharmaceuticals LLC (2:20-CR-113), United States v. Maikel Bolos (2:20-CR-112), and United States v. Scott Roix and HealthRight LLC (2:18-CR-133).

https://www.justice.gov/usao-edtn/pr/four-men-and-seven-companies-indicted-billion-dollar-telemedicine-fraud-conspiracy;

https://www.justice.gov/usao-edtn/pr/telemarketer-and-his-companies-agree-pay-25-million-settle-allegation-they-operated

Source

{jcomments on}

NEWARK, N.J. – Five individuals have been charged and two others have pleaded guilty in New Jersey for their roles in massive durable medical equipment and genetic cancer screening kickback fraud schemes, Acting U.S. Attorney Rachael A. Honig announced today.

Thomas Farese, 78, of Delray Beach, Florida; Pat Truglia, 53, of Parkland, Florida; Domenic J. Gatto Jr., 46, of Palm Beach Gardens, Florida; and Nicholas Defonte, 72, and Christopher Cirri, 63, both of Toms River, New Jersey, are each charged by complaint with conspiracy to commit health care fraud.

Two additional individuals pleaded guilty today by videoconference before U.S. District Judge Kevin McNulty: Brian Herbstman, 46, of Jackson, New Jersey, pleaded guilty to an information charging him with conspiracy to commit health care fraud and to violate the Anti-Kickback Statute; and Sean Hogan, 48, Old Bridge, New Jersey, pleaded guilty to an information charging him with conspiracy to engage in money laundering. Sentencing for both is scheduled for Aug. 31, 2021.

According to documents filed in these cases and statements made in court:

Each of the defendants played a role in defrauding health care benefit programs by offering, paying, soliciting, and receiving kickbacks and bribes in exchange for completed doctors’ orders for durable medical equipment (DME), namely orthotic braces:

Farese, Truglia, Gatto, and their conspirators had financial interests in multiple DME companies, which paid kickbacks to suppliers of DME orders, including Cirri, Defonte, and Truglia. In exchange for DME orders, the DME companies fraudulently billed Medicare, TRICARE, CHAMPVA, and other health care benefit programs. The defendants concealed their ownership of the DME companies by using straw owners, who were falsely reported to Medicare as the owners of the companies.

Truglia, Cirri, Defonte, and their conspirators owned and operated multiple call centers through which they obtained DME orders for beneficiaries of Medicare and other federal health care programs. The call centers paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these beneficiaries. The telemedicine companies then paid physicians to write medically unnecessary DME orders. The orders were provided to DME supply companies owned by Farese, Truglia, Gatto, and others in exchange for bribes. The DME supply companies provided the braces to beneficiaries and fraudulently billed the health care programs.

Herbstman and his conspirators had financial interests in multiple DME companies. The DME companies paid kickbacks to suppliers in exchange for DME orders, which the DME companies fraudulently billed to Medicare, TRICARE, CHAMPVA, and other health care benefit programs.

Hogan and his conspirators agreed to launder the proceeds of the health care fraud conspiracy. From March 2018 to October 2019, Hogan and others withdrew approximately $1.16 million in ill-gotten gains.

Herbstman and his conspirators had business relationships with call centers through which they obtained patient referrals for genetic cancer screening tests. Herbstman provided these patient referrals to others in exchange for kickbacks and bribes from companies that performed the tests and fraudulently billed them to health care programs.

The defendants caused losses to Medicare, TRICARE, and CHAMPVA of approximately $93 million.

The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charges of conspiracy to violate the federal Anti-Kickback Statute and conspiracy to commit health care fraud, to which Herbstman pleaded guilty, are punishable by a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charge of conspiracy to transact in criminal proceeds, to which Hogan pleaded guilty, is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000 or twice the gross profit or loss caused by the offense, whichever is greater.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Scott J. Lampert; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigations leading to the charges and guilty pleas.

The government is represented by Assistant U.S. Attorneys Sean M. Sherman and Ryan L. O’Neill of the Opioid Abuse Prevention & Enforcement and Health Care Fraud Units in Newark, Senior Trial Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit in Newark, and Trial Attorney Darren C. Halverson of the Criminal Division’s Fraud Section.

The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Source

{jcomments on}

NEWARK, N.J. – A Florida attorney today admitted his role in a scheme to extort $7.5 million from a California bank, Attorney for the United States Rachael A. Honig announced.

Richard L. Williams, 73, of Miami, Florida, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with conspiracy to transmit an interstate communication with the intent to extort.

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

Beginning in May 2020, Williams and his client (Client-1) conspired to extort $7.5 million from a commercial bank headquartered in California (Bank-1). Williams threatened Bank-1 that if it did not pay Client-1 $7.5 million, Client-1 would publicly disclose that Client-1 had accessed and obtained certain confidential data from the bank that did not belong to Client-1 and that Client-1 was not authorized to retain.

On June 18, 2020, Williams sent an email to an attorney for Bank-1 that attached a proposed agreement that Bank-1 had not requested. The agreement – titled “Settlement, Assistance, and Confidentiality Agreement” – provided for Bank-1 to pay Client-1 approximately $7.5 million as a “settlement, assistance and confidentiality fee” within 48 hours of signing the agreement. The payment was purportedly in exchange for Client-1 serving for one week as an “advisor” to Bank-1, a service that Bank-1 had not requested, and agreeing not to publicize confidential Bank-1 data that Client-1 had accessed and obtained. The agreement was designed to conceal that Williams and Client-1 were extorting Bank-1.

From July through August 2020, Williams also engaged in a series of telephone conversations with an undercover law enforcement agent (UC-1) who Williams believed was a representative of Bank-1 located in New Jersey, with authority to transfer funds to Williams. During a telephone call with UC-1 on July 24, 2020, Williams warned UC-1 that if Bank-1 did not pay Client-1 it should “fear” that Client-1 might reveal to various third parties that Client-1 had accessed and obtained the confidential data from Bank-1 or issue a press release disclosing that information. Williams also implied that if Bank-1 refused to accede to his demands and pay Client-1, there may be violent consequences from third parties unrelated to Williams. Williams warned UC-1 that “FBI agents were murdered a couple of blocks from where [he was] sitting,” and that if Williams were in Bank-1’s position, “what would scare the [expletive] out of [him] would be” the reaction of those third parties to the public revelation of Client-1’s access and retention of the data.

The charge to which Williams pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greater. Williams’s sentencing is scheduled for April 6, 2021.

Attorney for the United States Honig credited the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott Lampert; Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty; the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri; and special agents of the U.S. Attorney’s Office for the District of New Jersey with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Sean M. Sherman and Bernard J. Cooney, Acting Chief of the Opioid Abuse Prevention & Enforcement, of the U.S. Attorney’s Office in Newark.

Source

{jcomments on}

TALLAHASSEE, FLORIDA – Jason R. Coody, Acting United States Attorney for the Northern District of Florida, today announced the convictions of Stephanie Lynn Fleming, 42, and Helen Elizabeth Storey, 37, both of Waldorf, Maryland, and both formerly of Tallahassee, Florida. Both defendants were found guilty of health care fraud conspiracy, health care fraud, and aggravated identity theft. Fleming was also found guilty of making false statements in connection to health care matters. The convictions came yesterday after a 3-day federal bench trial that involved testimony from more than 15 witnesses and over 125 exhibits introduced into evidence.

“These convictions demonstrate that the United States Attorney’s Office is committed to aggressively and diligently prosecuting those who commit healthcare fraud,” said Acting U.S. Attorney Coody. “The concerted and cooperative effort of our federal and state law enforcement partners was critical to bringing these defendants to justice. We will continue to work toward our common goals of protecting our community members and preserving the integrity of our federally-funded healthcare programs.”

Storey owned and operated North Florida Mental Health (NFMH), a Tallahassee-based counseling center, and employed Fleming as a licensed mental health counselor. Evidence presented in court showed that between April 15, 2016 and December 31, 2017, Storey and Fleming improperly obtained, or attempted to obtain, more than $250,000 from Florida Medicaid by submitting fraudulent claims through NFMH.

“Convicted fraudsters Storey and Fleming fraudulently billed the Medicaid program for bogus claims. The pair ignored an exclusion from all federal health care programs, thus stealing from this taxpayer-funded safety net program that is designed to provide legitimate health services to vulnerable patients,” said Special Agent in Charge Omar Pérez Aybar. “Our investigators will continue to aggressively investigate such bad actors to hold them accountable and to send a warning to others tempted to loot from federal health care programs.”

Fleming, who provided psychotherapy, psychiatric diagnostic evaluations, and therapeutic behavioral services to patients of NFMH, agreed to a five-year debarment from participating in any state Medicaid program as a result of a 2016 felony conviction involving Medicaid fraud in the state of New Jersey. Evidence presented in court proved that Fleming falsely claimed on an application to become a Florida Medicaid provider that she had not been convicted of, or pled guilty or no contest to, a felony. Additional evidence demonstrated that Storey knew of Fleming’s conviction and debarment, and that Fleming was therefore ineligible to participate as a Florida Medicaid provider.  

During the trial, evidence showed that Fleming caused to be submitted – and that Storey submitted – multiple fraudulent Medicare claims by means of aggravated identity theft. In doing so, some of the false Medicare claims reflected that another eligible and licensed NFMH therapist performed services that, in reality, were provided by Fleming during the period of time that she was under debarment from participation in any state Medicaid program. The court heard evidence of additional instances in which the names and personal identification information of NFMH patients, many of whom were children, were used to submit fictitious Medicare claims for services that were not performed at all.

“These convicted criminals defrauded the Florida Medicaid program out of approximately a quarter of a million dollars,” said Florida Attorney General Ashley Moody. “They fled to Maryland, but through great investigative work by my Medicaid Fraud Control Unit and collaboration with federal officials, they were brought back to Florida to answer for their crimes—and today were found guilty on a myriad of charges. I look forward to seeing this criminal duo sentenced.”

Both defendants face a maximum sentence of 20 years in prison for conspiracy to commit health care fraud and 10 years in prison for each of the health care fraud convictions. They both also face 2 years in prison as a mandatory minimum sentence, consecutive to any other sentence imposed, for each count of aggravated identity theft. Fleming’s conviction for making false statements in connection to health care matters carries a maximum sentence of 5 years in prison. Sentencing is scheduled for August 20, 2021, at 1:30 p.m. at the United States Courthouse in Tallahassee.

Assistant United States Attorney Justin M. Keen prosecuted the case, which was jointly investigated by the Department of Health and Human Services - Office of Inspector General and the Florida Attorney General Office’s Medicaid Fraud Control Unit.

Source

{jcomments on}

NEWARK, N.J. – A Florida man today admitted his role in a conspiracy to receive kickbacks and bribes from laboratories in exchange for referrals of patient DNA samples and genetic tests, Acting U.S. Attorney Rachael A. Honig announced.

Norman Smiley, 80, of Boca Raton, Florida, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with conspiracy to violate the Anti-Kickback Statute.

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

Smiley owned and operated Sun Health Advocates LLC, a company that was in the business of acquiring patient DNA samples and physicians’ orders for purposes of submitting those samples and orders to clinical laboratories for genetic testing, including Metric Lab Services LLC and Spectrum Diagnostic Labs LLC. Smiley, on behalf of Sun Health, entered into illicit agreements with the Metric and Spectrum laboratories under which the laboratories paid Sun Health kickbacks in exchange for delivering DNA samples and orders for genetic tests. Sun Health concealed these arrangements by issuing sham invoices to the laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the kickback amount, which was based on the revenue the laboratories received from Medicare. Metric and Spectrum paid Sun Health approximately $1.16 million in kickbacks as part of the scheme.

The charge to which Smiley pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest. Sentencing is scheduled for March 16, 2022.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas J. Mahoney, with the investigation leading to today’s guilty plea.

The government is represented by Bernard J. Cooney, Chief of the Government Fraud Unit.

Source

{jcomments on}

NEWARK, N.J. – A Palm City, Florida, man today admitted participating in a compounded medication kickback scheme that he and others ran out of a pharmacy in Clifton, New Jersey, U.S. Attorney Philip R. Sellinger announced.

Anderson Triggs, 42, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to violate the Anti-Kickback Statute.

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

From 2014 through 2016, Triggs and his conspirators used Main Avenue Pharmacy, a mail-order pharmacy with a storefront in Clifton, New Jersey, to run a kickback scheme involving compounded drugs like scar creams, pain creams, migraine mediation, and vitamins. Compounded drugs are prescribed by a physician when an FDA-approved drug did not meet the health needs of a particular patient, such as when a dye or preservative triggers an allergic reaction, or when a patient can’t swallow an FDA-approved pill.

Triggs started as a consultant to Main Avenue Pharmacy and later became a board member of its corporate parent. The scheme revolved around identifying compounded drugs that would yield exorbitant reimbursements from health insurers, including both federal and commercial payers.

The physicians who signed prescriptions for compounded medications that were filled at Main Avenue frequently had never even spoken to the patients or examined them. Once the prescriptions were signed by a doctor, they would be returned to the marketing company, which would transmit the prescription to Main Avenue Pharmacy, which would fill them and submit claims to health care benefit programs for reimbursement

On compounded medications alone, Main Avenue received over $34 million in reimbursements from health care benefit programs, approximately $8 million of which was paid by federal payers. Triggs earned over $900,000 through the course of the scheme.

The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for June 21, 2022.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Department of Defense Office of Inspector General, Defense Criminal Investigative Service under the direction of Special Agent in Charge Patrick J. Hegarty; and special agents of the Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to the charges.

The government is represented by Senior Trial Counsel Jason S. Gould of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.

Source

{jcomments on}

BOSTON – A Florida man was sentenced yesterday for his role in a multi-million-dollar Medicare fraud scheme involving durable medical equipment.

Nathan LaParl, 34, of Boca Raton, Fla., was sentenced by U.S. District Court Senior Judge George A. O’Toole, Jr. to three years of probation, the first year to be served subject to a curfew and forfeiture in the amount of $220,671. On Jan. 21, 2021, LaParl pleaded guilty to one count of receiving kickbacks in connection with a federal health care program and one count of violating the HIPAA statute.

LaParl and co-defendant Talia Alexandre sold Medicare patients’ personal and medical data to Juan Camilo Perez Buitrago. LaParl and Alexandre worked with foreign call centers to contact Medicare patients to ask if they were interested in durable medical equipment (DME) such as arm, back, knee and shoulder braces “at little to no cost.” The call centers collected demographic and insurance information from Medicare patients, which LaParl and Alexandre sold to Perez Buitrago. Together, LaParl and Alexandre received more than $1.6 million from Perez Buitrago for the patient data. Perez Buitrago used that patient data to submit more than $109 million in false and fraudulent claims, submitting claims for DME that was not prescribed, not necessary, and, in many instances, never requested or received.

To perpetuate the scheme, LaParl checked Medicare patients’ insurance eligibility by improperly accessing a patient eligibility tool provided by co-defendant Stefanie Hirsch. Hirsch owned EI Medical, Inc., a Medicare-enrolled wheelchair and scooter repair company that qualified for access to a health care clearinghouse that contains Medicare patients’ personal, medical and insurance information. Hirsch improperly gave LaParl access to that clearinghouse and charged him about $0.25 per patient eligibility check. Using Hirsch’s credentials, LaParl accessed the personal and medical data of more than 350,000 patients.

Hirsch pleaded guilty to violating the HIPAA statute and was sentenced on Sept. 21, 2021, to three years of probation. Hirsch was also ordered to pay a fine of $2,500. Alexandre pleaded guilty to one count of receiving kickbacks in connection with a federal health care program and was sentenced on Dec. 8, 2021, to three years of probation with the first year spent in home detention. Alexandre was also ordered to pay a fine of $5,000 and restitution in the amount of $1.47 million

United States Attorney Rachael S. Rollins; Johnnie Sharp Jr., Special Agent in Charge of the Federal Bureau of Investigation, Birmingham Field Division; Phillip M. Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General, Boston Division; and Ketty Larco Ward, Inspector in Charge of the U.S. Postal Inspection Service made the announcement. Assistant U.S. Attorney Elysa Q. Wan of Rollins’ Health Care Fraud Unit prosecuted the case.

Source

{jcomments on}

BOSTON – A Florida woman was sentenced today in connection with a multi-million-dollar Medicare fraud scheme.

Talia Alexandre, 30, of Palm Springs, Fla., was sentenced by U.S. Senior District Court Judge George A. O’Toole Jr. to three years of supervised release with the first year spent in home detention. Alexandre was also ordered to pay a fine of $5,000 and restitution in the amount of $1.47 million. On Feb. 24, 2021, Alexandre pleaded guilty to one count of receiving kickbacks in connection with a federal health care program.

Alexandre and co-conspirator Nathan LaParl sold Medicare patients’ personal and medical data to Juan Camilo Perez Buitrago. Alexandre and LaParl worked with foreign call centers to contact Medicare patients to ask if they were interested in durable medical equipment (DME) such as arm, back, knee and shoulder braces “at little to no cost.” The call centers collected demographic and insurance information from Medicare patients, which Alexandre and LaParl sold to Perez Buitrago. Alexandre received more than $1.4 million from Perez Buitrago for the patient data. Perez Buitrago used that patient data to submit more than $109 million in false and fraudulent claims, submitting claims for DME that was not prescribed, not necessary, and, in many instances, never requested or received.

Acting United States Attorney Nathaniel R. Mendell; Johnnie Sharp Jr., Special Agent in Charge of the Federal Bureau of Investigation, Birmingham Field Division; Phillip M. Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General, Boston Division; and Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service made the announcement. Assistant U.S. Attorney Elysa Q. Wan of Mendell’s Health Care Fraud Unit prosecuted the case.

Source

{jcomments on}

Medicare reimbursement consultant Ted Albin and his wholly-owned consulting and billing firm Grapevine Billing and Consulting Services Inc. (Grapevine), both based in Stuart, Florida, have agreed to pay $50,000 to resolve allegations that they violated the False Claims Act. This settlement resolves allegations that Albin and Grapevine caused the submission of false claims to Medicare because of kickbacks to Medicare beneficiaries and because patients were ineligible to receive glucometers. This settlement is based on the United States’ analysis of financial disclosures made by Grapevine.

“Consultants must abide by federal requirements when providing Medicare billing advice,” said Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division. “We will continue to protect the integrity of federal health insurance programs by pursuing individuals or entities responsible for the submission of false or fraudulent claims, including those who cause such claims to be submitted.”

In its complaint, the United States alleged that, from 2008 until 2017, Albin and Grapevine provided consulting services to now-defunct diabetic testing supplier Arriva Medical LLC (Arriva), its parent Alere Inc. (Alere), and starting in January 2018, Abbott Laboratories (Abbott), after Abbott acquired Arriva and Alere in October 2017. From at least 2009 until 2011, Albin, through Grapevine, allegedly served effectively as the Head of Reimbursement at Arriva, overseeing Arriva’s reimbursement department, developing Arriva’s policies for the collection of beneficiary copayment obligations and submitting claims to Medicare on Arriva’s behalf for diabetic testing supplies.

The United States alleged that, as consultants to Arriva, from April 2010 until the end of 2016, Albin and Grapevine knowingly caused the submission of claims to Medicare that were tainted by the payment of kickbacks to Medicare beneficiaries in the form of (i) free or “no cost” glucometers, or (ii) the routine waiver of beneficiary copayment obligations. Additionally, the United States alleged that Albin and Grapevine knowingly caused the submission of claims to Medicare for glucometers on behalf of beneficiaries who were not eligible to seek reimbursement because they had received a meter paid for by Medicare within the previous five years.

The United States produced sworn testimony from Albin in the litigation in which he admitted that, as a reimbursement consultant for Arriva, Albin personally (1) would “write off customer co-payments” because “I could tell someone on my team ‘Yes, write this off,’” (2) engaged in such write-offs “probably every week,” (3) engaged in “mass write-offs of denials by Medicare” for ineligible meters, (4) created Arriva’s “routine policy not to send a bill for customers who owed less than $5,” and (5) “came up with the policy” of “courtesy adjustments” in the form of copayment waivers in response to customer complaints about their Medicare coinsurance obligations.

“The resolution of this matter brings about the conclusion of a lengthy and protracted investigation and litigation in which the United States sought and received substantial penalties and damages as a result of allegations of False Claims Act violations,” said U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee. “I commend the legal team and investigators for working diligently to preserve the integrity of our federal healthcare programs.”

“Those who provide advice to health care providers about Medicare billing must do so with integrity,” said Special Agent in Charge Tamala E. Miles of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to investigate those who cause fraudulent claims to be submitted to federal health care programs.”

The litigation resolved by this settlement originally included claims against Arriva and Alere that were brought under the qui tam or whistleblower provisions of the False Claims Act by Gregory Goodman, a former employee in Arriva’s Antioch, Tennessee call center. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The act also permits the United States to intervene and take over the litigation of a qui tam action, as the United States did here. In August 2021, Arriva and Alere agreed to pay $160 million to resolve the claims against them. The United States also previously settled for $1 million claims against Arriva’s founders, David Wallace and Timothy Stocksdale, for their alleged part in the scheme. The litigation, which is concluded by the settlement announced today, is currently captioned United States v. Albin, et al., Case No. 3:13-cv-00760 (M.D. Tenn.).

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Middle District of Tennessee and HHS-OIG, with the assistance of the Tennessee Bureau of Investigation.

The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was handled by Trial Attorney Jake M. Shields of the Civil Division and Assistant U.S. Attorney Ellen Bowden McIntyre of the Middle District of Tennessee.

Source

{jcomments on}

NCH Healthcare System (NCH), which operates two hospitals in Collier County, Florida, has agreed to pay the United States $5.5 million to resolve allegations that it made donations to local units of government to improperly fund the state’s share of Medicaid payments to NCH.

The Florida Medicaid program provides medical assistance to low-income individuals and individuals with disabilities, and is jointly funded by the federal and state governments. Under federal law, Florida’s share of Medicaid payments must consist of state or local government funds, and not “non-bona fide donations” from private health care providers, such as hospitals. A non-bona fide donation is a payment — in cash or in kind — from a private provider to a governmental entity that is then returned to the private provider as the state share of Medicaid. The private provider’s donation triggers a corresponding federal expenditure for the federal share of Medicaid, which is also paid to the private provider. This unlawful conduct causes federal expenditures to increase without any corresponding increase in state expenditures, since the state share of the Medicaid payments to the provider comes from and is returned to the provider. The prohibition of this practice ensures that states are in fact paying a share of Medicaid payments and thus have an incentive to curb Medicaid costs and prevent unnecessary services.

The United States alleged that, between October 2014 and September 2015, NCH made improper, non-bona fide donations by: (1) providing free nursing and athletic training services to the Collier County School Board; and (2) assuming and paying certain of Collier County’s financial obligations. Both types of donations were designed to increase Medicaid payments received by NCH, without any actual expenditure of state or local funds. In particular, NCH’s donations freed up funds for the county and school board to make payments to the State as the state share of Medicaid payments to NCH. This state share was “matched” by the federal government before being returned to NCH as Medicaid payments. The Medicaid payments NCH received were thus funded by the federal government and NCH’s own donations, in violation of the prohibition on non-bona fide donations.

“States and local units of government must use their own money when seeking federal Medicaid matching funds to help ensure that Medicaid payments are determined by beneficiaries’ medical needs rather than donations by hospitals or other health care providers,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “When private parties violate the rules by making improper donations to fund the state share of Medicaid, they endanger the integrity of the Medicaid program.”

“Millions of Floridians depend on the Medicaid Program for medical care and related services,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “This settlement underscores our commitment to protecting the integrity of the Medicaid program by ensuring that government funds are legally obtained and used for their intended purposes.”

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the U.S. Department of Health and Human Services Office of Inspector General.

The matter was handled by Fraud Section Attorneys Alison B. Rousseau and Jonathan T. Thrope and Assistant U.S. Attorney Carolyn B. Tapie.

Source

{jcomments on}

Dr. James J. Cole’s Patients Were Prescribed High Levels of Opioids and the “Holy Trinity” Cocktail

ALBANY, NEW YORK – Dr. James J. Cole, formerly a physician in Albany, is paying the United States $125,000 for overprescribing opioids and other controlled substances to patients, including one patient who died. Cole also forfeited his prescribing privileges and his medical license.

The announcement was made by United States Attorney Carla B. Freedman, Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (DHHS-OIG); and Acting Special Agent in Charge Keith Kruskall, U.S. Drug Enforcement Administration (DEA), New York Division.

“Sadly, many addictions begin and continue in a doctor’s office,” said Carla Freedman, United States Attorney for the Northern District of New York. “We know that opioids present significant risk to patients, especially when prescribed at high levels, for extended periods of time. We will continue using federal legal remedies to hold doctors accountable when they facilitate abuse.”

“DEA Registrants hold great responsibility and trust,” said Keith Kruskall, Acting Special Agent in Charge of the DEA New York Division. “This particular registrant violated that trust, and the settlement in place demonstrates how DEA and our law enforcement partners will continue to hold all sources of diversion accountable.”

“Opioid abuse has devastated many communities around this country," said Special Agent in Charge Scott J. Lampert, of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations' New York Region. "We will continue to work with our law enforcement partners to ensure that physicians that overprescribe are thoroughly investigated and held accountable for their actions."

This settlement resolves allegations that:

• One of Dr. Cole’s patients died after taking a combination of fentanyl and oxycodone prescribed by Dr. Cole. Six months before the fatal overdose, the patient overdosed using fentanyl strips, and an emergency room doctor took the strips from the patient. The next day, Dr. Cole prescribed fentanyl strips for the patient along with oxycodone and morphine.

The $125,000 payment constitutes civil penalties under the Controlled Substances Act, and damages sustained by Medicare when it reimbursed for Dr. Cole’s illegitimate prescriptions. Dr. Cole has surrendered his DEA registration, and, as part of the civil settlement, agreed not to seek a renewal for at least 15 years. In a separate agreement with New York State, Dr. Cole also agreed to permanently forfeit his New York State medical license.

This case was investigated by DEA Albany District Office’s Diversion Group and Tactical Diversion Squad; the DHHS Office of Inspector General’s New York Region, with assistance from the New York State Department of Health, Bureau of Narcotic Enforcement.

Assistant U.S. Attorney Christopher Moran represented the United States in this matter.

Source

{jcomments on}

BILLINGS – A former Billings rheumatologist and his business agreed to settle alleged civil False Claims Act violations regarding his practice for a $2,070,664 total payment, Acting U.S. Attorney Leif M. Johnson said today.

Dr. Enrico Arguelles, a former rheumatologist, and his business, Arthritis and Osteoporosis Center (AOC), which closed in September 2018, entered into a civil settlement agreement with the U.S. Attorney’s Office for the District of Montana on July 14, 2021. The terms of the settlement require Arguelles and AOC to pay a settlement amount of $1,268,646 and to relinquish any claim to $802,018 in Medicare payment suspensions that have been held in escrow for AOC since Oct. 11, 2017 by the Centers for Medicare and Medicaid.

“This civil settlement resolves claims of improper medical treatments and false billing to a federal program. Over billed and unnecessary claims, like the ones at issue in this case, drive up the costs for providing care to the people who really need it. Medical providers who attempt to enrich themselves by submitting false and exaggerated claims to federal health benefit programs, like Medicare, will be investigated and held responsible. I want to thank our office’s team of health care fraud investigators, the Department of Health and Human Services Office of Inspector General and the FBI for their work on this case,” said Acting U.S. Attorney Johnson.

“Patients and taxpayers expect physicians to make decisions based on medical necessity, not on boosting the physician’s profits, as alleged in this case,” said Special Agent in Charge Curt L. Muller of the U.S. Department of Health and Human Services Office of Inspector General. “Working with our law enforcement partners, we will hold accountable individuals who provide medically unnecessary treatments and pass along the cost to taxpayers.”

The United States contended that it had certain claims against Arguelles and AOC arising from the diagnosis and treatment of rheumatoid arthritis, including the improper billing for MRI scans, improper billing for patient visits, and the use of biologic infusions such as Remicade for certain patients who did not have seronegative rheumatoid arthritis, from Jan. 1, 2015 through AOC’s closure in September 2018.

The Settlement Agreement is neither an admission of liability by Arguelles or AOC, nor a concession by the United States that its claims are not well founded.

Assistant U.S. Attorney Michael A. Kakuk represented the United States in this matter, which was investigated by the U.S. Attorney’s Office’s Health Care Fraud Investigative Team, the Department of Health and Human Services Office of Inspector General and the FBI.

Source

{jcomments on}

HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Arminda Martin, age 49, formerly of York County, Pennsylvania, was sentenced on July 28, 2020, to 12 months’ and one day imprisonment to be followed by two years of supervised release, by Chief District Court Judge John E. Jones, III, for conspiring to commit mail fraud. The sentence represents a downward adjustment of approximately 32 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 her husband, Theodore 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.

Theodore Martin was sentenced earlier this year to 13 months’ imprisonment.        

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.

Source

{jcomments on}

U.S. Attorney Justin Herdman announced today that a grand jury sitting in Cleveland has returned a 28-count indictment charging William H. Precht, age 53, of Kent, Ohio, with theft of government property, conspiracy to commit wire fraud and honest services fraud, wire fraud, and false statements relating to health care matters.

According to the indictment, from October 5, 2010, through January 4, 2019, the defendant is accused of using his position with the Cleveland Veteran Affairs (VA) Medical Center to engage in a scheme to enrich himself and co-conspirators.

The indictment alleges that from on or about October 5, 2010, through on or about February 16, 2018, the defendant fraudulently used his VA-issued purchase card and facilitated the use of other VA employees’ purchase cards to make purchases from a company controlled by the defendant for approximately $1,066,348.

In addition, from on or about May 27, 2015, through on or about January 4, 2019, the defendant is accused of conspiring with a medical supplies company located in South Euclid, Ohio, to devise a scheme in which the defendant would receive kickbacks and other items of value, in exchange for steering VA business and other monetary awards to the medical supplies vendor.

Allegedly, it was part of the conspiracy that the defendant would solicit and accept items of value from the medical supplies vendor such as money, sporting event tickets and future business interest. The defendant would then provide favorable actions for the benefit of his co-conspirators and the medical supplies vendor when the opportunities arose. He is accused of concealing this activity from the Cleveland VA by providing false and misleading information to VA employees about reasons for ordering medical supplies. The defendant also allegedly falsified some patient records to make it appear patients had implants in their electronic health record that did not correlate to any actual surgical or medical procedure, to justify the purchase of implants.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation.

In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The investigation preceding the indictment was conducted by the Department of Veterans Affairs – Office of the Inspector General, Cleveland and the Cleveland Division of the FBI. This case is being prosecuted by Assistant U.S. Attorney Brian McDonough.

Source

{jcomments on}

A former Delaware doctor was sentenced today to 20 years in prison for unlawful drug distribution and maintaining a drug-involved premises.

Patrick Titus, 58, of Milford, was convicted by a federal jury in July 2021 of 13 counts of unlawfully distributing and dispensing controlled substances and one count of maintaining a drug-involved premises.

“This sentence is a reminder that the Department of Justice will hold accountable those doctors who are illegitimately prescribing opioids and fueling the country’s opioid crisis,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Doctors who commit these unlawful acts exploit their roles as stewards of their patients’ care for their own profit.”

According to court documents and evidence presented at trial, Titus unlawfully distributed or dispensed a variety of powerful opioids – including fentanyl, morphine, methadone, OxyContin and oxycodone – outside the usual scope of professional practice and not for legitimate medical purposes. Titus operated an internal medicine practice where he frequently prescribed these dangerous controlled substances in high dosages, sometimes in combination with each other or in other dangerous combinations, mostly in exchange for cash. Evidence at trial showed he distributed over 1 million opioid pills. Although these Schedule II drugs are approved for pain management treatment, Titus provided no meaningful medical care and instead prescribed these controlled substances to patients he knew were suffering from substance use disorder and/or who demonstrated clear signs that the prescribed drugs were being abused, diverted or sold on the street.

“DEA-registered medical practitioners have an important role in our communities to treat patients compassionately and responsibly,” said DEA Administrator Anne Milgram. “Today’s sentencing makes clear that medical professionals who recklessly prescribe opioids and endanger the safety and health of patients will be held accountable. I applaud the outstanding investigative work conducted by DEA’s Wilmington Resident Office Tactical Diversion Squad and the Department of Justice’s prosecution of the case.”

“As we continue the fight against the opioid crisis, this case serves as an important reminder that health care professionals have a duty to prescribe medication responsibly to ensure the well-being of individuals under their care. Failing to do so can endanger patients and undermines critical, ongoing public health measures,” said Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to hold bad actors accountable.”

The DEA and HHS-OIG investigated the case.

Assistant Deputy Chiefs Aleza Remis and Justin Woodard and Trial Attorney Claire Sobczak of the Criminal Division’s Fraud Section prosecuted the case. Assistant U.S. Attorney Edmond Falgowski of the District of Delaware assisted with the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this Program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found athttps://www.justice.gov/criminal-fraud/health-care-fraud-unit.

Source

{jcomments on}

Submitted over 2,000 materially false and fraudulent claims to Medicaid and Medicare

Evansville – Acting U.S. Attorney John Childress announced today that Barbara B. Witte, 74, of Evansville, Indiana, was convicted of felony health care fraud and sentenced to two years of federal probation by U.S. District Judge Richard L. Young. Witte was also ordered to pay $186,347.55 in restitution and a $50,000 fine.

“Health care fraud harms the entire healthcare system and those that need the care from it,” said Childress. “This office will continue to work with our law enforcement partners to investigate and prosecute those who do their best to undermine that system.”

Witte was a licensed mental health counselor. She provided counseling services for patients in Evansville and Vanderburgh County through her business, B-One Counseling. She billed health care benefit programs, including Medicaid and Medicare, for medical services she provided.

Between January 2014 and July 2018, Witte submitted over 2,000 materially false and fraudulent claims to Medicaid and Medicare. The claims were fraudulent because Witte had not actually provided services to the patients identified in the claims.

Medicaid and Medicare processed Witte’s false claims and paid her for services she never provided. Witte’s conduct caused a loss of $146,334.51 to the Medicaid program, and $40,013.04 to the Medicare program.

This investigation was a collaborative effort between the FBI, Indiana Medicaid Fraud Control Unit, Office of Attorney General, and the U.S. Department of Health and Human Services, Office of Inspector General.

"This sentence should put others on notice that exploiting federally funded health care programs will not be tolerated and those who engage in this type of crime will be identified and held accountable,” said FBI Indianapolis Special Agent in Charge Paul Keenan. “We will continue to work with our partners to protect taxpayer’s resources from those who would take advantage of such programs for their own greed.”

“Fighting fraud and protecting Hoosiers is our top priority. This criminal conviction is a win for all Indiana residents, as every dollar returned to Indiana Medicaid through this restitution is another taxpayer dollar that will go toward services for our most vulnerable,” said Indiana Attorney General Todd Rokita. “I am proud of the diligent work of our team and our federal partners to bring this case to justice.”

“Medical professionals are entrusted to provide only medically necessary services and bill for only for the services that they provide. Billing for services not rendered is fraud, pure and simple,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to work with our partners to ensure that those who choose to submit fraudulent claims to the Medicare and Medicaid programs are held accountable.”

According to Assistant U.S. Attorney Matthew B. Miller, who prosecuted this case for the government, Witte must pay restitution in full within thirty days.

In November of 2020, Acting United States Attorney John E. Childress renewed a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s enduring commitment to investigating and prosecuting those who engage in fraud and abuse that harm the public and the healthcare system. See U.S. Attorney’s Office, Southern District of Indiana Strategic Plan Section 5.2.

Source

{jcomments on}