PITTSBURGH, PA - A former physician who operated private family practices in Perryopolis, Pennsylvania, and Mount Pleasant, Pennsylvania, has been sentenced in federal court to 18 months’ incarceration, followed by three years supervised release, and ordered to pay a $5,000 fine on his conviction of violating federal narcotics and health care laws, United States Attorney Cindy K. Chung announced today.

United States District Judge J. Nicholas Ranjan imposed the sentence on Emilio Ramon Navarro, 60, of Coal Center, Pennsylvania.

According to the information presented to the court, Navarro, a licensed physician in the Commonwealth of Pennsylvania, operated private family practices in Mount Pleasant and Perryopolis. In 2018, Navarro issued Victim 1 nine prescriptions for a total of 300 dosage units of Oxycodone and 240 dosage units of Oxymorphone, both Schedule II controlled substances, outside the usual course of professional practice and for no legitimate medical purpose. Rather, Navarro forced Victim 1 to engage in sexual acts with him prior to issuing her these prescriptions to which he caused her to be addicted. Navarro thereby caused the submission of fraudulent claims to Medicaid for reimbursement for the unlawfully prescribed prescriptions thereby defrauding Medicaid.

Prior to imposing the sentence, Judge Ranjan stated, “There are victims involved and they have suffered lasting impacts.”

“Today’s sentence holds Dr. Navarro accountable for his illegal activities,” said U.S. Attorney Chung. “I will continue our office’s tenacious pursuit of unscrupulous doctors who exploit the addictions of patients for personal gratification and then cause our healthcare system to be defrauded.”

“Dr. Navarro had a clear disregard for medical integrity,” said FBI Pittsburgh Special Agent in Charge Mike Nordwall. “He preyed on victims struggling with addiction and traded drugs for sex. The FBI will continue to work with our partners to hold accountable those who abuse their positions of trust.”

“When Dr. Navarro prescribed opioid prescriptions in exchange for sexual favors, he abandoned his duty as a physician and recklessly discarded the health and safety of his patients,” said Special Agent in Charge Maureen R. Dixon of the U.S. Department of Health and Human Services. “Together with our law enforcement partners, our agency will continue to uproot such egregious fraud schemes that threaten public health and wastes taxpayer dollars.”

“Navarro held a position of trust in his community and his patients depended on him to provide medical care,” said AG Shapiro. “He will now face consequences for showing no regard for the health and safety of his patients, illegally prescribing drugs that have fueled the opioid crisis here in Pennsylvania, and defrauding our Commonwealth's Medicaid Program. The Office of Attorney General's arrests of prescribers who divert prescription drugs are up 135% since 2016. We will continue to work with our partners to seek out those who put lives at risk and hold them accountable.”

Assistant United States Attorneys Robert S. Cessar and Mark V. Gurzo are prosecuting this case on behalf of the government.

The investigation leading to the prosecution of Emilio Navarro was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit (OFADU). The Western Pennsylvania

OFADU, led by federal prosecutors in the U.S. Attorney’s Office, combines the expertise and resources of federal and state law enforcement to address the role played by unethical medical professionals in the opioid epidemic. The agencies which comprise the Western Pennsylvania OFADU include: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, Pennsylvania Office of Attorney General – Bureau of Narcotic Investigations, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations, U.S. Office of Personnel Management – Office of Inspector General and the Pennsylvania Bureau of Licensing.

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SYRACUSE, NEW YORK - Jennifer Caloia, age 57, a licensed pharmacist who owned and operated Dougherty Pharmacy in Morrisville, New York, from 1998 to 2015, was sentenced today in federal court in Utica to serve a two-year term of probation, perform 80 hours of community service, a fine in the amount of $10,000.00, a special assessment of $100 after previously pleading guilty to one felony count of health care fraud.

The announcement was made by Acting United States Attorney Antoinette T. Bacon; Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI); Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (HHS OIG); Ralph D. Tortora III, Regional Director, New York Attorney General’s Medicaid Fraud Control Unit, Syracuse Office; Carol S. Hamilton, Regional Director, U.S. Department of Labor Employee Benefits Security Administration (DOL EBSA); and Shirin Emami, Acting Superintendent, New York State Department of Financial Services.

In pleading guilty previously, Jennifer Caloia admitted that between 2011 and 2015 she defrauded public and private health insurance programs by submitting false and fraudulent claims for prescription drugs that the pharmacy did not dispense. Caloia also admitted that customers submitting prescriptions for medications had their health insurance providers billed for more expensive drugs than those prescribed. To facilitate this scheme, Caloia changed the names of some of the prescription drugs in the software she used to communicate with insurance companies and to print drug labels, which allowed her to submit her fraudulent claims while providing the customer with the appropriate labels and instructions. Evidence presented to the court in support of Caloia’s guilty plea also revealed that in at least a few instances she dispensed a drug different than what a customer’s doctor had prescribed as part of her scheme to defraud. Caloia no longer owns or operates Dougherty Pharmacy.

In sentencing Caloia, United States District Judge David N. Hurd also ordered her to pay restitution in the amount of $110,431.02 to the public and private insurers affected by her fraud scheme.

In separately negotiated civil settlements with the Civil Division of the United States Attorney’s Office for the Northern District of New York and the New York State Attorney General’s Office, Caloia and her company agreed to pay $92,308.76 related to her submission of false claims to public insurers such as Medicare and Medicaid. The civil settlement resolves a whistleblower lawsuit filed under the qui tam provisions of the federal and New York False Claims Acts, which allow private persons, knowns as “relators,” to file civil actions on behalf of the government and share in any recovery. The relator in this case will receive $18,461.75 of the settlement proceeds. The federal civil case is docketed with the United States District Court for the Northern District of New York under number 6:17-cv-92 (BKS/ATB).

This case was investigated by the Federal Bureau of Investigation (FBI); the U.S. Department of Health and Human Services, Office of Inspector General (HHS OIG); the U.S. Drug Enforcement Administration (DEA), the U.S. Department of Labor-Employee Benefits Security Administration (DOL EBSA), New York Attorney General’s Medicaid Fraud Control Unit; and the New York State Department of Financial Services, and it is being prosecuted by Assistant U.S. Attorney Michael F. Perry. The civil investigation is being handled by Assistant United States Attorney John Hoggan and New York Attorney General’s Medicaid Fraud Control Unit, Syracuse Office Regional Director Ralph D. Tortora III.

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PITTSBURGH, PA - A former physician has been sentenced in federal court to one day of imprisonment, to be followed by three years of supervised release, including 15 months home confinement and 300 hours community service, on his conviction of drug diversion, health care fraud and money laundering, associated with his suburban Pittsburgh holistic medical practice, Acting United States Attorney Stephen R. Kaufman announced today.

Senior United States District Judge Nora Barry Fischer imposed the sentence on Andrzej Kazimierz Zielke, 66, of Allison Park, Pennsylvania 15101.

According to information presented to the court, Zielke owned and operated Medical Frontiers, LLC, a purported pain management practice, located in Gibsonia, Pennsylvania. On or about October 3, 2017, May 25, 2017, October 3, 2017, and December 17, 2014, Zielke knowingly dispensed and distributed Schedule II drugs, including Oxycodone, Methadone, Hydrocodone and Oxymorphone, to four patients outside the course of professional practice and not for a legitimate medical purpose. Zielke committed health care fraud by causing fraudulent claims to be submitted to Medicaid for payments to cover the costs of the unlawfully prescribed drugs. Finally, Zielke violated federal money laundering statutes when he caused approximately $150,000 in proceeds obtained through his illegal drug distribution to be wired from a bank account to Kitco Metals, Inc., in Canada to purchase silver and collector coins.

In addition to the criminal penalties, Zielke agreed to forfeit $75,359 in U.S. currency and an unvalued amount of gold coins and bullion.

Assistant United States Attorney Robert S. Cessar, and Special Assistant United States Attorney Summer F. Carroll prosecuted this case on behalf of the government.

The investigation leading to the filing of charges in this case was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit (OFADU). The Western Pennsylvania OFADU, led by federal prosecutors in the U.S. Attorney’s Office, combines the expertise and resources of federal and state law enforcement to address the role played by unethical medical professionals in the opioid epidemic.

The agencies which comprise the Western Pennsylvania OFADU include: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, Pennsylvania Office of Attorney General – Bureau of Narcotic Investigations, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations, U.S. Office of Personnel Management – Office of Inspector General and the Pennsylvania Bureau of Licensing.

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BOSTON – An Illinois man was sentenced yesterday for defrauding insurance companies in relation to a high-priced drug made by Cambridge-based pharmaceutical company Aegerion Pharmaceuticals Inc., and for using the identities of physicians to carry out the fraud.

Mark Moffett, 49, of Springfield, Ill., was sentenced by U.S. Senior District Court Judge William G. Young to 54 months in prison and three years of supervised release. In December 2019, Moffett was convicted by a federal jury of nine counts of wire fraud and six counts of aggravated identity theft.

“Mr. Moffett exploited his personal relationships with medical staff, stole doctors’ identities, falsified medical documents and deceived insurance companies – all in pursuit of sales bonuses,” said Acting United States Attorney Nathaniel R. Mendell. “His prison sentence is a reminder that those who engage in healthcare fraud schemes, no matter how sophisticated, will pay for their crimes.”

“Today’s sentence holds Mark Moffett accountable for gaming the healthcare system to line his own pockets. He deceived doctors and patients to boost sales of this powerful drug, and defrauded Medicare in the process. Fraud of this magnitude will not be tolerated because it drives up healthcare costs for all of us,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division.

“Today’s sentence shows that fraudsters like Mark Moffett who try to enrich themselves at the expense of federal health care programs and the well-being of beneficiaries will be held accountable for their greed-fueled schemes. Such scams threaten patient health, waste taxpayer funds, and drive-up healthcare costs for all of us,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health & Human Services, Office of Inspector General. “Working closely with our law enforcement partners, we will continue to aggressively root out health care fraud and bring criminals to justice.”

“Working with our law enforcement partners, the Employee Benefits Security Administration continues to investigate and vigorously pursue cases in which participants and private sector health benefit plans are victimized by unscrupulous and illegal pharmaceutical sales practices,” said Carol S. Hamilton, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office.

In 2014 and 2015, Moffett, a pharmaceutical sales representative for Aegerion, marketed the company’s cholesterol drug Juxtapid. Juxtapid was approved by the FDA only to treat high cholesterol in patients with a rare genetic disease called homozygous familial hypercholesterolemia (HoFH). The FDA approved the drug only to treat HoFH patients because the drug carried serious risks of side effects, including liver damage. The drug’s label included a black box warning.

Moffett nonetheless convinced doctors to prescribe Juxtapid, which costs over $300,000 per year, for patients without HoFH. In order to defraud Medicare and private sector employee health plans into paying for a drug they only covered for FDA-approved uses, Moffett obtained fraudulent prescriptions and falsified numerous documents, including statements of medical necessity and other insurance documents. This included false patient test results, false clinical histories and false diagnoses. Moffett used the identities of several cardiologists to carry out the fraud. He was paid bonuses by Aegerion of up to $11,000 for each prescription of Juxtapid.

Acting United States Attorney Mendell, FBI Boston SAC Bonavolonta, HSI-OIG SAC Coyne and DOL-EBSA Regional Director Hamilton made the announcement. Assistant U.S. Attorneys Kriss Basil, of Mendell’s Securities and Financial Fraud Unit, and Rachel Y. Hemani, of Mendell’s Health Care Fraud Unit, prosecuted the case.

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PITTSBURGH, PA - A former Pittsburgh-area physician pleaded guilty in federal court to violating federal narcotics and health care laws, Acting United States Attorney Stephen R. Kaufman announced today.

Emilio Ramon Navarro, 60, of Coal Center, Pennsylvania, 15423 pled guilty to one count of unlawful distribution of oxycodone and one count of health care fraud before United States District Judge J. Nicholas Ranjan. Navarro also accepted responsibility for eight additional counts of unlawful distribution of Schedule II controlled substances.

In connection with the guilty plea, the court was advised that Navarro was a licensed physician in the Commonwealth of Pennsylvania and operated private family practices in Mount Pleasant and Perryopolis, Pennsylvania. In 2018, Navarro issued Victim 1 nine prescriptions for a total of 300 dosage units of oxycodone and 240 dosage units of oxymorphone, both Schedule II controlled substances, outside the usual course of professional practice and for no legitimate medical purpose but in exchange for sexual favors. Navarro then submitted fraudulent claims to Medicaid for reimbursement for the unlawfully prescribed prescriptions thereby defrauding Medicaid.

Judge Ranjan scheduled sentencing for March 1, 2022, at 2:00 p.m. The law provides for a total sentence of not more than 20 years in prison, a fine of $1,000,000, or both, for the narcotics conviction. Navarro faces an additional maximum term of imprisonment of not more than 10 years, a fine of $250,000, or both, for the health care fraud conviction. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorneys Robert S. Cessar and Mark V. Gurzo are prosecuting this case on behalf of the government.

The investigation leading to the filing of charges in this case was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit (OFADU). The Western Pennsylvania OFADU, led by federal prosecutors in the U.S. Attorney’s Office, combines the expertise and resources of federal and state law enforcement to address the role played by unethical medical professionals in the opioid epidemic.

The agencies which comprise the Western Pennsylvania OFADU include: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, Pennsylvania Office of Attorney General – Bureau of Narcotic Investigations, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations, U.S. Office of Personnel Management – Office of Inspector General and the Pennsylvania Bureau of Licensing.

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A former Sacramento-area CEO was sentenced to five years in prison Tuesday in connection with a Veterans Affairs health care fraud scheme.

In a news release, the U.S. Attorney's Office for the Eastern District of California said Peter Wong, 61, the founder of Sunrise Shoes and Pedorthic Service, a longtime specialized orthopedic shoe and prosthetic store, was found guilty in May of health care fraud and conspiracy to commit wire fraud.

Wong and Anthony Lazzarino, 69, the former chief of podiatry for the VA's Northern California health care system, were charged in 2016 with billing the VA for custom products that were prescribed but never supplied to Veterans between 2008 and 2015.

Their grand jury indictment said they billed the VA nearly $1.7 million worth of shoes, some costing $1,682 per pair, but Veterans didn't get the specialized footwear and instead received shoes straight off the shelves from Sunrise Shoes.

A former employee, Jai Aing Chen, pleaded guilty in December 2016 to making false statements to the VA while applying for a national contract worth $11 million per year with regard to the origin of the shoes.

Lazzarino, who was also found guilty in May, is scheduled to be sentenced in February and faces up to 10 years in prison for each count of health care fraud and five years in prison for each count of wire fraud conspiracy.

Chen was sentenced to one year and one day in prison on Aug. 6, 2019.

Sunrise Shoes has been open since 1986.

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A former nurse practitioner and clinic owner was sentenced in the Eastern District of Tennessee today to 14 years in prison for illegally distributing prescription opioid pills to his patients.

Mark Daniel Allen, 64, of Venice, Florida, was found guilty of six counts of unlawfully distributing controlled substances not for a legitimate medical purpose outside the scope of professional practice and one count of maintaining a drug-involved premises after a three-day trial on Sept. 1, 2021.

According to evidence presented at trial, Allen unlawfully prescribed roughly 15,000 opioid pills to three women with whom he had sexual relationships, and to a male patient who later passed away.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee; Special Agent in Charge Joseph Carrico of the FBI’s Knoxville Field Office; Special Agent in Charge Tamala Miles of the Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Director David Rausch of the Tennessee Bureau of Investigation (TBI) made the announcement.

The FBI, HHS-OIG, TBI, Manchester Police Department and Coffee County Sheriff's Office investigated the case.

Trial Attorney Emily Petro of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James Brooks of the Eastern District of Tennessee prosecuted the case.

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Assistant U. S. Attorneys Peter Ko (619) 546-7359 and Mark Conover (619) 546-6763

NEWS RELEASE SUMMARY – October 27, 2022

Justice.gov

SAN DIEGO – Christopher Toups, who at the time of his crimes was a chief petty officer in the U.S. Navy, pleaded guilty in federal court today, admitting that he and others participated in a scheme to file false claims to obtain unearned benefits from an insurance program that compensates service members who suffer serious and debilitating injuries while on active duty.

According to his plea agreement, participants in the scheme obtained approximately $2 million in payments from fraudulent claims submitted to the insurance program - Traumatic Servicemembers Group Life Insurance Program, or TSGLI - and Toups personally obtained about $400,000.

At today’s hearing, Toups pleaded guilty to conspiracy to commit wire fraud. He admitted that from 2012 to at least December 2015, he conspired with his then-spouse Kelene McGrath, Navy Dr. Michael Villarroel, and others to obtain money from the United States by making claims for life insurance payments based on exaggerated or fake injuries and disabilities. He is scheduled to be sentenced on February 3, 2023, at 9 a.m.

“The theft of military healthcare dollars directly ‎harms service members and taxpayers,” said U.S. Attorney Randy Grossman. “This fraud was costly for the U.S. Navy, and now for this defendant.” Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.

“Fraudulently filing claims for unearned TSGLI benefits diverts compensation from deserving service members who suffered serious and debilitating injuries while on active duty,” said Special Agent in Charge Rebeccalynn Staples with the Department of Veterans Affairs Office of Inspector General’s Western Field Office. “Worse yet, this defendant actively recruited others into the scheme to feed his greed for compensation he did not deserve. This guilty plea is a testament to the VA OIG’s commitment to investigating those who would defraud benefit programs administered by VA.”

“The Traumatic Servicemembers Group Life Insurance Program is designed to compensate service members who suffer serious and debilitating injuries while on active duty. Falsely claiming benefits from this program siphons money from deserving beneficiaries and makes medical care more costly for all of us,” said Stacey Moy, Special Agent in Charge of the FBI San Diego Division. “This scheme is particularly egregious given the service members involved deceitfully served themselves for their own financial gain. The FBI will continue to work with our law enforcement partners to ensure those who willingly defraud the American people are held accountable.”

The Traumatic Servicemembers Group Life Insurance (TSGLI) program was administered by Prudential for the Navy and funded by servicemembers and the Department of the Navy. TSGLI provided financial assistance to servicemembers recovering from traumatic injuries.

According to the plea agreement, in addition to submitting his own TSGLI claims based on fake injuries and disabilities, Toups encouraged numerous current or former Navy servicemembers to submit claims and sometimes told them to provide medical records to McGrath. McGrath, a nurse, falsified or doctored medical records to exaggerate or fake injuries. Villarroel certified that he reviewed the records and determined activities of daily living were lost or impaired and consistent with the claimed injuries as required for claims to be processed and qualify, at times supporting the determination by falsely stating he interviewed the claimant. Villarroel also, at times, provided others’ medical records for McGrath to use in fabricating claims.

Toups admitted that he encouraged recipients of claim payments to give him part of the money, sometimes characterizing it as a “processing fee.” McGrath and Villarroel received part of the kickback depending on their involvement in the claim. Toups paid Villarroel in cash and by cashier’s check. At times, Toups and other conspirators conducted financial transactions in amounts under $10,000 to evade perceived financial reporting requirements.

According to court records, some of Toups’ co-defendants were part of the Explosive Ordinance Disposal Expeditionary Support Unit One (“EOD ESU One”), based in Coronado, California. Toups was a Chief Petty Officer Construction Mechanic.

Ronald Olmsted and Anthony Coco, who each entered guilty pleas earlier this year, were previously sentenced by U.S. District Judge Janis L. Sammartino. Olmsted was sentenced to four months in prison followed by four months of home detention to be served as part of three years of supervised release. Coco was sentenced to four months of home detention to be served as part of three years of probation.

According to court records, Toups, Villarroel, and Meyer were at the center of the scheme, and together the conspirators defrauded the TSGLI program of nearly $2 million. Toups, Villarroel, and Meyer received kickbacks for creating and filing the fraudulent TSGLI applications for other U.S. Navy service members.

DEFENDANT           18CR1674-JLS

Christopher Toups     43       Woodstock, GA

RELATED CASES

Kelene Meyer                         18CR1674-JLS                       44                   Jacksonville, FL

Dr. Michael Villarroel           18CR1674-JLS                       48                   Coronado, CA

Paul Craig                               18CR1674-JLS                       47                    Austin, TX

Richard Cote                           18CR1674-JLS                       45                   Oceanside, CA

Earnest Thompson                 18CR1674-JLS                       46                   Murrieta, CA

Ronald Olmsted                      20CR0659-JLS                       48                   Mobile, AL

Anthony Coco                         20CR0197-JLS                       43                   San Diego, CA

Stephen Mulholland               20CR0052-JLS                       51                   Panama City Beach, FL

SUMMARY OF CHARGES

Toups:

18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution

Others:

18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution

18 U.S.C. § 1343, Wire Fraud

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution

18 U.S.C. § 287, Making a False Claim

Maximum Penalty: Five years in prison, $250,000 fine

AGENCIES

Federal Bureau of Investigation

Naval Criminal Investigative Service

Department of Veterans Affairs - Office of Inspector General

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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NEW BERN, N.C. – A Hope Mills man, Daniel Bruce Ross, was sentenced today to 24 months in prison for conspiring to accept bribe payments in exchange for the performance of official acts while working as a federal government employee. Ross previously pled guilty to the charge. He was also ordered to pay $21,520.00 in restitution.

According to court documents and other information presented in court, Ross worked for the U.S. Department of Veterans Affairs (VA) in Fayetteville as an agent for the Specially Adapted Housing (SAH) grant program, which provides federal funds to eligible Veterans with certain severe, service-connected disabilities for the purpose of constructing adapted homes or modifying existing homes. SAH agents have day-to-day responsibility for managing the grant program, including recommending action on grant applications to VA supervisory officials. Among other things, SAH agents are required to inform the Veteran that he or she may choose their own builder. Agents are prohibited from recommending a particular builder.

During the offense period, Ross was the assigned SAH agent for multiple grant projects awarded to All American Home Renovations (AAHR), a Fayetteville-based construction company then-owned and operated by Marc Schantz. According to the investigation, Ross abused his position as an SAH agent to steer over $1 million worth of grant projects to AAHR in exchange for monetary payments from Schantz. For example, Ross routinely advised his VA supervisors to approve grant awards to Veterans in which AAHR was improperly and deceptively designated as a particular Veteran’s “builder of choice” when, in fact, Ross had misled the Veteran to believe that AAHR had been selected for them by the VA. AAHR concealed the unlawful payments to Ross by transferring the funds to a dormant business owned by Ross, making it appear as if the business was providing legitimate subcontracting services to AAHR.

G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Louise W. Flanagan. The U.S. Department of Veterans Affairs – Office of Inspector General investigated the case and Assistant U.S. Attorney Adam F. Hulbig prosecuted the case.

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Dwane Nevins Took Cash Bribes and then Extorted Undercover Small Business Owners so that he could have his “Christmas”

DENVER – United States Attorney Jason R. Dunn announced that former U.S. Department of Veterans Affairs official Dwane Nevins, age 55, was sentenced to serve 18 months in federal prison followed by 3 years of supervised release for corruption offenses. The FBI’s Denver Field Office and the Veterans Affairs Office of Inspector General, Criminal Investigations Division, Central Field Office, joined in today’s announcement.

According to Court records, Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by co-defendants Robert Revis, Anthony Bueno and an undercover FBI agent to help them manipulate the process for bidding on federal contracts with the VA. Revis and Bueno, working with Nevins, agreed to submit fraudulent bids from service-disabled-Veteran-owned small businesses under contract with their consulting company so that federal contracts would be set aside for only those companies. As Bueno put it, the conspirators would then “own all the dogs on the track.” Nevins, Bueno and Revis worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to their consulting company, or by asking their consulting company’s clients to pay Nevins for sham training classes related to federal contracting. At one of those sham trainings in Las Vegas, Nevada, Nevins accepted a $4,500 cash bribe from the undercover FBI agent.

After complaining about not being paid by Revis and Bueno for his participation in the scheme, Nevins used his official position at the VA to extort approximately $10,000 from an undercover FBI agent, telling the agent that “the train don’t go without me. You know what I mean? I’m the engine. I’m the caboose. I’m the engine room.” Nevins also told the undercover FBI agent “this is a business and businessmen need to get paid . . . . so I can have my Christmas, you know what I’m saying?”

Anthony Bueno was previously sentenced in this case to 30 months imprisonment. He was also sentenced to 63 months imprisonment for his role in a separately indicted wire fraud scheme in which he used false representations about investment opportunities to take over a million dollars from several victims.

Robert Revis pleaded guilty in April 2019 to an Information charging him with a single count of supplementing the salary of a federal official. His sentencing hearing is scheduled for March 2, 2020.

“Public corruption is one of my office’s top priorities,” said U.S. Attorney Jason Dunn. “And when it comes at the expense of our Veterans by someone that is supposed to be helping them, we will vigorously prosecute those corrupt actors.”

“Dwane Nevins abused his position of power as a U.S. Department of Veterans Affairs Small Business Advisor in order to personally benefit,” said FBI Denver Special Agent in Charge Dean Phillips. “The FBI is grateful for its partnerships with OIG - U.S. Veterans Administration, OIG – U.S. Small Business Administration, and the U.S. Attorney’s Office which allowed the government to hold Mr. Nevins responsible for his actions.”

“This sentence should deter any government employee who hopes to unlawfully profit from their position of public trust,” said Gregg Hirstein, Special Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General. “Individuals and companies involved in corrupting the VA’s business practices will be held accountable.”

The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, with substantial assistance from U.S. Small Business Administration Office of Inspector General.

The defendant was sentenced by U.S. District Court Judge R. Brooke Jackson and was prosecuted by Assistant United States Attorneys Bryan D. Fields and Hetal J. Doshi.

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Stole Over $15,000 after Applying to Become Victim’s Representative Payee

A Fort Dodge man who stole over $15,000 in Social Security benefits from a severely disabled woman was sentenced February 23, 2022, to ten months in federal prison. Donald Glenn Conner, also known as Donald Luevanos, age 38, received the prison term after a September 16, 2021 guilty plea to one count of representative payee fraud.

In a plea agreement, and at his guilty plea and sentencing hearings, Conner admitted that, in March 2018, the Social Security Administration (SSA) approved his application to become the representative payee for a severely disabled relative. A representative payee is a person whom the SSA entrusts to manage Social Security funds for those who cannot do so due to mental, physical, or other limitations. A doctor had diagnosed Conner’s relative with a severe mental impairment, and she also had a number of other physical health issues. In May 2019, Conner admitted his victim to a local nursing home on the false pretense that she was on Medicaid when she was not. Conner then used his victim’s social security funds for his own purposes, including at a casino, a grocery store, and for videogames, subscription services, and other bills. In March 2020, after the nursing home began asking questions about Conner’s use of his victim’s Social Security funds, Conner abruptly removed his victim from the nursing home against a doctor’s medical advice and left the nursing home with an unpaid bill in excess of $50,000. The investigation also revealed that Conner falsely underreported his household income and received an overpayment of Section 8 federal housing benefits.

Conner was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Conner was sentenced to 10 months’ imprisonment. He was ordered to make $15,499 in restitution. He must also serve a two-year term of supervised release after the prison term. There is no parole in the federal system.

Conner was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.

The case was prosecuted by Assistant United States Attorney Timothy L. Vavricek and investigated by the Social Security Administration, Office of Inspector General, and Health and Human Services, Office of Inspector General.

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A Fort Worth osteopath who attempted to incinerate clinic records has been sentenced to 10 years in federal prison for his role in a $10 million healthcare fraud, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Mark Kuper, the 43-year-old owner of the Texas Center for Orthopedic and Spinal Disorders (TCOSD), was indicted in June 2020. Three months later, he pleaded guilty to one count of conspiracy to commit healthcare fraud. He was sentenced Thursday by U.S. District Judge Reed C. O’Connor.

According to plea papers, Mr. Kuper admitted he conspired with his wife, Melissa Kuper, and a TCOSD physical therapist, Travis Couey, to defraud Medicare, Medicaid, and TRICARE.

The defendant admitted he fraudulently billed insurers for services the clinic never actually rendered, including physical therapy and psychotherapy, and required patients to attend these bogus appointments in order to receive Schedule II controlled substance prescriptions.

He also admitted that he gave his wife access to the secure device and passcode he used to sign controlled substance prescriptions, allowing her to improperly dispense pain medications on her own initiative, without his input.

In plea papers, Mr. Kuper acknowledged that he submitted claims stating that TCOSD had developed individualized physical therapy plans of care for each patient, knowing full well that the clinic had simply issued a boilerplate template, and for one-on-one physical therapy, even though the patients were actually meeting in groups with an athletic trainer who was not qualified to perform physical therapy.

Mr. Kuper further admitted that although he billed insurers for professional 60-minute psychotherapy sessions, most patients actually spoke with unqualified professionals for just 15 to 20 minutes – often when Mr. Kuper was out of the office. 

On multiple occasions, Mr. Kuper billed as though he’d provided more than 100 hours’ work in a single 24-hour day. From 2014 to 2017, he submitted more than $10 million in claims to Medicaid, Medicare, and TRICARE.

As the scheme unraveled, Ms. Kuper attempted to destroy TCOSD documents in an outdoor fireplace at their home. The blaze destroyed their residence, but firefighters were able to recover some of the charred records from the outdoor fireplace.

Mr. Kuper also tried to cover up evidence of the fraud by accessing hundreds of electronic patient records and altering the purported treatment notes to make them appear more comprehensive.

Both Ms. Kuper and Mr. Couey pleaded guilty in September 2020 to conspiracy to commit healthcare fraud. They were sentenced to 18 months and 36 months, respectively.

A civil investigation into TCOSD began after whistleblower Richard Brown filed a qui tam suit alleging that Dr. Kuper was committing fraud through his clinic.

On May 29, 2020, the Civil Division of the U.S. Attorney’s office filed a complaint in partial intervention against Dr. Kuper, Mr. Couey, and Dr. Kuper’s clinic.  The Government’s False Claims Act complaint alleged that Dr. Kuper submitted fraudulent claims for physical therapy, psychotherapy, and pain injection services to federal healthcare programs.

In addition to his guilty plea, Dr. Kuper and his clinic agreed to settle the False Claims Act lawsuit by entry of an agreed judgment against Dr. Kuper and his clinic in the amount of $11,190,222.  As part of the settlement, Dr. Kuper also agreed to liquidate his real estate portfolio and other assets to satisfy the civil judgment.  The whistleblower, Richard Brown, will receive 17% of the government’s recovery. 

The Health and Human Services Office of Inspector General, the Defense Criminal Investigative Service, and the Texas Medicaid Fraud Control Unit, a division of the Texas Attorney General’s Office, conducted the investigation, with assistance from the Drug Enforcement Administration’s Dallas Field Division.  Assistant U.S. Attorneys Lindsey Beran and Steve Fahey, NDTX Criminal Chief, prosecuted the criminal case. Assistant U.S. Attorneys Richard Guiltinan and Kimberly McCoy handled the False Claims Act case for the United States.

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Four Florida men were charged in an indictment unsealed Thursday for their alleged participation in a compound pharmacy kickback scheme.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Maria Chapa Lopez of the Middle District of Florida, Special Agent in Charge Cyndy Bruce of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office, Special Agent in Charge Michael F. McPherson of the FBI’s Tampa Field Office, Special Agent in Charge Omar Aybar Perez of the U.S. Health and Human Services-Office of Inspector General (HHS-OIG) Miami Regional Office and Special Agent in Charge David Spilker of the Veterans Affairs-Office of Inspector General (VA-OIG) Southeast Field Office, made the announcement.

James Wesley Moss, 57, of Zephyrhills, Florida, Edward Christopher White, 38, of Panama City Beach, Florida, David Byron Copeland, 52, of Tallahassee, Florida, and Michael Alton Gordon, 56, of Ft. Myers, Florida, were each charged in an indictment filed in the Middle District of Florida with one count of conspiracy to defraud the United States and to pay or receive health care kickbacks.

In addition, Moss was charged with six counts of offering or paying health care kickbacks and one count of possession with intent to deliver a controlled substance, ketamine;

White was charged with four counts of soliciting or receiving health care kickbacks; Copeland was charged with two counts of soliciting or receiving health care kickbacks and three counts of offering or paying health care kickbacks; and Gordon was charged with three counts of soliciting or receiving health care kickbacks. The defendants will be arraigned in the Middle District of Florida at a later date.

The allegations stem from the defendants’ participation in a multi-million dollar conspiracy to defraud TRICARE, a federal health care benefit program. TRICARE is the health care benefit program of the U.S. Department of Defense that provides health care coverage for active duty service members, National Guard and Reserve members, retirees, their families and survivors. The indictment alleges that Moss and others owned and operated Florida Pharmacy Solutions Inc. (FPS) for the purpose of targeting TRICARE beneficiaries and causing the submission to TRICARE of claims for expensive prescription compounded drugs that were not legitimately prescribed because they were induced and procured by the payment of illegal kickbacks and bribes. The indictment alleges that between approximately November 2012 and September 2015, the defendants caused the submission to TRICARE of more than $54 million in claims for prescription compounded drugs and that TRICARE paid approximately $41 million to FPS on those claims.

The indictment further alleges that Moss paid more than $20 million in health care kickbacks to White, Copeland and Gordon in return for their procuring and referring prescriptions for compounded drugs for TRICARE beneficiaries to be filled by FPS. FPS allegedly submitted claims for payment to TRICARE for providing prescription compounded drugs to TRICARE beneficiaries living in approximately 30 states and several foreign countries.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the DCIS Tampa Resident Agency, assisted by the FBI, the HHS/OIG and the VA/OIG. Trial Attorney John A. Michelich of the Criminal Division’s Fraud Section, National Health Care Fraud Strike Force, is prosecuting the case.

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 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.

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Miami, Florida – Today, a South Florida federal district judge sentenced three men from different parts of the country to federal prison terms for their roles in a conspiracy to defraud companies by issuing worthless bonds to insure large-scale construction projects. A fourth defendant was sentenced earlier this year.    

On December 2, Alexander Robert Xavier, 57, formerly of Boca Raton, Florida was sentenced to 72 months in prison; Timothy Castracane a/k/a “Guy” Castracane, 51, of Saratoga Springs, New York, was sentenced to 46 months in prison; and Henry John Hattendorf, 73, of Las Vegas, Nevada was sentenced to 24 months in prison. On November 16, Robert Michael Wann, 64, of Rancho Mirage, California, was sentenced to 54 months in prison. Each defendant was also sentenced to a term of supervised release of three years and ordered to pay over $2.6 million in restitution to victims of the fraud.

From approximately March 2015 through December 2015, the defendants devised a scheme to unlawfully enrich themselves by issuing various performance and payment bonds – a type of insurance required on major construction contracts. During the course of the fraud, Defendant Xavier, acting as a so-called “individual surety,” pledged over $30 million in assets to builders working on large-scale infrastructure and residential construction projects. In truth, and as the defendants well knew, there were no such assets; only worthless securities that the defendants referred to as “gold certificates.”

Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida; Sean Earle, Special Agent in Charge, Eastern Region Field Office, United States Environmental Protection Agency, Office of the Inspector General (EPA-OIG); and David Spilker, Special Agent in Charge, Southeast Field Office, United States Department of Veterans Affairs, Office of Inspector General (VA-OIG), made the announcement.

United States District Judge Donald M. Middlebrooks imposed the sentences. Previously, the defendants all pled guilty to conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349.  

At the time of his sentencing, Defendant Xavier was already serving a 150-month prison sentence imposed in a different Southern District of Florida criminal fraud case, Case No. 15-80149-cr-Marra.

EPA-OIG and VA-OIG investigated the case, with assistance from the United States Department of Transportation OIG, Internal Revenue Service, Criminal Investigation Division, in Albany, New York, and The Port Authority of New York & New Jersey OIG.

It was prosecuted by Assistant U.S. Attorneys Christopher B. Browne and Stephanie Hauser. Annika Miranda handled the asset forfeiture component of the case.

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HARRISBURG, PA —The United States Attorney’s Office for the Middle District of Pennsylvania announced that Geisinger Community Health Services (GCHS) has agreed to pay $18,513,621.05 to resolve allegations of civil liability for submitting claims to Medicare for hospice and home health services that violated Medicare rules and regulations. GCHS voluntarily disclosed the violations.

According to the voluntary disclosures, between January 2012 and December 2017, through several affiliated entities, GCHS submitted claims to Medicare for hospice and home health services that violated Medicare rules and regulations regarding physician certifications of terminal illness, patient elections of hospice care, and physician face-to-face encounters with home health patients. After it discovered the problems, GCHS took corrective action and disclosed the matter to the United States Attorney’s Office.

“The $18 million payment in this matter reflects the priority healthcare providers should place on making sure they closely follow all Medicare rules and regulations,” said Acting U.S. Attorney Brandler. “Healthcare fraud remains a focus of the Department of Justice and the Affirmative Civil Enforcement Unit of the United States Attorney’s Office. I commend GCHS for taking this seriously, voluntarily disclosing these issues to our office and working to address the problems that led to these violations.”

This matter was handled by the Department of Health and Human Services (HHS), Office of Counsel to the Inspector General (OCIG), the Justice Department’s Civil Division Commercial Litigation Branch, Fraud Section, and AUSA Tamara Haken of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office for the Middle District of Pennsylvania.

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Columbia, South Carolina---- Acting United States Attorney M. Rhett DeHart announced today that his office has resolved claims that Alpha Genomix Laboratories, Inc. paid unlawful kickbacks to Aiken Counseling Group, LLC to induce genetic testing referrals, from April 2015 through December 2016.

The United States alleges that during this time period, Alpha Genomix disguised its kickbacks by paying the salary of an individual who primarily worked for Aiken Counseling Group. Further, the United States alleged most of the referrals were not legitimately ordered by a physician and were medically unnecessary. Medicare and South Carolina Medicaid paid for these fraudulent claims, which violated the Anti-Kickback Statute and the False Claims Act. Alpha Genomix Laboratories, Inc. will pay a $35,000 settlement upfront and a percentage of gross annual revenues up to a total of $200,000 to resolve the claims.

The allegations settled arose from a lawsuit filed by a psychiatrist formerly employed by Aiken Counseling Group, under the whistleblower provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share between 15 and 30% of the recovery.

The owner of the Aiken Counseling Group, Lain Bradford, was sentenced in February 2020 to three years of probation and ordered to pay restitution, after pleading guilty to health care fraud and drug offenses in a related case. Aiken Counseling Group filed for Chapter 7 Bankruptcy in January 2018 and is no longer in business.

Since the allegations, Alpha Genomix Laboratories was sold to new ownership.

The Alpha Genomix Laboratories, Inc. matter was investigated by the Office of the Inspector General of the Department of Health and Human Services, the South Carolina Attorney General’s Medicaid Fraud Control Unit, and Assistant United States Attorney Beth Warren.

“Providers participating in Medicare and Medicaid are expected to uphold the integrity of the programs,” stated Derrick L. Jackson, Special Agent in Charge with the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Companies that seek unmerited payment for unnecessary and illegitimate services abuse the programs and divert funds meant to improve the health and prolong the lives of beneficiaries. HHS-OIG and our partners will actively pursue those who commit health care fraud.”

The litigation and settlement of this matter 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).

The claims resolved by this settlement are allegations only. Alpha Genomix Laboratories, Inc. does not admit wrongdoing or liability.

The case is captioned United States ex rel. Jane Doe, M.D. v. Aiken Counseling Group, LLC and Alpha Genomix Laboratories, Inc.

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National Health Care Fraud Enforcement Action Results in Charges Involving over $1.4 Billion in Alleged Losses

CHARLOTTE, N.C. – A Georgia man is facing federal charges for an illegal kickback scheme that has defrauded the North Carolina Medicaid program of more than $4 million, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. Specifically, a criminal bill of information charges Glenn Pair, 35, formerly of North Carolina now residing in Georgia, with conspiracy to commit Medicaid fraud and money laundering.

“The Medicaid program provides medical services to qualified North Carolinians in need of assistance. It’s not a piggy bank for cheats and fraudsters,” said Acting U.S. Attorney Stetzer. “The U.S. Attorney’s Office will hold accountable those who engage in get-rich-schemes that exploit government programs and deprive important resources from those in real need.”

“North Carolina’s Medicaid program is meant to help the most vulnerable people in our community. Anyone who thinks they can manipulate the system should know the FBI will work tirelessly to make sure they pay dearly,” said FBI Special Agent in Charge Robert R. Wells.

“IRS Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money. Individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable,” said Acting Special Agent in Charge Mona Passmore for the Charlotte Field Office of Internal Revenue Service Criminal Division.

As alleged in the charging document, Pair was a partner and operator of Everlasting Vitality, LLC (EV) and Do-It-4-The Hood Corporation (D4H). From January 2016 through November 2018, Pair and his co-conspirators paid individuals to recruit at-risk youths, in particular children who were Medicaid eligible, for EV’s or D4H’s after-school and youth mentoring programs. Once enrolled, children were required to submit urine specimens for drug testing. Pair and his co-conspirators allegedly conspired with certain laboratories to perform the drug testing of the enrolled children’s urine specimens submitted and received kickbacks once the laboratories were reimbursed by the North Carolina Medicaid.

Pair and his conspirators also allegedly conspired to defraud North Carolina Medicaid by providing client information used by certain laboratories to file other fraudulent reimbursement claims. For example, on some occasions, Pair and his co-conspirators obtained personal identifying information (PII) of D4H clients, such as names, addresses, dates of birth, and Medicaid beneficiary numbers, which the laboratories used to submit drug testing claims to the North Carolina Medicaid that were fraudulent because, among other reasons, the drug tests were not medically necessary, or the urine specimens were not of the Medicaid beneficiaries under whose names they were submitted. Once the laboratories were reimbursed by North Carolina Medicaid, they paid companies under the control of Pair and others a percentage of the Medicaid reimbursements.

As the bill of information alleges, the drug testing laboratories involved in the scheme submitted over $16 million in fraudulent claims to Medicaid and received $4 million in reimbursements, of which they paid more than $1.5 million in illegal kickbacks to Pair and his co-conspirators.

Pair is the second defendant charged in the scheme. Pair’s co-conspirator, Markuetric Stringfellow, was sentenced in February 2021 to 78 months in prison and was ordered pay $5,278,550 in restitution for his role in the conspiracy.

In making today’s announcement Acting U.S. Attorney Stetzer thanked the FBI, IRS-Criminal Investigations and the North Carolina Medicaid Investigations Division for their investigation of the case.

Assistant U.S. Attorney Michael E. Savage, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

A bill of information is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

* * *

The Department of Justice announced today criminal charges against 138 defendants 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, $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.”

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Christopher A. Parris, 41, formerly of Rochester, New York, and currently of Lawrenceville, Georgia, pleaded guilty today to conspiracy to commit mail fraud related to a Ponzi scheme, as well as to wire fraud involving the fraudulent sale of purported N95 masks during the pandemic.

“The fraud schemes at issue here, including the purported sales of personal protective equipment that the defendant could not actually provide, are particularly egregious,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to prosecuting anyone who would try to profit through this kind of conduct.”

“Defendant Parris, together with his co-defendant Perry Santillo, bilked millions of dollars from unsuspecting investors in their Ponzi scheme,” said U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “Their web of deceit spread far and wide as they purchased established investment advisor or broker businesses from across the country in order to gain access to new victims. This office remains committed to working with all of our partners to identify and bring to justice those who seek to enrich themselves by defrauding others.”

“Preying on companies and the Department of Veterans Affairs as they sought to protect their employees and patients from this pandemic is beyond the pale,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “The department and our law enforcement partners will catch and stop those who take advantage of public health emergencies to perpetrate such frauds.”

“The U.S. Postal Inspection Service aggressively conducts investigations of those who fraudulently use the U.S. Mail to facilitate complex fraud schemes,” said Acting Inspector in Charge Joshua W. McCallister of the U.S. Postal Inspection Service, Boston Division. “Today’s plea demonstrates our ongoing work with law enforcement partners to stop those who are engaged in these types of fraudulent activities.”

“Financial frauds are grounded in greed, so it's no surprise that when multiple people are behind a single scheme the greed runs deeper and the damage hits harder,” said Special Agent-in-Charge Stephen Belongia of the Buffalo Office of the FBI. “The only guarantee in a Ponzi scheme is that it will fall short, and the founders who contrived them will too.”

“The urgent need to protect Veterans and VA health care workers during this fast-moving pandemic required the Department of Veterans Affairs to rapidly purchase personal protective equipment” said Inspector General Michael J. Missal of the Department of Veterans Affairs (VA). “Working with our law enforcement partners, the VA Office of Inspector General (OIG) stopped a criminal who was attempting to profit from this horrible crisis and prevented the government and taxpayers from being defrauded of hundreds of millions of dollars. The VA OIG will continue to work zealously to ensure schemes like this are uncovered, investigated and prosecuted to the fullest extent of the law.”

“Since the onset of the pandemic, HSI quickly adapted to investigate the increasing and evolving threat posed by COVID-19-related fraud and criminal activity,” said Acting Special Agent in Charge Jack P. Staton of Homeland Security Investigations (HSI), New Orleans Field Office. “This guilty plea is a testament to the commitment we have, along with our law enforcement partners, to protecting the American public in times of crisis.”

The Ponzi Scheme

Between January 2011 and June 2018, Parris conspired with co-defendant Perry Santillo and others to obtain money through an investment fraud, commonly known as a Ponzi scheme. Specifically, in 2007, Parris and Santillo, as equal partners, formed a business known as Lucian Development in Rochester. Prior to approximately July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Parris and Santillo were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Parris and Santillo agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.

Subsequently, Parris and Santillo chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, Parris and Santillo continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses. In order to find potential investors to solicit and defraud, Parris and Santillo purchased businesses from established investment advisors or brokers who were looking to exit their businesses. Between approximately 2008 and September 2017, Parris and Santillo, using money obtained from prior investors, purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (five businesses), Florida, South Carolina (two businesses), Texas, Pennsylvania, Maryland and Indiana.

The investment offerings pitched by Parris and Santillo consisted principally of unsecured promissory notes and preferred stock issued by various entities controlled by Parris and Santillo. Potential investors were offered an apparent array of investment options to create the illusion of a diversified investment portfolio. Those investment options included products issued by purported issuers such as First Nationle Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation and NexMedical Solutions, among others. None of these issuers had substantial bona fide business operations or used investor money in the manner and for the purposes represented to investors. To the extent that an issuer may have had some minor legitimate business activities, it was not profitable, and insufficient revenues were generated to pay investors any returns (let alone return the principal amounts of their investments).

Over the years, to keep the Ponzi scheme from being detected, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Parris, Santillo and other co-conspirators to finance lavish lifestyles of the conspirators, their families and associates; to expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors; and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans – all of which were used to keep the scheme going and maintain a façade of legitimate business operations.

Very little investor money was deployed in productive investments, and when so deployed, the investments yielded meager income and were not profitable, or failed altogether. The Ponzi scheme was headquartered and based out of locations in Rochester, with a number of satellite offices around the country. Administrative and banking functions were largely performed out of Rochester. The conspiracy employed a variety of salespeople, including Parris and Santillo, who traveled around the country to meet with and solicit new investors.

Between January 2012 and June 19, 2018, Parris and Santillo obtained at least $115.5 million from approximately 1,000 investors. By the time the scheme collapsed in late-2017/early 2018, Parris and Santillo, doing business through an array of corporate entities, had returned approximately $44.8 million to investors as part of their scheme, but continued to owe investors approximately $70.7 million in principal.

Among the Rochester area victims of the Ponzi scheme were the following:

• A resident of Webster, New York, who held a total asset value of $94,341.89 with a fictitious company known as First Nationle Solutions (FNS), which, as of Dec. 31, 2017, was in fact worthless or close to worthless; and
• A resident of Victor, New York, and his wife, who invested approximately $221,758.67 with FNS and Middlebury Development. The couple received three payments of $2,500 but lost approximately $214,258.67.

Parris and Santillo controlled hundreds of different business bank accounts opened under numerous different business names at various financial institutions, including but not limited to Bank of America, Citizens Bank, Genesee Regional Bank and ESL Federal Credit Union. Santillo and Parris directed and authorized the transactions that occurred in the accounts, including deposits, withdrawals, check writing and funds transfers. The various bank accounts were used to transfer money from one account to another. Incoming investor money was routinely transferred through several accounts before the funds were finally spent on whatever purpose Parris and/or Santillo authorized. By moving investors’ funds through various accounts in various entity names, Parris and Santillo were able to conceal and obscure the fact that new investor money was being used to repay earlier investors, finance the operations of the Ponzi scheme, and fund their lifestyles.

Santillo was previously convicted and is awaiting sentencing.

The COVID-19 Fraud Scheme

Parris also pleaded guilty in a case originally charged in the U.S. District Court for the District of Columbia to defrauding the U.S. Department of Veterans’ Affairs (VA), as well as at least eight other victim companies, in a scheme involving personal protection equipment (PPE). Between February and April 10, 2020, the defendant, as the owner and operator of Encore Health Group, a company based in Atlanta, that purported to broker medical equipment, offered to sell scarce PPE, including 3M-brand N95 respirator masks, to various medical supply companies and governmental entities. In these proposals, Parris knowingly misrepresented his access to, and ability to obtain and deliver on time, vast quantities of 3M N95 masks and other PPE. The defendant falsely represented that he was able to obtain 3M N95 masks directly from authorized sources in the United States, when in fact, he had no ready access to 3M factories or 3M N95 masks or other PPE, no proven source of supply, and no track record of procuring and delivering such items.

For example, in March 2021, Parris offered to sell the VA 125 million 3M N95 masks at a cost of $6.45 per mask. In this process, the defendant attempted to obtain an upfront payment of $3.075 million from the VA, even though he knew at the time that he had no access to the promised masks or present ability to deliver the promised masks.

As part of his guilty plea, Parris admitted that, in addition to attempting to defraud the VA, he actually obtained upfront payments totaling approximately $7.4 million from at least eight clients for 3M N95 masks that he knew he had no access to or present ability to obtain or deliver on time. Parris also admitted that the proceeds of the scheme totaled approximately $6,218,525. In total, Parris sought orders in excess of $65 million for the non-existent PPE equipment.

*         *         *

Parris is scheduled to be sentenced on Dec. 8 before U.S. District Judge Frank P. Geraci Jr. He faces a maximum penalty of 20 years in prison for conspiracy regarding the Ponzi scheme, 30 years in prison for wire fraud in connection to a presidentially-declared emergency, and 10 years in prison for committing the offense originally charged in the District of Columbia while on release from the Western District of New York.

The plea is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Acting Inspector-in-Charge Joshua W. McCallister of the Boston Division; the FBI, Buffalo Division, under the direction of Special Agent-in-Charge Stephen Belongia, the IRS, Criminal Investigation Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Nikitas Splagounias, Acting Special Agent-in-Charge, New York Region, the New York State Department of Financial Services, under the direction of Superintendent Linda A. Lacewell; the Securities and Exchange Commission; the VA OIG, under the direction of Michael J. Missal, Inspector General, and HSI, under the direction of Acting Special Agent in Charge Jack P. Staton of the New Orleans Field Office.

Assistant U.S. Attorney John J. Field is handling the prosecution in the Western District of New York, and Trial Attorney Patrick Runkle of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Peter Lallas are handling the prosecution in the District of Columbia.

On May 17, 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 visit https://www.justice.gov/coronavirus.

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Miami, Florida -- A Georgia man was sentenced yesterday to over 11 years in federal prison for defrauding Tricare of approximately $12 million through a South Florida compounding pharmacy fraud scheme. Tricare is the health care benefit program covering military personnel and their dependents.

According to court documents, 51-year-old Erik Santos and his co-conspirators ran the scheme as follows: Santos paid recruiters to convince Tricare beneficiaries to fill prescriptions for expensive, supposedly tailor-made, compounded medications that the beneficiaries did not need. Santos paid doctors to approve pre-printed prescriptions for large amounts of these medications. The doctors did not see the beneficiaries or otherwise consider their medical needs before approving the prescriptions. Lastly, Santos steered the Tricare beneficiaries to fill their prescriptions with Patient Care America (PCA), a compounding pharmacy located in Broward County, Florida. PCA would bill Tricare for expensive drug formulations that had little to no therapeutic value. Many of the compounded medications were billed to Tricare at $10,000 to $15,000 for a month’s supply, even though the ingredients used in the mixtures were little more than common pain or scar creams. Santos’s fraudulent referrals caused an actual loss to the Tricare program of approximately $12 million. PCA pharmacy paid Santos over $7 million in prescription referral kickbacks.

In addition to the prison sentence, the Court imposed restitution in the amount of $11.8 million and entered a forfeiture judgement of approximately $7.6 million. On January 27, 2021, Santos pled guilty in federal district court in Ft. Lauderdale to one count of conspiring to commit health care fraud and wire fraud.

Acting U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida, Special Agent in Charge Cynthia A. Bruce of the Defense Criminal Investigative Service (DCIS), Southeast Field Office, and Special Agent in Charge George L. Piro of FBI Miami announced the sentence.

“Criminals steal exorbitant amounts of money from our government health programs through prescription medication fraud schemes. This significant sentence recognizes the seriousness of the crime,” said Acting U.S. Attorney Gonzalez. “Those who use kickbacks and other illegal activity to bilk taxpayer dollars from vital public programs will be held accountable.”

“Billing healthcare programs for medically unnecessary medications not only undermines the viability of those programs, it exploits all citizens,” said DCIS Special Agent in Charge Bruce. “I am pleased with the significant outcome of this investigation and would like to thank the U.S. Attorney’s Office and the investigative team for their tireless effort and great work to hold accountable those who fraudulently bill the Defense Health Agency.”

“Illegal kickbacks undermined the integrity of the Tricare health benefit program by putting profits in front of patient welfare,” said FBI Special Agent in Charge Piro. “The investigators who unraveled this scam are to be commended for their diligence and commitment. The FBI and our partners will continue to pursue those individuals who pay kickbacks and fraudulently bill for medical services that are not necessary.”

DCIS investigated the case with assistance from FBI Miami, and the Food and Drug Administration-Office of Criminal Investigation. The superseding indictment also named CHAMPVA (the Department of Veterans Affairs’ version of Tricare) as a fraud target and the Department of Veterans Affairs-Office of Inspector General assisted with the investigation.

Assistant U.S. Attorney Jon Juenger prosecuted the case. Assistant U.S. Attorney Daren Grove is handling the asset forfeiture component of the case.

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Fraudulent orders included knee brace for leg amputee

AUGUSTA, GA: A Rockdale County, Ga., nurse practitioner faces substantial time in federal prison after a jury found her guilty of health care fraud, aggravated identity theft, and other counts in a multimillion-dollar telemedicine fraud scheme.

Sherley L. Beaufils, 43, of Conyers, Ga., was convicted after a two-day trial on charges of an illegal kickback conspiracy, and five counts each of Health Care Fraud, False Statements Related to Health Care, and Aggravated Identity Theft, said David H. Estes, U.S. Attorney for the Southern District of Georgia. Conviction on the charges subjects Beaufils to a possible statutory sentence of up to 10 years in prison on each count of Health Care Fraud, two years on each count of Aggravated Identity Theft, and five years in prison on all other counts, along with substantial fines and penalties, followed by a period of supervised release upon completion of any prison term. There is no parole in the federal system.

“Indicted in the Southern District as part of the nationwide Operation Brace Yourself initiative targeting healthcare fraud, Sherley Beaufils profited by signing unnecessary orders for orthotic braces for patients she never examined or spoke to,” said U.S. Attorney Estes. “Her greed was her undoing – and she is now being held accountable for targeting the elderly with her serial fraud.”

As described in court documents and testimony, Beaufils, as a nurse practitioner, facilitated orders for more than 3,000 orthotic braces that generated more than $3 million in fraudulent or excessive charges to Medicare. Co-conspirators captured the identities of senior citizens, identified through a telemarketing scheme, and bundled that information as “leads.”

Beaufils then signed her name to fake medical records, in which she falsely claimed she provided examinations of those patients, and then created orders for orthotic braces for patients she never met or spoke with – including a knee brace for an amputee, and a back brace for a recently deceased patient – and other durable medical equipment, in exchange for money. Beaufils’s fraudulent orders were then sold to companies that would generate reimbursement from Medicare.

Beaufils was found not guilty at trial of one additional charge of conspiracy.

“Today, this defendant found out what health care providers who defraud Medicare are finding out all over America: fraudsters will be held accountable for their greed-fueled fraud schemes,” said Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services Office of Inspector General. “Our investigators will continue to work closely with our state and federal law enforcement partners to protect federal health care programs from such scams.”

“The level of greed shown by Beaufils in this case is shocking, as she lined her pockets at the expense of American taxpayers and government funded healthcare programs,” said Philip Wislar, Acting Special Agent in Charge of FBI Atlanta. “Health care costs are driven up when doctors and staff bill for unnecessary and incomplete services, and the FBI and our partners will use every resource necessary to put a stop to it.”

The case was investigated by the FBI and the U.S. Department of Health and Human Services Office of Inspector General, and prosecuted for the United States by Assistant U.S. Attorneys Jonathan A. Porter and Patricia G. Rhodes.

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Conspiracy was uncovered in nationwide telemedicine fraud investigation

SAVANNAH, GA: A Georgia woman has admitted taking part in a nationwide telemedicine kickback scheme that led to fraudulent Medicare reimbursements for durable medical equipment and genetic testing.

Robin Darnell, known to some of her co-conspirators as “Nurse Robin,” 57, of Dallas, Ga., pled guilty in U.S. District Court to an Information charging her with one count of Conspiracy, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. The plea agreement subjects Darnell to a possible statutory sentence of up to five years in prison and substantial financial penalties and restitution, followed by up to three years of supervised release.

There is no parole in the federal system.

“Telemedicine has played an increasingly important role in providing accessible healthcare, particularly during the pandemic,” said Acting U.S. Attorney Estes. “With our law enforcement partners, we will continue to work diligently to identify and shut down those who would attempt to use technology and deceit to defraud taxpayer funded safety net programs.”

As described in court documents and testimony, Darnell admitted that from June 2018 through September 2020, she and other conspirators took part in a nationwide telemedicine kickback scheme in which she recruited physicians and other medical professionals to sign orders for durable medical equipment and genetic testing. Darnell claimed to have a team of nurses who would contact patients to conduct exams via telemedicine on behalf of the physicians, in exchange for the health care professionals ordering medical equipment and expensive genetic testing for those patients. In fact, Darnell had no such team of nurses, despite claiming otherwise to the physicians she recruited. Darnell processed thousands of orders, which Darnell knew contained medical histories, conditions, diagnoses, or examinations that Darnell knew were false.

Darnell’s conspirators then used these orders to bill Medicare for thousands of dollars each. Medicare beneficiaries were located in the Southern District of Georgia and elsewhere.

“Telemedicine has become a valuable tool for delivering health services in this time of pandemic. However, bad actors are abusing these tools to commit health care fraud,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “When marketing and so-called telehealth services are misused, alleged violators can expect aggressive investigation and swift prosecution.”

“Darnell took advantage of a system that was set up to help healthcare patients get much-needed government assistance during a pandemic,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Her actions not only affect those patients, but every citizen whose tax dollars support programs like Medicare. The FBI is determined to hold her accountable and anyone who would commit such fraud.”

The Southern District of Georgia has now charged 33 defendants as part of the nationwide crackdown on fraudulent genetic testing, and prescribing of orthotic braces and pain creams, identifying more than $1.5 billion in losses to Medicare and Medicaid for defendants charged in the Southern District alone.

This investigation is ongoing. As telemedicine becomes an increasing part of our healthcare system, particularly during the COVID-19 pandemic, vigilance in ensuring that fraud and kickbacks do not usurp the legitimate practice of medicine by electronic means is more important than ever. If you are aware of any fraud or kickbacks relating to telemedicine, including COVID-19 fraud, please call the FBI hotline at 1-800-CALL-FBI.

The case was investigated by the FBI and the Health and Human Services Office of the Inspector General, and prosecuted for the United States by Assistant U.S. Attorney Jonathan A. Porter.

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CAMDEN, N.J. – A federal grand jury today returned a five-count indictment charging a Gloucester County, New Jersey, man with defrauding his employer’s health insurance plan out of more than $4 million by submitting fraudulent claims for medically unnecessary compounded medications, Acting U.S. Attorney Rachael A. Honig announced today.

Christopher Gualtieri, 48, of Franklinville, New Jersey, is charged with conspiracy to commit health care fraud and mail fraud and individual acts of mail fraud. Gualtieri was also charged with making false statements to federal agents during the investigation, as well as preparing and filling fraudulent oxycodone prescriptions. Gualtieri is scheduled to appear today by videoconference before U.S. Magistrate Judge Sharon A. King. The case is assigned to U.S. District Judge Robert B. Kugler in Camden.

According to the indictment:

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Compounded drugs can be properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

Gualtieri and others learned that certain compound medication prescriptions – including vitamins, scar creams, pain creams, and sunscreens – were reimbursed by their health insurance plan for up to thousands of dollars for a one-month supply. Gualtieri recruited co-workers who were covered by their employer’s self-funded health insurance plan to agree to receive medically unnecessary compounded medications for themselves and their family members. Gualtieri and others caused the submission of fraudulent prescriptions to compounding pharmacies, which filled the prescriptions and billed the health insurance plan’s pharmacy benefits administrator. The pharmacy benefits administrator paid the compounding pharmacies more than $4 million for compounded medications arranged by Gualtieri and two conspirators for themselves, their dependents, and other family members. Gualtieri received a portion of the amount paid by the pharmacy benefits administrator to the compounding pharmacies. Gualtieri then paid cash and other remuneration to his conspirators for their participation in the scheme. When questioned by special agents of the FBI, Gualtieri falsely denied recruiting others to receive compounded medications and falsely denied paying cash to others for their participation in the scheme.

During the same time period as the conspiracy involving compounded medications, Gualtieri also prepared and filled fraudulent prescriptions for oxycodone for himself and a family member.

Gualtieri faces a maximum penalty on the conspiracy and mail fraud counts of 20 years in prison, a maximum penalty on the false statements count of five years in prison, and a maximum penalty on the obtaining drugs by fraud count of four years in prison. He also faces a fine on each count of up to $250,000 or twice the gross gain or gross loss from the offense, whichever is greatest.

Acting U.S. Attorney Honig credited agents of the FBI, Philadelphia Field Office, Health Care Fraud Task Force, under the direction of Acting Special Agent in Charge Bradley S. Benavides, and task force members from the Pennsylvania Attorney General’s Office, Department of Health and Human Services – Office of Inspector General, and the Philadelphia Police Department, as well as diversion investigators of the Drug Enforcement Administration, New Jersey Division, Camden Resident Office, under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to the indictment. Acting U.S. Attorney Honig also thanked U.S. Postal Service – Office of Inspector General, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.

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

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CAMDEN, N.J. – A Gloucester City, New Jersey, man today admitted conspiring to distribute Adderall, selling oxycodone, and defrauding the federal Supplemental Nutrition Assistance Program (SNAP) in connection with his role in a drug trafficking ring operating in and around Gloucester City, Acting U.S. Attorney Rachael A. Honig announced.

Michael DePoder, 41, of Gloucester City, pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with one count each of conspiring to distribute and possess with intent to distribute Adderall, distributing oxycodone, and unlawfully acquiring and using SNAP benefits.

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

DePoder admitted that on multiple occasions from December 2019 to March 2020, he distributed Adderall, a Schedule II controlled substance containing amphetamine, to his father, Rocco DePoder, as part of a drug distribution conspiracy. Michael DePoder also sold oxycodone pills to an associate on March 8, 2020. He also admitted unlawfully acquiring SNAP benefits in exchange for controlled substances and unlawfully using and possessing those and other SNAP benefits totaling $2,676. SNAP, formerly known as the Food Stamp program, is administered by the U.S. Department of Agriculture.

Michael DePoder was charged along with 17 others in March 2020 in connection with an investigation by the FBI into the illegal distribution of prescription drugs, including high dosage oxycodone pills, to customers in Gloucester City and Camden.  

The drug conspiracy and distribution counts are punishable by up to 20 years in prison and the SNAP fraud counts are punishable by up to five years in prison.   Michael DePoder also faces a fine of up to $1,000,000 on each of the drug distribution offense and a fine of up to $250,000 for the SNAP fraud offense. As part of his plea agreement, he must pay $2,676 in restitution. Sentencing is scheduled for Aug. 24, 2021.

Eleven other defendants – Rocco DePoder, 68, Marcus Rushworth, 47, and Kenneth Rushworth, 60, all of Gloucester City; Alfred Kee, Jr., 52, of Blackwood, New Jersey; Robert Pratt, 57, of Myrtle Beach, South Carolina, formerly of Blackwood; Wayne Muse, 74, of Lindenwold, New Jersey; Eric Bell, 50, Steven Walker, 50, Alexander Siaca, 55, all of Camden; Antwan Tucker, 51, of Woodbury, New Jersey; and Anwar Abdullah, 32, of Pennsauken, New Jersey – previously pleaded guilty before Judge Bumb to informations charging them with drug trafficking offenses involving the distribution of prescription drugs. They are all awaiting sentencing.

Acting U.S. Attorney Honig credited special agents of the FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the Camden County Police Department, under the direction of Chief Gabriel Rodriguez; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to today’s guilty plea.

She also thanked the FBI Newark Division, New Jersey State Police, Camden County Prosecutor’s Office, and U.S. Drug Enforcement Administration for their assistance.

The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the Office’s Camden branch and Sara F. Merin of the Newark Office.

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

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The United States has intervened in six complaints alleging that members of the Kaiser Permanente consortium violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to receive higher reimbursements.

The Kaiser Permanente consortium members (collectively Kaiser) are Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group Inc. and Colorado Permanente Medical Group P.C. Kaiser is headquartered in Oakland, California.

“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division. “Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”

“The integrity of government health care programs must be protected,” said Acting U.S. Attorney Stephanie Hinds for the Northern District of California. “The Medicare Advantage Program maintains the health of millions, and wrongful acts that defraud the program cannot continue and will be pursued.”

“The federal government pays hundreds of billions of dollars every year to Medicare Advantage Plans,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado. “The District of Colorado will vigorously pursue investigations with our partners to make sure that money supports necessary health care, not fraud.”

Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA Plans are paid a per-person amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the diagnoses of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.

Medicare requires that, for outpatient medical encounters, MA Plans submit diagnoses to CMS only for conditions that required or affected patient care, treatment or management during an in-person encounter in the service year. In order to increase its Medicare reimbursements, Kaiser allegedly pressured its physicians to create addenda to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements.  

The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done, in part, in these cases. The cases are consolidated in the Northern District of California and captioned United States ex rel. Osinek v. Kaiser Permanente, 3:13-cv-03891 (N.D. Cal.); United States ex rel. Taylor v. Kaiser Permanente, et al., 3:21-cv-03894 (N.D. Cal.); United States ex rel. Arefi, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-01558 (N.D. Cal.); United States ex rel. Stein, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-05337 (N.D. Cal.); United States ex rel. Bryant v. Kaiser Permanente, et al., 3:18-cv-01347 (N.D. Cal.); and United States ex rel. Bicocca v. Permanente Med. Group, Inc., et al., No. 3:21-cv-03124 (N.D. Cal.).

This matter was investigated by the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Offices for the Northern District of California and the District of Colorado, with assistance from HHS-OIG.

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ST. LOUIS – Earlier this week a federal grand jury indicted Michael McCormac with one count of health care fraud and three counts of violations of the Anti-Kickback Statute. The indictment was suppressed until today.

The indictment charges Michael McCormac, the former owner of GoLiveWell Pharmacy in Creve Coeur, Missouri with one count of health care fraud and three counts of violations of the Anti-Kickback Statute. McCormac is accused of paying kickbacks to marketing companies for referrals of prescriptions for topical creams, oral medications, and antibiotic and antifungal drugs referred to as “foot bath” drugs, which were filled by GoLiveWell and reimbursed by federal health insurance.

McCormac is accused of paying the kickbacks to marketing companies as various percentages, or “margins,” which are net profits on each prescription. The indictment also alleges that McCormac was aware that patients often did not have a valid doctor/patient relationship with the providers who signed the prescriptions and that the prescriptions were not medically necessary.

GoLiveWell primarily functioned as a mail-order pharmacy, which filled prescriptions for federal health insurance beneficiaries throughout the United States between on or about March 17, 2017 and November 30, 2019. Through the health care fraud and kickback scheme alleged in the indictment, Medicare paid at least $4.7 million to GoLiveWell to which it was not entitled, Missouri Medicaid paid at least $490,000 to GoLiveWell to which it was not entitled, and Ohio Medicaid paid at least $330,000 to GoLiveWell to which it was not entitled.

“Individuals who seek to enrich themselves through kickback fraud schemes -- as alleged in this case -- undermine the taxpayer-funded Medicare and Medicaid programs and drive up health care costs for everyone,” said Special Agent in Charge Curt L. Muller, of the U.S. Department of Health and Human Services Office of Inspector General. “We remain committed to working closely with our law enforcement partners to swiftly investigate such fraud allegations.”

Charges set forth in the indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

The case was investigated by the Office of Inspector General for the United States Department of Health and Human Services and the Federal Bureau of Investigation.

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ST. LOUIS – On August 18, 2021, a federal grand jury issued a twenty-five-count indictment against Katie Diana Rooney charging Rooney with health-care fraud and controlled substance offenses. At the time Rooney allegedly committed these offenses, she was a resident of St. Charles, Missouri.    

The indictment alleges that through fraud and deceit, Rooney obtained prescriptions for Adderall and Xanax, both controlled substances. Rooney illegally sold these drugs to an undercover detective. Because the drugs were intended for Rooney’s two minor children, who were both Medicaid recipients, Medicaid paid for the drugs.

The charges set forth in this indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

The United States Drug Enforcement Administration, the United States Department of Health and Human Services (Office of the Inspector General), and the Missouri Medicaid Fraud Control Unit are investigating this case. The case is being prosecuted by Assistant United States Attorney Dorothy L. McMurtry.

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ANorth Carolina Veteran completed a public-use disability benefits remote questionnaire for a Department of Veterans Affairs claim for a mental health condition arising from three service-connected conditions.

A North Carolina Veteran completed a public-use disability benefits remote questionnaire for a Department of Veterans Affairs claim for a mental health condition arising from three service-connected conditions.

Ultimately, the VA awarded about $6,500 in disability to the Veteran, despite the fact that an examination by a licensed clinical psychologist ruling there was no direct relationship between the Veteran's symptoms and conditions. That's according to a new VA inspector general report released Tuesday, finding that use of questionnaires administered remotely increased bad rulings and led to fraud.

In this case, the Veteran went through a private provider in Puerto Rico via teleconference to fill out the questionnaire. The VA prohibits staff from using questionnaires completed remotely by non-VA doctors when determining benefits.

The report suggested that the Veterans Benefits Administration "determine whether public-use disability benefits questionnaires continue to be an effective means of gathering evidence to support claims for benefit entitlement and, if not, take steps to discontinue their use."

The VBA created the questionnaires for public use a decade ago to address its claims backlog by letting Veterans undergo a private, non-VA provider examination. But several years later, over concerns of fraud raised by the IG, the VBA stopped accepting "telehealth" examinations -- health care delivered remotely via phone or internet -- by non-VA providers or contractors when determining a disability claim.

But IG staff found VBA claims processors have used the telehealth questionnaires to make decisions in more than half of the claims it reviewed, adding up to about $613,000 in payments from April 2017 through September 2018.

VBA staff have alerted 225 potential fraudulent claims relating to these public-use questionnaires to the IG as of December 2018.

"VBA claims processors improperly used disability benefits questionnaires completed by private providers to determine benefit entitlement without evidence the examination was done in person," IG staff wrote in the report. "VA lacks the ability to easily identify private provider telehealth examinations and takes no actions to correct claims where such examinations are improperly used to provide benefits."

The report added that "numerous" organizations have been using these telehealth questionnaires to exploit Veterans, charging them fees or taking some of their disability compensation benefits in exchange for filling out the questionnaires. IG staff also reported hearing reports that Veterans were being coached on what to say to maximize their benefits.

In addition to lacking checks, the IG report pointed out neither the VBA's website nor its forms informed users that telehealth questionnaires filled out by private providers could not be used for deciding benefit entitlements.

VA staff told the IG it would take time to change the form and website because of the Paperwork Reduction Act of 1995 and the requirement to obtain approval from the Office of Management and Budget. This process takes more than a year to complete so public-facing forms, including public-use questionnaires, will be outdated.

VBA staff concurred that a broad review should be done, along with subsequent changes if they decide to keep the questionnaire - adding a spot to say it was completed via a telehealth examination and update VBA procedures so staff know what to do if they suspect a questionnaire was completed via telehealth.

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GREENSBORO, N.C. – HEAG Pain Management Center, P.A. (HEAG) and its owner, Dr. Kwadwo Gyarteng-Dakwa (Dr. Dakwa), have agreed to pay $500,000.00 to resolve allegations that HEAG and Dr. Dakwa violated the False Claims Act by billing Medicare and Medicaid for medically unnecessary diagnostic testing between January 1, 2011 and October 31, 2016, announced Acting U.S. Attorney Sandra J. Hairston. HEAG and Dr. Dakwa will also enter into an Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General.

The United States alleged that HEAG and Dr. Dakwa knowingly submitted or caused the submission of false claims to Medicare and Medicaid for diagnostic nerve conduction studies. Diagnostic tests must be ordered for a patient to treat a specific illness or injury and must be individualized to the patient’s need. The government alleged that HEAG performed the nerve conduction studies without regard to medical necessity, as these tests were performed prior to any examination by Dr. Dakwa and therefore not tailored to the treatment of the individual patient. In addition, unqualified staff at HEAG frequently performed the nerve conduction studies, despite coverage rules requiring a physician to perform the tests.

“Dr. Dakwa devised a scheme to increase his profits rather than make medical decisions based on individual patient need,” said Acting United States Attorney Sandra Hairston. “We will not tolerate and will continue to search for any fraud that allows individual practitioners to wrongfully profit off taxpayer-funded health care programs.”

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.

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PITTSBURGH – A resident of Westmoreland County, PA, was sentenced in federal court following his convictions for conspiracy to violate the Anti-Kickback Statute, health care fraud, and conspiracy to distribute Schedule IV controlled substances, United States Attorney Cindy K. Chung announced today.

United States District Judge William S. Stickman sentenced Thomas Whitten, age 71, of Greensburg, PA, to 57 months of imprisonment followed by three years of supervised release.

Whitten pled guilty on July 22, 2021. During the change of plea hearing, Whitten admitted that, from May 2013 to November 2015, he conspired to receive kickbacks from pharmaceutical company Insys Therapeutics in exchange for prescribing Subsys, a powerful painkiller approximately 50 to 100 times more potent than morphine. The FDA approved Subsys only for the management of breakthrough pain in cancer patients. Whitten prescribed Subsys to patients for whom the drug was not medically indicated and received more than $100,000 as well as other benefits from Insys in exchange for writing those prescriptions. Prescriptions for Subsys typically cost thousands of dollars each month, and Medicare and Medicaid, as well as commercial insurers, including Highmark, paid millions of dollars to cover illegitimate Subsys prescriptions written by Whitten.

In addition, from November 2017 through December 12, 2019, Whitten conspired to unlawfully distribute Schedule IV controlled substances, phentermine hydrochloride and diethylpropion, to patients at five weight loss clinics. Based on an agreement between Whitten and the owner of those clinics, Schedule IV controlled substances were dispensed to patients under Whitten’s DEA registration numbers, including to new patients and patients who had not been seen at the clinics for years, without any physical examination by Whitten or another appropriately trained licensed medical professional.

As part of his sentence, Whitten must pay restitution totaling over $8 million to the victim insurers, and forfeit both his medical license and DEA registration.

United States Attorney Cindy K. Chung and Assistant United States Attorney Karen Gal-Or prosecuted this case on behalf of the government.

The investigation leading to the filing of charges in this case was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit (OFADU). The Western Pennsylvania OFADU, led by federal prosecutors in the U.S. Attorney’s Office, combines the expertise and resources of federal and state law enforcement to address the role played by unethical medical professionals in the opioid epidemic.

The agencies which comprise the Western Pennsylvania OFADU include: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, Pennsylvania Office of Attorney General – Bureau of Narcotic Investigations, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations, U.S. Office of Personnel Management – Office of Inspector General and the Pennsylvania Bureau of Licensing.

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ERIE, Pa. – A physical therapy practice in Erie County, Pennsylvania, and 20 people – 18 of them from northwestern Pennsylvania - have been indicted by a federal grand jury in Erie on charges of conspiracy to commit wire and health care fraud and health care fraud, Acting United States Attorney Stephen R. Kaufman announced today.

The two-count Indictment named the following individuals as defendants:

• Aaron Wilhelm Hertel, of North East, Pennsylvania 16428
• Michael Robert Brown, of Erie, Pennsylvania 16506
• Sarah Elizabeth Bailey, of Erie, Pennsylvania 16506
• Jessica Jeanne Morphy, of Erie, Pennsylvania 16505
• Jacqueline Renee Exley, of Erie, Pennsylvania 16508
• Julie Ann Johnson, of Erie, Pennsylvania 16506
• Bobby Lee Rainey, of Erie, Pennsylvania 16505
• Steve Michael Bauer, of Erie, Pennsylvania 16502
• Austin John Dudenhoefer, of Erie, Pennsylvania 16509
• Philip Dale Sorensen, Jr., of Erie, Pennsylvania 16509
• Patricia Susan Berchtold, of Melbourne, Florida 32940
• Jeremy Richard Bowes, of Erie, Pennsylvania 16506
• Jennifer Marie Larmon, of Waterford, Pennsylvania 16441
• Travis Walter Litz, of Erie, Pennsylvania 16508
• Erin Marie Riffe, of Conneaut, Ohio 44030
• Abigayle Jane Fachetti, of Erie, Pennsylvania 16511
• Lori Lynn Goss, of Waterford, Pennsylvania 16441
• Marissa Sue Hull, of Waterford, Pennsylvania 16441
• Justin Charles Burger, of Erie, Pennsylvania 16508
• Carl William Lewis, Jr., of Lake City, Pennsylvania 16423

The indictment also names Hertel & Brown Physical & Aquatic Therapy, main office located at 902 West Erie Plaza Drive, Erie, Pennsylvania 16505, as a defendant.

According to the Indictment presented to the court, the defendants conspired from January 2007 to October 2021 to commit wire fraud and health care fraud. The multi-faceted conspiracy had numerous components including:

a) Hertel & Brown Physical & Aquatic Therapy utilized unlicensed technicians to provide physical therapy treatment, including aquatic therapy, and billed that treatment as if performed by a licensed physical therapist or physical therapy assistant.

b) Unlicensed technicians at Hertel & Brown Physical & Aquatic Therapy were permitted and required to log into the treatment documentation system, WebPT, as a licensed physical therapist to facilitate documenting treatment as if performed by a licensed therapist.

c) Hertel & Brown Physical & Aquatic Therapy and its licensed employees regularly recorded and billed for treatment time in excess of actual treatment time spent with patients.

d) Hertel & Brown Physical & Aquatic Therapy and its licensed employees rarely if ever utilized group therapy codes when billing for treatment even when group billing codes were the only appropriate billing codes that could have been utilized.

e) Hertel & Brown Physical & Aquatic Therapy regularly billed treatment time using the name and credentials of a physical therapist who was on vacation and not working on the day in question.

f) Hertel & Brown Physical & Aquatic Therapy allowed physical therapy assistants and unlicensed personnel to treat patients with insurance that only reimbursed for treatment performed by a physical therapist. Then the practice and its employees covered up who actually treated the patient by removing the name of the actual person providing treatment from the treatment record.

g) Hertel & Brown Physical & Aquatic Therapy and some of its employees also manually changed the patient schedule after the fact to conceal that Medicare patients were scheduled at the same time as other patients. This was done to conceal that Medicare patients did not have one on one treatment with a physical therapist as billed by the practice and required by Medicare.

“The indictment alleges that essentially since Hertel & Brown opened in 2007, the defendants perpetrated a systematic and brazen fraud scheme that bilked insurance companies and the government of millions through blatantly false billings,” said U.S. Attorney Kaufman. “Addressing health care fraud is a top priority of our Office and of our federal, state and local law enforcement partners.”

“Those charged today were in the business to make a quick buck and in turn violated the very basic ethical and moral standards medical professionals are held to,” said FBI Pittsburgh Special Agent in Charge Mike Nordwall. “Taking short cuts, illegal and improper billings and elaborate health care fraud schemes all increase the cost of medical care. The FBI will continue to work with our state, local and federal partners to detect and hold accountable those who abuse our health care system and patients’ trust.”

"When individuals and entities engage in health care fraud schemes, they steal from taxpayers and undermine the safeguards intended to protect patients,” stated Special Agent in Charge Maureen R. Dixon of the U.S. Department of Health and Human Services Office of Inspector General. “Working with our law enforcement partners, we will continue to investigate health care fraud to protect the integrity of federal health care programs and the beneficiaries served by them.”

“Health care fraud takes away limited resources from some of our most vulnerable Pennsylvanians,” said Pennsylvania Attorney General Josh Shapiro. “My Office, as well as our local, state, and federal partners, are committed to stopping these bad actors and preventing them from undermining critical support that families across the Commonwealth rely on.”

“Today’s indictment charges the defendants with conspiring to fraudulently bill the government for healthcare services that were either not provided or not provided to standard,” said Special Agent in Charge Kim Lampkins with the Department of Veterans Affairs Office of Inspector General. “The VA OIG, along with our law enforcement partners, is dedicated to ensuring that our nation’s Veterans receive only the highest quality health care for which they deserve.”

The law provides for a maximum total sentence of 30 years in prison, a fine of $500,000 or twice the pecuniary loss (whichever is greater), or both for each defendant and the business. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation (FBI), United States Department of Health and Human Services – Office of Inspector General (HHS-OIG), United States Department of Veteran’s Affairs – Office of Inspector General (VA-OIG), Defense Criminal Investigative Service (DCIS), the Pennsylvania Office of Attorney General – Medicaid Fraud Control and Abuse Unit, and the United States Office of Personnel Management – Office of Inspector General (OPM-OIG) conducted the investigation leading to the Indictment in this case.

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

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The administrator of a Southern California hospice was sentenced Thursday to 30 months in prison for his role in a multimillion dollar hospice fraud scheme.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office, and Special Agent in Charge Timothy B. DeFrancesca of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Los Angeles Regional Office made the announcement.

Antonio Olivera, 80, of Norwalk, was also ordered to pay $2,193,914 in restitution. Olivera pleaded guilty to one count of conspiracy to commit health care fraud in November 2020. Three co-conspirators have pleaded guilty and are awaiting sentencing.

As part of his guilty plea, Olivera admitted that from 2011 to 2018, while acting as administrator for Mhiramarc Management LLC (Mhiramarc), a hospice located in Downey, California, Olivera and others paid illegal kickbacks to patient recruiters for the referral of hospice beneficiaries to Mhiramarc. Further, when clinical staff at Mhiramarc determined beneficiary referrals did not qualify to receive hospice services, Olivera overruled those determinations and nonetheless caused the beneficiaries to be put on hospice service.

Olivera and co-conspirators caused Mhiramarc to submit approximately $28 million in claims to Medicare, which resulted in the company being paid over $17 million. Olivera was personally responsible for $4,769,982 in false and fraudulent claims to Medicare, resulting in Medicare paying Mhiramarc $2,984,914 for medically unnecessary hospice services for beneficiaries, many of whom had been recruited through illegal kickbacks.

This case was investigated by the FBI’s Los Angeles Field Office and HHS-OIG’s Los Angeles Regional Office. Trial Attorneys Justin Givens and Claire Yan of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Health Care 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.

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NEW ORLEANS – U.S. Attorney Duane A. Evans announced that SHIVA AKULA (“AKULA”), age 65, of New Orleans, Louisiana was charged by a grand jury on August 5, 2021, in a 23-count Indictment for Health Care Fraud.

AKULA owned and oversaw the day-to-day operations of Canon Healthcare, a hospice facility.

According to the Indictment, AKULA unlawfully enriched himself by submitting and causing the submission of false and fraudulent claims to health care benefit programs, including Medicare. AKULA instructed Canon employees to improperly bill for General Inpatient (“GIP”) services to maximize reimbursement from health care benefit programs, knowing that those services were not medically necessary.

Canon routinely billed physician services with Common Procedural Terminology (“CPT”) Code 99233 for beneficiaries who were receiving GIP services, in addition to the daily per diem rate. CPT Code 99233 is an evaluation and management code, which requires two of the three following components: (1) detailed interval history; (2) detailed examination; or (3) medical decision making of a high complexity. Usually, the beneficiary is unstable or has developed a significant complication or a significant new problem.

Canon routinely billed for physician services for CPT Code 99236 for beneficiaries who were admitted into GIP and remained on GIP for more than 24 hours. CPT Code 99236 should only be billed when a patient is admitted to inpatient hospital care for a minimum of 8 hours, but less than 24 hours and discharged on the same calendar day. In addition, when billing for CPT Code 99236, the physician shall identify that he or she was physically present and that he or she performed the initial hospital care service. The physician shall personally document the admission and discharge notes and include the number of hours the beneficiary remained in inpatient hospital status.

From on or about January 1, 2013, to on or about August 25, 2017, Canon submitted approximately 1,053 claims for CPT code 99236 and was paid approximately $223,601 by Medicare. During that same time period, Canon submitted approximately $2,281,251. These physician services reflected in CPT Codes 99236 and 99233 should not have been billed as a separate line item in addition to the GIP services because they were included within the daily per diem rate that Medicare paid for the GIP services.

From on or about January 1, 2013, through on or about August 25, 2017, Canon submitted claims to Medicare for approximately 1,949 home visits using CPT code 99350 that were purported to have been performed by a doctor, when a doctor did not perform home visits. As a result of these 1,949 home visits, Medicare reimbursed Canon approximated $316,384.

From January 2013 to December 2019, Canon billed Medicare approximately $62,833,346.28 and was paid approximately $47,106,838.94.

If convicted, AKULA faces a maximum of 10 years imprisonment, a fine of not more than $250,000, supervised release of up to 3 years, and a mandatory special assessment of $100 as to each count.

U.S. Attorney Evans reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.

The case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, and the Louisiana Department of Justice, Medicaid Fraud Control Unit. The case is being prosecuted by Assistant U.S. Attorney Kathryn McHugh.

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WASHINGTON – Folashade Adufe Horne, 51, of Laurel, Maryland, pled guilty on February 17, 2021 in federal court to defrauding the D.C. Medicaid program out of more than $370,000.

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

Horne pled guilty to health care fraud in the United States District Court for the District of Columbia. The charge carries a statutory maximum of 10 years in prison and financial penalties. Under federal sentencing guidelines, Horne faces a likely recommended sentence of between 18 and 24 months in prison. The Honorable Reggie B. Walton took the plea and scheduled sentencing for May 12, 2021.

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

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

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

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

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

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Miami, Florida – A federal district judge in Fort Lauderdale yesterday sentenced the last of 16 defendants for their roles in a large-scale kickback and bribery scheme involving employees and vendors of the U.S. Department of Veterans Affairs (VA) Medical Centers located in West Palm Beach and Miami.

Earron Starks, 51, was sentenced to 30 months’ imprisonment, followed by three years of supervised release, and ordered to pay $2,451,000 in restitution. His wife, Carlicha Starks, 42, was sentenced to three years of supervised release, including one year of home confinement, and ordered to pay $501,000 in restitution.

Earron and Carlicha Starks, both from Hallandale Beach, Florida, were vendors who sold supplies to the VA. They, as did other vendors, paid kickbacks to VA employees in exchange for getting the VA’s business. Court filings describe how in exchange for cash bribes, medical center employees used government credit cards to order medical and other hospital supplies from these corrupt vendors. In some cases, the prices of the supplies were grossly inflated. In other cases, the orders were only partially fulfilled or not fulfilled at all. Ultimately, the fraud scheme enabled the Starks couple and other corrupt vendors to receive over $20 million in purchase orders with VA Medical Centers in West Palm Beach and Miami.

“There is no place for kickbacks in our veterans’ healthcare system,” said Juan Antonio Gonzalez, Acting U.S. Attorney for the Southern District of Florida. “These crimes not only violate the public’s trust, they also compromise the integrity of programs intended to help those who have made great sacrifices for our country. The United States Attorney’s Office will hold accountable anyone who tarnishes the VA through fraud, bribes, or other crimes.”

“These crimes were a gross violation of public trust and a threat to the resources used to care for our nation’s veterans and their families. The act of soliciting and accepting bribes undermines the vital work that honest VA employees do every day,” said David Spilker, Special Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division (VA-OIG, CI), Southeast Field Office. “The VA OIG is grateful for the United States Attorney’s Office’s partnership in holding these defendants accountable.”

Fourteen additional defendants were charged for their roles in this scheme. They pleaded guilty and received the following sentences:

Defendants who worked at West Palm Beach VA Medical Center (Case Number 19-80223-CR-KAM).

• Clinton Purvis, 54, of West Palm Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 27 months’ incarceration followed by 24 months of supervised release and ordered to pay $1.4 million in restitution.
• Christopher Young, 46, of West Palm Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 24 months’ probation.
• Kenneth Scott, 61, of Riviera Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 24 months’ probation and ordered to pay $295,511 in restitution.
• Robert “Bob” Johnson, 64, of West Palm Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 24 months’ imprisonment followed by 24 months of supervised release and ordered to pay $800,000 in restitution.

Defendants who worked at Miami VA Medical Center.

• Waymon Melvon Woods, 60, of Miami, pleaded guilty to one count of receiving a bribe as a public official and was sentenced to nine months’ incarceration, 36 months of supervised release and ordered to pay $120,505 in restitution (case number 19-20743-CR-FAM).
• Don Anderson, 61, of Port St. Lucie, Fl., pleaded guilty to one count of receiving a bribe as a public official and was sentenced to 10 days of incarceration, 36 months of supervised release, and ordered to pay $31,579 in restitution (case number 19-20746-CR-FAM).
• Jose Eugenio Cuervo, 55, of Miramar, Fl., pleaded guilty to one count of receiving a bribe as a public official and was sentenced to six months of home confinement, 36 months of supervised release, and ordered to pay $8,596 in restitution (case number 19-20748-CR-DPG).
• Donnie Shatek Hawes, 37, of Cutler Bay, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 5 days of incarceration, 24 months of probation, and ordered to pay $2,900 in restitution (case number 19-20745-CR-RNS).
• Robert Lee James Harris, 46, of Miami Gardens, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 6 months of home confinement, 36 months of probation and ordered to pay $7,775 (case number 19-20747-CR-RNS).
• Emir Gilberto Reyes,55, of Homestead, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 60 months of probation and ordered to pay $18,380 (case number 20-20098-CR-FAM).
• Eugene Campbell, 62, of Miami Gardens, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 36 months’ incarceration, 36 months of supervised release, and ordered to pay $592,717 in restitution (case number 19-20744-CR-UU).

Defendants who were VA supply vendors.

• Jorge Flores, 47, of Delray Beach, pleaded guilty to one count of conspiracy to commit healthcare fraud was sentenced to 18 months’ incarceration, 36 months of supervised release, and ordered to pay $2.1 million in restitution (case number 19-80200-CR-RS).
• Robert Kozak, 75, of Boca Raton FL, pleaded guilty to one count of conspiracy to commit healthcare fraud and was sentenced to 6 months’ incarceration, 36 months of supervised release, and ordered to pay $850,000 in restitution (case number 19-80201-CR-RS).
• Vincent Bellafiore, 47, of Palm Beach Gardens, FL, pleaded guilty to one count of conspiracy to commit healthcare fraud and was sentenced to 36 months’ probation and ordered to pay a $10,000 fine (case number 20-80077-CR-RS).

All VA employees were either terminated or resigned.

The convictions were the result of a lengthy investigation by Special Agents of VA-OIG CI, who uncovered the extensive scheme after receiving an anonymous tip. A related case in the Eastern District of Pennsylvania resulted in another VA employee being charged with bribery. VA OIG, Criminal Investigations Division, is responsible for conducting independent investigations of VA’s expansive programs and operations, which includes the largest healthcare system in the country.

Assistant U.S. Attorney Amanda Perwin is prosecuting the case.

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Miami, Florida – A federal district judge in Fort Lauderdale yesterday sentenced the last of 16 defendants for their roles in a large-scale kickback and bribery scheme involving employees and vendors of the U.S. Department of Veterans Affairs (VA) Medical Centers located in West Palm Beach and Miami.

Earron Starks, 51, was sentenced to 30 months’ imprisonment, followed by three years of supervised release, and ordered to pay $2,451,000 in restitution. His wife, Carlicha Starks, 42, was sentenced to three years of supervised release, including one year of home confinement, and ordered to pay $501,000 in restitution.

Earron and Carlicha Starks, both from Hallandale Beach, Florida, were vendors who sold supplies to the VA. They, as did other vendors, paid kickbacks to VA employees in exchange for getting the VA’s business. Court filings describe how in exchange for cash bribes, medical center employees used government credit cards to order medical and other hospital supplies from these corrupt vendors. In some cases, the prices of the supplies were grossly inflated. In other cases, the orders were only partially fulfilled or not fulfilled at all. Ultimately, the fraud scheme enabled the Starks couple and other corrupt vendors to receive over $20 million in purchase orders with VA Medical Centers in West Palm Beach and Miami.

“There is no place for kickbacks in our Veterans’ healthcare system,” said Juan Antonio Gonzalez, Acting U.S. Attorney for the Southern District of Florida. “These crimes not only violate the public’s trust, they also compromise the integrity of programs intended to help those who have made great sacrifices for our country. The United States Attorney’s Office will hold accountable anyone who tarnishes the VA through fraud, bribes, or other crimes.”

“These crimes were a gross violation of public trust and a threat to the resources used to care for our nation’s Veterans and their families. The act of soliciting and accepting bribes undermines the vital work that honest VA employees do every day,” said David Spilker, Special Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division (VA-OIG, CI), Southeast Field Office. “The VA OIG is grateful for the United States Attorney’s Office’s partnership in holding these defendants accountable.”

Fourteen additional defendants were charged for their roles in this scheme. They pleaded guilty and received the following sentences:

Defendants who worked at West Palm Beach VA Medical Center (Case Number 19-80223-CR-KAM).

1. Clinton Purvis, 54, of West Palm Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 27 months’ incarceration followed by 24 months of supervised release and ordered to pay $1.4 million in restitution.
2. Christopher Young, 46, of West Palm Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 24 months’ probation.
3. Kenneth Scott, 61, of Riviera Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 24 months’ probation and ordered to pay $295,511 in restitution.
4. Robert “Bob” Johnson, 64, of West Palm Beach, who pleaded guilty to one count of conspiracy to commit healthcare fraud, was sentenced to 24 months’ imprisonment followed by 24 months of supervised release and ordered to pay $800,000 in restitution.

Defendants who worked at Miami VA Medical Center.

1. Waymon Melvon Woods, 60, of Miami, pleaded guilty to one count of receiving a bribe as a public official and was sentenced to nine months’ incarceration, 36 months of supervised release and ordered to pay $120,505 in restitution (case number 19-20743-CR-FAM).
2. Don Anderson, 61, of Port St. Lucie, Fl., pleaded guilty to one count of receiving a bribe as a public official and was sentenced to 10 days of incarceration, 36 months of supervised release, and ordered to pay $31,579 in restitution (case number 19-20746-CR-FAM).
3. Jose Eugenio Cuervo, 55, of Miramar, Fl., pleaded guilty to one count of receiving a bribe as a public official and was sentenced to six months of home confinement, 36 months of supervised release, and ordered to pay $8,596 in restitution (case number 19-20748-CR-DPG).
4. Donnie Shatek Hawes, 37, of Cutler Bay, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 5 days of incarceration, 24 months of probation, and ordered to pay $2,900 in restitution (case number 19-20745-CR-RNS).
5. Robert Lee James Harris, 46, of Miami Gardens, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 6 months of home confinement, 36 months of probation and ordered to pay $7,775 (case number 19-20747-CR-RNS).
6. Emir Gilberto Reyes,55, of Homestead, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 60 months of probation and ordered to pay $18,380 (case number 20-20098-CR-FAM).
7. Eugene Campbell, 62, of Miami Gardens, Fl., who pleaded guilty to one count of receiving a bribe as a public official, was sentenced to 36 months’ incarceration, 36 months of supervised release, and ordered to pay $592,717 in restitution (case number 19-20744-CR-UU).

Defendants who were VA supply vendors.

1. Jorge Flores, 47, of Delray Beach, pleaded guilty to one count of conspiracy to commit healthcare fraud was sentenced to 18 months’ incarceration, 36 months of supervised release, and ordered to pay $2.1 million in restitution (case number 19-80200-CR-RS).
2. Robert Kozak, 75, of Boca Raton FL, pleaded guilty to one count of conspiracy to commit healthcare fraud and was sentenced to 6 months’ incarceration, 36 months of supervised release, and ordered to pay $850,000 in restitution (case number 19-80201-CR-RS).
3. Vincent Bellafiore, 47, of Palm Beach Gardens, FL, pleaded guilty to one count of conspiracy to commit healthcare fraud and was sentenced to 36 months’ probation and ordered to pay a $10,000 fine (case number 20-80077-CR-RS).

All VA employees were either terminated or resigned.

The convictions were the result of a lengthy investigation by Special Agents of VA-OIG CI, who uncovered the extensive scheme after receiving an anonymous tip. A related case in the Eastern District of Pennsylvania resulted in another VA employee being charged with bribery. VA OIG, Criminal Investigations Division, is responsible for conducting independent investigations of VA’s expansive programs and operations, which includes the largest healthcare system in the country.

Assistant U.S. Attorney Amanda Perwin is prosecuting the case.

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WICHITA, KAN. – Edward Parks, 60, Liberal, Kan., is charged with one count of submitting false claims for travel reimbursement to the Department of Veterans Affairs and one count of making a false statement to investigators from the Department of Veterans Affairs – Office of Inspector General. The crimes are alleged to have occurred in 2019 in Sedgwick County, Kan.

The indictment alleges he falsely claimed he travelled to Wichita, Kan., from Liberal, Kan., for medical appointments, in order to be reimbursed under the Beneficiary Travel Program.

If convicted, he could face up to five years in federal prison and a fine up to $250,000 on each count. The Department of Veterans Affairs – Office of Inspector General investigated. Assistant U.S. Attorney Debra Barnett is prosecuting.

OTHER INDICTMENTS

Loren Olson, 68, Marquette, Kan., is charged with four counts of producing child pornography and one count of the sex trafficking of a minor. The crimes are alleged to have occurred in May, June and July 2020 in McPherson County, Kan.

Olson initially was charged by criminal complaint Dec. 9, 2020.

If convicted, Olson could face a penalty of not less than 15 years and not more than 30 years in federal prison on each production count, and not less than 10 years on the other count. The FBI investigated. Assistant U.S. Attorney Jason Hart is prosecuting.

Alejandro Valerio Pineda, 45, Wichita, Kan., is charged with two counts of distributing methamphetamine. The crimes are alleged to have occurred during November and December 2020 in Wichita, Kan.

If convicted, he could face a penalty of not less than five years and not more than 40 years and a fine up to $5 million on each count. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Mona Furst is prosecuting.

Troy Bong, 51, Wichita, is charged with three counts of possession with intent to distribute methamphetamine (counts 1, 4, 7), three counts of possession of a firearm in furtherance of drug trafficking (counts 2, 5, 8) and three counts of unlawful possession of a firearm by a felon (counts 3, 6, 9). The crimes are alleged to have occurred in 2020 in Sedgwick County, Kan.

Upon conviction, the crimes carry the following penalties:

         Count one: Up to 20 years in federal prison and a fine up to $1 million.

         Counts 4, 7: Not more than 40 years and not less than five years and a fine up to $5 million.

         Counts 2, 5 and 8: Not less than five years and a fine up to $250,000.

         Counts 3, 6 and 9: Up to 10 years and a fine up to $250,000.

The Drug Enforcement Administration investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.

Treylis Presley, 31, Wichita, Kan., is charged with one count of unlawful possession of a firearm by a felon, one count of possession of cocaine and one count of possession of marijuana. The crimes are alleged to have occurred Sept. 4, 2020, in Sedgwick County, Kan.

If convicted, he could face a penalty of up to 10 years in federal prison and a fine up to $250,000 on the firearm charge, and up to a year and a fine up to $1,000 on each of the other two counts. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Molly Gordon is prosecuting.

Luis Contreras-Mata, 35, is charged with one count of unlawfully re-entering the United States after being deported. He was found Dec. 10, 2020, in Rawlins County, Kan.

If convicted, he could face a penalty of up to two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement – Enforcement and Removal Operations investigate. Assistant U.S. Attorney Lanny Welch is prosecuting.

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MACON, Ga. – A civil settlement has been reached with Infectious Disease Consultants of Georgia (IDC), an infusion clinic with six out-patient locations in the greater Atlanta area.

IDC agreed to pay $325,000 to the United States to resolve allegations that it violated the False Claims Act by submitting bills to the Medicare program for infusion services provided by unlicensed or otherwise unapproved individuals. The settlement marks the end of a years-long investigation into IDC’s billing practices that began with a qui tam case filed in the Middle District of Georgia.

“We are committed to protecting the public trust and will carefully investigate allegations of fraud in pursuit of this mission,” said Acting U.S. Attorney Peter D. Leary. “I want to thank the U.S. Department of Health and Human Services for their work investigating these allegations, and also want to thank IDC for cooperating fully during the investigation and resolution of these claims.”

“To ensure patients receive quality care and taxpayer-funded federal healthcare programs are properly billed, Medicare only pays for medical services provided by licensed, credentialed and approved professionals. Therefore, we will continue to investigate allegations of unapproved providers billing federal healthcare 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. “We are proud to work with the U.S. Attorney’s Office staff to investigate this case and also acknowledge IDC for fully cooperating during the investigation and resolution of this matter.”

Federal health care programs, such as Medicare, allow infusion services to be provided and billed only when they are provided by certain licensed and approved providers. The alleged scheme in this case concerned IDC’s submission of claims to Medicare for infusion services improperly rendered by unlicensed or otherwise unapproved individuals. IDC fully cooperated during the investigation, after which the parties agreed to resolve the allegations described herein. The claims covered by the settlement are allegations only, and there has been no determination of liability.

The case was investigated by Special Agent Shawn McAleer of the U.S. Department of Health and Human Services—Office of Inspector General and Investigator Shaketia Morgan, formerly of the U.S. Attorney’s Office for the Middle District of Georgia. The Government’s civil settlement was reached by Assistant U.S. Attorney Bowen Reichert Shoemaker.

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BEAUMONT, Texas – A physician practicing in Beaumont has been sentenced to prison for federal health care fraud violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Grigoriy T. Rodonaia, 45, of Port Neches, Texas, was convicted by a jury on Nov. 17, 2020, of 12 counts of health care fraud, three counts of aggravated identity theft, and one count of making a false statement. Rodonaia was sentenced to 84 months in federal prison today by U.S. District Judge Marcia Crone. Rodonaia was additionally ordered to pay $195,607.76 in restitution.

“Mr. Rodonaia’s sentence is well deserved. His criminal acts inflicted significant financial harm on the TRICARE system and involved identity theft from military service members and their families,” said Acting U.S. Attorney Nicholas J. Ganjei. “Targeting health care fraud in all its forms remains a top priority for the U.S. Attorney’s Office for the Eastern District of Texas.”

Rodonaia, a physician practicing in Beaumont with Rodonaia Family Medicine and Aesthetics, was indicted on March 18, 2020. According to information presented in court, beginning in January 2015, Rodonaia participated in a health care fraud scheme by issuing prescriptions for specially compounded scar creams using the names, dates of birth, and Health Insurance Claim Numbers of TRICARE beneficiaries, and caused the prescriptions to be forwarded directly to Memorial Compounding Pharmacy in Houston, Texas. These prescriptions were issued without consultation with the patient and without the patient’s knowledge. The pharmacy billed the prescriptions to the military health care program, TRICARE, at approximately $9,000 to $13,000 per prescription, with multiple refills authorized per prescription. Rodonaia issued over 600 prescriptions in the names of approximately 140 beneficiaries in furtherance of this scheme. Before the scheme could be detected, TRICARE paid approximately $6.7 million in TRICARE funds to Memorial Compounding Pharmacy. Further, to conceal his criminal activity, Rodonaia forged patient records to create the false appearance that he had examined those patients, and he submitted the fraudulent records to the Defense Health Agency in response to an audit.

This case was investigated by the Defense Criminal Investigative Service, the Drug Enforcement Administration, Health and Human Services – Office of Inspector General, and the Texas Medicaid Fraud Control Unit. Assistant U.S. Attorneys John B. Ross and Robert A. Wells prosecuted this case.

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A federal jury convicted Dallas area owners and operators of two durable medical equipment companies Thursday of one count of conspiracy to defraud the United States and to pay and receive health care kickbacks and one count of conspiracy to commit money laundering.

According to the evidence presented at trial, Leah Hagen, 49, and Michael Hagen, 54, of Arlington, Texas, were owners and operators of two durable medical equipment (DME) companies: Metro DME Supply LLC (Metro) and Ortho Pain Solutions LLC (Ortho Pain), both operated out of the same location in Arlington. The defendants paid a fixed rate per DME item in exchange for prescriptions and paperwork completed by telemedicine doctors that were used to submit false claims to Medicare. The defendants paid illegal bribes and kickbacks and wired money to their co-conspirator’s call center in the Philippines that provided signed doctor’s orders for orthotic braces. The evidence at trial showed emails exchanged between Leah and Michael Hagen and their co-conspirators showing a per-product pricing structure for orthotic braces but disguising their agreement as one for marketing and other services.

Through this scheme, the defendants billed Medicare Parts B and C approximately $59 million and were paid approximately $27 million. The defendants wired millions of proceeds into their personal bank accounts, both in the U.S. and overseas. At sentencing, the Hagens each face a maximum sentence of 25 years in prison.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, Acting U.S. Attorney Prerak Shah of the Northern District of Texas, Special Agent in Charge Miranda Bennett of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region, and Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office made the announcement.

This case was investigated by HHS-OIG and the FBI and was brought as part of Operation Brace Yourself, a federal law enforcement action led by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in partnership with the U.S. Attorney’s Offices for the Districts of South Carolina, New Jersey, and the Middle District of Florida.

Assistant Deputy Chief Adrienne Frazior and Trial Attorneys Brynn Schiess and Catherine Wagner of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, 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.

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Acting United States Attorney Bob Murray announced today that HOLLI TELFORD LUNDAHL, age 64 of Oelrichs, South Dakota was convicted by a jury on charges of three counts of health care fraud and two counts of aggravated identity theft after a one-week trial in the United States District Court for the District of Wyoming. Lundahl is scheduled to be sentenced by U.S. District Court Judge Nancy Freudenthal in Cheyenne on July 12, 2021. Lundahl may be sentenced to not more than 10 years in prison for each health care fraud count and must be sentenced to a mandatory 2-year prison term for each identity theft count. The 2-year identity theft prison sentences must be consecutive to any prison term imposed for the health care fraud counts but may be imposed concurrent to one another. A fine of up to $250,000 could be imposed for each count.

In March 2020, Holli Lundahl was indicted on the charges which included three overlapping schemes to defraud Wyoming Medicaid by submitting false claims for long-term care provided to Lundahl’s sibling, and the unlawful possession and use of identity information of two individuals in furtherance of two of the charged schemes.

The evidence at trial showed that Wyoming Medicaid operates a long-term care program designed to keep beneficiaries out of nursing homes and other institutional settings. This program includes limited payments for certain direct support services provided to beneficiaries by properly qualified and enrolled workers. Lundahl enrolled her niece in this program as a caregiver for Lundahl’s sister using the niece’s name, social security number, and other identifying information. Lundahl then submitted claims to Wyoming Medicaid for direct support work using the niece’s name when the niece had not provided any services. Lundahl’s niece did not know her identity was being used and had never been to Wyoming before testifying at trial. The false information provided by Lundahl caused Wyoming Medicaid money to be paid in the niece’s name into a credit union account controlled by Lundahl.

Evidence at trial also proved that Lundahl advertised for a direct support worker in Lusk. When a young woman responded to the ad, Lundahl convinced the woman to give her social security number and other identification information to Lundahl to be hired for the job. The woman worked one day, was paid cash for her time, and was not asked to return. The young woman did not know that she was enrolled with Medicaid or that her information was used for that purpose. However, Lundahl then used the young woman’s information to submit false claims to Wyoming Medicaid for direct support work that the woman did not perform. The false information provided by Lundahl caused Wyoming Medicaid money to be paid in the young woman’s name into a credit union account controlled by Lundahl.

Finally, evidence at trial proved that Lundahl enrolled herself as a direct support worker when she had a power of attorney for her sister and therefore could not be enrolled under Medicaid’s long-term care rules. Lundahl then submitted claims to Wyoming Medicaid for direct support work when she was not eligible to be paid for this work. As a result, Wyoming Medicaid money was paid to Lundahl when she was not eligible to receive that money.

“I applaud my litigation team, the court and the Wyoming Medicaid Fraud Control Unit for stopping this blatant abuse of the system,” said Acting United States Attorney Bob Murray. “Identifying and preventing Medicaid fraud continues to be one of our highest priorities and we remain steadfast in ensuring that Medicaid dollars are preserved for those who most need them.”

The case was investigated by the Wyoming Medicaid Fraud Control Unit and prosecuted by Senior Assistant Attorney General Travis Kirchhefer of the Wyoming Attorney General’s Office and Assistant United States Attorney Eric Heimann.

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Historic level of enforcement action during national health emergency continues

The Department of Justice announced an update today on criminal and civil enforcement efforts to combat COVID-19 related fraud, including schemes targeting the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program and Unemployment Insurance (UI) programs.

As of today, the Department of Justice has publicly charged 474 defendants with criminal offenses based on fraud schemes connected to the COVID-19 pandemic. These cases involve attempts to obtain over $569 million from the U.S. government and unsuspecting individuals through fraud and have been brought in 56 federal districts around the country. These cases reflect a degree of reach, coordination, and expertise that is critical for enforcement efforts against COVID-19 related fraud to have a meaningful impact and is also emblematic of the Justice Department’s response to criminal wrongdoing.

“The Department of Justice has led an historic enforcement initiative to detect and disrupt COVID-19 related fraud schemes,” said Attorney General Merrick B. Garland. “The impact of the department’s work to date sends a clear and unmistakable message to those who would exploit a national emergency to steal taxpayer-funded resources from vulnerable individuals and small businesses. We are committed to protecting the American people and the integrity of the critical lifelines provided for them by Congress, and we will continue to respond to this challenge.”

“To anyone thinking of using the global pandemic as an opportunity to scam and steal from hardworking Americans, my advice is simple – don’t,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “No matter where you are or who you are, we will find you and prosecute you to the fullest extent of the law.”

“We will not allow American citizens or the critical benefits programs that have been created to assist them to be preyed upon by those seeking to take advantage of this national emergency,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “We are proud to work with our law enforcement partners to hold wrongdoers accountable and to safeguard taxpayer funds.” 

In March 2020, Congress passed a $2.2 trillion economic relief bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. Anticipating the need to protect the integrity of these taxpayer funds and to otherwise protect Americans from fraud related to the COVID-19 pandemic, the Department of Justice immediately stood up multiple efforts dedicated to identifying, investigating, and prosecuting such fraud. Leveraging data analysis capabilities and partnerships developed through its vast experience combatting economic crime and fraud on government programs, the Justice Department’s response to COVID-19 related fraud serves as a model for proactive, high-impact white-collar enforcement, and demonstrates our agility in responding to new and emerging threats. This rapid and nationwide response enabled the Justice Department to quickly ensure accountability for wrongdoing amid a national crisis and sent a forceful message of deterrence during an ongoing crisis. The multifaceted and multi-district approach to enforcement during this national health emergency continues and is expected to yield numerous additional criminal and civil enforcement actions in the coming months.

On criminal matters, the Justice Department’s efforts to combat COVID-19 related fraud schemes have proceeded on numerous fronts, including:

• Paycheck Protection Program (PPP) fraud: Prominent among the department’s efforts have been cases brought by the Criminal Division’s Fraud Section involving at least 120 defendants charged with PPP fraud. The cases involve a range of conduct, from individual business owners who have inflated their payroll expenses to obtain larger loans than they otherwise would have qualified for, to serial fraudsters who revived dormant corporations and purchased shell companies with no actual operations to apply for multiple loans falsely stating they had significant payroll, to organized criminal networks submitting identical loan applications and supporting documents under the names of different companies. Most charged defendants have misappropriated loan proceeds for prohibited purposes, such as the purchase of houses, cars, jewelry, and other luxury items. In one case, U.S. v. Dinesh Sah, in the Northern District of Texas, the defendant applied for 15 different PPP loans to eight different lenders, using 11 different companies, seeking a total of $24.8 million. The defendant obtained approximately $17.3 million and used the proceeds to purchase multiple homes, jewelry, and luxury vehicles. In another case, U.S. v. Richard Ayvazyan, et al., in the Central District of California, eight defendants applied for 142 PPP and EIDL loans seeking over $21 million using stolen and fictitious identities and sham companies, and laundered the proceeds through a web of bank accounts to purchase real estate, securities, and jewelry.
  
  
• Economic Injury Disaster Loans (EIDL) fraud: The department has also focused on fraud against the EIDL program, which was designed to provide loans to small businesses, agricultural and non-profit entities. Fraudsters have targeted the program by applying for EIDL advances and loans on behalf of ineligible newly-created, shell, or non-existent businesses, and diverting the funds for illegal purposes. The department has responded, primarily through the efforts of the U.S. Attorney's Office for the District of Colorado and their partners at the U.S. Secret Service, acting swiftly to seize loan proceeds from fraudulent applications, with $580 million seized to date and seizures ongoing. The EIDL Fraud Task Force in Colorado, comprised of personnel from five federal law enforcement agencies and federal prosecutors, is investigating a broad swath of allegedly fraudulently loans and their applicants. It is working to identify individual wrongdoers and networks of fraudsters appropriate for prosecution.
  
  
• Unemployment Insurance (UI) fraud: Due to the COVID-19 pandemic, more than $860 billion in federal funds has been appropriated for UI benefits through September 2021. Early investigation and analysis indicate that international organized criminal groups have targeted these funds by using stolen identities to file for UI benefits. Domestic fraudsters, ranging from identity thieves to prison inmates, have also committed UI fraud. In response, the department established the National Unemployment Insurance Fraud Task Force, a prosecutor-led multi-agency task force with representatives from more than eight different federal law enforcement agencies. Additionally, the department is hiring Assistant U.S. Attorneys in multiple U.S. Attorney’s Offices whose focus will be UI fraud prosecutions. Since the start of the pandemic, over 140 defendants have been charged and arrested for federal offenses related to UI fraud. In one case, U.S. v. Leelynn Danielle Chytka, in the Western District of Virginia, a defendant recently pleaded guilty for her role in a scheme that successfully stole more than $499,000 in UI benefits using the identities of individuals ineligible for UI, including a number of prisoners.

Through the department’s International Computer Hacking and Intellectual Property (ICHIP) program, ICHIP advisors have provided assistance and case-based mentoring to foreign counterparts around the globe to help detect, investigate and prosecute fraud related to the pandemic. The ICHIPs have helped counterparts combat cyber-enabled crime (e.g., online fraud) and intellectual property crime, including fraudulent and mislabeled COVID-19 treatments and sales of counterfeit pharmaceuticals. ICHIPs conducted webinars for foreign prosecutors and law enforcement in Asia, Africa, Europe, and South America on how to take down fraudulent COVID-19 websites. These webinars addressed methods for finding the registrar for a particular domain and requesting a voluntary takedown as well as the U.S. legal processes necessary for obtaining a court order that would bind a U.S. registrar. This has resulted in the take down of multiple online COVID-19 scams and significant seizures of counterfeit medicines and medical supplies such as masks, gloves, hand sanitizers and other illicit goods.

The department has also brought actions to combat coronavirus-related fraud schemes targeting American consumers. With scammers around the world attempting to sell fake and unlawful cures, treatments, and personal protective equipment, the department has brought dozens of civil and criminal enforcement actions to safeguard Americans’ health and economic security. The department has prosecuted or secured civil injunctions against dozens of defendants who sold products — including industrial bleach, ozone gas, vitamin supplements, and colloidal silver ointments — using false or unapproved claims about the products’ abilities to prevent or treat COVID-19 infections. The department has also worked to shutter hundreds of fraudulent websites that were facilitating consumer scams, and it has taken scores of actions to disrupt financial networks supporting such scams. The department is also coordinating with numerous agency partners to prevent and deter vaccine-related fraud.

The department is also using numerous civil tools to address fraud in connection with CARES Act programs. For example, in the Eastern District of California, the department obtained the first civil settlement for fraud involving the Paycheck Protection Program, resolving civil claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and the False Claims Act (FCA) against an internet retail company and its president and chief executive officer arising from false statements to federally insured banks to influence those banks to approve, and the SBA to guarantee, a PPP loan. FIRREA allows the government to impose civil penalties for violations of enumerated federal criminal statutes, including those that affect federally-insured financial institutions. The FCA is the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of government operations and functions. The FCA permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Such whistleblower complaints have been on the rise as unscrupulous actors take advantage of vulnerabilities created by the COVID-19 pandemic and the new government programs disbursing federal relief, and whistleblower cases will continue to be an essential source of new leads to help root out the misuse and abuse of taxpayer funds.

Indictments and other criminal charges referenced above are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.   

The unprecedented pace and tempo of these efforts is made possible only through the diligent work of a wide range of Justice Department partners, including the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section, the Civil Division’s Commercial Litigation Branch (Fraud Section) and Consumer Protection Branch, U.S. Attorneys’ Offices throughout the country, and law enforcement partners from the FBI, Department of Labor Office of Inspector General, U.S. Secret Service, IRS-Criminal Investigation, Defense Criminal Investigative Service, Homeland Security Investigations, U.S. Postal Inspection Service, the Offices of Inspectors General from the Small Business Administration, Department of Homeland Security, Social Security Administration, Federal Deposit Insurance Corporation, Department of Health and Human Services, Department of Veterans Affairs, Federal Housing Finance Agency and Federal Reserve Board, Food and Drug Administration’s Office of Criminal Investigations, Treasury Inspector General for Tax Administration, Financial Crimes Enforcement Network,  Special Inspector General for Pandemic Relief, Pandemic Response Accountability Committee, OCDETF Fusion Center and OCDETF’s International Organized Crime Intelligence and Operations Center. 

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 website: https://www.justice.gov/criminal-fraud/ppp-fraud. For further information on the Civil Division’s enforcement efforts, visit the following website: https://www.justice.gov/civil.

To report a COVID-19-related fraud scheme or suspicious activity, contact the National Center for Disaster Fraud (NCDF) by calling the NCDF Hotline at 1-866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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LOUISVILLE – On Friday, June 11, 2021, a federal jury convicted a Louisville physician, nurse practitioner, and the medical practice in United States District Court, before District Judge Rebecca G. Jennings, of conspiracy to unlawfully distribute and dispense controlled substances, conspiracy to commit health care fraud, and conspiracy to commit money laundering.  

Following a six-week trial, the jury deliberated approximately three days before finding Dr. Jeffrey Campbell, Advanced Practice Registered Nurse Mark Dyer, and Physicians Primary Care, PLLC (“PPC”), guilty on 13 of 22 charges. Sentencing is scheduled before Judge Jennings on September 8, 2021, at 9 a.m., in Louisville.

The jury found Campbell, Dyer, and PPC guilty of unlawfully distributing and dispensing controlled substances, not for a legitimate medical purpose and outside the usual course of professional practice between January 1, 2009, and December 1, 2016. The controlled substances prescribed were Oxycodone and Methadone, schedule II controlled substances. The jury also found Campbell, Dyer, and PPC guilty of committing health care fraud for falsely and fraudulently billing Kentucky Medicaid (Passport), Indiana Medicaid and Medicare by submitting claims for physical therapy, counseling and exercise services using evaluation and management codes in order to obtain higher reimbursement. Campbell and Dyer were also convicted of money laundering for paying and/or receiving bonuses to incentivize the ordering of physical therapy, counseling, and exercise. Finally, Campbell and Dyer were convicted of billing for physical therapy services using evaluation and management codes as if a physician performed a service on the patients, but in reality, a non-physician and non-physical therapist performed the service on the patients.

“I commend the outstanding work of the prosecution team and that of the agents and investigators who worked on this case,” stated Acting U.S. Attorney Michael A. Bennett. “The unlawful distribution of controlled substances by medical professionals entrusted with the health and well-being of our citizens is extremely troubling. This office, working with our federal and state partners, will continue to vigorously pursue this kind of criminal conduct, as well as all forms of health care fraud, throughout the entire Western District of Kentucky.”

“The unlawful distribution and dispensing of controlled substances with no legitimate medical purpose and the fraudulent billing of federally funded health care programs will not be tolerated,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “These convictions send a strong message that the OIG and our law enforcement and prosecutorial partners are committed to protecting the health and safety of patients and taxpayer dollars.”

“Physicians and medical professionals take an oath that obligates them to do no harm. Dr. Campbell, Mark Dyer, and the other defendants willingly broke that oath – by providing unnecessary drugs and defrauding various benefits programs – solely to line their pockets,” said Special Agent in Charge Robert Brown of the FBI’s Louisville Field Office. “Today’s guilty verdict sends a message to those who prioritize profit over care: The FBI and its partners will root out physicians and healthcare professionals who let dollar signs rather than medical needs drive their treatment of patients.”

“Today’s announcement illustrates IRS CI’s commitment to combatting healthcare fraud and those who launder proceeds of healthcare fraud,” said Bryant Jackson, Special Agent in Charge, IRS, Criminal Investigation. “I applaud the terrific efforts of the trial team and our law enforcement partners in investigating and prosecuting this important case.”

"It is unthinkable for medical providers to put our military personnel and their families in harm's way, just to make money off the system," stated Special Agent in Charge Cynthia Bruce, DCIS Southeast Field Office. "We will continue to seek out these bad actors to ensure we are protecting America's warfighters and combating the opioid crisis in our country."

Assistant United States Attorneys Joseph Ansari, Lettricea Jefferson-Webb and Christopher Tieke prosecuted the case. Elizabeth Fauxpoint, paralegal, and Bob Masterson, health care fraud investigator, assisted the prosecution team. The case was investigated by the United States Department for Health and Human Services (HHS), Defense Criminal Investigative Services (DCIS), Internal Revenue Service (IRS), Federal Bureau of Investigation (FBI), United States Drug Enforcement Administration (DEA), the Indiana Attorney General’s Office and the Kentucky Medicaid Fraud Control Unit (MFCU).

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PITTSBURGH - A resident of Louisville, Kentucky, pleaded guilty in federal court to a charge of health care fraud, Acting United States Attorney Stephen R. Kaufman announced today.

Varanise C. Booker, 66, pleaded guilty to one count before Senior United States District Judge David S. Cercone.

In connection with her guilty plea, the defendant admitted that she was a licensed psychiatrist who operated a medical practice, Family and Children Behavioral Health Services, in Louisville, Kentucky. Between approximately October 2011 and August 2013, the defendant further admitted that she referred patients for drug testing and related services performed by Universal Oral Fluid Labs (“UOFL”), a clinical drug testing and drug screening laboratory located in Greensburg, Pennsylvania. The court was further advised that the defendant engaged in health care fraud by causing UOFL to bill the Kentucky Medicaid program for testing based on referrals that were outside the ordinary course of professional practice and not for a legitimate medical purpose. Specifically, the defendant acknowledged that she did not document a legitimate justification for ordering certain drug tests and services, failed to document the results of certain drug tests and services performed by UOFL in her medical files, and failed to address the results of certain drug tests and services in the treatment of her patients. The defendant further admitted that she caused UOFL to pay her a certain portion of the reimbursements the laboratory received from Kentucky Medicaid in connection with her referral of unlawful drug tests and related services. As a result, the defendant caused losses to Kentucky Medicaid of more than $15,000 but not more than $40,000.

Judge Cercone scheduled sentencing for 11:30 a.m. on Feb. 10, 2022. The law provides for a total sentence of not more than 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Eric G. Olshan is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation, Health and Human Services Office of Inspector General, Internal Revenue Service - Criminal Investigation, and Pennsylvania Office of Attorney General Medicaid Fraud Control Section conducted the investigation that led to the prosecution of Booker.

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FRESNO, Calif. — A federal grand jury returned a 12-count indictment today against Travis Gober, 42, of Hanford, charging him with health care fraud and aggravated identity theft, Acting U.S. Attorney Phillip A. Talbert announced.

According to court documents, Gober owns and controls VIP Sleep Center, a sleep disorder clinic that operated out of Fresno and Visalia. Sleep disorder clinics perform diagnostic tests to identify ailments like sleep apnea and narcolepsy. Between January 2015 and September 2021, Gober caused VIP Sleep to bill Medicare for sleep tests the company did not actually perform. Each of these claims also listed a provider who had purportedly referred the patient to VIP Sleep even though the provider had not done so. In total, Gober caused VIP Sleep to submit more than $10 million in false and fraudulent Medicare claims.

This case is the product of an investigation by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorneys Vincente A. Tennerelli and Melanie L. Alsworth are prosecuting the case.

If convicted, Gober faces a maximum statutory penalty of 10 years in prison and a $250,000 fine on the health care fraud charges and a mandatory two years in prison on the aggravated identity theft charges. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

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Since 1988 more than $500,000 in benefits paid to accounts

Tacoma – An Olalla, Washington man was sentenced today in U.S. District Court in Tacoma to 25 months in prison for wire fraud and aggravated identity theft for his decades-long theft of his missing brother’s identity and benefits, announced Acting U.S. Attorney Tessa M. Gorman. Chris Harvey Sayler, 74, began fraudulently collecting his missing brother’s Social Security Disability benefits since at least 1998. Over the last twenty years, those benefits total more than $388,000. At the sentencing hearing, U.S. District Judge Robert J. Bryan said, “This is a sad case for all concerned – including the public…. It’s a crime against all the citizen taxpayers in the country.” Judge Bryan noted that but for Sayler’s age, health and military service, he would have faced a much longer sentence.

“Over the course of this investigation, the defendant has made conflicting statements about when he last saw his brother – who was reported missing in 1989,” said Acting U.S. Attorney Gorman. “Our hope was that the investigation could shed light on what happened to Jarvis Sayler. While that has not happened, we are able to hold his brother accountable for stealing benefits from government programs that are designed to help the most needy in our community.”

According to records in the case, Chris Sayler’s brother, Jarvis L. Sayler, traveled from his home in Missouri to the Vancouver, Washington area in 1988. He told relatives that he planned to visit Chris Sayler, then return to Missouri to build a home on property there. Jarvis Sayler was born with partial eyesight, and had been receiving Social Security disability benefits since 1977. Jarvis Sayler wrote a few letters to Missouri between June and September 1988, but that was the last anyone heard from him. A third brother in Missouri reported Jarvis Sayler missing in March of 1989. The Clark County Sheriff’s Office interviewed Chris Sayler at that time about his brother’s whereabouts. Sayler claimed his brother moved from his home after the two had an argument. That was the last reported sighting of Jarvis Sayler.

In 2013, a person claiming to be Jarvis Sayler attempted to renew a Washington State ID card, but the renewal was denied because facial recognition software indicated the person in the ID photo was the same as in a drivers license photo of Chris Sayler. When Sayler went to a Department of Licensing Office to renew a license (in his own name) years later, he claimed that he and Jarvis were twins and that was the reason for the facial recognition report. The clerk pointed out that the two men’s birthdates were four years apart, but Sayler said it is a “rare twin situation” that does occur. The investigation has revealed that Sayler and Jarvis Sayler are not biologically related.

In 2019, the Department of Licensing referred the matter to the Social Security Office of Inspector General (SSA-OIG) for investigation. The investigation revealed that as early as 1998, Sayler’s photo appears on Jarvis Sayler’s identification card and that the addresses on Jarvis’ cards and other identifying documents are associated with Chris Sayler.

Since at least 1998, Jarvis Sayler’s Social Security benefits went to a bank account opened with an address in Vancouver, Washington. When Chris Sayler moved to Olalla, the address on the account was updated to the new address as well. ATM withdrawal records and debit card records from retailers such as Costco and Fred Meyer show Sayler withdrawing money or making purchases with the debit card associated with Jarvis Sayler’s account.

Speaking with family members in September 2019, Sayler claimed he had not seen his brother in more than 15 years. When interviewed by law enforcement at the time of his arrest in October 2019, Sayler claimed he had last seen his brother in 2016 and before that in 2012.

In court today Sayler said, “I’m sorry that I caused all this problem. I shouldn’t have done it.”

In asking for the 25-month prison sentence, Assistant United States Attorney Benjamin Diggs noted that the ultimate loss to Social Security was likely more than $500,000, but records only exist from as far back as 1998. “The fraud loss of hundreds of thousands of dollars reflects the fact that this crime involves not an isolated incident of dishonesty or a brief lapse in judgment during a difficult period, but rather a separate decision to steal, month after month, for nearly 30 years, resulting in hundreds of separate acts of theft,” prosecutors wrote in their sentencing memo.

“Misusing Social Security benefits intended for another person is a Federal crime —one we will continue to aggressively pursue,” said Gail S. Ennis, Inspector General for the Social Security Administration. “I want to thank our law enforcement partners for joining us in this investigation and the U.S. Attorney’s Office for prosecuting this case.”

The Clark County Sheriff’s Office remains interested in hearing from anyone who has information on Jarvis Sayler and his disappearance.

The case was investigated by the Social Security Office of Inspector General (SSA-OIG), Health and Human Services Office of Inspector General (HHS-OIG), and Homeland Security Investigations (HSI) as part of the Document and Benefit Fraud Task Force in Seattle. Investigative assistance was also provided by the FBI and Sheriff’s Offices for Clark County, Cowlitz County, and Kitsap County.

The case was prosecuted by Assistant United States Attorney Benjamin Diggs.

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A Florida man pleaded guilty today in the Southern District of Florida to a $6.9 million conspiracy to defraud Medicare by paying kickbacks and bribes to obtain doctors’ orders for medically unnecessary lab tests that were then billed to Medicare. The defendant exploited the COVID-19 pandemic by bundling COVID-19 testing with other forms of testing that patients did not need, including genetic testing and tests for rare respiratory pathogens.

According to court documents, Christopher Licata, 45, of Delray Beach, admitted that, as owner of Boca Toxicology LLC (dba Lab Dynamics), he bribed patient brokers who would refer Medicare beneficiaries and doctors’ orders authorizing medically unnecessary genetic testing to Licata’s laboratory. Licata and these patient brokers entered into sham agreements to disguise the true purpose of these payments. Once the COVID-19 pandemic began, Licata exploited patients’ fears of COVID-19 by bundling COVID-19 tests with more expensive, medically unnecessary testing, including respiratory pathogen panel testing and, at times, genetic testing for cardiovascular diseases, cancer, diabetes, obesity, Parkinson’s, Alzheimer’s and dementia. In total, Licata caused his laboratory to submit over $6.9 million in false and fraudulent claims to Medicare for these medically unnecessary tests.

Licata pleaded guilty to one count of conspiring to commit health care fraud. He is scheduled to be sentenced on March 24 and faces 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; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; and Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) made the announcement.

The FBI’s Miami Field Office and HHS-OIG are investigating the case.

Trial Attorneys Jamie de Boer and Dermot Lynch of the Criminal Division’s Fraud Section are prosecuting the case.

In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the department 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 visit https://www.justice.gov/coronavirus.

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 federal districts, 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.

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 (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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A Florida owner of multiple diagnostic testing laboratories was sentenced today in the Southern District of Florida to 82 months in prison for a scheme to defraud the United States and to pay and receive kickbacks through exploiting regulatory waivers put in place to ensure access to health care during the COVID-19 pandemic.

According to court documents, Leonel Palatnik, 42, of Aventura, as a co-owner of Panda Conservation Group LLC (Panda), conspired with other co-owners of the company and with Michael Stein, the owner of 1523 Holdings LLC, to pay illegal kickbacks to Stein in exchange for his work arranging for telemedicine providers to authorize genetic testing orders for Panda’s laboratories. 1523 Holdings and Panda then exploited temporary amendments to telehealth restrictions enacted during the pandemic, which were intended to expand access to care for Medicare recipients by making it easier for beneficiaries to receive needed medical care from home. Palatnik and his co-conspirators took advantage of these waivers by using telehealth providers to authorize thousands of medically unnecessary cancer and cardiovascular genetic testing orders. In exchange, Panda gave these providers access to beneficiary information and the opportunity to bill for purported telehealth consultations with Medicare recipients, which often did not take place. On Aug. 31, Palatnik pleaded guilty to one count of conspiracy to defraud the United States and offer kickbacks and one count of paying a kickback.

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 Omar Pérez Aybar of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG) made the announcement.

The FBI’s Miami and Dallas Field Offices and HHS-OIG are investigating the case, with assistance from the FBI’s Healthcare Rapid Response Team.

Trial Attorney Ligia Markman of the National Rapid Response Strike Force is prosecuting the case.

The case against Palatnik was brought as part of the COVID-19 Health Care Fraud coordinated law enforcement action on May 26 against 14 defendants in seven judicial districts. Palatnik was charged along with Stein, who is currently awaiting trial. 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 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 HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

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 visit https://www.justice.gov/coronavirus.

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 (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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WILMINGTON, N.C. – Latisha Harron, a Las Vegas resident, was sentenced today to 170 months in federal prison and ordered to pay $13,396,921.64 in restitution to the North Carolina Medicaid Program on charges of Conspiracy to Commit Health Care Fraud and Wire Fraud, in violation of Title 18, United States Code, Section 1349; Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A; and (5) Conspiracy to Commit Money Laundering, in violation of Title 18, United States Code, Section 1956(h). The court also sentenced Harron to forfeit various assets as a part of her case. Court documents reflect that forfeitable items include up to $13,396,921.64 in cash, a British Aerospace Bae 125-800A Aircraft, a 2017 Aston Martin DB 11 sports car; a 2016 Ford F-150 Super-Crew pickup truck; real property held in the name of Assured Healthcare Systems in Hertford County, North Carolina; real property located in Charles County, Maryland; as well as various other items of designer jewelry and luxury items seized from the defendant’s penthouse condominium in Las Vegas.

Acting United States Attorney G. Norman Acker, III, stated, “This case demonstrates the resolve of this office to bring healthcare fraud artists to justice – wherever they are found; pandemic or no pandemic. The ultimate reward of fraud is not a life of luxury, but years of life lost to federal prison.”

According to court documents, Harron, also known as Latisha Reese Holt, 44, originally from Eastern North Carolina, admitted to conspiring with her husband to carry out a massive fraud upon the North Carolina Medicaid Program (“NC Medicaid”) by billing the government for fictitious home health services. Harron admitted to then working with her husband to launder the proceeds of the fraud into, among other things, a private jet, luxury jewelry and clothing, and properties in Ahoskie and Rich Square, North Carolina.

According to the charges, Harron created, and was operating, Agape Healthcare Systems, Inc. (“Agape”) an alleged Medicaid home health provider, in Roanoke Rapids, North Carolina. As charged, to enroll Agape as a Medicaid provider, Harron fraudulently concealed her prior felony conviction for Identity Theft. In 2012, Harron moved out of North Carolina to Maryland. Despite that move, Harron continued to bill NC Medicaid as though Agape was providing home health services to North Carolina recipients.

As charged, in May of 2017, Harron moved to Las Vegas, Nevada to live with codefendant Timothy Mark Harron, and that the two were married in 2018. The indictment alleges that Timothy Harron was also a previously convicted felon, and that this fact was concealed from the NC Medicaid on enrollment documents. Latisha Harron pleaded guilty to allegations that Harron and her husband then worked together to expand the Agape fraud upon NC Medicaid, by fraudulently billing the program for more than $10 Million, just in the period between 2017 and 2019.

As charged, Harron admitted that she and her husband carried out the fraud by exploiting an eligibility tool that was entrusted only to NC Medicaid providers. Specifically, Harron and her husband searched publicly available sources, such as obituary postings on the internet by North Carolina funeral homes, to locate recently deceased North Carolinians. Harron admitted that the two would then extract from the obituary postings certain personal information for the deceased, including their name, date of birth, and date of death. Then, utilizing the extracted information, the defendants would then query the NC Medicaid eligibility tool to determine whether the deceased individual had a Medicaid Identification Number. If the deceased North Carolinian had a valid Medicaid Identification Number and was otherwise eligible for Medicaid coverage during their life, the defendants would use that individual’s identity to “back-bill” NC Medicaid, through Agape, for up to one year of fictitious home health services that were allegedly rendered prior to the death of the individual. NC Medicaid then disbursed millions to Agape, all of which flowed into accounts controlled by the Harron and her husband.

Harron admitted that she and her husband carried out the fraud via the internet from locations around the globe, including their corporate office building in Las Vegas, their penthouse condominium in Las Vegas, a corporate office in North Carolina, and from various hotels and luxury resorts in and outside of the United States.

Harron further pled guilty to laundering the proceeds of the Agape fraud into various luxury items. These expenses included a $900,000 wire for the purchase of a British Aerospace Bae 125-800A private jet, hundreds of thousands of dollars in Tiffany & Co. and Brioni clothing and jewelry, thousands of dollars on Eastern North Carolina business properties, and thousands of dollars in gym equipment.

G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina, made the announcement after U.S. District Judge Richard E. Myers II announced the sentence. The Federal Bureau of Investigation, the United States Department of Health and Human Services Office of the Inspector General, the Internal Revenue Service Criminal Investigation, and the North Carolina Attorney General’s Office Medicaid Investigations Division, all investigated the case. Assistant U.S. Attorney William M. Gilmore served as the prosecutor. Assistant U.S. Attorney John Harris represented the United States with respect to forfeiture aspects of the case.

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RALEIGH, N.C. – A Las Vegas, Nevada man pleaded guilty today to Conspiracy to Commit Health Care Fraud and Wire Fraud, Conspiracy to Commit Money Laundering, and Aggravated Identity Theft, and further agreed to forfeit the proceeds of his crimes. In additional to cash, forfeitable property included the defendant’s interest in a British Aerospace Bae 125-800A Aircraft, a 2017 Aston Martin DB 11 sports car; a 2016 Ford F-150 Super-Crew pickup truck; real property held in the name of Assured Healthcare Systems in Hertford County, North Carolina; real property located in Charles County, Maryland; as well as various other items of designer jewelry and luxury items seized from the defendant’s penthouse condominium in Las Vegas.

According to court documents, Timothy Mark Harron, 52, admitted to conspiring with his wife, Latisha Harron, to carry out a massive fraud upon the North Carolina Medicaid Program (“NC Medicaid”) by billing the government for fictitious home health services. Harron further admitted to working with his wife to launder the proceeds of the fraud into, among other things, a private jet, luxury jewelry and clothing, and properties in Ahoskie and Rich Square, North Carolina. Latisha Harron has already pleaded guilty to similar charges and is awaiting sentencing.

According to the charges, Latisha Harron created, and was operating, Agape Healthcare Systems, Inc. (“Agape”) an alleged Medicaid home health provider, in Roanoke Rapids, North Carolina. As charged, to enroll Agape as a Medicaid provider, Latisha Harron fraudulently concealed her prior felony conviction for Identity Theft. In 2012, Harron moved out of North Carolina to Maryland. Despite that move, Harron continued to bill NC Medicaid as though Agape was providing home health services to North Carolina recipients.

As charged, in May of 2017, Latisha Harron moved to Las Vegas, Nevada to live with the defendant Timothy Mark Harron, and that the two were married in 2018. The indictment alleges that Harron was also a previously convicted felon, and that this fact was concealed from the NC Medicaid on enrollment documents. Harron pleaded guilty to allegations that he and his wife worked together to expand the Agape fraud upon NC Medicaid -- fraudulently billing the program for millions in just the few years in which he participated in the scheme.

As charged, Harron admitted that he and his wife carried out the fraud by exploiting an eligibility tool that was entrusted only to NC Medicaid providers. Specifically, Harron and his wife searched publicly available sources, such as obituary postings on the internet by North Carolina funeral homes, to locate recently deceased North Carolinians. Harron admitted that the two would then extract from the obituary postings certain personal information for the deceased, including their name, date of birth, and date of death. Then, utilizing the extracted information, the defendants would then query the NC Medicaid eligibility tool to determine whether the deceased individual had a Medicaid Identification Number. If the deceased North Carolinian had a valid Medicaid Identification Number and was otherwise eligible for Medicaid coverage during their life, the defendants would use that individual’s identity to “back-bill” NC Medicaid, through Agape, for up to one year of fictitious home health services that were allegedly rendered prior to the death of the individual. NC Medicaid then disbursed millions to Agape, all of which flowed into accounts controlled by the Harrons.

As charged, the fraud was carried out via the internet from locations around the globe, including their corporate office building in Las Vegas, their penthouse condominium in Las Vegas, a corporate office in North Carolina, and from various hotels and luxury resorts in and outside of the United States.

Harron further pled guilty to laundering the proceeds of the Agape fraud into various luxury items. These expenses included a $900,000 wire for the purchase of a British Aerospace Bae 125-800A private jet, hundreds of thousands of dollars in Tiffany & Co. and Brioni clothing and jewelry, thousands of dollars on Eastern North Carolina business properties, and thousands of dollars in gym equipment.

Harron pleaded guilty to (1) Conspiracy to Commit Health Care Fraud and Wire Fraud, in violation of Title 18, United States Code, Section 1349, which carries a maximum punishment of up to 20 years in prison, (2) one count of Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A, which carries a maximum punishment of not less than, nor more than 2 years in prison consecutive to other sentences, and (3) Conspiracy to Commit Money Laundering, in violation of Title 18, United States Code, Section 1956(h), which carries a maximum punishment of 10 years in prison.

Acting United States Attorney G. Norman Acker, III made the announcement after U.S. District Judge Richard E. Myers II accepted the plea. The Federal Bureau of Investigation, the United States Department of Health and Human Services Office of the Inspector General, the Internal Revenue Service Criminal Investigation, and the North Carolina Attorney General’s Office Medicaid Investigations Division, are all investigating the case. Assistant U.S. Attorney William M. Gilmore is the prosecutor on this case. Assistant U.S. Attorney John Harris represents the United States with respect to forfeiture aspects of the case.

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Oklahoma City, Oklahoma – Comanche County Hospital Authority (“CCHA”), Troy L. Harden, D.O., and Moncy Varkey, D.O., agreed to pay a total of $550,000 to the United States to settle civil penalty claims related to prescriptions for various non-opioid Schedule II Controlled Substances, announced United States Attorney Robert J. Troester.

Under the Comprehensive Drug Abuse Prevention and Control Act of 1970 and its regulations, prescriptions for controlled substances must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.

During the relevant time, Drs. Harden and Varkey were employed by CCHA and practiced medicine on behalf of Lawton Community Health Care Center, Inc. ("CCMH"), in and around Lawton, Oklahoma. The United States alleges that during the period November 2016 to August 2018, Drs. Harden and Varkey issued prescriptions for various non-opioid Schedule II Controlled Substances, without establishing a doctor-patient relationship via a face-to-face encounter with the patient. During this time, CCHA was responsible for certain CCMH operations including administration, management, and regulatory compliance. The United States alleges the prescriptions issued by Drs. Harden and Varkey were outside the usual course of professional practice and that CCHA neglected to implement appropriate prescribing policies and procedures.

To resolve these allegations, CCHA and Drs. Harden and Varkey agreed to pay a total of $550,000 to the United States.

In reaching this settlement, Drs. Harden and Varkey and CCHA did not admit liability, and the government did not make any concessions about the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.

This case was investigated by the Drug Enforcement Administration, Office of Diversion Control, with assistance from the Department of Health and Human Services, Office of Inspector General, Office of Audit Services. Assistant U.S. Attorneys Amanda R. Johnson and Ronald R. Gallegos prosecuted the case.

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PORTLAND, Maine— Two Lewiston men were sentenced today in U.S District Court in Portland for health care fraud, Acting U.S. Attorney Donald E. Clark announced.

U.S. District Judge Jon D. Levy sentenced Abdirashid Ahmed, 41, to two years in prison and three years of supervised release, and Garat Osman, 35, to three years of probation. Judge Levy also ordered Ahmed to pay $1,863,264.83 and Osman to pay $544,097.78 in restitution to MaineCare. Both men pleaded guilty in May 2019.

According to court records, Ahmed and Osman were interpreters who conspired with several Lewiston/Auburn mental health counseling services to defraud MaineCare. One of the counselors was Nancy Ludwig, who was the owner of Facing Change, a mental health and substance abuse counseling agency in Lewiston. From about November 2015 until May 2018, Ludwig and Ahmed led a conspiracy to commit health care fraud by submitting claims to MaineCare for services that were not rendered as billed.

Beginning in February 2015, Ludwig agreed to pay Ahmed a kickback in return for Ahmed bringing MaineCare beneficiaries to Facing Change. Ludwig, Ahmed and other employees at Facing Change then caused false and fraudulent claims to be submitted to MaineCare for both counseling and interpreter services. The false claims included claims for visits that never occurred and claims that inflated the level of service provided. In 2016, in response to a MaineCare regulatory change, Ludwig and Ahmed conspired to change the diagnosis of many of Ahmed’s clients to schizophrenia so they could remain eligible to receive MaineCare reimbursement for the services at Facing Change.

In the fall of 2016, auditors with the MaineCare Program Integrity Unit audited Facing Change. Ludwig and many of her employees conspired to manufacture false and fraudulent records in an attempt to deceive the auditor. Osman joined the fraud scheme in December 2016 and established an interpreter company that received all the fraudulent payments from that time until early May 2019. In May 2019, agents with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), the FBI and the Maine Attorney General’s Office executed search warrants at Facing Change and Ahmed’s business. Investigators eventually determined that MaineCare was defrauded of $1,863,264.83 in this fraud scheme.

“Healthcare fraud depletes funds intended to provide care for our most vulnerable citizens,” said Phillip M. Coyne, Special Agent in Charge for HHS-OIG. “Today’s sentencing is a strong reminder that we will spare no resources to bring to justice those that undermine the integrity of our federal health care system and those served by it. I appreciate the continued partnership with the Maine U.S Attorney’s Office to protect public funds.”

“Federal and state investigators did tremendous work in uncovering this fraud scheme,” said Acting U.S. Attorney Clark. “The U.S. Attorney’s Office was proud to be part of the team that brought these defendants to justice. We will always aggressively pursue those who attempt to defraud the public in this fashion.”

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS.

This prosecution was the result of a three-year collaborative investigation by HHS-OIG, the FBI and the Maine Attorney General’s HealthCare Crimes Unit. The investigation started because of the auditing work done by the MaineCare Program Integrity Unit.

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Tampa, FL – United States Attorney Maria Chapa Lopez announces that Kelly Wolfe (49, Indian Rocks Beach) has pleaded guilty to conspiracy to commit health care fraud and filing a false tax return. She faces a maximum penalty of 13 years in federal prison. A sentencing date has not yet been set.

In addition to her criminal charges, Wolfe and her company, Regency, Inc. (“Regency”) have agreed to pay up to $20,332,516, to resolve allegations that Wolfe and Regency violated the False Claims Act in a number of ways, including falsifying documentation in order to fraudulently establish durable medical equipment (“DME”) corporations to bill for medically unnecessary DME equipment, and engaging in improper marketing practices that violate the Anti-Kickback Statute. The civil settlement amount is based on Wolfe and Regency’s ability to pay.

According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies—or, rather, DME fronts—using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership of the fronts, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and CHAMPVA (i.e., the Civilian Health and Medical Program of the Department of Veterans). The conspirators relied on the guise of “telemedicine” to explain the unusually high volume of claims, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no interaction, including telehealth interaction, with the beneficiaries. Wolfe further admitted that, for tax year 2017, she had purchased numerous personal items and services using Regency’s funds. Rather than properly report this as income to the Internal Revenue Service, Wolfe falsely classified her personal spending as purported business expenditures.

This prosecution, arising out of the nationwide “Operation Brace Yourself” takedown, involves one of the largest health care fraud schemes in United States history. The Middle District of Florida is playing a significant role in these historic and nationwide enforcement actions. Collaborative efforts among federal, state, and local partners have resulted in criminal charges against 12 defendants in the MDFL.

“The Department is committed to ensuring that federal health care program providers do not place their own financial gain over patients’ clinical needs,” said Acting Assistant Attorney General Brian Boynton of the Department of Justice’s Civil Division. “When medical professionals and companies knowingly commit fraud to maximize their profits, we will hold them accountable for their unlawful conduct.”

“Fraud and deceit in our nation’s healthcare system is not only unacceptable, it is illegal,” said U.S. Attorney Maria Chapa Lopez for the Middle District of Florida. “The U.S. Attorney’s Office will continue to aggressively work with our investigative partners in rooting out these illicit practices to ensure that patients receive the optimum care they deserve.”

“This pernicious telefraud scheme’s ambitions were cut short by the exceptional partnership of our law enforcement partners” said Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of Inspector General. “This guilty plea and the forfeiture of tens of millions of dollars back to the U.S. Treasury show our determination to stop such damaging fraud schemes and to bring fraudsters to justice.”

"The FBI is laser-focused on exposing those who cheat our government healthcare programs," said Special Agent in Charge of the FBI Tampa Division Michael McPherson. "American taxpayers can be assured the FBI and its law enforcement partners are working vigorously to protect federally funded healthcare programs from deception and greed."

“Honest and law-abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets," stated Special Agent in Charge Brian Payne of IRS Criminal Investigation. "Fleecing the health care industry effectively robs us all, and tax fraud undermines the integrity of our nation’s tax system. Those who engage in these swindles should know they will not go undetected and will be held accountable."

“The VA OIG’s continued oversight of CHAMPVA, which provides community care to family members of disabled Veterans, is one of the agency’s highest priorities because it safeguards the integrity of VA’s health care programs,” stated David Spilker, Special Agent in Charge at the Department of Veterans Affairs Office of Inspector General (VA OIG). “As detailed in the charging documents, the defendant’s criminal actions resulted in a massive fraud being committed against both CHAMPVA and Medicare, ultimately impacting the beneficiaries of those programs. The VA OIG commends the extensive cooperation between our law enforcement partners in this important investigation.”

This case is being prosecuted criminally by Assistant United States Attorneys Kristen Fiore and James Muench, and pursued civilly by Assistant United States Attorney Carolyn B. Tapie and Department of Justice, Civil Division, Commercial Litigation Branch Trial Attorney Daniel A. Schiffer, with assistance from the Department of Health and Human Services – Office of Inspector General, the FBI, the Department of Veterans Affairs – Office of Inspector General, and the Internal Revenue Service – Criminal Investigation. The United States previously obtained an emergency temporary restraining order and preliminary injunction enjoining the conduct and assets of Wolfe, Regency, and several of their co-conspirators, in a civil injunctive action prosecuted by Assistant United States Attorneys Carolyn B. Tapie and Sean P. Keefe. The injunctive action is captioned United States v. Regency, Inc., et al., No. 8:19-cv-803-T-33AEP.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against Wolfe and Regency by Condra Albright, a former Regency employee. As a result of the settlement, Albright will receive 23% of the civil recovery as her statutory reward. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The claims resolved by the settlement are allegations only, and there has been no determination of liability.

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A federal grand jury in New Orleans, Louisiana, returned an indictment today charging a Louisiana physician for his role in distributing over 1,200,000 doses of Schedule II controlled substances, including oxycodone and morphine, outside the scope of professional practice and not for a legitimate medical purpose, and for maintaining his clinic for the purpose of illegally distributing controlled substances. Today’s indictment also charges the physician with defrauding health care benefit programs, including Medicare, Medicaid, and Blue Cross and Blue Shield of Louisiana, of more than $5,100,000, given that the opioid prescriptions were filled using health insurance benefits.

According to court documents, Adrian Dexter Talbot, M.D., 55, of Slidell, owned and operated a medical clinic located in Slidell that accepted cash payments from individuals seeking prescriptions for Schedule II controlled substances. In 2015, Talbot took a full-time job in Pineville, Louisiana, and although he was no longer physically present at the Slidell clinic, he pre-signed prescriptions to be distributed to individuals there without seeing or examining those individuals. In 2016, Talbot hired another practitioner who also pre-signed prescriptions to be distributed in the same manner at the Slidell clinic. With Talbot’s knowledge, individuals were filling their prescriptions that were issued outside the scope of professional practice and not for a legitimate medical purpose using their insurance benefits, thereby causing health care benefit programs to be fraudulently billed for filling prescriptions that were written without an appropriate patient examination or determination of medical necessity for the prescription.

Talbot is charged with one count each of conspiracy to unlawfully distribute and dispense controlled substances, maintaining a drug-involved premises and conspiracy to commit health care fraud, as well as four counts of unlawfully distributing and dispensing controlled substances. The defendant is scheduled for his initial court appearance Sept. 10 before U.S. Magistrate Judge Michael B. North of the U.S. District Court for the Eastern District of Louisiana. If convicted, he faces a maximum penalty of 10 years for conspiracy to commit health care fraud and 20 years each for all other counts. 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; U.S. Attorney Duane A. Evans for the Eastern District of Louisiana; Special Agent in Charge Douglas A. Williams Jr. of the FBI’s New Orleans Field Office; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Special Agent in Charge Jeffrey Breen for the Department of Veterans Affairs, Office of Inspector General (VA-OIG) made the announcement.

The FBI, HHS-OIG, VA-OIG, and the Louisiana Office of the Attorney General’s Medicaid Fraud Control Unit are investigating the case.

Trial Attorney Sara E. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Howard Sinkman of the Eastern District of Louisiana are prosecuting the case.

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A federal grand jury in New Orleans, Louisiana, returned an indictment today charging a Louisiana physician for his role in distributing over 1,200,000 doses of Schedule II controlled substances, including oxycodone and morphine, outside the scope of professional practice and not for a legitimate medical purpose, and for maintaining his clinic for the purpose of illegally distributing controlled substances. Today’s indictment also charges the physician with defrauding health care benefit programs, including Medicare, Medicaid, and Blue Cross and Blue Shield of Louisiana, of more than $5,100,000, given that the opioid prescriptions were filled using health insurance benefits.

According to court documents, Adrian Dexter Talbot, M.D., 55, of Slidell, owned and operated a medical clinic located in Slidell that accepted cash payments from individuals seeking prescriptions for Schedule II controlled substances. In 2015, Talbot took a full-time job in Pineville, Louisiana, and although he was no longer physically present at the Slidell clinic, he pre-signed prescriptions to be distributed to individuals there without seeing or examining those individuals. In 2016, Talbot hired another practitioner who also pre-signed prescriptions to be distributed in the same manner at the Slidell clinic. With Talbot’s knowledge, individuals were filling their prescriptions that were issued outside the scope of professional practice and not for a legitimate medical purpose using their insurance benefits, thereby causing health care benefit programs to be fraudulently billed for filling prescriptions that were written without an appropriate patient examination or determination of medical necessity for the prescription.

Talbot is charged with one count each of conspiracy to unlawfully distribute and dispense controlled substances, maintaining a drug-involved premises and conspiracy to commit health care fraud, as well as four counts of unlawfully distributing and dispensing controlled substances. The defendant is scheduled for his initial court appearance Sept. 10 before U.S. Magistrate Judge Michael B. North of the U.S. District Court for the Eastern District of Louisiana. If convicted, he faces a maximum penalty of 10 years for conspiracy to commit health care fraud and 20 years each for all other counts. 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; U.S. Attorney Duane A. Evans for the Eastern District of Louisiana; Special Agent in Charge Douglas A. Williams Jr. of the FBI’s New Orleans Field Office; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Special Agent in Charge Jeffrey Breen for the Department of Veterans Affairs, Office of Inspector General (VA-OIG) made the announcement.

The FBI, HHS-OIG, VA-OIG, and the Louisiana Office of the Attorney General’s Medicaid Fraud Control Unit are investigating the case.

Trial Attorney Sara E. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Howard Sinkman of the Eastern District of Louisiana are prosecuting the case.

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WASHINGTON - A federal grand jury in New Orleans, Louisiana, returned an indictment on August 26, 2021 charging a Louisiana physician for his role in distributing over 1,200,000 doses of Schedule II controlled substances, including oxycodone and morphine, outside the scope of professional practice and not for a legitimate medical purpose, and for maintaining his clinic for the purpose of illegally distributing controlled substances. Today’s indictment also charges the physician with defrauding health care benefit programs, including Medicare, Medicaid, and Blue Cross and Blue Shield of Louisiana, of more than $5,100,000, given that the opioid prescriptions were filled using health insurance benefits.

According to court documents, Adrian Dexter Talbot, M.D., 55, of Slidell, owned and operated a medical clinic located in Slidell that accepted cash payments from individuals seeking prescriptions for Schedule II controlled substances. In 2015, Talbot took a full-time job in Pineville, Louisiana, and although he was no longer physically present at the Slidell clinic, he pre-signed prescriptions to be distributed to individuals there without seeing or examining those individuals. In 2016, Talbot hired another practitioner who also pre-signed prescriptions to be distributed in the same manner at the Slidell clinic. With Talbot’s knowledge, individuals were filling their prescriptions that were issued outside the scope of professional practice and not for a legitimate medical purpose using their insurance benefits, thereby causing health care benefit programs to be fraudulently billed for filling prescriptions that were written without an appropriate patient examination or determination of medical necessity for the prescription.

Talbot is charged with one count each of conspiracy to unlawfully distribute and dispense controlled substances, maintaining a drug-involved premises and conspiracy to commit health care fraud, as well as four counts of unlawfully distributing and dispensing controlled substances. The defendant is scheduled for his initial court appearance Sept. 10 before U.S. Magistrate Judge Michael B. North of the U.S. District Court for the Eastern District of Louisiana. If convicted, he faces a maximum penalty of 10 years for conspiracy to commit health care fraud and 20 years each for all other counts. 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; U.S. Attorney Duane A. Evans for the Eastern District of Louisiana; Special Agent in Charge Douglas A. Williams Jr. of the FBI’s New Orleans Field Office; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Special Agent in Charge Jeffrey Breen for the Department of Veterans Affairs, Office of Inspector General (VA-OIG) made the announcement.

The FBI, HHS-OIG, VA-OIG, and the Louisiana Office of the Attorney General’s Medicaid Fraud Control Unit are investigating the case.

Trial Attorney Sara E. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Howard Sinkman of the Eastern District of Louisiana are prosecuting the case.

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Took Kickbacks from Arkansas Company

FAYETTEVILLE, Ark.—A Lake Charles, La., physician pleaded guilty today to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal remunerations (taking kickbacks), in connection with a scheme to defraud the U.S. government and private insurance companies by over-billing for unnecessary medications provided to workers’ compensation patients.

U.S. District Judge Timothy L. Brooks presided over the plea hearing, in which Robert Dale Bernauer, Sr., 74, waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conspiracy to violate five different federal statutes. According to court documents, Bernauer, an orthopedic surgeon and clinician who practiced in Louisiana, made more than $1,000,000 off of the scheme, which ran from 2011 until 2017 and defrauded both federal and private workers’ compensation insurers.

Court documents allege that the basic premise of the scheme was that individuals associated with an Arkansas company recruited Bernauer to dispense pain creams and patches to his workers’ compensation patients by offering him a 50 percent split of the profits collected from successfully billing insurers. The company billed insurers at markups of anywhere from 1,500 to 2,000 percent—in other words, 15 to 20 times what the medications actually cost. The unnamed company acted as the billing agent for Bernauer, handling all of the paperwork and submitting the allegedly fraudulent claims to both the U.S. Department of Labor, Office of Workers’ Compensation Programs, which covers all federal employees, and to private insurers as well.

Bernauer admitted that both he and his co-conspirators knew he did not have a license to dispense medications from his clinic, which was required under Louisiana law, but proceeded anyway to sign two contracts under which he agreed to buy topical medications from the Arkansas company at set rates, and dispense them exclusively to his workers’ compensation patients. In turn, the contracts provided that Bernauer and the company would each get half of all amounts successfully collected from insurers.

Although such profit-splitting arrangements violated both federal and Louisiana laws, in pleading guilty Bernauer admitted he joined the scheme knowing it was, in his words, “too good to be true.” Bernauer further admitted he deliberately blinded himself to the illegality of the business arrangement, despite all the “red flags” he knew to be present. Bernauer’s plea agreement states that while not offering any excuses for his conduct, he joined in the conspiracy because he needed the money, and continued to participate due to expenses associated with his wife’s final illness.

Court documents indicate that Bernauer was not the only physician involved in this scheme, and the total financial harm to federal and private workers’ compensation insurers is not listed. However, Bernauer alone accounted for a loss of approximately $2,050,546, of which $664,176.50 was suffered by the federal agencies whose employees were Bernauer’s patients.

“The Department of Justice and this U.S. Attorney’s Office are committed to combatting health care fraud and holding accountable the perpetrators of schemes like the one alleged here,” said David Clay Fowlkes, Acting U.S. Attorney for the Western District of Arkansas.

“Today’s guilty plea highlights the commitment of the Department of Defense Inspector General, Defense Criminal Investigative Service, and our law enforcement partners to protect the integrity of the workers’ compensation program that serves our federal workforce,” said Special Agent in Charge Michael Mentavlos of the Defense Criminal Investigative Service Southwest Field Office. “Physicians, marketers and billing companies who attempt to take advantage of the program by paying and receiving kickbacks for prescribing unnecessary medications expose our workforce to potential physical harm and waste valuable taxpayer dollars.”

“An important mission of the Office of Inspector General is to investigate allegations of fraud related to the Department of Labor’s Office of Workers’ Compensation Programs. We will continue to work with our law enforcement partners and the Office of Workers’ Compensation Programs to protect the integrity of the department’s benefit programs and hold those who defraud them accountable as demonstrated in today’s guilty plea,” stated Steven Grell, Special Agent in Charge, Dallas Region, U.S. Department of Labor Office of Inspector General.

“Billing for unnecessary medications undermines the integrity of federal health care programs,” stated Jeffrey Breen, Special Agent in Charge at the Department of Veterans Affairs Office of Inspector General. “This guilty plea holds the defendant accountable for his criminal actions placing profits before his patients’ health. We thank our law enforcement partners for their collaboration in this important investigation.”

“Today’s guilty plea is a testament to the dedication and determination of the investigative and legal teams,” said Special Agent in Charge Scott Pierce, U.S. Postal Service Office of Inspector General, Southern Area Field Office. “The Postal Service spends hundreds of millions of dollars annually on health care related costs and these monies are critical to those who legitimately need medical services. As in this case, our criminal investigators will diligently pursue any individual or organization intent on defrauding the Postal Service with an eye on both federal prosecution and returning lost monies to the affected program.”

In his plea agreement, Bernauer promised to immediately start making amends, by within 30 days paying $664,176.30 directly to the Department of Labor, as restitution to the federal agencies that were primary targets of the fraudulent scheme, and a further $361,096.70 to the court clerk’s office, to be distributed to other insurers victimized by the conspiracy. Bernauer also acknowledged that he would be subject to an additional restitution order of approximately $1,025,273, as a shared obligation with any of his co-conspirators who are later convicted.

As a result of his guilty plea to the single conspiracy count, Bernauer may be sentenced to a maximum of five years in prison. The court will determine his sentence at a later date, after reviewing a pre-sentence investigation report prepared by the U.S. Probation Office, and considering the U.S. Sentencing Guidelines and other statutory factors.

The case was investigated by the Department of Defense, Defense Criminal Investigative Service, the Department of Labor Office of Inspector General, the Department of Veterans Affairs Office of Inspector General, the U.S. Postal Service Office of Inspector General, with the assistance of the Internal Revenue Service-Criminal Investigation, the Louisiana Department of Justice, the Louisiana State Board of Medical Examiners, and the Louisiana Board of Pharmacy.

Assistant U.S. Attorneys Steven Mohlhenrich and Hunter Bridges prosecuted the case for the United States.

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U.S. Attorney Bridget M. Brennan announced that Martin Escobar, 58, of Youngstown, Ohio, pleaded guilty in federal court today to illegally distributing controlled substances, causing the deaths of two patients, unlawfully distributing a controlled substance to a person under the age of 21 and health care fraud.

According to court documents and the plea hearing, between March 2015 and October 2019, Escobar admitted to prescribing controlled substances out of his Lake Milton medical office, including opioids such as oxycodone and hydrocodone, often in combination with benzodiazepines and stimulants, all outside the usual course of professional practice and without a legitimate medical purpose.

Escobar admitted that, in order to support his unlawful prescription practices, he used false diagnoses, falsified patient pain intensity scales in medical charts, increased dosages of controlled substances and prescribed them for prolonged periods without evidence of efficacy. Furthermore, Escobar admitted to inadequately investigating patient pain complaints, failing to pursue treatment options other than controlled substances and falsely claiming to have performed extensive physical examinations on his patients.

Escobar also admitted to ignoring warning signs of his patients’ drug addiction and abuse. This included ignoring the results of his patients’ urine drug screen tests, many of which were performed in Escobar’s medical office and later billed to the government. These tests suggested that patients were abusing the drugs that Escobar had prescribed, using other controlled substances and selling their prescription drugs on the illegal secondary market. As a result, Escobar pleaded guilty to health care fraud.

Escobar also admitted that, in July of 2015 and 2016, he unlawfully prescribed opioids and other controlled substances to two patients without a legitimate medical purpose. Both patients later fatally overdosed from the drugs. In another instance, in April of 2018, Escobar admitted that he unlawfully prescribed opioids to an individual under the age of 21 without a medical need.

Escobar is scheduled to be sentenced on May 17, 2022.

The case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, the Ohio Attorney General’s Healthcare Fraud Section and the Ohio Board of Pharmacy. This case is being prosecuted by Assistant U.S. Attorneys Brendan D. O’Shea, Elliot D. Morrison and Michael L. Collyer, and Special Assistant U.S. Attorney Jonathan L. Metzler of the Ohio Attorney General’s Office.

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Arriva Medical LLC (Arriva), at one point the nation’s largest Medicare mail-order diabetic testing supplier, and its parent, Alere Inc. (Alere), have agreed to pay $160 million to resolve allegations that they violated the False Claims Act.

Until it ceased business operations in December 2017, Arriva was a mail-order diabetic testing supply company based in Coral Springs, Florida. Alere is a medical device company now based in Abbott Park, Illinois. Alere acquired Arriva in November 2011. The settlement resolves allegations that Arriva and Alere made, or caused, claims to Medicare that were false because kickbacks were paid to Medicare beneficiaries, patients were ineligible to receive meters, or patients were deceased.

“Paying illegal inducements to Medicare beneficiaries in the form of free items and routine copayment waivers can result in overutilization and waste taxpayer funds,” said Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division. “We will continue to protect the integrity of the Medicare program by pursuing fraudulent claims arising from violations of the Anti-Kickback Statute or other applicable reimbursement requirements.”

The United States alleged that, from April 2010 until the end of 2016, Arriva, with Alere’s approval, paid kickbacks to Medicare beneficiaries by providing them “free” or “no cost” glucometers and by routinely waiving, or not collecting, their copayments for meters and diabetic testing supplies. Specifically, the United States alleged that Arriva advertised that glucometers would be “free,” and then during intake calls offered Medicare beneficiaries a “no cost guarantee,” under which Arriva would provide the meters at “no cost” if Medicare denied payment, which typically happened because the beneficiaries were not yet entitled to a new glucometer paid for by Medicare. Arriva also allegedly offered and provided existing customers “free” additional meters to induce them to reorder testing supplies from Arriva.

Arriva also allegedly routinely waived, and failed to make reasonable efforts to collect, Medicare copayments. It allegedly failed to send invoices to beneficiaries, and failed to take other basic steps, like sending collection letters or making phone calls, to collect copayments. Specifically, Arriva allegedly systematically waived “small” dollar copayments without informing beneficiaries of their copayment obligations by sending them an invoice, and allegedly automatically waived other unpaid copayments after sending no more than three invoices seeking payment and making no other collection efforts. Arriva also allegedly waived copayments when customers complained that Arriva had advertised and otherwise indicated that their supplies would be free or at no cost.

“The False Claims Act and related statutes exist to protect the public fisc and to ensure companies do not benefit from unfair competition by gaining an illegal advantage over competitors,” said Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee. “When companies engage in such practice, they can expect to be held accountable for their actions.”

“Engaging in activities that result in the submission of false claims to Medicare diverts funding from the necessary treatment and medical supplies beneficiaries need,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will continue working with our law enforcement partners to hold accountable those who seek to enrich themselves by submitting false claims to federal health care programs.”

“The TBI is diligent in pursuing false claims allegations such as these,” said Director David Rausch of the Tennessee Bureau of Investigation. “The partnership we have with our federal counterparts is key in combating healthcare fraud.”

The settlement also resolves allegations that Arriva and Alere caused the submission of false claims to Medicare for glucometers because Arriva, with Alere’s approval, allegedly systematically provided to all of its new patients, and billed Medicare for, a meter without regard to the patients’ eligibility for one. Medicare beneficiaries are only eligible to seek reimbursement for a new meter once every five years. Arriva also allegedly repeatedly billed Medicare for new meters for existing patients where Arriva itself had previously billed Medicare for meters for those patients within the five-year window.

Finally, the settlement resolves claims that Arriva submitted false claims to Medicare on behalf of deceased beneficiaries. In November 2016, the Medicare program revoked Arriva’s Medicare supplier number for doing so.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Gregory Goodman, a former employee at an Arriva call center in Antioch, Tennessee. 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 such actions, as the United States did here. Mr. Goodman will receive $28,548,749 as his share of the recovery. The qui tam case is captioned United States ex rel. Goodman v. Arriva Medical LLC et al., Case No. 3:13-cv-00760 (M.D. Tenn.).

Arriva’s founders, David Wallace and Timothy Stocksdale, previously paid $1 million to resolve allegations that they participated in the kickback scheme. Ted Albin and Albin’s company, Grapevine Billing and Consulting Services Inc., are not parties to the settlement and remain defendants in the ongoing litigation. The United States filed suit against Albin and Grapevine shortly after it intervened in the qui tam action against Arriva and Alere.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Middle District of Tennessee, HHS-OIG, and the Tennessee Bureau of Investigation.

The investigation and resolution of this matter illustrate 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).

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.

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CONCORD - Richard Stanton, 34, of Hope, Maine pleaded guilty in federal court on Thursday to multiple charges, United States Attorney Scott W. Murray announced today.

According to court documents and statements made in court, on March 18, 2019, New Hampshire State Troopers stopped a vehicle with a defective taillight. The driver, Stanton, was seen reaching under the front passenger seat as they approached. Due to safety concerns, a trooper asked Stanton to exit and walk to the rear of the vehicle. Stanton initially provided false information about his identity to the officers. Officers later determined his actual identity. He was arrested after officers determined that he had a suspended driver’s license and that he was the subject of outstanding warrants in Maine

Stanton told the officers there was no one to pick up the vehicle roadside. Per their policy, the officers started to inventory the vehicle in anticipation of it being towed. Various drug paraphernalia was located during the search. Additionally, the officers observed an unlocked gun case in the rear seat containing a rifle and several rounds of ammunition. Officers then stopped the search to apply for a search warrant. The following day, pursuant to the search warrant, the vehicle was searched and officers discovered Stanton’s wallet hidden in a compartment along with over 118 grams of heroin secreted in the dashboard. As a previously-convicted felon, Stanton is prohibited from possessing firearms and ammunition.

On July 24, 2019, Stanton, an uninsured individual, checked into a medical center in Bangor, Maine. Stanton signed a consent to treatment form using another individual’s identity who was a lawful recipient of Maine Care benefits. Stanton received care and generated medical bills to be processed in the other individual’s name.

Stanton pleaded guilty to possession of heroin with intent to distribute, possession of a firearm and ammunition by a prohibited person, and making a false statement in connection with health care benefits.

Stanton is scheduled to be sentenced on March 19, 2021.

“Drug traffickers are involved in a risky business and often arm themselves for protection,” said U.S. Attorney Murray. “The result is that they pose a greater danger to the public. Working with our law enforcement partners we will prosecute drug traffickers and keep guns out of the hands of criminals. This defendant’s illegal activities jeopardized public health and safety and led to a well-deserved federal prosecution.”

This matter was investigated by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Office of the Inspector General of the U.S. Department of Health and Human Services with assistance from the New Hampshire State Police. The case is being prosecuted by Assistant U.S. Attorney Jennifer Cole Davis.

This investigation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

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WILMINGTON, N.C. – A Bethesda, Maryland man was sentenced today to 18 months in prison for health care fraud. In addition to the prison term imposed, he was also ordered to pay $173,870.12 to the North Carolina Medicaid Fund as restitution.

According to court documents, Christian Anthony Ekberg, 34, was an officer and minority shareholder of an out-of-state company that entered into an agreement with a North Carolina dentist. Under the agreement, the out-of-state company would provide professional management services to the dentist, including submitting Medicaid claims, and the dentist would provide dental services to patients living in skilled nursing facilities throughout North Carolina.

From September 2, 2015 through April 21, 2017, Ekberg, and others, knowingly submitted fraudulent dental claims to Medicaid. For example, although the dental records showed that only approximately 107 prophylaxes and 24 debridements had been performed for Medicaid recipients living at the skilled nursing facilities, claims were submitted falsely representing that 771 prophylaxes and 611 debridements were performed for these recipients. In total, the health care fraud resulted in Medicaid paying approximately $173,870.12 for services that had not been rendered.   These funds were deposited into an account to which Ekberg had access. During the relevant time period, Ekberg signed all the checks from this account. The checks written to Ekberg, to cash, and to the out-of-state company, totaled approximately $177,034.

Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by Chief U.S. District Judge Richard E. Myers II. The North Carolina Department of Justice’s Medicaid Investigations Division (MID) investigated the case and Special Assistant U.S. Attorney Mike Heavner prosecuted the case.

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

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

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NEW ORLEANS, LA - U.S. Attorney Duane A. Evans for the Eastern District of Louisiana, announced that BRET BERRY (“BERRY”), age 60, of Mandeville, LA was charged March 9, 2021 with seven counts of health care fraud, in violation of Title 18, United States Code, Section 1347 and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.

According to the indictment, BERRY defrauded Blue Cross and Blue Shield of Louisiana, Medicare and Medicaid, other health care benefit programs relating to billing for cardiac rehabilitation services. BERRY attempted to provide services that required a doctor’s order when he did not have said order, and he attempted to provide services that required a doctor’s presence, when no doctor was present.

According to the indictment, BERRY and his companies billed health care insurance companies for fraudulent services totaling approximately $11,290,000. BERRY and his companies were reimbursed approximately $859,000 in relation to those fraudulent claims.

The maximum penalty for each health care fraud charge is up to 10 years in prison, a $250,000 fine, 3 years of supervised release and a $100.00 special assessment fee for each count.

Aggravated identity theft has a mandatory minimum of two years imprisonment per count to be served consecutively.   The maximum penalty per count is up to 20 years imprisonment, a $250,000 fine, and up to 3 years supervised release.

The U.S. Attorney’s Office praised the work of the Federal Bureau of Investigation and the Department of Health and Human Services – Office of Inspector General. The prosecution of the case is being handled by Assistant U.S. Attorney Kathryn McHugh.

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Dr. Feng Qin Agrees to Pay $800,000, Admits Misconduct, and Receives Four-Year Ban from Participating in Federal Healthcare Programs

Audrey Strauss, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the civil and criminal healthcare fraud cases against FENG QIN, M.D. (“QIN”), a vascular surgeon, and his medical practice QIN MEDICAL P.C. (“QIN MEDICAL”) have been resolved. QIN, who practiced in Lower Manhattan and Far Rockaway, Queens, was criminally charged in December 2018 with fraudulently billing Medicare for vascular surgery procedures performed on end-stage renal disease (“ESRD”) patients that were not medically reasonable and necessary or covered under Medicare rules; the United States also filed a civil healthcare fraud complaint against QIN and QIN MEDICAL in December 2018.

Under the civil settlement approved today by U.S. District Judge Laura Taylor Swain, QIN and QIN MEDICAL agreed to a pay $783,200 to the United States. The State of New York is expected soon to enter into an additional settlement with defendants in the amount of $16,800, for a total recovery of $800,000. The amount is based on the Office’s assessment of the defendants’ ability to pay based on the financial information they provided. As part of the settlement, QIN and QIN MEDICAL admitted and accepted responsibility for conduct alleged by the Government in its civil complaint as further described below. QIN previously paid $150,000 to settle a prior civil fraud lawsuit filed against him and his previous employer for engaging in fraudulent billing practices during the time period 2010 through 2012.

QIN also entered into a Voluntary Exclusion Agreement with HHS-OIG, which prohibits him from participating in Medicare and other federal healthcare programs for four years. This is in addition to the more than two years he has been so excluded since his arrest, as a condition of his bail. The Government has agreed to defer QIN’s criminal prosecution for a period of one year, after which time it will seek to dismiss the charges if QIN abides by the terms of the deferred prosecution agreement.  

Manhattan U.S. Attorney Audrey Strauss said: “For several years, Dr. Qin performed interventional vascular procedures on patients with end-stage renal disease without any documented clinical justification. As a repeat offender, Dr. Qin now faces a lengthy suspension from participating in federal healthcare programs and must make a hefty monetary payment. This Office will continue to hold unscrupulous medical providers accountable when they perform and bill the Government for medically unnecessary procedures.”

HHS-OIG Special Agent in Charge Scott Lampert said: “By billing Medicare for medically unnecessary procedures, Dr. Qin needlessly compromised patient care and victimized taxpayers. Our agency will continue to hold medical professionals accountable, while protecting the federal health care programs intended for those that depend on them for critical services.”

According to the indictment and the Government’s civil complaint:

Patients with ESRD who are receiving dialysis may require vascular access surgical procedures, such as fistulagrams, where dye is injected into the patient’s vein or artery to visualize blood flow, and percutaneous transluminal angioplasties, in which wires and balloons are inserted into blood vessels that have narrowed in order to restore blood flow. However, as Medicare billing guidelines made clear, it is not reasonable and necessary for physicians to bill the program for fistulagrams and angioplasties unless the patient has specific and documented clinical problems, such as significant difficulty receiving dialysis properly.

The patients at QIN’s medical practice primarily consisted of ESRD patients undergoing dialysis treatment. During the relevant period, from 2015 to 2016, QIN routinely scheduled patients for fistulagrams and angioplasties three months in advance, and performed fistulagrams and angioplasties on these patients as a matter of routine, regardless of whether there was a justifiable clinical reason to do so. Furthermore, on multiple occasions he misrepresented the medical conditions of patients in their medical records to make it seem as if they suffered from symptoms that would warrant the procedures when they did not. QIN MEDICAL then unlawfully billed and received payment from Medicare for these procedures, which were excluded from Medicare coverage, as QIN knew.

As part of the civil settlement, QIN and QIN MEDICAL admit, acknowledge, and accept responsibility for the following conduct:

• QIN often routinely scheduled, and actually saw, ESRD patients approximately every three months, regardless of their medical need.

• QIN treated many of his ESRD patients with fistulagrams and angioplasties. The symptoms documented in the medical records, including the records of the dialysis center and the treating nephrologist, were insufficient to justify these treatments for numerous ESRD patients.

• QIN knew that in the absence of a documented clinical justification, Medicare would not pay for fistulagrams or angioplasties. Nevertheless on numerous occasions, QIN MEDICAL sought and received reimbursement from Medicare for these treatments without the required documented clinical justification.
• The allegations of fraud stated in the civil complaint were first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.

The criminal case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Jean-David Barnea, Michael Krouse, and Alexander Li are in charge of the criminal prosecution. The civil case is being handled by the Office’s Civil Frauds Unit, and Assistant United States Attorney Barnea is in charge of the matter.

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Suit Alleges That Eleven New York-Based Facilities Fraudulently Inflated Medicare Reimbursements by Prolonging Patient Stays Without Regard to Patients’ Medical Needs and Billing for Excessive Rehabilitation Therapy That Patients Did Not Need

Audrey Strauss, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), announced today that the United States has filed a civil healthcare fraud lawsuit against ISSAC LAUFER, TAMI WHITNEY, MONTCLAIR CARE CENTER, INC., EAST ROCKAWAY CENTER LLC, EXCEL AT WOODBURY FOR REHABILITATION AND NURSING, LLC, LONG ISLAND CARE CENTER INC., TREETOPS REHABILITATION & CARE CENTER LLC, SUTTON PARK CENTER FOR NURSING & REHABILITATION, LLC, SUFFOLK RESTORATIVE THERAPY & NURSING, LLC, OASIS REHABILITATION AND NURSING, LLC, FOREST MANOR CARE CENTER, INC., SURGE REHABILITATION & NURSING LLC, QUANTUM REHABILITATION & NURSING LLC, and PARAGON MANAGEMENT SNF LLC (collectively the “Defendants”). The lawsuit seeks damages and civil penalties under the False Claims Act for fraudulently billing Medicare for unreasonable and unnecessary services provided to patients at eleven skilled nursing facilities located in New York (the “Facilities”).

The complaint alleges that, during the period from at least January 2010 through September 2019, Defendants systematically kept patients at the Facilities longer than necessary in order to maximize the amount billed to Medicare for the patients’ stays. During those stays, the Facilities systematically put patients on higher levels of rehabilitation therapy than necessary based on their actual clinical needs in order to bill Medicare at the highest rate. ISSAC LAUFER, who is a part owner of ten of the eleven Facilities and operates all eleven Facilities through PARAGON MANAGEMENT SNF LLC, and TAMI WHITNEY, the Coordinator of Rehabilitation Services for the Facilities, instructed and pressured staff to engage in these fraudulent practices. As a result, according to the complaint, the Facilities submitted, or caused to be submitted, false claims for payment for rehabilitation services that were unreasonable and unnecessary, or in some cases, did not even involve the provision of skilled therapy.

U.S. Attorney Audrey Strauss said: “As alleged, ISSAC LAUFER, TAMI WHITNEY and the skilled nursing facilities ISSAC LAUFER owns and/or operates prioritized profits above their obligation to focus on their patients’ actual medical needs. In clear violation of the governing regulations, the Defendants fraudulently inflated their Medicare reimbursements by unnecessarily prolonging patient stays and billing for therapy that offered little or no clinical benefit. This Office will continue vigorously to pursue companies and individuals who engage in these practices at the expense of the public fisc.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “The Medicare program is designed to protect both beneficiaries and taxpayers. When medical providers bill for unnecessary or improper services, patient care is put at risk and the financial integrity of our federal health care system is compromised. Working with our law enforcement partners, we will continue to ensure that medical providers are held accountable for their billing practices and the services they provide.”              

The following allegations are based on the Complaint that was filed in White Plains federal court today:

The eleven facility defendants are skilled nursing facilities located in the New York metropolitan area. LAUFER is a part owner of ten of the eleven Facilities and operates all eleven Facilities through PARAGON MANAGEMENT SNF LLC. WHITNEY is the Coordinator of Rehabilitation Services for the Facilities and as such is involved in decisions regarding the provision of, and billing for, rehabilitation services.

From at least January 2010 through September 2019, the Defendants systematically kept Medicare patients at the Facilities longer than reasonable or necessary, and put those patients on higher levels of rehabilitation therapy than reasonable or necessary. These practices were designed to increase the amounts billed to Medicare beyond what was justified based on patients’ clinical needs. In some instances, the Facilities went so far as to intentionally limit patients’ progress in order to create the appearance of a continued need for services. In one instance, WHITNEY reported to LAUFER that the Facilities should not allow patients to go to the bathroom by themselves because they would then “think they are ready to go home.”

LAUFER and WHITNEY directed the Facilities to engage in this conduct. Specifically, WHITNEY carefully tracked the length of stay for each Medicare patient and expected staff at the Facilities to justify discharges scheduled to take place before the patient’s stay approached 100 days—the maximum compensable by Medicare. Together with management at the Facilities, WHITNEY devised strategies for extending patient stays, including giving patients unnecessary tests to gauge their balance proficiency at the point they were ready for discharge to create a pretext for extending their stays. WHITNEY reported on the success of these “discharge prevention” measures to Laufer, noting both areas where these measures succeeded and those where the Facilities had to work harder to prolong patient stays—such as for patients who were “younger and smarter” or “high level.” LAUFER, in turn, received daily updates from the Facilities reporting the number of Medicare patients who had been discharged, and, on a number of occasions, instructed WHITNEY to curb discharges. LAUFER gave these instructions without any information about the patients’ clinical needs and made explicit that they were designed to increase revenue.

WHITNEY, with LAUFER’S knowledge, also instructed the Facilities to provide virtually all Medicare patients with therapy at the “Ultra High”—i.e., highest billing—level, without regard to the patients’ needs or whether, due to their conditions, they could benefit from this intense therapy. To qualify for the Ultra High level, a patient must receive at least 720 minutes of skilled therapy services (i.e., physical, occupational or speech therapy requiring the services of a trained therapist) per week. Employees understood that there was virtually no wiggle room when it came to determining how much rehabilitation therapy a patient would receive. The pressure to provide this level of therapy in turn led the Facilities to bill for services that did not actually qualify as skilled therapy and thus were not eligible for Medicare reimbursement (such as simply moving the limbs of patients with severe cognitive impairments or assisting with routine self-care tasks).

LAUFER and WHITNEY’S efforts to keep Medicare patients at the Facilities for as close as possible to 100 days and to provide almost all patients, without regard to need, with therapy at the Ultra High level succeeded. During the relevant period, the Facilities were significant outliers, compared to other skilled nursing facilities, with respect to Medicare patients’ average length of stay and levels of rehabilitation therapy.

These practices resulted in the Facilities submitting claims to Medicare for rehabilitation therapy that was not reasonable or necessary, was billed at a higher rate than appropriate, or did not involve the provision of skilled services and, accordingly, were ineligible for payment. In addition, the Facilities made or used false statements and records that were material to false claims submitted to Medicare for payment for rehabilitation therapy that was unreasonable, unnecessary, or unskilled.

The Government intervened in a private whistleblower lawsuit before the Honorable Cathy Seibel that had previously been filed under seal pursuant to the False Claims Act.

Ms. Strauss thanked HHS-OIG for its assistance with the case.

The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jacob Bergman and Rachael Doud are in charge of the case.

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A Montana man who claimed he was a former CIA agent and Force Reconnaissance Marine conducting “off the books” rescue operations pleaded guilty Nov. 10 to wire fraud, tax evasion and money laundering after defrauding another man of more than $2 million, U.S. Attorney Leif M. Johnson of the District of Montana said in a press release.

Matthew Anthony Marshall, 51, of Whitefish, Montana, faces up to 20 years in prison, a $250,000 fine and three years of supervised release for wire fraud, the most serious charge against him. He will also be ordered to pay restitution totaling at least $3 million for the charges of wire fraud and tax evasion.

According to court documents, Marshall allegedly began working for the victim — identified only as John Doe — in Montana in 2013, during which Marshall convinced the man he was a former CIA agent and Force Recon Marine who had conducted covert operations around the world.

However, Marshall had no affiliation with the CIA and had never served with the elite reconnaissance unit while in the Marine Corps. According to the press release, Marshall had served in the Marine Corps Reserve, but received an other-than-honorable discharge in 1999 after missing more than 80 inactive-duty training events.

Marshall allegedly asked Doe if he would fund “off the books,” CIA-backed missions, stating that he would lead assault teams on rescue missions abroad.

For the first “mission,” purportedly a paramilitary operation in Mexico, Marshall had Doe wire him $400,000 in April 2013. Doe allegedly made at least six different wire transactions to Marshall between 2013 and March 2016, totaling approximately $2,355,000.

None of the money Marshall received was used for any missions, in Mexico or elsewhere. Instead, Marshall allegedly used the money on gifts for family and friends and on personal expenses.

He additionally failed to report any of the money he received on his tax returns, according to prosecutors, resulting in $356,756 in tax evasion for 2013 alone.

According to the press release, a plea agreement filed in the case calls for eight counts against Marshall to be dismissed at sentencing if the court accepts the agreement. Marshall will also be held completely responsible for restitution and will have to pay it to both the victim and to the government.

The prosecution is requesting approximately $2,355,000 in restitution for the wire fraud and $899,327 for tax evasion committed from 2013 through 2016.

U.S. District Judge Donald W. Molloy will determine Marshall’s sentence March 3, 2022, during which the complete amount of restitution to be paid will be determined.

Assistant U.S. Attorneys Timothy J. Racicot and Ryan G. Weldon are prosecuting the case. The investigation was conducted by the IRS’s Criminal Investigation unit and the FBI.

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JACKSON, Miss. — A pharmacy marketer has been sentenced to 30 months in prison for his role in a scheme to defraud a military health care program and private insurance companies, federal prosecutors said.

Thomas Wilburn Shoemaker, 57, of Rayville, Louisiana, was sentenced Tuesday for his role in a multimillion-dollar scheme to defraud Tricare and private insurance companies by paying kickbacks to distributors for the referral of medically unnecessary prescriptions. Tricare covers uniformed service members, retirees and their families.

The alleged conduct resulted in more than $180 million in fraudulent billings, including more than $50 million paid by federal health care programs, the U.S. Department of Justice said in a news release.

Shoemaker participated in the scheme by acting as a marketer for a network of pharmacies owned and operated by co-conspirators Mitchell Barrett and David Rutland. Shoemaker worked with the pharmacies to use his Tricare insurance to adjust prescription formulas to ensure the highest reimbursement without regard to efficacy, and he recruited doctors to procure prescriptions for high margin compounded medications. Shoemaker also obtained numerous fraudulent prescriptions using the personal information of military acquaintances.

Shoemaker pleaded guilty on Aug. 12 to conspiracy to defraud the United States and solicit, receive, offer, and pay illegal kickbacks.

In addition to the prison sentence, Shoemaker was ordered to pay restitution and forfeit all assets resulting from the scheme.

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COLUMBUS, Ga. – A Veteran who reaped federal monetary benefits for faking a mental health condition and who falsely claimed to have earned two of the highest honors bestowed for military service was sentenced to the top of his sentencing guideline range and will pay restitution for his crimes, said Charles “Charlie” Peeler, the United States Attorney for the Middle District of Georgia.

Gregg Ramsdell, 61, of Columbus, was sentenced to 12 months in prison, the top of his federal sentencing guideline range, three years supervised release and was ordered to pay $76,000 in restitution to the U.S. Department of Veterans Affairs (VA) by U.S. District Judge Clay Land on Tuesday, August 18 after pleading guilty to one count of false statements and one count of violation of the Stolen Valor Act. There is no parole in the federal system.

“Ramsdell’s conduct does a disservice to all of those who exhibit true valor, serving honorably and courageously in our nation’s armed forces. He will pay the penalty for claiming to be the hero he was not, and reaping monetary benefits reserved for our nation’s true heroes,” said U.S. Attorney Charlie Peeler. “I want to thank the FBI for unraveling his lies, and working alongside us and the VA to protect the integrity of a system built only for those who have sacrificed for and served our country.”

“The sentenced imposed on Ramsdell sends a clear message that anyone who falsely claims to have received our Nation’s most valorous medals earned through combat and service will be held accountable. VA OIG is resolute in investigating allegations of ‘Stolen Valor’ and holding those who attempt to besmirch the heroic service of our military for personal gain responsible for their deceitful acts,” said David Spilker, Special Agent in Charge, VA Office of Inspector General.

"Anyone who lies about serving our country to illegally take tax payer money from federal programs that help deserving Veterans must be held accountable to the full extent of our laws," said Chris Hacker, Special Agent in Charge of FBI Atlanta. "Hopefully Ramsdell's sentence will bring solace to every Veteran insulted by his actions, particularly those who suffered physical and mental trauma for their commitment and valor."

Ramsdell admitted that he falsely claimed to have suffered post-traumatic stress disorder (PTSD) when he applied for disability payments from the VA on September 7, 2014. Ramsdell wrote that he witnessed horrible atrocities during deployment in Afghanistan from October 2008 to March 2009. Among other stressors, he stated he had seen "men, women and children being executed. Women holding babies while detonating themselves. IED explosions causing severe bodily injuries and death. Retrieving body parts and bagging them. Having blood and body excrements being blown onto my uniform." He also falsely claimed that these experiences made him “unable to live a normal life.” As a result of Ramsdell’s false claims, the VA gave him added PTSD benefits retroactive to his military discharge date of June 1, 2014 totaling $76,000. In truth, Ramsdell was not in Afghanistan during that period of time that he claimed to witness the atrocities that supported his false PTSD claim, and he admitted to investigators that he lied about having PTSD. In addition, Ramsdell applied for and attained a coVeted civilian position at U.S. Army Fort Benning in 2017, in part because his resume listed that he was both a Silver Star and Purple Heart with Cluster recipient. He never received these honors.

The Stolen Valor Act of 2013 makes it a crime for people to pass themselves off as war heroes in order to claim money, employment, property or other tangible benefits. The Silver Star medal is the third highest honor bestowed by the U.S. Army. The Purple Heart medal is awarded to members of the U.S. Armed Forces who are wounded or killed in battle. An additional Oak Leaf Cluster is given to Army and Air Force service members to indicate being wounded in combat on more than one occasion.

The case was investigated by the FBI and the Department of Veterans Affairs, Office of the Inspector General. Assistant U.S. Attorney Melvin Hyde is prosecuting the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.

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Alere Entities Allegedly Sold Diagnostic Devices They Knew Had a Materially Defective Algorithm

Medical device manufacturers Alere Inc. and Alere San Diego Inc. (collectively, Alere) have agreed to pay $38.75 million to resolve allegations that the companies violated the False Claims Act by billing, and causing others to bill, the Medicare program for defective rapid point-of-care testing devices.

The settlement announced today resolves allegations that, from 2008 to 2016, Alere knowingly sold defective INRatio blood coagulation monitors used by Medicare beneficiaries taking anticoagulant drugs, such as warfarin. For those patients, blood coagulation monitoring is essential to determining a clinically appropriate and safe dosage for their medications. Too much of an anticoagulant drug can cause major bleeding, and too little of the drug can cause blood clots and strokes.

Since at least 2008, Alere allegedly knew that the software algorithm used in each version of its INRatio monitors contained a material defect. Based on its own internal research, as well as external complaints and warnings, Alere allegedly was aware that INRatio devices had a “system limitation” that produced inaccurate and unreliable results for some patients. The United States alleged that, despite awareness that INRatio systems were linked to over a dozen deaths and hundreds of injuries, including intra-cerebral hemorrhaging and cardiovascular events following bleeding episodes, Alere concealed the defect for years and billed Medicare for the use of defective INRatio devices. Alere allegedly failed to take appropriate corrective actions until 2016, when the devices were removed from the market following a nationwide Class I product recall undertaken at the request of the U.S. Food and Drug Administration (FDA).

“Patients and health care providers rely on diagnostic devices to provide reliable health information,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department's Civil Division. “The Department of Justice will hold accountable medical device companies that knowingly sell defective products that can harm patients and waste taxpayer dollars.”

“Health care companies have an obligation to be candid and clear in their disclosures to the FDA,” said Acting U.S. Attorney Rachael A. Honig for the District of New Jersey. “The government expects companies to be proactive in investigating issues affecting patient safety. The U.S. Attorney’s Office for the District of New Jersey will hold accountable any company that fails to meet these obligations.”

“Companies that withhold information from or provide false information to FDA put patients’ health at risk and jeopardize the integrity of the regulatory process designed to protect the public health,” said Timothy Stenzel, M.D., Ph.D., Director of the Office of In Vitro Diagnostics and Radiological Health in the FDA’s Center for Devices and Radiological Health.

“Medical device providers who cut corners or purposefully market defective tools put profit above patient health,” said Special Agent in Charge George M. Crouch Jr. of the FBI. “The FBI will not sit idly by when people’s lives are at risk. It’s an ill-advised business model that ignores the consequences of getting caught.”

This settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the District of New Jersey, with investigative support from the FBI’s Newark Division and Healthcare Fraud Unit Major Provider Response Team and the Department of Health and Human Services, Office of Inspector General.

This matter was handled by Trial Attorney Christopher Terranova of the Civil Division and Assistant U.S. Attorney Daniel W. Meyler of the District of New Jersey.

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Arthrex Inc., a Florida-based medical device company, has agreed to resolve allegations that it violated the False Claims Act by paying kickbacks that caused the submission of false claims to the Medicare program.

According to the settlement, Arthrex Inc., which specializes in orthopedic products, has agreed to pay $16 million for allegedly paying kickbacks to a Colorado-based orthopedic surgeon. The settlement resolves allegations that Arthrex agreed to provide remuneration to the surgeon in the form of royalty payments purportedly for the surgeon’s contributions to Arthrex’s SutureBridge and SpeedBridge products when the remuneration was in fact intended to induce the surgeon’s use and recommendation of Arthrex’s products. The United States contended that Arthrex’s participation in this arrangement violated the Federal Anti-Kickback statute and, in turn, the False Claims Act by causing the submission of false or fraudulent Medicare claims.

“The Department of Justice will continue to pursue medical device manufacturers that pay kickbacks to boost their profits,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Such arrangements can improperly influence physicians’ decision-making and result in the misuse of critical federal health care program funds.”

“Paying bribes to physicians to distort their medical decision-making corrupts the health care system,” said Acting U.S. Attorney Nathaniel R. Mendell for the District of Massachusetts. “This settlement demonstrates our dedication to ensuring that taxpayers and patients get a health care system that is on the level. Kickbacks have no place anywhere in our health care system, and we will continue to identify and punish this illegal conduct.”

“Medical device manufacturers who engage in such kickback schemes undermine the integrity of federal health care programs,” said Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working closely with our law enforcement partners, our agency will continue to protect patients and taxpayers by holding accountable companies that engage in unlawful activities.”

In connection with the settlement, Arthrex entered into a five-year corporate integrity agreement with HHS-OIG, setting forth requirements for future compliance.

The settlement resolves claims brought in a lawsuit under the qui tam or whistleblower provisions of the False Claims Act by Joseph Shea. The lawsuit was filed in the U.S. District Court for the District of Massachusetts and is captioned United States ex rel. Shea v. Arthrex Inc. et al., No. 20-cv-10210-ADB (D. Mass.). Under the False Claims Act’s qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Shea will receive $2.5 million of the False Claims Act settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch (Fraud Section); the U.S. Attorney’s Office for the District of Massachusetts; HHS-OIG; and the FBI.  

Trial Attorney Andrew Jaco of the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorneys David Derusha and Charles Weinograd of the District of Massachusetts are handling this case.

The investigation and resolution of this matter 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).

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PITTSBURGH, PA - A resident of Wexford, Pennsylvania, has been sentenced in federal court to two years of probation and 100 hours of community service on his conviction of unlawfully distributing controlled substances, United States Attorney Cindy K. Chung announced today.

Senior United States District Judge Nora Barry Fischer imposed the sentence on Mark R. Foster, age 75.

According to information presented to the court, co-defendant Terry Brown owned and operated Cherry Way, a Suboxone clinic, located in Bridgeville PA, and Foster was a medical director at Cherry Way. Brown and Foster conspired together to create and submit unlawful prescriptions for Suboxone, Adderall and Percocet, and then unlawfully dispensed those controlled substances to Brown and to other persons not specifically named in the Indictment..

Assistant United States Attorney Robert R. Cessar prosecuted this case on behalf of the government.

The investigation leading to the filing of charges in this case was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit (OFADU). The Western Pennsylvania OFADU, led by federal prosecutors in the U.S. Attorney’s Office, combines the expertise and resources of federal and state law enforcement to address the role played by unethical medical professionals in the opioid epidemic.

The agencies which comprise the Western Pennsylvania OFADU include: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, Pennsylvania Office of Attorney General – Bureau of Narcotic Investigations, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations, U.S. Office of Personnel Management – Office of Inspector General and the Pennsylvania Bureau of Licensing.

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KNOXVILLE, Tenn. – On May 27, 2021, Michael LaPaglia, 49, was sentenced to 18 months imprisonment by the Honorable Katherine A. Crytzer in the United States District Court for the Eastern District of Tennessee at Knoxville. LaPaglia was also ordered to pay restitution to the health care providers who were victims in this case.

According to documents filed with the court, LaPaglia, a medical doctor, who previously lost his authorization to write prescriptions for controlled substances, had pleaded guilty to an information charging him with one count of conspiring to distribute controlled substances and one count of making a material false statement in connection with the delivery of health care benefits. The charges stem from LaPaglia’s involvement in a mobile Suboxone clinic through which LaPaglia issued prescriptions for Suboxone, Clonazepam, diazepam, and Pregabalin in the name of another doctor.

In the spring of 2018, in the Eastern District of Tennessee, investigators with Federal Bureau of Investigation ("FBI") and Department of Health and Human Services ("HHS") responded to a complaint that LaPaglia was issuing prescriptions for Suboxone without the authority to do so. Investigators learned that LaPaglia would meet patients at his home and in parking lots where, without any meaningful examination, LaPaglia would give the drug customers prescriptions (signed by another doctor) for controlled substances. Customers were charged $300 cash per monthly visit. The customers would then take their prescriptions to be filled at pharmacies, where a number of them used their health insurance to pay for the controlled substances.

"The public places great trust in our medical professionals, and our office is committed to safeguarding that trust through the vigorous enforcement of federal laws," said Acting United States Attorney Francis M. Hamilton III. "Doctors are supposed to help people, not hurt them, and those who abuse their position by illegally prescribing opioids will be prosecuted."

"Tennessee remains at the epicenter of the opioid crisis. Opioid abuse destroys lives, and it devastates families. It is extremely disappointing when caregivers allow greed and selfishness to violate their oath to help those in need. The FBI along with our federal, state, and local partners will continue to investigate and hold those accountable to face the consequences of their actions,” said Joseph E. Carrico, Special Agent-in-Charge of the Knoxville office of the Federal Bureau of Investigation.

"Protecting the health and safety of Medicare and Medicaid patients is our number one priority,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "This provider’s reckless actions not only eluded his prescribing restrictions but endangered the health and safety of these patients."

The charges were the result of an investigation by FBI, HHS, and the Drug Enforcement Administration (DEA). This case was brought as part of the Opioid Fraud and Abuse initiative, a comprehensive national strategy that focuses on investigations and prosecutions of medical providers who prescribe opioids outside of the course of professional medical practice and for no legitimate purpose.

Assistant United States Attorneys Anne-Marie Svolto and David Lewen represented the United States.

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A Texas woman and an Austrian national were sentenced yesterday to 151 months in prison for a $27 million Medicare kickback conspiracy.

According to the evidence presented at trial, Leah Hagen, 50, of Arlington, and Michael Hagen, 54, a citizen of Austria and Arlington resident, owned and operated two durable medical equipment (DME) companies, Metro DME Supply LLC and Ortho Pain Solutions LLC. From March 2016 to January 2019, the defendants paid kickbacks and bribes to their co-conspirator’s call center in the Philippines in exchange for signed doctors’ orders for DME that were used to submit false claims in excess of $59 million to Medicare. From those claims, Medicare paid the defendants more than $27 million. The defendants transferred millions of dollars overseas to, among other things, purchase a home in Spain.

To conceal the payments of kickbacks and bribes from the authorities, the defendants, through their DME companies, signed sham contracts that disguised payments as marketing and business process outsourcing. The DME claims submitted by the defendants to Medicare were for services that were medically unnecessary and not provided as represented. In some cases, beneficiaries were convinced to accept braces they did not need or want and were offered gift cards in exchange for accepting those braces.

On July 8, the Hagens were convicted following an eight-day trial on charges of conspiracy to defraud the United States and to pay and receive health care kickbacks and conspiracy to launder money. The Hagens were sentenced by U.S. District Judge Jane J. Boyle of the Northern District of Texas, who also ordered them to pay $27,104,359 in restitution.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Chad E. Meacham of the Northern District of Texas; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services, Office of the Inspector General’s (HHS-OIG) Dallas Region; Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division; and Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office made the announcement.

This case was investigated by HHS-OIG and the FBI’s Dallas Field Office and was brought as part of Operation Brace Yourself, a federal law enforcement action led by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in partnership with the U.S. Attorney’s Offices for the District of South Carolina, District of New Jersey, and the Middle District of Florida.

Assistant Deputy Chief Adrienne Frazior and Trial Attorneys Brynn Schiess and Catherine Wagner of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, 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.

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The president of a California-based medical technology company was charged in a complaint unsealed today in the Northern District of California, in connection with his alleged participation in schemes to mislead investors, to manipulate the company’s stock price and to conspire to commit health care fraud in connection with the submission of over $69 million in false and fraudulent claims for allergy and COVID-19 testing.

The complaint against Mark Schena, 57, of Los Altos, California, the president of Arrayit Corporation, is the first criminal securities fraud prosecution related to the COVID-19 pandemic that has been brought by the Department of Justice and charges one count of securities fraud and one count of conspiracy to commit health care fraud.

“This defendant allegedly defrauded Medicare through illegal kickbacks and bribes, and then turned to exploiting the pandemic by fraudulently promoting an unproven COVID-19 test to the market,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Working together with our law enforcement partners, the Criminal Division is committed to safeguarding the integrity of the Medicare system and protecting the investing public from securities scams.”

“The allure of cheap reliable alternatives to today’s standard blood tests panels has captured the imagination of the health care industry, making such alternatives a prime subject for fraudsters,” said U.S. Attorney David L. Anderson of the Northern District of California. “The scheme described in the complaint, in which the defendant allegedly leveraged this allure by appending the fear of the COVID-19 pandemic, amounts to a cynical multi-million dollar hoax.”

“Investigating COVID-19 fraud scams billed to federal health programs – such as those charged here – are a top priority for our agency,” said Special Agent in Charge Steven J. Ryan for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “The ongoing public health crisis has spawned a rash of fraudulent schemes; therefore, we will continue working with law enforcement partners to protect beneficiaries, programs and taxpayers.”

“Those seeking to maximize profits while misleading investors should expect to pay a heavy price, especially now,” said Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service (USPIS) – Criminal Investigations Group. “The U.S. Postal Inspection Service is proud to work alongside the Department of Justice and our other law enforcement partners to identify and investigate anyone who capitalizes on this pandemic to commit fraud. By working together, we can keep our communities and our vulnerable populations safe from financial exploitation.”

“Scams that trade on the VA’s name to portray an air of credibility will not be tolerated,” said Special Agent in Charge Kim R. Lampkins of the Veterans Affairs Office of Inspector General (VA OIG). “These charges reflect the VA OIG’s commitment to working with our law enforcement partners to investigate any fraudulent schemes that affect VA’s COVID-19 testing or other responses to the pandemic.”

“Today’s unsealing of the criminal complaint and the subsequent arrest of Mr. Schena are significant steps forward in this case to root out fraud and corruption being committed against the U.S. healthcare system, including the Department of Defense’s TRICARE program,” said Special Agent in Charge Bryan D. Denny, Defense Criminal Investigative Service, Western Field Office. “Any attempts to subvert the integrity of the TRICARE program, especially as we all are struggling to cope with the COVID-19 pandemic, will be aggressively investigated and prosecuted, if appropriate, to preserve and recover precious taxpayer dollars.”

According to the affidavit in support of the complaint, Schena touted that Arrayit is the “only laboratory in the world that offers” revolutionary “microarray technology” that allows Arrayit to test for allergy and COVID-19 based on a drop of blood that is 250,000 times smaller than the technology touted by Theranos.

Beginning in or around 2018 and continuing to in or around February 2020, Schena and others paid kickbacks and bribes to recruiters and doctors to run an allergy screening test for 120 allergens (including things ranging from stinging insects to food allergens) on every patient regardless of medical necessity, and then made numerous misrepresentations to potential investors about Arrayit’s allergy test sales, financial condition, and its future prospects. Schena and others issued press releases and tweeted about partnerships with Fortune 500 companies, government agencies and public institutions, without disclosing that such partnerships either did not exist or were of de minimis value.

As the COVID-19 crisis began to escalate in March 2020, Schena and others made false claims concerning Arrayit’s ability to provide accurate, fast, reliable and cheap COVID-19 tests in compliance with state and federal regulations, and made numerous misrepresentations to potential investors about the COVID-19 tests and Arrayit’s future prospects for COVID-19 testing.

Schena stated that it was simple to develop a test for COVID-19 because the switch from testing for allergies to testing for COVID-19 was “like a pastry chef” who switches from selling “strawberry pies” to selling “rhubarb and strawberry pies.” Arrayit’s stock price doubled in mid-March, but Schena and others never disclosed that there were questions about the validity of its data and the accuracy of its COVID-19 test.

A complaint is merely an allegation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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 uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it.. To learn more about victims’ rights, please visit: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas. If you believe you are a victim who has invested in Arrayit, or you have taken a COVID-19 test prepared or marketed by Arrayit, please visit https://www.justice.gov/criminal-vns/case/Arrayit.

HHS-OIG’s San Francisco Regional Office and Detroit Regional Office, USPIS, the FBI, VA-OIG and DCIS investigated the case. Assistant Chiefs Jacob Foster and Justin Weitz of the Criminal Division’s Fraud Section and Assistant U.S. Attorney William Frentzen of the Northern District of California are prosecuting the case. The department appreciates the assistance of the Securities and Exchange Commission.

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NEW ORLEANS – U.S. Attorney Duane A. Evans announced that BENJAMIN TEKIPPE (TEKIPPE), age 37, a resident of New Orleans, Louisiana, was charged on September 30, 2021 with health care fraud, aggravated identity theft, and making a false statement.

According to the Indictment, TEKIPPE was a licensed chiropractor in Louisiana. TEKIPPE owned and operated his own practice, Metairie Chiropractic, located in Metairie, Louisiana, where he purported to provide chiropractic services to patients.

TEKIPPE knowingly participated in a scheme to defraud a health care benefit program, in connection with the delivery of and payment for health care benefits and services.

TEKIPPE submitted, and caused to be submitted, fraudulent claims to health care benefit programs that falsely represented that certain health care services were provided to patients, when TEKIPPE knew that those services were not actually provided.

On various dates in 2019, TEKIPPE submitted, or caused to be submitted, claims for payment which were not provided. In addition, TEKIPPE knowingly used or caused to be used, without lawful authority, a means of identification of another person, specifically insurance members’ unique member identification numbers, to bill for services which were not provided.

On or about July 22, 2020, TEKIPPE did knowingly and willfully make a materially false, fictitious, and fraudulent statement to Special Agents of the United States Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.

If convicted of health care fraud, TEKIPPE faces a possible maximum sentence of 10 years imprisonment and up to three years of supervised release. If convicted of aggravated identity theft, TEKIPPE faces a possible sentence of 2 years of imprisonment to be run consecutively to any other sentence and up to one year of supervised release, . If convicted of making a false statement, TEKIPPE faces a possible maximum sentence of 5 years imprisonment and up to three years of supervised release. For each offense, TEKIPPE faces up to a $250,000 fine and a mandatory $100 special assessment fee.

The case is being investigated by the Federal Bureau of Investigation and The Department of Health and Human Services, Office of Inspector General.

An indictment is merely a charge and the guilt of the defendant must be proven beyond a reasonable doubt.

The prosecution of the case is being handled by Assistant United States Attorney Kathryn McHugh.

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EAST SAINT LOUIS, Ill. – Shomanicka Holly, 36, of East Saint Louis, Illinois, was arraigned in federal court today after a grand jury returned an indictment charging her with three counts of felony health care fraud.

The indictment alleges that Holly served as a personal assistant from 2016 to 2019 for a qualified beneficiary enrolled in the Illinois Department of Human Services Home Services Program. The Home Services Program is a Medicaid program in Illinois that provides personal assistants to Medicaid recipients to assist them with general household activities and personal care. It is designed to reduce Medicaid expenditures by avoiding more expensive institutional care, including

nursing home care.

According to the indictment, Holly submitted false timesheets requesting payment for personal assistant services that she never actually performed because she was working at another job, not caring for the Medicaid recipient. In doing so, Holly allegedly defrauded the program and breached its policies stating that personal assistants “cannot charge [the Home Services Program] for the same hours worked when working another job” and “billing for hours not worked constitutes Medicaid fraud.”

Holly’s case is set for trial on October 4, 2021, at 9:00am, before United States District Judge David W. Dugan in the federal courthouse in East St. Louis. If convicted, Holly faces a maximum penalty of 10 years in prison on each fraud count.

An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.

This case was investigated by agents of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Illinois State Police, Medicaid Fraud Control Bureau (MFCB). The case is being prosecuted by Assistant United States Attorney Luke J. Weissler.

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EAST ST. LOUIS, Ill. – Shomanicka Holly, 36, of East Saint Louis, Illinois, pled guilty today to a two-count felony information charging her with health care fraud and making materially false statements on a public housing form.

As part of her plea, Holly admitted to defrauding a government funded health care program by requesting payment for services that she never performed. The Illinois Department of Human Services (“IDHS”) operates a program known as the Personal Assistant program, which pays people to work as personal assistants for qualified disabled individuals. The program, which utilizes federal Medicaid funds, will only pay for work performed while the

disabled individuals are present in their homes.

According to court documents, Holly served as a personal assistant to a qualified disabled person from August 2016 to June 2019. During that time, Holly submitted timesheets requesting payment for providing personal assistant services on dates and times when she was working at another job. In doing so, Holly defrauded the program out of funds by falsely certifying that she was at the disabled person’s home when, in fact, she was on the clock somewhere else.

In addition, Holly pled guilty to a separate charge of making materially false statements on a public housing application. Court documents alleged that Holly received public housing assistance through a program funded by the U.S. Department of Housing and Urban Development (“HUD”).

At her plea hearing, Holly acknowledged that she knowingly failed to disclose on her housing assistance renewal application that another adult resided in her home and earned income. The housing agency relied on this information to allocate its limited resources, including in determining whether Holly was eligible for public housing assistance and the amount of assistance. Holly withheld the information to receive more benefits than she was entitled to.

Health care fraud carries a maximum sentence of ten years in prison. Holly faces up to five years in prison for making a materially false statement on a housing form. She may also be fined up to $250,000 and ordered to pay restitution on each charge.

Sentencing is scheduled for April 13, 2022, at 10:00 a.m. in the federal courthouse in East St. Louis, Illinois.

This case was investigated by agents of the United States Department of Health and Human Services, Office of Inspector General (HHS-OIG), United States Department of Housing and Urban Development, Office of Inspector General (HUD-OIG), and the Illinois State Police, Medicaid Fraud Control Bureau (MFCB).

The case was prosecuted by Assistant United States Attorney Luke J. Weissler.

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

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

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

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

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

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

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

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

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

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

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Acting United States Attorney Dennis R. Holmes announced that a Mission, South Dakota, woman convicted of two counts of Assault Resulting in Serious Bodily Injury, one count of Health Care Fraud, and one count of Obtaining Controlled Substances by Fraud was sentenced on October 22, 2021, by Judge Jeffrey L. Viken, U.S. District Court.

Frenchone One Horn, a/k/a Frenchone Kills In Water, age 41, was sentenced to 60 months in federal prison to be served consecutively on each count of Assault Resulting in Serious Bodily Injury. One Horn was sentenced to 24 months in federal prison on the charge of Health Care Fraud, to be served consecutively to the assault charges. As to the charge of Obtaining Controlled Substances by Fraud, One Horn was sentenced to 12 months in federal prison. In total, One Horn was sentenced to 12 years in federal prison, followed by three years of supervised release, and ordered to pay $400 in special assessments to the Federal Crime Victims Fund.

One Horn was indicted for the charges by a federal grand jury on October 22, 2020. She pleaded guilty on May 28, 2021.

One Horn was addicted to prescription controlled substances and was no longer able to obtain controlled substances as a result of her behavior. One Horn assaulted others, including her minor children, in order to obtain prescriptions from medical providers for the injuries she intentionally inflicted. As a result of One Horn’s actions, three victims lost four fingers to amputation. One Horn fabricated stories as to how the individuals received their injuries, and also provided false statements to health care providers in order to obtain controlled substances and health care benefits. Once the individuals received controlled substances, One Horn took the controlled substances, despite the individuals having significant bodily injuries.

This case was investigated by the U.S. Department of Health and Human Services - Office of Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen prosecuted the case.

One Horn was immediately turned over to the custody of the U.S. Marshals Service.

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BIRMINGHAM, Ala. – A federal grand jury returned an eight-count indictment yesterday charging a Mississippi man with wire fraud and health care fraud and with conspiracy to commit wire and health care fraud, announced U.S. Attorney Prim F. Escalona and Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick Jackson.

According to the indictment, in October 2016, Phillip Anthony Minga, 55, of Amory, MS, was excluded from providing services to Medicare participants. Minga also signed an agreement which provided that Medicare would not pay claims submitted by anyone who employed Minga in a management or administrative role. The indictment charges, however, that Minga and others concealed his ownership interests and managerial roles in multiple pharmacies and caused the submission of millions of dollars in claims for reimbursement to Medicare, in violation of his exclusion agreement.

If convicted, Minga faces a maximum of twenty years in prison for wire fraud and ten years in prison for health care fraud, and a $250,000 fine.

The Department of Health and Human Services, Office of Inspector General, investigated the case along with the State of Mississippi’s Office of the Attorney General and the State of Alabama’s State Board of Pharmacy. Assistant U.S. Attorneys Lloyd Peeples and Don Long are prosecuting the case.

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

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MISSOULA – A Missoula vascular surgeon who operates vein and surgery centers in Missoula and Kalispell has agreed to pay the federal government $3.7 million to settle alleged False Claims Act violations that he performed medically unnecessary surgeries based on improper techniques and submitted fraudulent bills for payment to federal health care programs, U.S. Attorney Leif M. Johnson said today.

Dr. David Bellamah, and his business, Bellamah Vein & Surgery, PLLC, doing business as Bellamah Vein Center, has entered into a civil settlement agreement with the U.S. Attorney’s Office for the District of Montana, the Department of Health and Human Services Office of Inspector General, the Defense Health Agency, the Department of Veterans Affairs and a third party, Lenore Lezanne. The terms of the settlement agreement require Bellamah and his company to pay a settlement amount of $3,746,324. The settlement agreement resolves a civil complaint alleging violations of the False Claims Act and other common law claims. The civil complaint in intervention was filed today in U.S. District Court for the District of Montana along with a stipulation to dismiss the case.

“This civil settlement resolves claims of using improper techniques and unnecessary medical procedures to create and submit false claims to four federal health care programs. Submitting false claims for unnecessary procedures increases the cost of providing services to people who really need it. Had the United States known the truth, it would not have paid such claims. We will investigate and hold accountable medical providers who try to enrich themselves through false billing to federal health benefit programs. I want to thank our office’s health care fraud investigation team, the Department of Health and Human Services Office of Inspector General and the FBI for their work on this case,” U.S. Attorney Johnson said.

“Performing medically unnecessary surgeries risks the health and wellbeing of patients, compromises the integrity of federal health care programs, and increases the financial burden on taxpayers,” stated Curt L. Muller, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General. “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.”

“David Bellamah’s alleged actions violated the oath held sacred by physicians,” said Special Agent in Charge Dennis Rice of the Salt Lake City FBI. “Health care fraud affects all Americans and the FBI remains committed to doing our part to combat it.”

The United States contended in court documents that its civil claims against Bellamah and his company arose from him billing for certain services that were medically unnecessary and based on false medical records from January 1, 2015 through March 31, 2017. Bellamah specializes in the diagnosis and treatment of venous reflux disease and varicose veins.

In March 2018, Lezanne, who was a sonographer formerly employed at Bellamah Vein Center, filed a suit in U.S. District Court against Bellamah Vein and Surgery, Bellamah and others alleging Bellamah received government funds for performing unnecessary venous procedures based on inaccurate medical records. The United States partially intervened in the case.

In its complaint, the United States alleged that Bellamah and staff at Bellamah Vein Center used improper techniques to conduct and analyze ultrasounds and used false ultrasound findings to conduct and bill for medically unreasonable and unnecessary services related to the diagnosis and treatment of venous reflux disease and varicose veins. The government contends that Bellamah submitted false claims to the Department of Health and Human Services’ Medicare and Medicaid programs, the Department of Defense’s TRICARE program and the Department Veterans Affairs’ CHAMPVA program.

The Settlement Agreement directs Bellamah to pay the United States $3,746,324, plus interest if applicable, of which $1,923,861 is restitution and the remaining $1,822,463 is settlement of additional damages. If the settlement amount is paid in full within 21 days of the effective date of the Settlement Agreement, no interest shall be charged. Otherwise, Bellamah shall make payments, plus interest, over five years. Upon receiving the settlement amounts, the United States will pay Lezanne 17 percent of each payment as her share of the settlement.

The Settlement Agreement is neither an admission of liability by Bellamah 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 office’s health care fraud investigation team, the Department of Health and Human Services Office of Inspector General and the FBI, with additional assistance from the Defense Health Agency and the Department of Veterans Affairs.

PACER case reference. 18-57-M-DLC

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MISSOULA – A Missoula vascular surgeon who operates vein and surgery centers in Missoula and Kalispell has agreed to pay the federal government $3.7 million to settle alleged False Claims Act violations that he performed medically unnecessary surgeries based on improper techniques and submitted fraudulent bills for payment to federal health care programs, U.S. Attorney Leif M. Johnson said today.

Dr. David Bellamah, and his business, Bellamah Vein & Surgery, PLLC, doing business as Bellamah Vein Center, has entered into a civil settlement agreement with the U.S. Attorney’s Office for the District of Montana, the Department of Health and Human Services Office of Inspector General, the Defense Health Agency, the Department of Veterans Affairs and a third party, Lenore Lezanne. The terms of the settlement agreement require Bellamah and his company to pay a settlement amount of $3,746,324. The settlement agreement resolves a civil complaint alleging violations of the False Claims Act and other common law claims. The civil complaint in intervention was filed today in U.S. District Court for the District of Montana along with a stipulation to dismiss the case.

“This civil settlement resolves claims of using improper techniques and unnecessary medical procedures to create and submit false claims to four federal health care programs. Submitting false claims for unnecessary procedures increases the cost of providing services to people who really need it. Had the United States known the truth, it would not have paid such claims. We will investigate and hold accountable medical providers who try to enrich themselves through false billing to federal health benefit programs. I want to thank our office’s health care fraud investigation team, the Department of Health and Human Services Office of Inspector General and the FBI for their work on this case,” U.S. Attorney Johnson said.

“Performing medically unnecessary surgeries risks the health and wellbeing of patients, compromises the integrity of federal health care programs, and increases the financial burden on taxpayers,” stated Curt L. Muller, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General. “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.”

“David Bellamah’s alleged actions violated the oath held sacred by physicians,” said Special Agent in Charge Dennis Rice of the Salt Lake City FBI. “Health care fraud affects all Americans and the FBI remains committed to doing our part to combat it.”

The United States contended in court documents that its civil claims against Bellamah and his company arose from him billing for certain services that were medically unnecessary and based on false medical records from January 1, 2015 through March 31, 2017. Bellamah specializes in the diagnosis and treatment of venous reflux disease and varicose veins.

In March 2018, Lezanne, who was a sonographer formerly employed at Bellamah Vein Center, filed a suit in U.S. District Court against Bellamah Vein and Surgery, Bellamah and others alleging Bellamah received government funds for performing unnecessary venous procedures based on inaccurate medical records. The United States partially intervened in the case.

In its complaint, the United States alleged that Bellamah and staff at Bellamah Vein Center used improper techniques to conduct and analyze ultrasounds and used false ultrasound findings to conduct and bill for medically unreasonable and unnecessary services related to the diagnosis and treatment of venous reflux disease and varicose veins. The government contends that Bellamah submitted false claims to the Department of Health and Human Services’ Medicare and Medicaid programs, the Department of Defense’s TRICARE program and the Department Veterans Affairs’ CHAMPVA program.

The Settlement Agreement directs Bellamah to pay the United States $3,746,324, plus interest if applicable, of which $1,923,861 is restitution and the remaining $1,822,463 is settlement of additional damages. If the settlement amount is paid in full within 21 days of the effective date of the Settlement Agreement, no interest shall be charged. Otherwise, Bellamah shall make payments, plus interest, over five years. Upon receiving the settlement amounts, the United States will pay Lezanne 17 percent of each payment as her share of the settlement.

The Settlement Agreement is neither an admission of liability by Bellamah 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 office’s health care fraud investigation team, the Department of Health and Human Services Office of Inspector General and the FBI, with additional assistance from the Defense Health Agency and the Department of Veterans Affairs Office of Inspector General.

PACER case reference. 18-57-M-DLC

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Lift Up Received Nearly $300,000 for COVID-19 Testing Already Paid for by Clients at For-Profit Clinics

SPRINGFIELD, Mo. – Additional charges have been returned by a federal grand jury against an elected Missouri state representative for a nearly $900,000 COVID-19 fraud scheme, following her indictment last month for a separate fraud scheme in which she made false claims about a supposed stem cell treatment marketed through her clinics in southern Missouri, and for illegally providing prescription drugs to clients of those clinics.

Patricia “Tricia” Ashton Derges, 63, of Nixa, Missouri, was charged in a 23-count superseding indictment returned under seal by a federal grand jury in Springfield, Mo., on Tuesday, March 23. The superseding indictment replaces the original indictment returned on Feb. 1, 2021, and includes three new counts of COVID-19 fraud in addition to the original charges.

The superseding indictment was unsealed today when Derges appeared in federal court for her arraignment.

Derges was elected in November 2020 as a Missouri state representative in District 140 (Christian County). Derges, who is not a physician but is licensed as an assistant physician, operates three for-profit Ozark Valley Medical Clinic locations in Springfield, Ozark, and Branson, Mo. Derges also operates the non-profit corporation Lift Up Someone Today, Inc., with a medical and dental clinic in Springfield to serve the poor, homeless and uninsured.

Today’s indictment alleges that Derges fraudulently received $296,574 in CARES Act funds for Lift Up, although Lift Up did not provide any COVID-19 testing services to its patients. In fact, Lift Up’s medical clinic closed at the beginning of the COVID-19 pandemic and remained closed from March to June 2020.

Derges allegedly sought CARES Act funding for COVID-19 testing that had been provided, and already paid for, at her for-profit Ozark Valley Medical Clinic. According to the indictment, Derges requested reimbursement for $379,294 in COVID-19 testing and related expenses, and future funding in the amount of $503,350. In total, Derges applied for $882,644 from the CARES Act Relief Fund on Lift Up’s behalf.

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, which provided $150 billion to states, tribal governments, and units of local government. Missouri was allocated approximately $2.3 billion. Missouri allocated approximately $34 million in CARES Act funds to Greene County. To administer the CARES Act funds it received, the Greene County Commission created the CARES Act Relief Fund to “promote recovery by funding programs and services that support the needs of those impacted by the COVID-19 public health emergency.” An advisory council of 30 citizen volunteers was appointed to review funding requests and make funding recommendations to the Greene County Commission.

Derges claimed in her application to the Greene County CARES Act Relief Fund that Lift Up provided COVID-19 testing and she sought reimbursement for “COVID-19 eligible expenses” that Lift Up had incurred. To support her claim, Derges provided invoices totaling $296,574 from Dynamic DNA for more than 3,000 COVID-19 laboratory tests. Derges submitted the Dynamic DNA invoices as Lift Up expenditures, the indictment says, although they were actually for testing done at Derges’s for-profit Ozark Valley Medical Clinic.

Lift Up, a non-profit charity, and Ozark Valley Medical Clinic, a for-profit corporation, are separate legal entities. According to the indictment, Ozark Valley Medical Center had already received payment from its clients of approximately $517,000 for these COVID-19 tests. Ozark Valley Medical Center charged clients, patients, or their patient’s employer approximately $167 per sample for its COVID-19 testing services. Derges allegedly concealed from Greene County that these COVID-19 tests had already been paid for by other payors.

In December 2020, the Greene County Commission awarded Lift Up $296,574 in CARES Act funding based upon Lift Up’s fraudulent application and the Dynamic DNA invoices Derges had submitted. Derges deposited the check into Lift Up’s bank account, then transferred the funds into Ozark Valley Medical Center’s bank account.

Derges provided several more invoices from Dynamic DNA to Greene County later in December 2020 to further support her application for Lift Up, the indictment says, although the invoices were actually for testing done for clients at Ozark Valley Medical Center, raising the total to $589,143 for 6,177 COVID-19 tests. Derges allegedly concealed from Greene County that Ozark Valley Medical Center already had been paid approximately $1 million by clients, patients, or their patients’ employers, for these COVID-19 tests.

Ozark Valley Medical Center’s COVID-19 testing services were a financial boon for the corporation, according to the indictment. Between January 2015 and May 19, 2020, Ozark Valley Medical Center’s daily bank account balance never exceeded $50,000. On Sept. 22, 2020, for example, the daily bank account balance was over $345,000.

Wire Fraud Scheme

The superseding indictment contains the original eight counts of wire fraud related to a nearly $200,000 fraud scheme, which lasted from December 2018 to May 2020. Derges allegedly marketed a stem cell treatment that actually utilized amniotic fluid that did not contain any stem cells.

The Controlled Substances Act

The superseding indictment contains the original 10 counts of distributing Oxycodone and Adderall over the internet without valid prescriptions. The indictment alleges that Derges, without conducting in-person medical evaluations of the patients, wrote electronic prescriptions for Oxycodone and Adderall for patients and transmitted them to pharmacies over the internet.

False Statements

The superseding indictment contains the original two counts of making false statements to federal agents investigating this case in May 2020.

Forfeiture Allegation

In addition to the criminal charges, the indictment contains a forfeiture allegation, which would require Derges to forfeit to the government any property derived from the proceeds of her alleged fraud schemes, as well as a money judgment representing the proceeds Derges obtained through the fraud schemes.

The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Shannon Kempf. It was investigated by the FBI, Health and Human Services – Office of Inspector General, and the DEA.

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TUSCALOOSA, Ala. – This week, Chief U.S. District Judge L. Scott Coogler sentenced two dozen defendants who were part of a major conspiracy to commit health care fraud, announced U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr., U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge Cynthia Bruce, United States Postal Inspector in Charge, Houston Division, Adrian Gonzalez, and Internal Revenue Service Criminal Investigation Special Agent in Charge James E. Dorsey.

The defendants sentenced included an array of company executives and managers, a prescriber, billers, and sales representatives. Among those sentenced this week were:

John Jeremy Adams, 40, of Panama City Beach, Florida, the president and CEO of Global Compounding Pharmacy (Global), who directed the fraud and made millions from it, was sentenced to 170 months in prison on one count of conspiring to commit health care fraud and mail fraud, 19 counts of health care fraud, one count of conspiring to pay kickbacks to a prescriber, and 8 counts of spending the proceeds of health care fraud. Adams pleaded guilty to the charges in May 2020.

James A Mays, III, 45, of Winfield, Ala., was sentenced to 102 months in prison on one count of conspiring to commit health care fraud and mail fraud, twelve counts of health care fraud, and three counts of money laundering based on spending the proceeds of health care fraud. Mays was the pharmacist who handled Global’s compounding operation and made millions during the conspiracy. Mays pleaded guilty to the charges in February 2021.

Jessica Linton, 38, of Clearwater, Florida, was sentenced to 132 months in prison on one count of conspiracy, thirteen counts of health care fraud, three counts of mail fraud, and seven counts of aggravated identity theft. Linton was the manager in charge of Global’s billing center; she altered and added prescriptions, billed insurers for medically unnecessary prescriptions, and helped hide the fraud from auditors. In February 2021, a federal jury convicted Linton of these charges.

John Gladden, 51, of Tallahassee, Florida, was sentenced to 64 months in prison on one count of conspiracy, six counts of health care fraud, one count of mail fraud, and one count of aggravated identity theft. Gladden, a district manager for Global during most of 2015, directed his sales representatives to get medically unnecessary prescriptions for themselves and their family members and profited from the scheme. In February 2021, a federal jury convicted Gladden of these charges.

Phillip Marks, 52, of St. Augustine, Florida, was sentenced to 36 months in prison on one count of conspiracy and twelve counts of health care fraud. Marks served as a manager of the sales managers and, in 2015, pressured subordinates to get unnecessary prescriptions for themselves and their family members. Marks made more than $400,000 during his time at Global. He pleaded guilty to the charges in September 2018.

“The health care fraud conspiracy and scheme executed by these defendants caused health insurance companies to lose millions of dollars,” U.S. Attorney Escalona said. “These defendants manipulated the system for their own personal gain without regard for patient need or medical necessity. I applaud our prosecutors and law enforcement partners for their commitment and hard work on this complex investigation and prosecution.”

The sentencings came after an extensive investigation into a prescription drug billing scheme involving a Haleyville, Ala.-based pharmacy, Northside Pharmacy, doing business as Global Compounding Pharmacy. More than two dozen defendants pleaded guilty to charges, and two additional defendants went to trial in February 2021.

From 2013 to 2016, this large-scale conspiracy billed insurers for massive quantities of medically unnecessary prescription drugs. The scheme involved directing employees to get medically unnecessary drugs for themselves, family members, and friends, changing prescriptions to add non-prescribed drugs because insurance would pay for them, automatically refilling prescriptions regardless of patient need, routinely waiving and discounting co-pays to induce patients to get and keep medically unnecessary drugs, and billing for drugs without patients’ knowledge. When prescription drug administrators attempted to police this conduct, the conspirators hid their fraud and obstructed detection efforts—including by lying to auditors and diverting their billing through affiliated pharmacies. The scheme targeted multiple health insurance plans, including the pharmacy’s Blue Cross Blue Shield of Alabama plan, as well as plans providing health insurance to the elderly, disabled, members of the military, and Veterans—Medicare, TRICARE, and CHAMPVA, among others.

The scheme resulted in pharmacy benefit managers paying Global nearly $50 million in claims in just a two-year period. Global received more than $13 million from prescriptions written by prescribers who were either paid cash to write them or whose spouses worked as Global sales reps. One nurse practitioner who wrote prescriptions was paid kickbacks in paper bags filled with thousands of dollars in cash and left in her car. Global also received over $8.4 million for prescriptions Global employees got for themselves—including from doctors they had never seen as patients. In some cases, Global was paid as much as $30,000 or more for a single tube of compounded cream.

The FBI, HHS-OIG, DCIS, USPIS, and IRS-CI investigated the cases. Assistant U.S. Attorneys J.B. Ward, Edward Canter, and Don Long prosecuted the case. The U.S. Department of Veterans Affairs Office of Inspector General, Criminal Investigations Division, aided in the investigation.

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PITTSBURGH - A resident of Murrysville, Pennsylvania, was sentenced in federal court following his convictions for unlawful dispensing and distributing Schedule II controlled substances and health care fraud, United States Attorney Cindy K. Chung announced today.

Senior United States District Judge Nora Barry Fischer sentenced Yee Chung Ho, age 72, a physician, to three years of probation, including 180 days of home detention. Ho also was ordered to pay restitution totaling $6,500 to Medicare, and to forfeit his Drug Enforcement Administration number, Pennsylvania state license to practice medicine, and $89,280.00 to the United States. Ho was further ordered to serve 250 hours of community service.

During the defendant’s plea hearing on November 9, 2021, Ho admitted that, while practicing as a licensed medical doctor at his family medicine practice located in Pittsburgh, Pennsylvania, he knowingly dispensed and distributed Schedule II drugs, specifically, Oxycodone, to a patient outside the usual course of professional practice and not for a legitimate medical purpose. Ho also admitted that, from April 2018 through June 2019, he committed health care fraud by causing fraudulent claims to be submitted to Medicare for payments to cover the costs of unlawfully prescribed drugs.

Assistant United States Attorneys Robert Cessar and Karen Gal-Or and Special Assistant United States Attorney Edward Song are prosecuting this case on behalf of the government.

The investigation leading to the filing of charges in this case was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit (OFADU). The Western Pennsylvania OFADU, led by federal prosecutors in the U.S. Attorney’s Office, combines the expertise and resources of federal and state law enforcement to address the role played by unethical medical professionals in the opioid epidemic.

The agencies which comprise the Western Pennsylvania OFADU include: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, Pennsylvania Office of Attorney General – Bureau of Narcotic Investigations, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations, U.S. Office of Personnel Management – Office of Inspector General and the Pennsylvania Bureau of Licensing.

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Miami, Florida – Over 50 defendants were charged in the Southern District of Florida in the last six weeks, as part of a nationwide federal law enforcement action to combat health care fraud.

The federal charges filed in South Florida cover a wide range of schemes, from novel crimes like theft of Covid-19 personal protection equipment and fraud connected to substance abuse treatment facilities (sober homes), to more familiar violations like health care fraud involving durable medical equipment suppliers, home health, pharmacies, payment of kickbacks, money laundering, and more. It is alleged that $308 million in fraudulent claims was billed by the defendants charged in the Southern District of Florida during the six-week enforcement period. Over $106 million of that billed amount was paid.  

Nationwide, 138 defendants, including 42 doctors, nurses, and other licensed medical professionals, in 31 federal districts across the United States, were charged during the enforcement period for their alleged participation in various healthcare fraud schemes that resulted in approximately $1.4 billion in alleged losses. Nationally, 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.

“The results of the coordinated law enforcement effort that we announce today exemplify my Office and its law enforcement partners’ enduring commitment to combatting all forms of health care fraud-related schemes.” said Juan Antonio Gonzalez, Acting U.S. Attorney for the Southern District of Florida. “We will not relent in holding accountable those in South Florida who exploit health care programs and patient trust for personal gain, particularly during the COVID-19 global pandemic.”

“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.”

Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in conjunction with its Health Care Fraud and Appalachian Regional Prescription Opioid (ARPO) Strike Force program, and its core partners, the U.S. Attorneys’ Offices, the Department of Health and Human Services Office of Inspector General (HHS-OIG), FBI, and the Drug Enforcement Administration (DEA), as part of the department’s ongoing efforts to combat the devastating effects of health care fraud and the opioid epidemic.

The Southern District of Florida, in particular, worked with the Department’s Criminal Division and the following law enforcement organizations to investigate and prosecute the cases filed during the enforcement period: FBI Miami; U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Miami Region; Social Security Administration, Office of Inspector General (SSA-OIG), Atlanta Field Division; Homeland Security Investigations (HSI), Miami; United States Postal Inspection Service (USPIS), Miami Region; Florida’s Office of the Attorney General, Medicaid Fraud Control Unit (MFCU); Florida State Attorney’s Office; City of Miami Beach Police Department; Palm Beach County Sober Homes Task Force; Amtrack Office of the Inspector General; and the Department of Insurance Fraud.

“South Florida is ground zero for health care fraud. As such, the FBI and its partners devote vast resources to investigate, catch and prosecute those committing this fraud,” said George L. Piro, Special Agent in Charge, FBI Miami. The victims are U.S. taxpayers, you and me. Our message to those who commit health care fraud and steal from U.S. taxpayers is clear: you will be caught, and you will be punished.”

“Healthcare fraud is hardly a victimless crime. The well-being and trust of patients and taxpayers are at risk when corrupt providers engage in schemes that drain taxpayer-funded health care programs and undermine impartial medical judgement,” said Special Agent in Charge Omar Pérez Aybar of HHS-OIG Miami. “These cases demonstrate our resolve to investigate bad actors and protect the patients served by vital federal health and human services programs.”

“Those who misuse the Social Security numbers of other individuals for personal gain are warned -- we will hold you accountable.” said Rodregas W. Owens, Special Agent-in-Charge, SSA-OIG, Atlanta Field Division. “We will continue to work aggressively to identify such fraud in an effort to protect taxpayers against fraud, waste, and abuse.”

“We as a law enforcement community will not allow individuals to defraud government health-care programs for their own personal gain,” said Anthony Salisbury, Special Agent in Charge, HSI Miami. “HSI and its partners will continue to pursue individuals and companies who are taking advantage of innocent patients seeking medical care.”

“My Medicaid Fraud Control Unit works tirelessly to stop the exploitation of the taxpayer-funded Medicaid program and protect the vulnerable Floridians who rely on its services. I’m proud of our partnership with federal authorities to hold these criminals abusing the system accountable,” said Florida Attorney General Ashley Moody.

COVID-19 Fraud Cases

Across the nation, nine defendants are charged with engaging in various health care fraud schemes designed to exploit the COVID-19 pandemic, which resulted in the submission of over $29 million in false billings.

In the Southern District of Florida, for example, a defendant is charged with stealing personal protective equipment from a hospital and reselling it at inflated prices:  

In U.S. v. Rickey Delancey, Jr., Case No. 21-20471-Cr-Moore, a 30-year-old Miami resident is charged by indictment with conspiracy to steal medical products, theft of medical products, and transportation of stolen goods. According to the indictment, Delancey worked in the supplies department of Mount Sinai Hospital. From about April to November 2020, Delancey stole N95 masks and other medical supplies from his workplace and sold them to various purchasers. Among other items, he sold $55,000 worth of stolen masks to a purchaser in California, says the indictment. As a result of the thefts, during the height of the COVID-19 pandemic, Mount Sinai did not have the supplies needed for nurses, doctors, staff, and patients, and at one point was down to only a three-day supply of N95 masks.

FBI Miami and USPIS Miami investigated this case, along with City of Miami Beach Police Department. Southern District of Florida Assistant U.S. Attorney Lindsey Lazopoulos Friedman is prosecuting it.

The law enforcement action today also includes criminal charges against five defendants across the country who allegedly engaged in 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 COVID-19 cases announced today build upon the success of the COVID-19 Health Care Fraud Takedown on May 26, a coordinated law enforcement action against 14 defendants in seven judicial districts for over $128 million in false billings. The law enforcement action and the cases announced today were 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.

Sober Homes Cases

Today’s announcement of sober homes cases charged across the nation coincides with the one-year anniversary of the first national sober homes initiative in 2020, which included charges against more than a dozen criminal defendants in connection with more than $845 million of allegedly false and fraudulent claims for tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction. The over $133 million in false and fraudulent claims that are additionally alleged in cases announced today reflect the continued effort by the National Rapid Response Strike Force and the Health Care Fraud Unit’s Los Angeles Strike Force, with the participation of the U.S. Attorney’s Offices for the Central District of California and the Southern District of Florida, to prosecute those who participated in illegal kickback and bribery schemes involving the referral of patients to substance abuse treatment facilities; those patients could be subjected to medically unnecessary drug testing – often billing thousands of dollars for a single test – and therapy sessions that frequently were not provided, and which resulted in millions of dollars of false and fraudulent claims being submitted to private insurers.

In the Southern District of Florida, two defendants are charged with sober homes fraud:

In United States v. Mimi Bieda and Levi Bieda a/k/a Larry, Case No. 21-80112-CR-Rosenberg, Mimi Bieda, 62, and Levi Bieda, 36, of West Palm Beach, Florida, are charged by information with conspiracy to commit $128 million of health care fraud. According to the information, the Biedas owned and operated Academy Health Solutions, LLC (“Academy”), a substance abuse treatment center in Palm Beach County, Florida, as well as a sober home and detox facilities. They also had ownership interest in several drug testing laboratories. It is alleged that the Biedas hired a medical director for Academy, Dr. Michael Ligotti, who signed standing orders for medically unnecessary and expensive drug testing in exchange for patient referrals. Dr. Ligotti then billed the patients’ insurance plans for duplicative, excessive, non-rendered, and/or medically unnecessary treatment and testing. The Biedas used the standing orders signed by Dr. Ligotti, and by a subsequent medical director at Academy, to authorize medically unnecessary drug testing at laboratories in which they had an ownership interest, allowing them to receive percentages of all claim reimbursements for those tests, says the information. It is alleged that the Biedas also paid kickbacks and bribes, in the form of free or reduced rent, access to controlled substances provided by Academy’s medical directors, and other benefits, to individuals who agreed to live at their sober home, attend treatment at Academy, and submit to drug testing, so that the Biedas could bill these services to the residents’ insurance plans.

FBI Miami investigated this case, along with Palm Beach County Sober Homes Task Force, Florida State Attorney’s Office, Amtrack Office of the Inspector General, and Department of Insurance Fraud. Southern District of Florida Assistant United States Attorneys Alexandra Chase and Danielle Croke, as well as National Rapid Response Strike Force Senior Litigation Counsel James V. Hayes and Trial Attorney Ligia Markman are prosecuting it.

Cases Involving Traditional Healthcare Fraud Schemes and the Illegal Prescription and/or Distribution of Opioids

The cases announced today that fall into more traditional categories of health care fraud include charges filed across the nation against over 60 defendants who allegedly participated in schemes to submit more than $145 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. Cases filed across the nation involving the illegal prescription and/or distribution of opioids involve 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.

In the Southern District of Florida, defendants are charged in cases involving a wide range of traditional health care fraud schemes. Some of the cases charged in the Southern District of Florida during the six-week enforcement period include the following:

In United States v. Edward Pizzi, Case No. 21-20467-CR-Altman, a 40-year-old from Miami, Florida is charged by information with conspiracy to pay health care kickbacks. According to the information, Pizzi owned and operated Miami-based Rios Medical Center and Union Medical Clinic. Pizzi directed his employees to pay kickbacks to recruit Medicare beneficiaries and Medicaid recipients to the clinics. The clinics used the identification numbers of these beneficiaries and recipients to submit claims to Medicare Part C and Medicaid for, among other things, purported mental health therapy services. Most of the recruited beneficiaries neither needed nor qualified for such services.

FBI Miami, HHS-OIG Miami, and MFCU investigated this case. Southern District of Florida Assistant U.S. Attorney Michael Homer is prosecuting it.

In United States v. Mayara Gonzalez Chaviano, Case No. 21-20468-CR-King, a 28-year-old Miami, Florida resident is charged by information with conspiracy to pay health care kickbacks. According to the information, Chaviano was the office manager of Rios Medical Center and Union Medical Clinic, in Miami, Florida. Chaviano managed the clinics’ scheme to pay kickbacks to recruit Medicare beneficiaries and Medicaid recipients to the clinics. The clinics used the identification numbers of these beneficiaries and recipients to submit claims to Medicare Part C and Medicaid for, among other things, purported mental health therapy services. Most of the recruited beneficiaries neither needed nor qualified for such services.

FBI Miami, HHS-OIG Miami, and MFCU investigated this case. Southern District of Florida Assistant U.S. Attorney Michael Homer is prosecuting it.

In United States v. Liliana Liseth Duarte, Case No. 21-20469-CR-Bloom, a 47-year-old resident of Miami, Florida, is charged by information with conspiracy to pay health care kickbacks. According to the information, Duarte was an employee of Rios Medical Center and Union Medical Clinic, in Miami, Florida. Duarte paid kickbacks to individuals to recruit Medicare beneficiaries and Medicaid recipients to the clinics. The clinics used the identification numbers of these beneficiaries and recipients to submit claims to Medicare Part C and Medicaid for, among other things, purported mental health therapy services. Most of the recruited beneficiaries neither needed nor qualified for such services.

FBI Miami, HHS-OIG Miami, MFCU investigated this case. Southern District of Florida Assistant U.S. Attorney Michael Homer is prosecuting it.

In United States v. Jason Kashou, Case No. 21-60245-CR-Dimitrouleas, the 35-year-old owner of 1st Choice is charged by information with conspiracy to solicit and receive illegal kickbacks from pharmacies. Kashou bought Medicare and Medicaid beneficiary information from a call center in India. Kashou then agreed to provide the beneficiary information to pharmacies so that the pharmacies could fill prescriptions for expensive diabetic supplies and topical pain creams. In exchange, the pharmacies agreed to pay Kashou a percentage of the profits from the amount Medicare and Medicaid paid on a per patient basis.

On September 14, Kashou pled guilty to the charge. His sentencing hearing is set for November 23, at 1:15 p.m., before U.S. District Judge William P. Dimitrouleas.

HSI Miami, HHS-OIG Miami and MFCU investigated this case. Southern District of Florida Assistant U.S. Attorneys Stephanie Hauser and Michael Gilfarb are prosecuting it.

In United States v. Greisy Rosario Varona Docasal, Case No. 21-20439-CR-Cooke, a 52-year-old Miami, Florida resident is charged by indictment with conspiracy to receive health care kickbacks, and substantive counts of receiving kickbacks in connection with a federal health care program. According t0 the indictment, Varona Docasal, as office manager of a doctor’s office, was involved in a scheme to illegally recruit Medicare beneficiaries and refer them to home health agencies in exchange for receiving illegal kickbacks from the owners and operators of the home health agencies who in turn billed Medicare for home health services for the recruited Medicare beneficiaries.

HHS-OIG Miami investigated this case. Southern District of Florida Assistant U.S. Attorney Aimee C. Jimenez is prosecuting it.

In United States v. Mayra De La Paz, Case No. 21-20474-CR-Bloom, a 69-year-old resident of Hialeah, Florida is charged by information with conspiracy to solicit and receive kickbacks in connection with a federal health care program. According to the information, De La Paz participated in a conspiracy to solicit and receive kickback payments for the referral of Medicare beneficiaries to a home health agency.

HHS-OIG Miami and FBI Miami investigated this case. Southern District of Florida Assistant U.S. Attorney Timothy J. Abraham is prosecuting it.

In U.S. v. Michael Marcelus Mogollon, Case No. 21-20432-CR-Moore, a 33-year-old from Miami, Florida is charged by information with conspiracy to commit health care and wire fraud. According to the information, Mogollon paid kickbacks to beneficiaries with Blue Cross Blue Shield health insurance in exchange for the patients allowing Miami clinics Quality Professional, Zion Medical, and Renewal to bill the insurance plans for medical benefits, items, and services, that were not medically necessary, not eligible for reimbursement, and not received by the beneficiaries. As a result of Mogollon’s participation in the conspiracy, the clinics billed Blue Cross Blue Shield approximately $678,800, and Blue Cross Blue Shield paid approximately $220,000 based on the false claims, says the information.

FBI Miami investigated this case. Southern District of Florida Assistant U.S. Attorney Lindsey Lazopoulos Friedman is prosecuting it.  

In U.S. v. Jorge Luis Taboada, Case No. 21-20443-CR-Williams, a 52-year-old resident of Miami, Florida is charged by information with conspiracy to commit health care and wire fraud. According to the information, Taboada paid kickbacks to beneficiaries with Blue Cross Blue Shield and Aetna health insurance in exchange for the patients allowing United Medical of South Florida, d/b/a Sleep Study of South Florida, Inc. to bill the insurance plans for medical benefits, items, and services, that were not medically necessary, not eligible for reimbursement, and not received by the beneficiaries. As a result of Taboada’s participation in the conspiracy, the clinics billed Blue Cross Blue Shield and Aetna between $1,500,000 and $3,500,000, says the information.

FBI Miami investigated this case. Southern District of Florida Assistant U.S. Attorney Lindsey Lazopoulos Friedman is prosecuting it.  

In United States of America vs. Patricia M. Cleary, a/k/a Patricia M. Cleary Syling, a/k/a Patricia M. Syling, a/k/a Patricia A. Cleary, Case No. 21-60262-CR-Singhal, a 51-year-old from Odessa, Florida is charged by indictment with one count of falsely representing a social security number and one count of aggravated identity theft.

According to the indictment, Cleary knowingly gave a false social security number to a Medicaid Managed Care Organization while applying for a job with the company. The social security number did not belong to Cleary. Instead, it belonged to a victim living in a different state. Cleary did this to hide her real identity from the company, says the indictment.

HHS-OIG Miami, State of Florida Medicaid Fraud Control Unit, SSA-OIG Miami, and FBI Miami investigated this case. Southern District of Florida Special Assistant U.S. Attorney Marc Canzio is prosecuting it.

In United States v. Julio Cesar Betancourt, Case No. 21-20425-CR-Moore, a 31-year-old resident of Hialeah Gardens, Florida is charged by information with conspiracy to commit money laundering. According to the information, Betancourt, as owner of owner of JD Solution USA, Inc., conspired to launder $363,139 in health care fraud proceeds between July 2019 and October 2019. These proceeds were related to a durable medical equipment company located in Miami that was committing health care fraud, says the information.

HHS-OIG Miami and FBI Miami investigated this case. Southern District of Florida Assistant U.S. Attorney Timothy J. Abraham is prosecuting it.

In United States v. Jorge Luis Lopez Pena, Case No. 21-CR-20466-Gayles, a 36-year-old from Miami, Florida is charged by information with conspiracy to commit money laundering. According to the information, Lopez Pena, as owner of Lopez Distributors, Inc., conspired to launder $185,671 in health care fraud proceeds between August 2019 and December 2019. These health care fraud proceeds were related to a durable medical equipment company located in Miami that was committing health care fraud, says the information.

HHS-OIG Miami and FBI Miami investigated this case. Southern District of Florida Assistant U.S. Attorney Timothy J. Abraham is prosecuting it.

In U.S. v. Angel Pimentel, Case No. 21-20420-CR-King, a 72-year-old from Miami, Florida, is charged by indictment with conspiracy to commit health care fraud and substantive counts of health care fraud. According to the indictment, Pimentel owned Maggie Pharmacy Discount, Inc. From about March 2015 to August 2019, Pimentel submitted $988,983 in claims to Medicare, which falsely and fraudulently represented that various health care benefits, primarily prescription drugs, were medically necessary, prescribed by a doctor, and had been provided by Maggie Pharmacy Discount, Inc. to Medicare beneficiaries. As a result of the false claims, Medicare prescription drug plan sponsors, through their pharmacy benefit managers, made payments funded by the Medicare Part D Program to the corporate bank accounts of Maggie Pharmacy Discount, Inc. of at least $988,983, says the indictment.

HHS-OIG Miami and FBI Miami investigated this case. Southern District of Florida Assistant U.S. Attorney Christopher J. Clark is prosecuting it.

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.

Telemedicine Fraud Cases

More than 43 criminal defendants in 11 judicial districts nationwide are charged in cases involving telemedicine: the use of telecommunications technology to provide health care services remotely. It is alleged that these telemedicine defendants filed over $1.1 billion in fraudulent claims.

The continued focus on prosecuting health care fraud schemes involving telemedicine reflects the success of the nationwide coordinating role of the Fraud Section’s National Rapid Response Strike Force, the creation of which was announced at the 2020 National Health Care Fraud and Opioid Takedown. The National Rapid Response Strike Force helped coordinate the prosecution of the telemedicine initiative, Sober Homes initiative, and COVID-19 cases that were announced today. The focus on telemedicine fraud also builds on the telemedicine component of last year’s national takedown and the impact of the 2019 “Operation Brace Yourself” Telemedicine and Durable Medical Equipment Takedown, which resulted in an estimated cost avoidance of more than $1.9 billion in the amount paid by Medicare for orthotic braces in the 20 months following that takedown.

Health Care Fraud Prosecutions in the Southern District of Florida for

Fiscal Year 2020-2021

The Southern District of Florida is a national leader in health care fraud prosecutions. So far, during the 2020-2021 Fiscal Year (from October 1, 2020 through today), a total of 196 defendants have been charged in the Southern District of Florida with health care fraud-related offenses. It is alleged that approximately $2.2 billion was billed by these defendants and that approximately $488 million was paid.

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WILMINGTON, N.C. – A Pembroke woman pleaded guilty today to Conspiracy to Commit Healthcare Fraud.

According to court documents, Melisha Oxendine West pleaded guilty to Conspiracy to Commit Healthcare fraud. The charge to which West pled guilty alleges that from 2006 through July of 2017, West was employed at Townsend’s Pharmacy, located at 111 S. Main Street in Red Springs, North Carolina. During that time, West conspired with the owner of the pharmacy and others to bill fraudulent claims to Medicare, Medicaid, and private health insurers, such as Blue Cross and Blue Shield of NC. According to the charge, West and others did this by fraudulently reauthorizing previously existing prescriptions from licensed medical providers, and billing health care benefit programs as though those drugs had been dispensed.

West pleaded guilty to a violation of Title 18, United States Code, Section 1349, and faces a statutory maximum of 10 years in prison and a fine amounting to as much as twice the gross gain or loss from the offense. The sentencing before United States District Judge Louise W. Flanagan will not occur earlier than 90 days from today.

Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after United States Magistrate Judge Robert Jones accepted the plea. The United States Department of Health and Human Services Office of the Inspector General is investigating the case and Assistant U.S. Attorney William M. Gilmore is prosecuting the case.

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Each Defendant Excluded from Federal Healthcare Programs for Six Years

Neurosurgeon Wilson Asfora, M.D. of Sioux Falls, South Dakota, and two medical device distributorships that he owns, Medical Designs LLC and Sicage LLC, have agreed to pay $4.4 million to resolve False Claims Act allegations relating to illegal payments to Asfora to induce the use of certain medical devices, in violation of the Anti-Kickback Statute, as well as claims for medically unnecessary surgeries.

Medical Designs and Sicage agreed to pay an additional $100,000 in penalties to settle allegations that they violated the Open Payments Program by failing to report to the Centers for Medicare & Medicaid Services (CMS) Asfora’s ownership interests and payments made to Asfora.

Under the terms of the settlement agreement, Asfora, Medical Designs, and Sicage each will be excluded from participation in federal healthcare programs for a period of six years.

“Physicians who accept kickbacks and perform unnecessary surgeries put their patients at risk and increase healthcare costs for everyone,” said Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division. “We will continue to hold physicians and medical device companies accountable for unlawful financial arrangements that undermine the integrity of federal healthcare programs.”

The settlement announced today resolves allegations that over the course of nearly a decade, Asfora, Medical Designs, and Sicage knowingly and willfully engaged in three kickback schemes to allow Asfora to profit from his use of over a dozen devices in his medical procedures. First, the United States alleged that Medical Designs and Sicage paid Asfora profit distributions in exchange for Asfora using Medical Designs’ and Sicage’s devices in his spine surgeries. Second, the United States alleged that Medical Designs acted as a distributor, reselling other manufacturers’ spinal devices and splitting the profits with Asfora when he used those devices in surgeries. Third, the United States alleged that Asfora solicited and received kickbacks from medical device manufacturer Medtronic USA Inc. in exchange for using its SynchroMed II infusion pumps, which are implantable devices used to deliver medication to patients. At Asfora’s request, Medtronic allegedly paid the kickbacks to Asfora through a restaurant he owned with his wife, called Carnaval Brazilian Grill, in the form of lavish meals and alcohol for Asfora and his friends, colleagues, and business partners.

In addition, the settlement resolves allegations that Asfora knowingly submitted false claims to federal healthcare programs for medically unnecessary procedures using the devices in which he had a financial interest. Despite receiving numerous warnings that he was performing medically unnecessary procedures – including warnings from his own physician colleagues – Asfora allegedly continued to perform such procedures while personally profiting from his use of devices sold by Medical Designs, Sicage, and Medtronic.

“Fraud in the healthcare arena is taken very seriously by the Department of Justice,” said Acting U.S. Attorney Dennis R. Holmes for the District of South Dakota. “South Dakota is fortunate to have many honest and dedicated healthcare providers who strive daily to provide high quality services. Dr. Asfora and his companies violated the trust that so many others have worked hard to earn.”

“Kickback dollars can corrupt the high quality medical care patients deserve and taxpayers fund,” said Special Agent in Charge Curt L. Muller of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We have excluded Dr. Asfora and his two medical distributorships from receiving Medicare, Medicaid, and other federal health program dollars.”

This settlement also resolves Medical Designs’ and Sicage’s liability under CMS’ Open Payments Program, which was established by the Affordable Care Act and requires medical device companies to disclose to CMS physician ownership interests and certain payments or other transfers of value to a physician.

The civil settlement includes the resolution of claims that Drs. Carl Dustin Bechtold and Bryan Wellman brought under the qui tam or whistleblower provisions of the False Claims Act against Asfora and Medical Designs. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of any settlement. The qui tam case is captioned United States ex rel. Bechtold, et al. v. Asfora, et al., No. 4:16-cv-04115-LLP (D.S.D.). The whistleblowers will receive $880,000 of the settlement proceeds.

This settlement was the result of a coordinated effort between the Civil Division's Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of South Dakota, with assistance from HHS-OIG. As a result of its efforts, the United States has recovered a total of more than $33 million relating to conduct involving Asfora, including a False Claims Act settlement with Sanford Health entities for $20.25 million in October 2019 and a False Claims Act and Open Payments settlement with Medtronic for $9.21 million in October 2020. This matter and the related matters were investigated by Trial Attorneys Christopher Terranova and Harin C. Song and Assistant U.S. Attorneys Meghan K. Roche and Ellie J. Bailey.  

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

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Defendant admitted NECC created fraudulent prescriptions to avoid federal oversight

BOSTON – The National Sales Director of the now-defunct New England Compounding Center (NECC) was sentenced today in federal court in Boston in connection with conspiring to defraud the Food and Drug Administration (FDA).

Robert A. Ronzio, 48, of North Providence, R.I., was sentenced by U.S. District Court Judge Richard G. Stearns to time served. In December 2016, Ronzio pleaded guilty to one count of conspiring to defraud the FDA. Ronzio cooperated with the government and testified at three trials of other NECC defendants.

NECC fraudulently held itself out as a pharmacy dispensing drugs pursuant to physician-created prescriptions when in fact it operated as a manufacturer distributing drugs in bulk. NECC created numerous work-around methods to make it appear to federal and state regulators that NECC was dispensing drugs pursuant to valid patient-specific prescriptions when in fact it was not.

Specifically, NECC sales representatives requested that customers (hospitals and clinics) send in a list of patient names with their orders, but informed the customers that NECC would not label the drugs with the names of patients, thereby allowing the customers to use the drugs for any patients. NECC sales representatives requested customers send patient rosters or appointment schedules with their orders, from which NECC employees created patient-specific prescriptions that could be provided to federal or state regulators. Furthermore, NECC would not request patient names for first orders and often waived the requirement entirely for certain customers or drug orders. To determine the number of patient names required, the former owner of NECC and head pharmacist, Barry Cadden, created ratios of patient names to the number of drug units sought in an order. Ronzio admitted that the reason for these work-around methods was to maintain NECC’s status as a pharmacy and avoid heightened regulatory oversight of the FDA.

The NECC criminal case arose from the nationwide outbreak of fungal meningitis that was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC. In 2012, 753 patients in 20 states were diagnosed with a fungal infection after receiving injections of MPA manufactured by NECC, and more than 100 patients died as a result. The outbreak was the largest public health crisis ever caused by a contaminated pharmaceutical drug.

In December 2014, following a two-year investigation, Ronzio and 13 other owners, employees, and associates of NECC were charged in a 131-count indictment. The indictment did not charge Ronzio with having any role in the drug manufacturing operations of NECC.

On July 7, 2021, Cadden was resentenced, following the government’s successful appeal of his original sentence, to 174 months in prison and ordered to pay forfeiture of $1.4 million and restitution of $82 million. On July 21, 2021, Chin was resentenced, following the government’s successful appeal of his original sentence, to 126 months in prison and three years of supervised release. Chin was also ordered to pay forfeiture of approximately $473,584 and restitution in the amount of $82 million.

United States Attorney Rachael S. Rollins; Acting FDA Commissioner Janet Woodcock, M.D.; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Christopher Algieri, Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Patrick Hegarty, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; and Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division, made the announcement today. Assistant U.S. Attorney Amanda P.M. Strachan, Deputy Chief of Rollins’ Criminal Division, prosecuted the case.

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A federal jury convicted a New Jersey rheumatologist today for defrauding Medicare and other health insurance programs by billing for services that patients never received.

According to court documents and evidence presented at trial, Alice Chu, 64, of Fort Lee, owned and operated a rheumatology practice in Clifton. From 2010 through 2019, Chu billed Medicare and other health insurance programs for expensive infusion medication that her practice never purchased. Chu also fraudulently billed millions of dollars for allergy services that patients never needed or received.

Chu was convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud. She is scheduled to be sentenced on July 14 and faces a maximum penalty of 10 years in prison for each count. 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; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge George M. Crouch Jr. of the FBI’s Newark Field Office; Special Agent in Charge Scott J. Lampert of the Department of Health and Human Service Office of the Inspector General (HHS-OIG); and Special Agent in Charge Patrick J. Hegarty of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DOD-OIG) made the announcement.

The FBI, HHS-OIG and DOD-OIG investigated the case.

Acting Assistant Chief Rebecca Yuan and Trial Attorney Nicholas Peone of the Justice Department’s Fraud Section are prosecuting the case.

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NEWARK, N.J. – A New Jersey physician and his medical practice will pay $106,255 to resolve allegations that they violated the False Claims Act by making false representations in connection with submissions to the Centers for Medicare & Medicaid Services, Acting U.S. Attorney Rachael A. Honig announced today.

According to the contentions of the United States contained in the settlement agreement:

From Jan. 1, 2016, through March 31, 2020, Vedat Obuz and his medical practice, Lotus Clinics P.C./Lotus Family Medicine, falsely billed certain medical procedures to Medicaid and Medicare by representing that the procedures had been performed by Obuz when, in fact, those procedures were performed by nurse practitioners.

The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Kathleen Menold. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Ms. Menold will receive 20 percent from the federal share of the settlement.

The government’s pursuit of this lawsuit illustrates its efforts to combat 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).

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services – Office of the 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 Supervisory Special Agent Thomas Mahoney, with the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney Daniel Meyler of the Health Care Fraud Unit in Newark.

The lawsuit is captioned United States ex rel. Menold v. Lotus Family Medicine, Vedat Obuz, and Ozlem Obuz, 17-cv-1728 (D.N.J.). The claims settled by this agreement are allegations only, and there has been no determination of liability.

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PITTSBURGH, PA - A resident of New Kensington, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of misappropriation of U.S. Department of Veterans Affairs ("VA") beneficiary funds, United States Attorney Scott W. Brady announced today.

The one-count Indictment charges Andrew Ziacik, 57, as the sole defendant. According to the Indictment, Ziacik was appointed as a Federal Fiduciary for a VA beneficiary and, as such, was responsible for receiving the beneficiary’s VA income and ensuring the beneficiary’s debts were paid. The Indictment further charges that Ziacik engaged in a pattern of conduct between July 2013 and late 2017 that violated his Fiduciary Agreement, including by making approximately $25,000 in unauthorized ATM cash withdrawals from the beneficiary’s VA bank account and transferring approximately $135,000 of the beneficiary’s VA benefits to Ziacik’s personal bank accounts. In addition, the Indictment alleges that the defendant misused the beneficiary’s VA benefits for his personal benefit including through financing payments made to Harley Davidson, the purchase of a diamond ring, and the purchase of a GMC truck, all in violation of Ziacik’s Fiduciary Agreement. Moreover, the Indictment also alleges that Ziacik failed to maintain accurate records and receipts related to the disposition of the beneficiary’s VA benefits, as required. and failed to provide complete and accurate records in response to a formal accounting initiated by the VA.

The law provides for a maximum total sentence of not more than five (5) years in prison, a fine of not more than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Eric G. Olshan is prosecuting this case on behalf of the government. The U.S. Department of Veterans Affairs Office of Inspector General conducted the investigation leading to the Indictment in this case.

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

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WHEELING, WEST VIRGINIA – A new initiative to combat health care fraud in West Virginia was launched today in Wheeling, according to United States Attorney William Ihlenfeld.

State and federal agencies gathered at the U.S. Attorney’s office this morning for the first meeting of the Mountaineer Health Care Fraud Strike Force, a unit that will take a data-driven approach to uncovering waste and abuse. Representatives from seven different agencies discussed fraudulent billing patterns and new targets were identified as a result.

In addition to its analytical work, the Strike Force will engage with providers and insurers so that there is a better understanding on how to recognize and report health care fraud.

“The time I spent in the private sector opened my eyes to the scope of the health care fraud that is occurring in West Virginia,” said Ihlenfeld. “It made me realize that more can and should be done by law enforcement, which is why this new group has been formed.”

Ihlenfeld stressed the importance of whistleblowers and the impact that they can have upon uncovering fraud.

“Oftentimes the first person to witness fraud is an employee of a hospital or a doctor’s office,” Ihlenfeld remarked. “Those who blow the whistle and expose conduct that the government was not able to detect on its own are awarded a portion of the amount recovered, and those awards can be substantial."

Last year, a whistleblower was awarded $10 million in the matter of U.S. ex rel. Longo v. Wheeling Hospital, Inc. Read more here: https://www.justice.gov/usao-ndwv/pr/west-virginia-hospital-agrees-pay-50-million-settle-allegations-concerning-improper

A new hotline, email address and mailing address have been established to allow for the reporting of potential fraud. Anyone with information may call (304) 234-7711, send an email to This email address is being protected from spambots. You need JavaScript enabled to view it., or mail correspondence to the U.S. Attorney’s Office, Attn: Mountaineer HCF Strike Force, P.O. Box 591, Wheeling, WV 26003.

“Fraud and abuse take critical resources out of our health care system and contribute to rising costs for everyone,” said FBI Special Agent in Charge Mike Nordwall. “It costs U.S. taxpayers tens of billions of dollars annually. The FBI, along with state, local and federal partners, are working side by side to help stop West Virginians from having to absorb the costs associated with health care fraud. I hope the community will use this tip line to aid us in our efforts to hold those who commit fraud accountable.”

“The newly formed team will combine the talents, dedication, and resources of federal law enforcement and the State of West Virginia to fight health care fraud, waste, and abuse,” said Maureen R. Dixon, Special Agent in Charge for the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We look forward to working with our law enforcement partners in this collaborative initiative to prevent and detect health care fraud, hold wrongdoers accountable, and ensure appropriate use of taxpayer funds.”

Members of the Mountaineer Health Care Fraud Strike Force include agents, officers and prosecutors from the Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Resources (HHS), the Drug Enforcement Administration (DEA), the U.S. Department of Defense, the West Virginia Medicaid Fraud Control Unit, the West Virginia Offices of Insurance Commission, and the United States Attorney’s Office.

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A pharmacy marketer who allegedly collected more than $60 million in illegal kickbacks has been charged with violating the federal Anti-Kickback Statute, Northern District of Texas First Assistant U.S. Attorney Prerak Shah announced today.

On Tuesday, a federal grand jury indicted Vinson Woodlee, owner of Med Left LLC, on one count of conspiracy to pay and receive healthcare kickbacks and three counts of soliciting and receiving healthcare kickbacks.

According to the indictment, Mr. Woodlee, 68, served as a marketer for NextHealth, a pharmacy and laboratory services company controlled by Andrew Hillman and Semyon Narosov.

NextHealth allegedly identified the industry’s most profitable prescriptions – including compound pain cream, scar cream, pain patches, and wellness supplements – then illegally paid physicians to prescribe those medications through NextHealth pharmacies, funneling some of the kickbacks through marketers like Mr. Woodlee.

In exchange for enlisting physicians to participate in the scheme, Mr. Woodlee allegedly demanded roughly 50% of the profits from each prescription and refill written by the doctors he recruited. He then funneled a portion of the money on to prescribing physicians and sub-marketers, keeping the rest for himself.

From 2012 to 2018, Mr. Woodlee allegedly collected more than $60 million in kickbacks. Of the $60 million, he passed $16.8 million on to “his” physicians and $30.6 million on to sub-marketers who likely passed a portion along to “their” physicians. (Over that same period, NextHealth fraudulently billed insurers more than $700 million and received hundreds of millions of dollars in tainted proceeds.)

Because NextHealth billed federal insurers like Medicare, TRICARE, CHAMPVA, and FECA in addition to private insurers, NextHealth and its marketers were subject to the federal Anti-Kickback Statute (AKS), which prohibits the knowing and willful payment of remuneration to induce or reward referrals for drugs or services payable by federal healthcare programs. Knowing that some of the NextHealth kickbacks likely violated the AKS, Mr. Woodlee allegedly took a number of steps to conceal them:

First, he attempted to exploit the AKS’s bona fide employee exception, which allows employers to pay W2 wages to legitimate employees. From 2013 to 2014, under the auspice of an employment relationship, he and NextHealth disguised the kickbacks as his “salary” and “bonuses.”

Later, he agreed that rather than disguising the kickbacks as his wages, NextHealth would disguise the payments as wages to three of his family members, Persons A, B, and C, who NextHealth “hired” as account executives in December 2014. On multiple occasions between 2014 and 2016, Mr. Woodlee corresponded with NextHealth about their compensation.

Then, in spring 2016, Mr. Woodlee executed a new contract with NextHealth, increasing his commission on non-federal insurance prescriptions from 50 percent to 58 percent, effectively compensating himself for federal insurance prescriptions written in violation of the AKS.

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

If convicted, he faces up to 35 years in federal prison.

In a separate case, NextHealth’s Andrew Hillman and Semyon Narasov pleaded guilty to money laundering conspiracy. According to court documents, the pair admitted NextHealth used marketers to funnel illegal kickbacks to physicians, attempted to conceal the payments, and submitted fraudulent claims to insurers. Mr. Hillman was sentenced to 66 months in federal prison; Mr. Narasov was sentenced to 76 months.

The Federal Bureau of Investigation’s Dallas Field Office, the U.S. Department of Health & Human Services Office of Inspector General, the U.S. Department of Veterans Affairs Office of Inspector General, the U.S. Food & Drug Administration Office of Criminal Investigations, the U.S. Department of Defense Office of Inspector General, DOD’s Defense Criminal Investigative Service, IRS Criminal Investigation, the U.S. Department of Justice Office of Inspector General, the U.S. Postal Inspection Service, the U.S. Office of Personnel Management Office of Inspector General, and HHS’s Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorneys Chad Meacham and Andrew Wirmani are prosecuting the case.

U.S. Attorney Erin Nealy Cox has been recused from this matter. Per direction from Department of Justice ethics officials, Northern District of Texas First Assistant U.S. Attorney Prerak Shah will act as U.S. Attorney with respect to this matter pursuant to the authority conferred by 28 U.S.C. § 515.

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RALEIGH, N.C. – A North Carolina corporation was sentenced today to 5 years’ probation and ordered to pay a $2,000,000 fine in addition to paying $10,069,361.35 in restitution to the North Carolina Medicaid Program on a charge of Healthcare Fraud, in violation of Title 18, United States Code, Section 1347. The company and its owner have also agreed to pay millions to the United States and State of North Carolina to resolve related civil claims under the federal and state False Claims Acts. In that same civil action, the Governments have obtained a multi-million-dollar judgment against one of the company’s employees.

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

After appointment of a receiver, A Perfect Fit for You, Inc. self-reported suspected fraudulent activity to the North Carolina Medicaid Investigations Division. Thereafter, the company cooperated throughout the investigation.

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

On December 29, 2020, Bandy pled guilty to making false statements relating to health care matters in violation of Title 18, United States Code, Section 1035. Bandy admitted to submitting fraudulent claims to Medicaid on behalf of A Perfect Fit for You, Inc.   Bandy is scheduled to be sentenced later in March, 2021.

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

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

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

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Columbia, South Carolina – Acting United States Attorney M. Rhett DeHart announced today that Tony Lee Covington, 50, his wife Priscilla Covington, 51, and his sisters Vanessa McPhaul, 56, and Mary Moses Covington, 51, all of Raeford, North Carolina, were sentenced for conspiracy to commit wire fraud in a scheme to defraud South Carolina Medicaid of over $3.6 million.

According to evidence presented during the defendants’ guilty plea and sentencing hearings, the family members founded two companies, Preferred Care Incorporated and Saving Grace Outreach. The two companies claimed to provide rehabilitative behavioral health services to disabled, low-income individuals in South Carolina through the Medicaid program. Instead, between 2014 and 2016, the companies billed South Carolina Medicaid millions of dollars for “crisis intervention,” a service offered to individuals experiencing extreme emotional distress like suicidal thoughts or mental breakdowns.

During the hearings, the government indicated that despite the companies having fewer than 20 clients, they billed more in total for crisis intervention services than the entire South Carolina Department of Mental Health. Clients contacted by investigators indicated that while they had received some services from the companies, they never received any crisis intervention. Evidence in the case indicated that the services provided by the companies should have been billed at approximately $9.00 an hour, but by billing the services as crisis intervention, the companies were instead paid $67.88 per hour.

Although Medicaid instituted an audit of Preferred Care once the irregular billing was discovered, the family immediately started Saving Grace Outreach to continue the fraudulent billing practices.

“Stealing from agencies that serve those in distress is shameful, and illegal,” said Acting U.S. Attorney DeHart. “This office worked with our partners in the South Carolina Attorney General’s Office to not only prosecute these defendants, but to put a stop to their illegal practices.”

“This case shows the great working relationship between our office and the U.S. Attorney’s Office and illustrates how we use that cooperation to hold criminals accountable,” South Carolina Attorney General Alan Wilson said. “This Medicaid Fraud Scheme enabled providers to steal millions of dollars from taxpayers, which means there’s less money available for people who actually need medical care.”

United States District Judge Mary Lewis sentenced Tony Covington to 51 months in federal prison, Priscilla Covington to 39 months in federal prison, Mary Covington Moses to 33 months in federal prison, and Vanessa Covington McPhaul to 33 months in federal prison. There is no parole in the federal system. All defendants were given a three-year term of court-ordered supervision and ordered to repay $3,647,094.83 in restitution to South Carolina Medicaid.

The case was investigated by the United States Department of Health and Human Services (HHS) and South Carolina Attorney General’s Office.

Assistant United States Attorney T. DeWayne Pearson prosecuted the case.

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RALEIGH, N.C. – A federal grand jury returned an indictment today charging a Raleigh woman with Adulteration of Medical Devices, Paying Illegal Remunerations, Making and Using Materially False Healthcare Documents, Mail Fraud, and Conspiracy.

According to the Superseding Indictment, between 2014 and 2018, Anita Louise Jackson, 58, billed Medicare more than $46 million for allegedly rendering more than 1,200 incidents of “balloon sinuplasty” services to more than 700 patients. Her practice, Greater Carolina Ear, Nose, and Throat (GCENT), received more than $5.4 Million for the services. During portions of this same time period, Jackson was the top-paid provider of balloon sinuplasty services in the United States, despite the location of her practice outside of a major metropolitan area. Jackson profited substantially from these billings to the Medicare program.

Jackson is charged with Adulteration of Medical Devices, in violation of 21 U.S.C. §§ 331(k), 333(a)(1), 333(a)(2), and 351(a)(2)(A); ten counts of Paying Illegal Remunerations, in violation of 42 U.S.C. § 1320a-7b(b)(2)(B); 3 counts of Making False Statements Relating to Health Care Benefits, in violation of 18 U.S.C. § 1035(a)(2); two counts of Aggravated Identity Theft, in violation of 18 U.S.C. § 102A(a)(1); three counts of Mail Fraud, in violation of 18 U.S.C. § 1341; and Conspiracy, in violation of 18 U.S.C. § 371. If convicted, Jackson faces a maximum term of imprisonment of 20 years for Mail Fraud, 10 years for Paying Illegal Remunerations, and 5 years for Conspiracy and Making False Statements. Aggravated Identity Theft carries a 2-year mandatory prison sentence, consecutive to any other punishment. Jackson also faces fines exceeding $250,000.

The speaking Superseding Indictment is attached in full to this press release.

Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement. The United States Department of Health and Human Services Office of the Inspector General (HHS-OIG), the United States Food and Drug Administration Office of Criminal Investigations (FDA-OCI), and the Department of Defense Office of Inspector General, Defense Criminal Investigative Service are investigating the case and Assistant U.S. Attorney William M. Gilmore is prosecuting the case.

If you feel that you or someone you know may be a victim in this case, you are encouraged to contact HHS-OIG at (336) 542-1494 to make a report.

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PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Myron Rodos, 80, of Ambler, PA, was sentenced to five years in prison, three years of supervised release, and ordered to pay a fine of $300,000 by United States District Court Judge Chad F. Kenney for distributing controlled substances, namely opioids, outside the course of professional conduct and not for a legitimate medical purpose.

The defendant pleaded guilty in November 2019 to four counts of distribution of Schedule II controlled substances, and stipulated that he illegally distributed an additional 6,130 oxycodone (30 mg) pills and 3,670 methadone (10 mg) pills to patients in exchange for sex and money. Rodos, a physician, operated a medical practice in North Philadelphia as a prescription “pill mill” where he prescribed dangerous and addictive controlled substances to addicts for cash, and often in exchange for sex. The charges resulted from a lengthy FBI investigation that produced audio and videotape recordings made by a civilian source and an undercover agent that showed Rodos prescribe medically unnecessary hydrocodone in exchange for cash. Moreover, female patients, who became drug addicts while under the defendant’s ‘care’ reported to FBI agents that they routinely obtained prescriptions from Rodos for oxycodone and other controlled substances in exchange for sexual favors.

“The U.S. Attorney’s Office is committed to stopping drug-dealing doctors like Rodos,” said Acting U.S. Attorney Williams. “As a physician, he was well aware of the inherently dangerous nature of the drugs he was selling. But because of his greed and sometimes to satisfy his own lecherous intentions, he took advantage of vulnerable people struggling with addiction, piling on to the enormous opioid epidemic ravaging the neighborhoods of Philadelphia.”

“It’s hard to understand how a longtime physician, trained to help and to heal people, could be this depraved,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Dr. Rodos used his patients’ addictions against them, readily doling out powerful opioids in exchange for money or sex acts. The FBI and our partners are doggedly working to put drug-dealing doctors like him out of business, as we battle our country’s opioid epidemic.”

“Doctors are expected to help their patients, not take advantage of them,” said Maureen Dixon, Special Agent in Charge for the Office of the Inspector General, Department of Health and Human Services. “HHS-OIG and our law enforcement partners will continue to work together to protect patients from illegally prescribed prescription drugs.”

The case was investigated by the Federal Bureau of Investigation and Health and Human Services, Office of Inspector General, and is being prosecuted by Assistant United States Attorney M. Beth Leahy.

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BOSTON – A registered nurse pleaded guilty today in federal court in Worcester in connection with tampering with morphine prescribed to a nursing home resident in her care.

Gwen Rider, 42, of Northborough, pleaded guilty to one count of tampering with a consumer product and one count of obtaining a controlled substance by fraud and deception. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Aug. 15, 2022. Rider was arrested and indicted in April 2021.

Rider was a registered nurse employed by a Worcester County nursing home. From approximately 11:00 p.m. on Nov. 6, 2020 until 7:00 a.m. the following morning, Rider was on duty in a unit specializing in care for residents suffering from dementia. During her shift and while entrusted with the care of a resident suffering from dementia, Rider tampered with a bottle of morphine sulfate prescribed to the patient by removing some of the morphine and adding water to the remaining supply. Morphine sulfate is a Schedule II controlled substance under federal law. A nurse on a subsequent shift administered the adulterated morphine to a patient before the tampering was discovered.

The charge of tampering with a consumer product provides for a sentence up to 10 years in prison, up to three years of supervised release and a fine of $250,000. The charge of obtaining a controlled substance by fraud and deception provides for a sentence of up to four years in prison, up to one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Rachael S. Rollins; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations; Margret R. Cooke, Commissioner of the Massachusetts Department of Public Health; and Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General made the announcement today. Valuable assistance was also provided by the Northborough Police Department. Assistant U.S. Attorney John T. Mulcahy and Kristen M. Noto of Rollins’ Criminal Division are prosecuting the case.

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The CEO of a local hospice agency has pleaded guilty to defrauding Medicare and Medicaid, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Bradley J. Harris, the 39-year-old former head of Novus and Optimum Health Services, pleaded guilty on Friday to conspiracy to commit healthcare fraud and healthcare fraud.

“Mr. Harris scammed federal healthcare programs out of millions of dollars, and worse yet, denied vulnerable patients the medical oversight they deserved, writing pain prescriptions without physician input and allowing terminally ill patients to go unexamined,” said Acting U.S. Attorney Prerak Shah. “The Justice Department cannot allow unscrupulous business people to interfere with the practice of medicine. We are determined to root out healthcare fraud.”

“In addition to causing fraudulent billing for tens of millions of dollars, Mr. Harris preyed upon patients and families that did not have a true understanding of Novus and hospice services. The core of the company was rooted in deception, and the lack of physician oversight allowed Mr. Harris to make medical decisions for his own financial benefit,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “We will continue to work tirelessly with our state and federal partners to hold those who commit health care fraud accountable and seek justice for patients that are harmed in furtherance of fraud schemes.”

According to his plea papers, Mr. Harris admitted that from 2012 to 2016, he billed Medicare and Medicaid for hospice services that were not provided, that were not directed by a medical professional, or that were provided to patients who were not actually eligible for hospice care. He further admitted that he used blank, pre-signed controlled substance prescriptions to doll out potent drugs without physician input.

Mr. Harris admitted that two of his coconspirators, Dr. Mark Gibbs and Dr. Laila Hirjee, frequently certified that that his hospice patients faced terminal illnesses without actually examining with the patients in person, as required by Medicare. (A “terminal” patient is one with a life expectancy of six months or less, according to the Department of Health & Human Services.) The doctors were paid around $150 for each false order they signed.

Mr. Harris also admitted that Dr. Gibbs, Dr. Hirjee, and another physician, Dr. Charles Leach, left him blank controlled substance prescriptions, sometimes a whole pad at a time. This allowed Mr. Harris, an accountant by trade, to “prescribe” schedule II controlled substances to hospice beneficiaries without the guidance of a medical professional.

In plea papers, Mr. Harris admitted that in summer 2014, he realized he could avoid exceeding Medicare’s aggregate hospice cap by enrolling an influx of first-time hospice patients. So, he negotiated an agreement with a company called Express Medical that allowed him to access potential patient’s confidential medical information in return for using Express Medical for laboratory services and home health visits. His wife and other Novus staff then called on individuals that had at some point been patients of Express Medical to recruit them for Novus hospice services, regardless of whether they were eligible to receive benefits.

When the Center for Medicare & Medicaid Services suspended Novus based upon credible allegations of fraud, Mr. Harris and simply transferred patients from Novus to a new company, “Company A.” Dr. Gibbs became a medical director for the “new” hospice company, which used Novus staff and transferred hospice reimbursements back to Novus, Mr. Harris admitted.

The defendant now faces up to 14 years in federal prison. His sentencing hearing has been set for Aug. 3 before Chief U.S. District Judge Barbara M.G. Lynn.

Ten of Mr. Harris’ codefendants, including Dr. Leach, have already pleaded guilty. Four more, including Dr. Gibbs and Dr. Hirjee, are slated for trial on April 5.

The Federal Bureau of Investigation’s Dallas Field Office, the U.S. Department of Health & Human Services Office of Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorneys Donna Strittmatter Max, Marty Basu, and Chad Meacham are prosecuting the case.

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PROVIDENCE, R.I. – A registered nurse and nurse practitioner who allegedly billed and received more than $2.3 million dollars from commercial health insurers and Medicaid for services he falsely claimed to have performed on patients in Rhode Island, New York, and Florida is in federal custody in Florida and will be brought to Rhode Island to face health care fraud, mail fraud, and money laundering charges, announced Acting United States Attorney Richard B. Myrus.

It is alleged in an indictment returned by a federal grand jury in Rhode Island on August 6, 2021, that among his schemes, Alexander E. Istomin, 55, of Florida, routinely submitted claims for health insurance payments for in-person patient services he claimed to have performed in East Greenwich, New York, and Florida, but that investigators determined were at times when Istomin was actually in another state or out of the country. In other instances, Istomin allegedly billed insurance companies and Medicare for services he claimed to have provided to patients who themselves were out of state or out of the country at the time.

It is alleged in the indictment that as part of the scheme Istomin waived copayments for some Medicare patients despite being aware that waiving copayments is prohibited by Medicare. By waiving copayments, they otherwise would be responsible for, Istomin induced his patients not to report his fraudulent billing to Medicare.

According to information presented to the court, no patient services were provided at Istomin’s East Greenwich business, Rhode Island Diagnostic Center, or his New York office. Neither office is equipped to provide patient care. It is alleged that Istomin rented and used the East Greenwich office space in name only for billing purposes and to receive insurance payments made payable to his Rhode Island business.

The indictment alleges that since February 2014, in Rhode Island, the Eastern District of New York, the Southern District of Florida, and elsewhere, Istomin fraudulently billed and received approximately $2,309,468.16 from commercial health insurers and Medicare for services he did not provide to patients. The indictment charges Istomin with health care fraud, eight counts of mail fraud, and money laundering.

The government has moved in the indictment that, upon a conviction for health care fraud and mail fraud, Istomin shall forfeit to the United States any and all interest in any property, real or personal, from proceeds traceable to his alleged criminal fraudulent activity, totaling $2,309,468.

A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.

Istomin was arrested on August 11, 2021, in Ft. Lauderdale, Florida, by agents from the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI.

The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan, with the Assistance of Assistant U.S. Attorney Mary Rogers.

The matter was investigated the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI.

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