GREAT FALLS – Two Montana nurse practitioners have been sentenced for conspiring to defraud Medicare of millions of dollars. Chief U.S. District Judge Brian Morris sentenced Janae Nichole Harper, 34, of Kalispell, to 12 months in prison and Mark Allen Hill, 54, of Edinburg, North Dakota to 9 months in prison. Both defendants will be placed on supervised release for 3 years after their release from prison. Additionally, Harper was ordered to pay $4,307,934.58 in restitution and Hill was ordered to pay $5,054,866 in restitution.

Harper was a licensed nurse practitioner in Montana, Missouri, Nevada, South Carolina and Wyoming and was enrolled as a medical provider with Medicare. Hill was a licensed nurse practitioner in Montana, Iowa, Maine, Minnesota, North Dakota, South Dakota and Washington.

In court documents filed in Harper’s case, the government alleged that from Nov. 18, 2017 through July 16, 2019, Harper worked with certain staffing and telemedicine companies to commit health care fraud and received money to sign brace orders that were prepared by telemarketers who had no medical training or certification. Harper routinely signed these orders for Medicare beneficiaries regardless of medical necessity. Harper signed approximately 7,673 brace orders, which resulted in $8,259,849 billed to Medicare, of which Medicare paid approximately $4,307,934. Harper was paid at least $94,395 for the orders she signed.

In court documents filed in Hill’s case, the government alleged that from Oct. 15, 2017 to April 24, 2019, Hill worked with certain staffing and telemedicine companies to commit health care fraud and received money to sign unnecessary brace orders for Medicare beneficiaries regardless of medical necessity, often without ever talking to the Medicare beneficiary to determine whether the braces were medically necessary. Hill signed approximately 7,097 brace orders, which resulted in $10,055,436 billed to Medicare, of which Medicare paid approximately $5,054,866. Hill was paid at least $124,900 for the orders he signed.

Both defendants previously pled guilty to conspiracy to commit health care fraud.

The cases were prosecuted by Assistant U.S. Attorney Michael A. Kakuk and Darren Halverson, Trial Attorney, and Robyn Pullio, former Trial Attorney, Fraud Section, Criminal Division of the Justice Department and investigated by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.

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LOS ANGELES – An Orange County man who falsely held himself out to be a United States Marine Corps combat Veteran and two-time Purple Heart recipient to fraudulently obtain Veterans’ health care and housing benefits was sentenced today to 16 months in federal prison.

James Stiles, 43, of Orange, was sentenced by United States District Judge John A. Kronstadt, who also ordered him to pay $167,234 in restitution. Stiles pleaded guilty on June 18 to one count of health care fraud.

In November 2012, Stiles applied for health care benefits through the United States Department of Veterans Affairs (VA) by submitting and signing a fraudulent application. On the form, Stiles falsely claimed that he had served in the Marine Corps from 1995 to 2005, and that he was awarded the Purple Heart after being wounded in combat.

Once he was enrolled in the VA’s health care benefit program, Stiles scheduled medical appointments at will. From December 2012 to March 2016, Stiles received 692 outpatient treatments, primarily at the Tibor Rubin VA Medical Center in Long Beach.

Stiles admitted in his plea agreement that in December 2015 he also applied for housing benefits intended for homeless Veterans, and he submitted forms where he falsely claims to be the recipient of two Purple Hearts. As a result of this application, Stiles was accepted into the HUD-Veterans Affairs Supporting Housing program. The Orange County Housing Authority, HUD's local housing partner in Orange County automatically provided his landlord with vouchers on Stiles’s behalf each month beginning in February 2016.

Also, in February 2016, Stiles submitted a form to the VA for the purpose of obtaining disability benefits in which he falsely claimed that he was a Veteran.

Stiles’s scheme to defraud ended in April 2016 when the VA confronted him, and he admitted he had never served in the U.S. military and was not entitled to receive VA benefits.

The total loss in this case was $167,234, with a loss of $162,900 to the Veterans Health Administration and a $4,334 loss to the Orange County Housing Authority.

In a sentencing memorandum, prosecutors cited a March 2016 audio recording where Stiles falsely told a religious outreach group for Veterans “that he was a captain in the Marine Corps, that he served for 10 years, that he was simultaneously shot in the head by a 5-year-old ‘kid’ and in the back by a sniper, that he was subsequently in a coma for approximately two years, and that he still lives with the bullet in his head.”

“His comments have no basis in the truth,” prosecutors wrote. “[Stiles’s] statements are deeply offensive to those that have actually served in the United States military.”

This matter was investigated by the U.S. Department of Veterans Affairs – Office of Inspector General and the Department of Housing and Urban Development – Office of Inspector General.

This case was prosecuted by Assistant United States Attorney Eli A. Alcaraz of the Riverside Branch Office.

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COLUMBUS, Ohio – A local home healthcare provider has agreed to pay half a million dollars to the government and close its operations as part of a False Claims Act settlement.

According to court documents, Academy Health Care Services is a home healthcare agency based in Dayton providing service to patients in Ohio, many of whom are disabled and living in group homes.

Academy’s owners include Jagdish, Nita and Vijay Patel, all of Ohio.

The settlement unsealed today details that the healthcare provider’s billing practices routinely caused Ohio Medicaid to pay at a higher level of reimbursement than warranted by the services provided as well as the setting in which the services were provided.

From 2014 until 2017, Academy billed for individual healthcare services when any services it actually provided were in group settings. Further, Academy nurses did not spend the time required with patients to receive reimbursement for individual services.

The healthcare provider will pay $500,000 in total, of which $250,000 is restitution.

As part of the settlement, Academy agrees to cease operations no later than June 30, 2022, and agrees that after Dec. 31, 2021, it will no longer provide services to beneficiaries of federal healthcare programs, including the Ohio Medicaid program, and will not submit claims for any services provided to beneficiaries of federal healthcare programs.

Kenneth L. Parker, United States Attorney for the Southern District of Ohio, announced the settlement and commended the work of the U.S. Department of Health and Human Services Office of Inspector General, Ohio Attorney General Dave Yost’s Medicaid Fraud Control Unit and Ohio Department of Medicaid. Deputy Civil Chief Andrew M. Malek and Assistant United States Attorney Stephanie Rawlings are representing the United States in this case.

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Oglethorpe Inc. and its three Ohio facilities, Cambridge Behavioral Hospital, Ridgeview Behavioral Hospital, and The Woods at Parkside, will pay $10.25 million to resolve alleged violations of the False Claims Act for improperly providing free long-distance transportation to patients and admitting patients at Cambridge and Ridgeview who did not require inpatient psychiatric treatment, resulting in the submission of false claims to the Medicare program.

Oglethorpe Inc. is a Florida company that operates two Ohio inpatient psychiatric hospitals, Cambridge and Ridgeview, and one Ohio substance abuse treatment facility, Parkside. The settlement was based on analysis of the companies’ ability to pay after review of their financial condition.

This settlement resolves allegations that, between August 2013 and June 2019, defendants provided free long-distance van transportation to patients to induce them to seek treatment at the defendants’ facilities, in violation of the Anti-Kickback Statute, and then submitted claims for services provided to these patients, in violation of the False Claims Act. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by a federal health care program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act. The government also alleged that Oglethorpe, Cambridge, and Ridgeview submitted, or caused to be submitted, false claims to Medicare for medically unnecessary inpatient psychiatric admissions and associated services at the two hospitals.

“Kickbacks to patients can result in unnecessary services that serve neither the patients nor our federal health care programs,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Justice Department is committed to pursuing unlawful remunerations in whatever form they occur to safeguard taxpayer funded health care benefits.”

“Submitting false claims by billing for unnecessary inpatient psychiatric hospitalizations is not only inappropriate – it’s illegal,” said Acting U.S. Attorney Vipal J. Patel for the Southern District of Ohio. “This settlement shows that the United States will hold accountable those who seek to profit by flouting proper standards of medical practice and appropriate review and submission of Medicare billings.”

“Kickbacks in the form of free van rides and the false claims subsequently submitted to federal health care programs come at a tremendous cost to patients and the taxpayers,” said Special Agent in Charge Lamont Pugh for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “We will continue to work with our law enforcement partners to pursue and hold accountable entities who engage in such acts.”  

Contemporaneous with the settlement, Oglethorpe entered into a corporate integrity agreement (CIA) with HHS-OIG. Among other things, the CIA requires that for the next five years Oglethorpe must retain an Independent Review Organization to review its claims to Medicare and Medicaid.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Darlene Baker, a former client advocate at Cambridge. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery if the government takes over the case and reaches a monetary agreement with the defendant. The qui tam case is captioned United States ex rel. Baker v. Oglethorpe, Inc., et al., No. 2:16-cv-1040 (S.D. Ohio).

The resolutions obtained in this matter were the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; the U.S. Attorney’s Office for the Southern District of Ohio; and HHS-OIG.

The matter was investigated by Trial Attorney Christopher Wilson of the Civil Division and Assistant U.S. Attorney Andrew Malek.

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OKLAHOMA CITY – Tulsa, Oklahoma-based contractor the Ross Group Construction Corporation (Ross Group), and its corporate affiliates, have agreed to pay over $2.8 million to settle allegations that they violated the False Claims Act by improperly obtaining federal set-aside contracts reserved for disadvantaged small businesses, the Justice Department announced today.  

"Small business set-aside contracts provide opportunities for small businesses to participate in federal contracting and gain valuable experience to help them compete for future economic opportunities," said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. "We will pursue those who knowingly obtain set-aside contracts to which they are not entitled and thereby prevent deserving small businesses from receiving the assistance that Congress intended."

To qualify as a small business for purposes of U.S. Small Business Administration (SBA) programs, companies must meet defined eligibility criteria, including requirements concerning size, ownership, and operational control. The settlement with Ross Group resolves allegations that the company fraudulently induced the government to award certain small business set-aside contracts to several affiliated entities that did not meet eligibility requirements. The United States alleged that Ross Group created two companies, PentaCon LLC and C3 LLC, to obtain small business set-aside contracts for which Ross Group itself was ineligible. The United States further alleged that Ross Group maintained operational control over the day-to-day and long-term management decisions of the two purported small businesses, including controlling their financial affairs and business operations, and that, as a result, neither PentaCon nor C3 satisfied the size and eligibility requirements to participate in the set-aside programs. Ross Group, PentaCon, and C3 allegedly concealed their affiliation from the United States and knowingly misrepresented the eligibility of PentaCon and C3 for the set-aside contracts.

"It is critical that we protect the integrity of federal government contract programs so that taxpayer money goes only to those who legitimately qualify for assistance," said U.S. Attorney Timothy J. Downing for the Western District of Oklahoma. "We will continue to hold accountable those who make false statements to take unfair advantage of programs for which they would not otherwise qualify, because it deprives legitimate applicants from obtaining these necessary benefits. I want to specifically thank the Defense Criminal Investigative Service for their outstanding and thorough investigative work in this case."

"SBA’s preferential contracting programs are intended to promote development of eligible small businesses," said Small Business Administration Inspector General Hannibal "Mike" Ware. "OIG will continue to work with its law enforcement partners to identify, investigate, and pursue people and businesses who abuse these programs by trying to participate through front companies. I want to thank the Department of Justice and the other Federal agencies involved for their dedication to pursuing justice in this case."

"This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense (DoD) contracting process," said Michael Mentavlos, Special Agent in Charge of the DCIS Southwest Field Office. "DCIS will continue to investigate fraud and corruption targeting DoD programs by pursuing all available remedies possible."

The settlement with Ross Group and its corporate affiliates resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in federal district court in the Western District of Oklahoma and is captioned United States ex rel. Southwind Construction Services, LLC v. The Ross Group Construction Corporation, et al., Case No. 15-0102-R (W.D. Okla.). As part of today’s resolution, the whistleblower will receive approximately $520,000.  

The settlement is the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the United States Attorney’s Office for the Western District of Oklahoma, DCIS, the Inspector General Offices of the SBA, General Services Administration, and the Department of Veterans Affairs, and the Army Criminal Investigation Division Major Procurement Fraud Unit.

To learn more about the Civil Division, please visit https://www.justice.gov/civil. To learn more about the U.S. Attorney’s Office for Western District of Oklahoma, please visit https://www.justice.gov/usao-wdok. To download a photo of U.S. Attorney Downing, click here.

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

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Also Ordered to Pay More than $73,000 in Medicare Restitution

OKLAHOMA CITY – Over the past week, DR. JAMES FERRIS, 47, of Midwest City, KATHERINE DOSSEY, 61, of Luther, and SHERRY ISBELL, 50, of Chandler, were sentenced for their respective roles in the unlawful distribution of controlled substances and corresponding health care fraud, announced U.S. Attorney Timothy J. Downing.

On June 20, 2018, a federal grand jury returned a 103-count Indictment charging Ferris, Dossey and Isbell with crimes related to the distribution of controlled prescription drugs using invalid medical prescriptions and the subsequent fraudulent billings of Medicare for those prescriptions. According to the Indictment, Isbell was the owner of Physicians at Home and the Mid-Oklahoma Medical Access Clinic, both located in Wellston, Oklahoma. Ferris was a physician employed by Physicians at Home. Dossey was a licensed pharmacist who owned a retail pharmacy located in the same building as the clinic.

From September 2015 through December 2015, Isbell, Dossey and Ferris allegedly conspired to dispense prescription controlled substances, including opioids such as hydrocodone, morphine, and fentanyl. In furtherance of the conspiracy, Ferris provided Dossey with stacks of pre-signed, blank prescription pads. Isbell provided Dossey with access to patient records, allowing Dossey to prepare invalid prescription refills utilizing the pre-signed prescription pads.

The Indictment further alleged that Isbell, Dossey and Ferris conspired to commit health care fraud in connection with these pre-signed prescriptions. Due to the unlawful nature of the prescriptions, any claim for reimbursement to Medicare was a false claim for payment.

On January 26, 2021, Ferris pleaded guilty to one count of distribution of fentanyl without a valid prescription and one count of health care fraud. In the same court proceeding, Chief U.S. District Judge Timothy DeGuisti sentenced Ferris to 42 months’ probation. Pursuant to the terms of his plea agreement, Ferris agreed to surrender his license to practice medicine in Oklahoma and would not apply for a medical license in Oklahoma for a period of three years from the date of surrender.

On November 27, 2019, Dossey pleaded guilty to one count of health care fraud. On January 27, 2021, Judge DeGuisti sentenced Dossey to 54 months’ probation. Pursuant to the terms of her plea agreement, Dossey agreed to surrender her Oklahoma pharmacy license and further agreed that she would never reapply for that license.

On July 30, 2019, Isbell pleaded guilty to one count of health care fraud. On February 3, 2021, Judge DeGuisti sentenced Isbell to 24 months’ probation.

Judge DeGuisti additionally ordered Ferris, Dossey and Isbell to pay restitution to the Center for Medicare and Medicaid Services (CMS) in the amount of $53,468.74, as well as to the Oklahoma Medicaid Fraud Control Unit in the amount of $20,301.51. This restitution was ordered to be paid jointly and severally among the defendants, representing the monetary amount Medicare unknowingly reimbursed for the unlawful prescriptions.

"The tragic consequences of opioid abuse are an ongoing problem in our Oklahoma communities," said U.S. Attorney Downing. "These criminal convictions send a clear message that those given the power to prescribe controlled substances will be held to high standards of ethical and professional behavior in accordance with the law."

This prosecution was the product of a multi-year investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation’s Oklahoma City Field Division, and the Department of Health and Human Services - Office of the Inspector General.

Assistant U.S. Attorney Thomas Snyder prosecuted the case.

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NORFOLK, Va. – A Portsmouth man was sentenced today to two years in prison for defrauding the Virginia Medicaid program by submitting over $188,000 in false claims for a residential nursing facility.

“For three years, the defendant used his position as a nursing home operator to fraudulently obtain over $188,000 from the Virginia Medicaid program,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Health care fraud takes funding and critical services away from those who truly need it. We will continue to hold accountable those who exploit these essential health care programs at the expense of vulnerable members of our communities.”

According to court documents, Lopez Scott, 47, operated Turning Points Residential Care, a business authorized to provide residential support services and skilled nursing services to recipients of Medicaid. Between October 2016 and October 2019, Scott submitted numerous false and fraudulent claims to Virginia Medicaid, known as the Virginia Medical Assistance Program (VMAP), which misrepresented that 5,847.75 hours of skilled nursing services had been provided to a Medicaid recipient. As a result, Scott received approximately $188,297.39 in health care payments to which he was not entitled.

“When Lopez Scott launched his fraud scheme, he threatened the integrity of the Medicaid program and illegally pocketed taxpayer funds meant to pay for the legitimate care of needy patients,” said Special Agent in Charge Maureen R. Dixon of the U.S. Department of Health and Human Services (HHS) Office of the Inspector General. “Along with our law enforcement partners, we will continue to hold such fraudsters accountable for their unprincipled actions.”

According to court documents, in order to conceal and cover up the fact that no skilled nursing services had been provided to the Medicaid recipient, Scott created fraudulent entries of nursing notes in the electronic office records of Turning Points, including the forged signature of a nurse, which falsely indicated that such services had been provided. Scott also asked this nurse to falsely state to investigators that she had continued to work for the company even after her employment had ceased.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, and Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General for HHS, made the announcement after sentencing by U.S. District Judge Robert G. Doumar.

Assistant U.S. Attorney Alan Salsbury prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:20-cr-104.

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

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

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

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

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

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

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

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

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

*                     *                     *

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

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

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

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

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Dr. Ashish Pal, a cardiologist based in Orlando, Florida, has paid $6.75 million to resolve allegations that he violated the False Claims Act by performing medically unnecessary ablations and vein stent procedures.

The settlement resolves allegations that, from Jan. 1, 2013 to Dec. 31, 2019, Dr. Pal knowingly submitted false claims to federal health care programs for medically unnecessary ablations and vein stent procedures. The government alleged that Dr. Pal performed the ablations and stent procedures on veins that did not qualify for treatment under accepted standards of medical practice. Additionally, the government alleged that Dr. Pal made misrepresentations in patient medical records to justify the procedures, including overstating the degree of reflux and diameter of veins, and falsely documenting patient symptoms. The United States also alleged that, in many instances, the ablations were performed either exclusively or primarily by one or more ultrasound technicians outside their scope of practice.

“Physicians are expected to perform procedures only when they have a legitimate medical basis to do so,” said Acting Assistant Attorney General Brian M. Boynton for Justice Department’s Civil Division. “The department will pursue those who waste taxpayer funds and subject patients to unwarranted medical care.”

“Our office is committed to protecting vulnerable patients from those who put financial gain ahead of patients’ needs,” said Acting U.S. Attorney Karin Hoppmann of the Middle District of Florida. “We will continue to hold accountable those who abuse the nation’s healthcare programs at the expense of the taxpayers.”

“The Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS) will continue to lead the way in the dogged pursuit of unethical providers who risk patient health for profit,” said Acting Inspector General Sean O’Donnell for the Department of Defense Office of Inspector General. “Ensuring Force readiness and proper care of our military members and their families are among our top priorities.”

“When physicians enrich themselves by performing medically unnecessary procedures on Medicare and Medicaid beneficiaries, they threaten their patients’ health and divert taxpayer funds meant to pay for necessary care,” said Special Agent in Charge Omar Pérez Aybar of U.S. Department of Health & Human Services Office of Inspector General (HHS-OIG). “We will continue to work hard with our law enforcement partners to ensure that health care providers who engage in such abusive behavior are held accountable.”

“The healthcare providers within the Military Health System are committed to patient satisfaction and take seriously their obligation to ensure great outcomes by providing the highest-quality care,” said Director Lt. Gen. Ronald J. Place, M.D. of the Defense Health Agency (DHA). “We are grateful to the U.S. Department of Justice for working to maintain that trust by ensuring medical providers continue to put their patients’ needs and safety first.”

“The Office of Personnel Management’s Office of the Inspector General (OPM-OIG) is dedicated to investigating providers that prioritize profits over patient well-being,” said Deputy Inspector General Performing the Duties of the Inspector General Norbert E. Vint for the OPM-OIG. “We will continue to work with our law enforcement partners and colleagues at the Department of Justice to safeguard the federal health care programs from fraud.”

To help ensure the alleged abuses outlined in this case do not reoccur, Dr. Pal and Interventional Cardiology & Vascular Consultants, PLC entered a detailed, multi-year integrity agreement with HHS-OIG. This integrity agreement contains training and reporting requirements as well as a quarterly claims review conducted by an Independent Review Organization, with the requirement that the review team includes at least one interventional cardiologist who is board certified. It also contains provisions for stipulated penalties and, possibly, the exclusion from federal health programs such as Medicare and Medicaid in the event of a breach of its terms.

The resolution obtained in this matter 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 Middle District of Florida, with assistance from the Department of Defense Office of Inspector General - DCIS, the FBI, the U.S. Department of Health & Human Services Office of Inspector General and the Office of Personnel Management Office of Inspector General.

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

This matter was handled by Nicholas C. Perros of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorney Michael R. Kenneth of the U.S. Attorney’s Office for the Middle District of Florida.

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Allegedly Dispensed Oxycodone Without a Legitimate Medical Purpose

Greenbelt, Maryland – A federal grand jury has indicted the owner and operator of a purported pain management clinic, as well as two nurse practitioners who were employed at the clinic, on the federal charges for conspiracy to distribute and dispense oxycodone and for distribution and dispensing of oxycodone. Charged in the indictment are:

Joyce Shawanda Edwards, age 45, of Largo, Maryland;

Justina Aburime, age 53, of Bowie, Maryland; and

Thomas Charles Johnson, Jr., age 56, of Baltimore, Maryland.

The indictment was returned on March 3, 2021 and unsealed today at the initial appearances of the defendants.

The indictment was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Jarod Forget of the Drug Enforcement Administration - Washington Division; and Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.

According to the eight-count indictment, from February 2017 to February 2020, Joyce Shawanda Edwards owned and operated Personal Touch Medical Spa, LLP (“PTMS”), formerly known as Holistic Health and Wellness Medical Spa LLP, a purported “pain management” clinic located in Largo, Maryland, which the indictment alleges was, in reality, a “pill mill.”   A pill mill is a health care provider’s office, clinic, or health care facility that routinely prescribes and dispenses controlled substances outside the scope of professional practice and without a legitimate medical purpose. According to the indictment, Justina Aburime was a nurse practitioner who worked at PTMS from February 2017, until she left in August 2018, at which time Thomas Charles Johnson, Jr., who was also a nurse practitioner, began working at PTMS. Aburime and Johnson were both authorized to prescribe controlled substances for legitimate medical purposes and in the course of professional practice.

Specifically, the indictment alleges that Edwards, Aburime, and Johnson distributed and dispensed oxycodone that was not prescribed for a medical purpose or in the usual course of professional practice. Edwards typically charged customers who came to PTMS a fee of $280 for an initial visit and $250 for any subsequent visit. Although Edwards, Aburime, and Johnson allegedly required customers of PTMS to provide certain paperwork, generally a magnetic resonance imaging (“MRI”) report, a prescription history, and a “plan of care” purportedly signed by the customer’s primary care physician, to include in the customer’s patient file to support a false claim that there was a legitimate medical need for the prescription of oxycodone, the indictment alleges that the conspirators prescribed oxycodone even when the medical records revealed that there was no legitimate medical need for the prescription. The conspirators allegedly directed customers to physical therapy and provided massages to create the false appearance that PTMS provided other treatment options to controlled substances.  

The indictment alleges that Aburime and Johnson pre-signed blank prescriptions, allowing Edwards to issue prescriptions for oxycodone under their names. Further, the indictment alleges that even though Edwards was not authorized to prescribe controlled substances, she wrote and issued prescriptions for oxycodone using blank prescriptions that Edwards signed under the name of a nurse practitioner. Edwards allegedly issued prescriptions for controlled substances at times when a nurse practitioner was not present and did not see the patient, including on dates when Aburime and Johnson were out of town. Edwards, Aburime, and Johnson also allegedly: conducted cursory, incomplete, and inadequate medical examinations; prescribed controlled substances on the basis of diagnoses that were not corroborated by the medical record; increased the customer’s dosage over time without a medical justification; falsified urine drug test results for customers receiving oxycodone prescriptions; and permitted the customer to determine the drug type and dosage, rather than prescribing controlled substances according to legitimate medical need.

The indictment also seeks the forfeiture of approximately $278,951.72, seized on July 11, 2019, after the execution of seizure warrants on bank accounts held in the name of Personal Touch Medical Spa, LLP.

If convicted, the defendants each face a maximum sentence of 20 years for the conspiracy and for each count of distribution and dispensing of controlled substances. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

The defendants had an initial appearance today in U.S. District Court in Greenbelt and were ordered to be released under the supervision of U.S. Pretrial Services pending trial.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Acting United States Attorney Jonathan F. Lenzner commended the DEA and the U.S. Department of Health and Human Services - Office of Inspector General for their work in the investigation and thanked the Charles County Sheriff’s Office, the Prince George’s County Police Department, the Virginia State Police, and the Metropolitan Police Department for their assistance. Mr. Lenzner thanked Assistant U.S. Attorneys Jessica C. Collins and Elizabeth Wright, who are prosecuting the case.

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Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that NICOLE M. BALKAS, 31, of Bridgeport, waived her right to be indicted and pleaded guilty today before U.S. District Judge Jeffrey A. Meyer in New Haven to one count of health care fraud.

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

From December 2018 to October 2020, Balkas submitted and caused to be submitted fraudulent claims to Medicaid for applied behavior analysis services that were purportedly provided to Medicaid clients. Balkas submitted claims for dates of service when no applied behavior analysis services of any kind had been provided to the Medicaid clients identified in the claims, and she inflated the number of hours for certain claims even when applied behavior analysis had been provided to the Medicaid clients identified in the claims.

In addition, in September and October 2020, Balkas submitted, and was subsequently paid for, Medicaid claims in which she falsely claimed that a former Helping Hands Academy provider, who was a Board Certified Behavior Analyst (“Individual 1”), performed Medicaid-approved services when, in fact, Individual 1 was not employed by Helping Hands Academy on those dates of service, provided no such services to the clients identified on the claims, and was not aware that Helping Hands Academy or Balkas was billing Medicaid using Individual 1’s name and performing provider number. Individual 1 had resigned from Helping Hands Academy in July 2019.

In August 2020, the Connecticut Department of Social Services (DSS), which administers the Medicaid program in Connecticut, terminated Helping Hands Academy as a provider. In an effort to rescind the termination and to receive payment for previously submitted claims, Balkas made several false statements and submitted an altered document to DSS.

Medicaid suffered a loss of $551,311.85 as a result of Balkas’ conduct.

Judge Meyer scheduled sentencing for July 21, 2021, at which time Balkas faces a maximum term of imprisonment of 10 years. Balkas also will be ordered to make full restitution.

Balkas is released on a $50,000 bond pending sentencing.

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

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

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

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

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SHREVEPORT, La. - United States Attorney Brandon B. Brown announced that Marty T. Johnson and Keesha Dinkins were both sentenced today by United States District Judge Donald E. Walter in connection with a healthcare fraud and wire fraud scheme they were involved in.

Johnson, 59, of Shreveport, was sentenced to 60 months in prison, followed by 1 year of supervised release. Dinkins, 45, of Bossier City, was sentenced to 24 months in prison, followed by 1 year of supervised release. In addition, Johnson and Dinkins were ordered to jointly pay restitution in the amount of $3,500,000.

On October 26, 2021, Johnson and Dinkins each entered guilty pleas in connection with the case. Johnson pleaded guilty to a Bill of Information charging him with conspiracy to commit healthcare fraud and wire fraud. Dinkins pleaded guilty to a Bill of Information charging her with misprision of a felony charge of healthcare fraud. Johnson and Dinkins each admitted to defrauding the Medicaid Program out of $3.5 million.

According to information presented to the court, Johnson owned and operated Positive Change Counseling Agency (Positive Change) located in Shreveport, Louisiana, from January 2013 to January 2018. Keesha Dinkins was a manager and supervisor at Positive Change. Positive Change provided mental health rehabilitation and related services to Medicaid beneficiaries in the Caddo and Bossier Parish areas. From 2014 to January 2018, Johnson submitted and caused to be submitted fraudulent claims for mental health rehabilitation and non-emergency transportation services on behalf of Positive Change. Dinkins knew that Johnson submitted these fraudulent claims which she and Johnson both knew were not performed or rendered. These fraudulent claims resulted in Positive Change receiving payments from Medicaid to which it was not entitled.

Johnson admitted to paying individuals money to enroll with Positive Change, increasing the capacity for Positive Change to bill Medicaid for services that were not rendered. Johnson instructed employees, and Dinkins supervised those employees, at Positive Change to create false client files to conceal from Medicaid and insurance company auditors and inspectors that it had not performed the services related to its previously submitted claims which had already been reimbursed by Medicaid. In order to create these false client files, sections from different client documents were physically cut to create inserts which were glued into blank client log templates. These templates with the glued inserts were then photocopied to create the appearance of legitimate documents. Johnson and Dinkins supervised and knowingly and willfully instructed the employees that were creating these false client files to place the false and fictitious photocopied, cut and pasted, documents into the client files. Johnson and Dinkins knew that these false client files were used to conceal from Medicaid officials that Positive Change did not render the services in the claims submitted by it and paid by Medicaid.

In addition, Johnson knowingly caused Positive Change to use Medicaid recipients’ names and identification information without their knowledge or consent to submit fraudulent claims for mental health rehabilitation and non-emergency transportation.

The case was investigated by the U.S. Department of Health and Human Services–Office of Inspector General, Louisiana State Attorney General’s Office-Medicaid Fraud Control Unit, and Federal Bureau of Investigation. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.

If you have any information pertaining to this or any other type of Medicaid fraud, please contact the U.S. Department of Health and Human Services–Office of Inspector General at 1-800-HHS-TIPS (1-800-447-8477) or the Louisiana Medicaid Fraud Hotline at 1-800-488-2917.

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CAMDEN, N.J. – The president and CEO of a commercial diving school was sentenced today to 27 months in prison for fraudulently obtaining funding from the U.S. Department of Education (DOE) and the U.S. Department of Veterans Affairs (VA) for the school and its students, U.S. Attorney Philip R. Sellinger announced.

Tamara Brown, 58, of Haddon Heights, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging her with one count of wire fraud. Judge Rodriguez imposed the sentence today by videoconference.

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

From January 2012 through July 2018, Brown owned a private, for-profit commercial diving school, which offered educational programs in commercial diving and underwater welding and salvage. As a for-profit institution, the diving school was required to be accredited through an approved accreditation body to be eligible to receive tuition funds from the DOE’s Higher Education Act’s programs. The VA also relies upon the accreditation in evaluating the eligibility of Veteran students to receive student aid funding. Given that more than 80 percent of the diving school’s students received financial assistance from the Department of Education, the school stood to lose its largest source of tuition funding for its students if it lost its accreditation.

Prior to 2012, the diving school had been properly accredited. However, when renewing the diving school’s accreditation that year, Brown submitted fraudulent information to the accrediting authority. For example, Brown reported rates of employment of the school’s graduates of between 81 to 84 percent, when the employment rates were closer to 50 to 60 percent, significantly lower than the rate required to maintain accreditation. Brown also provided fraudulent information pertaining to the school’s holding of “advisory board” meetings required for accreditation to ensure that the school’s curriculum would educate students to meet the current demands of the industry and prospective employers. In the school’s accreditation application, Brown reported holding advisory board meetings on various dates and also submitted what purported to be minutes of nine such board meetings. The diving school did not have a formal advisory board and did not regularly conduct meetings as required. Brown submitted wholly fabricated meeting minutes for at least six of the nine dates listed in the school’s accreditation application and, therefore, did not satisfy the minimum accreditation requirements. The diving school nonetheless continued to regularly receive DOE funds via wire transfers, including a wire transfer which occurred on Jan. 18, 2017.

In addition to the prison term, Judge Rodriguez sentenced Brown to three years of supervised release, fined her $50,000 and ordered restitution of $1.1 million.

U.S. Attorney Sellinger credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; the Philadelphia Resident Agency of the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Terry V. Harris, and the Northeast Field Office of the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigation leading to today’s sentencing.

Students who can show that their school misled them or engaged in other misconduct in violation of certain state laws may be eligible for the discharge of some or all federal student loan debt under certain circumstances pursuant to the Borrower Defense Loan Discharge program. Former students of Divers Academy International who wish to seek federal loan forgiveness may apply at http://www.studentaid.gov/borrower-defense/.

The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S Attorney’s Office in Camden.

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Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that WALI MUHAMMAD, 45, of Branford, waived his right to be indicted and pleaded guilty today to one count of health care fraud.

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding before U.S. Magistrate Judge Thomas O. Farrish occurred via videoconference.

According to court documents and statements made in court, from 2010 to 2019 Muhammad owned and operated Happy Family Clinical Services LLC (“Happy Family”), a mental health and social services agency. At various times, Happy Family’s office was located in East Haven and Branford, before moving to New Haven in 2014.

From 2013 through 2019, Muhammad engaged in a scheme to defraud the Connecticut Medicaid Program by submitting fraudulent claims for psychotherapy services that were purportedly provided to Medicaid clients. The claims were for occasions and dates of service when no psychotherapy services of any kind had been provided to the Medicaid clients identified in the claims. The claims also were submitted using the names and identities of licensed clinical social workers and other licensed health care providers who purportedly worked for Happy Family, and represented that the psychotherapy services were personally rendered by the licensed providers, when, in fact, the licensed providers had not personally rendered the services, had not supervised the services that were billed, and were unaware that Muhammad was billing or causing the services to be billed as if the providers had personally rendered the services. When services were provided, they were usually rendered by unlicensed individuals and billed as licensed psychotherapy.

Muhammad is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on June 23, 2021, at which time he faces a maximum term of imprisonment of 10 years. As part of his plea, Muhammad agreed to pay $574,034 in restitution to Medicaid.

This case has been investigated by Special Agents of the Office of the Inspector General of the U.S. Department of Health and Human Services (HHS-OIG), and Police Inspectors from the Medicaid Fraud Control Unit (MFCU) of the Connecticut Chief State’s Attorney’s Office. Acting U.S. Attorney Boyle also thanked the Connecticut Attorney General’s Office, the Connecticut Department of Social Services, and the Connecticut Department of Mental Health and Addiction Services for their assistance in the investigation.

The matter is being prosecuted by Assistant U.S. Attorney David J. Sheldon and Auditor Susan Spiegel.

The U.S. Attorney’s Office, Chief State’s Attorney’s Office, and Attorney General’s Office meet regularly as part of The Medicaid Fraud Working Group. The Working Group also includes representatives from the Connecticut Department of Social Services; the Connecticut Department of Public Health; the Drug Control Division of the Connecticut Department of Consumer Protection; the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Federal Bureau of Investigation. The Working Group reviews pending issues and cases, identifies trends that might indicate fraudulent activity, and coordinates efforts for maximum results.

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Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that WALI MUHAMMAD, 46, of Branford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 24 months of imprisonment, followed by three years of supervised release, for defrauding Connecticut’s Medicaid Program.

According to court documents and statements made in court, from 2010 to 2019 Muhammad owned and operated Happy Family Clinical Services LLC (“Happy Family”), a mental health and social services agency. At various times, Happy Family’s office was located in East Haven and Branford, before moving to New Haven in 2014.

From 2013 through 2019, Muhammad engaged in a scheme to defraud the Connecticut Medicaid Program by submitting fraudulent claims for psychotherapy services that were purportedly provided to Medicaid clients. The claims were for occasions and dates of service when no psychotherapy services of any kind had been provided to the Medicaid clients identified in the claims. The claims also were submitted using the names and identities of licensed clinical social workers and other licensed health care providers who purportedly worked for Happy Family, and represented that the psychotherapy services were personally rendered by the licensed providers, when, in fact, the licensed providers had not personally rendered the services, had not supervised the services that were billed, and were unaware that Muhammad was billing or causing the services to be billed as if the providers had personally rendered the services. When services were provided, they were usually rendered by unlicensed individuals and billed as licensed psychotherapy.

Judge Bryant ordered Muhammad to pay $527,034 in restitution to Medicaid.

On March 11, 2021, Muhammad pleaded guilty today to one count of health care fraud.

Muhammad, who is released on bond, is required to report to prison on September 27, 2021.

This case was investigated by U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), and the Medicaid Fraud Control Unit (MFCU) of the Connecticut Chief State’s Attorney’s Office. Acting U.S. Attorney Boyle also thanked the Connecticut Attorney General’s Office, the Connecticut Department of Social Services, and the Connecticut Department of Mental Health and Addiction Services for their assistance in the investigation.

The matter was prosecuted by Assistant U.S. Attorney David J. Sheldon and Auditor Susan Spiegel.

The U.S. Attorney’s Office, Chief State’s Attorney’s Office, and Attorney General’s Office meet regularly as part of The Medicaid Fraud Working Group. The Working Group also includes representatives from the Connecticut Department of Social Services; the Connecticut Department of Public Health; the Drug Control Division of the Connecticut Department of Consumer Protection; the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Federal Bureau of Investigation. The Working Group reviews pending issues and cases, identifies trends that might indicate fraudulent activity, and coordinates efforts for maximum results.

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

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Allegations Include $86 Million Fraudulently Billed to Medicare

NASHVILLE – The owner and Chief Executive Officer of Spring Hill, Tennessee-based Crestar Labs, LLC, (Crestar) was charged Friday with aiding and abetting and violation of the anti-kickback statute for his role in orchestrating a fraudulent Medicare billing scheme relating to genetic testing in cancer patients, announced Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee.

The criminal complaint was unsealed yesterday and outlined the charges against Fadel Alshalabi, 53, of Waxhaw, North Carolina. Alshalabi was arrested by federal agents Sunday evening in Chicago and will return to the Middle District of Tennessee to face the charges.

The complaint alleges that beginning as early as 2016, Alshalabi, as the owner of Crestar, engaged in a scheme to pay illegal health care kickbacks in exchange for the solicitation of genetic tests from Medicare beneficiaries. In addition to the laboratory in Spring Hill, Alshalabi owned associated labs in other locations, including Karemore Labs in Baltimore, Maryland, and Martis Labs and CrestarDX in Dallas, Texas.

Alshalabi, as the owner and Chief Executive Officer, contracted with marketing companies to target and recruit elderly patients who were federal health care program beneficiaries in order to obtain their genetic material for conducting genetic tests. Marketers, who were not health care professionals, obtained swabs from the mouths of the patients at nursing homes, senior health fairs, and elsewhere. The tests were then approved by telemedicine doctors who did not engage in the treatment of the patients, and often did not even speak with the patients for whom they ordered tests. Often, the patients or their treating physicians never received the results of the tests. Alshalabi paid illegal kickbacks and bribes in exchange for the doctor’s orders and tests, without regard to any medical necessity.   During the period of late 2017 to present, Crestar billed Medicare approximately $86 million for genetic testing and was paid almost $14 million for those claims.

If convicted, Alshlabi faces up to 10 years in prison.

This case is being investigated by the U.S. Department of Health & Human Services- Office of Inspector General and the FBI. Assistant U.S. Attorney Sarah K. Bogni is prosecuting the case.

A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.

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Conspired with Owner of Tennessee Genetic Testing Laboratory, Marketing Companies, and Physicians to Defraud the United States

NASHVILLE – A Kentucky woman pleaded guilty yesterday in U.S. District Court in Nashville, to conspiracy to pay and receive health care kickbacks, announced Acting U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.

Elizabeth Turner, 34 of Glenview, Kentucky, was charged by criminal Information in November with conspiring with Fadel Alshalabi, the owner of Crestar Labs, LLC, based in Spring Hill, Tennessee, Melissa Lynn “Lisa” Chastain, the owner of marketing company Genetix, LLC, located in Belton, South Carolina, as well as other marketers and physicians, to offer, pay, solicit and receive illegal kickbacks and to defraud the Medicare and Medicaid Programs.

Between approximately February 2018 and ending around August 2019, Turner was the owner of telemedicine company Advanced Tele-Genetic Counseling (“ATGC”), which received kickback payments from marketers in exchange for providing signed doctors’ orders for Cancer genomic (“CGx”) testing. CGx testing uses DNA sequencing to detect mutations in genes that could indicate a higher risk of developing certain types of cancers in the future. CGx testing is not a method of diagnosing whether an individual presently has cancer. The marketers targeted Medicare and Medicaid patients through door-to-door marketing, at senior citizen fairs, at nursing homes, and at other locations, and convinced patients to provide their genetic material via a mouth swab kit. The marketers then provided the swab kits to Crestar Labs for CGx testing in exchange for kickbacks paid by Crestar Labs. Crestar Labs billed Medicare and Medicaid for the tests.

Turner, through ATGC, paid kickbacks to doctors for signed orders for CGx tests, without regard for the medical necessity of the tests. Turner knew the doctors were not the patients’ treating physicians, were not treating the patients for any specific medical problem, symptom, illness, or diagnosis, and were not using the results in the care of the patients. Turner was aware that the doctors often never contacted the patients at all.

As a result of Turner’s involvement in the conspiracy, ATGC received approximately $234,730 in illegal kickback payments from marketing company co-conspirators, including Genetix, LLC. As a result of the conspiracy, Medicare and Medicaid paid laboratories, including Crestar Labs, LLC millions of dollars in reimbursements they were not entitled to receive because the CGx tests had been procured through the payment of kickbacks, and were otherwise ineligible for reimbursement.

Turner faces up to five years in prison when she is sentenced on May 2, 2022, and a fine of up to $250,000; restitution to the Medicare and Medicaid programs; and forfeiture of the ill-gotten proceeds.

This case was investigated by the U.S. Department of Health and Human Services - Office of the Inspector General, and the Federal Bureau of Investigation. Assistant U.S. Attorneys Sarah K. Bogni and Robert S. Levine are prosecuting the case.

United States v. Elizabeth Turner is docketed at Criminal Case No. 3:21-cr-00280.

United States v. Fadel Alshalabi, Edward Klapp, and Melissa Lynn Chastain is docketed at Criminal Case No. 3:21-cr-00171. The charges contained in that Superseding Indictment are merely accusations. The defendants are presumed innocent until proven guilty in a court of law.

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ABINGDON, Va. – Michael Dube, who formerly owned and operated American Toxicology Labs, was sentenced was today in U.S. District Court in Abingdon, Virginia to 36 months in federal prison. Acting United States Attorney Daniel P. Bubar and Virginia Attorney General Mark G. Herring made the announcement today.

Dube, 59, of Johnson City Tenn., previously pleaded guilty in U.S. District Court in Abingdon to two felony counts of health care fraud (one filed in the Western District of Virginia and one filed in the Eastern District of Kentucky).

“Michael Dube took advantage of health care funds, aimed at helping the most vulnerable, for his own greed,” Acting U.S. Attorney Bubar said today. “Today’s significant sentence demonstrates that health care fraud will not be tolerated, and is the product of close partnership between federal, state, and local law enforcement, whose collaboration brought the Dubes to justice.”

“Addressing the opioid crisis is an issue of great concern for our nation and remains a top public health priority for the FDA. It is crucial that treatment providers act with honesty and integrity in combatting the crisis,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations, Metro Washington Field Office. “In cooperation with our federal and state law enforcement partners, we will continue to investigate and bring to justice those who defraud federal programs.”

According to court documents, in March 2011, Michael Dube pleaded guilty in the Eastern District of Tennessee to one count of intentionally omitting information from reports as required under the Controlled Substances Act. As a result of his conviction, the Department of Health and Human Services [HHS] informed Dube in a letter dated June 29, 2012, that he was excluded from participating in any federal health care program.

Nonetheless, in May 2013, Michael and his wife, Regan Dube, established American Toxicology Labs [ATL] in Johnson City, Tennessee, with Regan Dube serving as the company’s registered agent, and using the couple’s home address as the principal office and mailing address. ATL then applied to participate in Medicare and Medicaid. On the applications, Regan Dube was listed as the owner of ATL, and Michael Dube’s name and participation in ATL was omitted.

ATL conducted urine screens for various entities who represented themselves to be opioid treatment facilities. Between May 1, 2014, and January 31, 2020, Medicare, Virginia Medicaid, Kentucky Medicaid and TennCare made payments to ATL that totaled approximately $8.5 million. During this time, Michael Dube made employment decisions, negotiated business arrangements with providers, and otherwise participated in the management of ATL.

In addition, Michael Dube also received kickback payments from third parties for referring individuals to those third parties for services for which payment was made (in whole or in part) by federal health care programs. These payments were deposited in Michael and Regan Dube’s personal checking account in a total amount of $441,646. Regan Dube was previously convicted and sentenced in connection with the scheme.

As a result of their convictions, Regan and Michael Dube will pay a total of $9,015,046, plus interest, divided between special assessments, fines, restitution, and forfeiture. They will have to repay all of the money they received from Medicare and Medicaid programs.

The investigation of the case was conducted by the Food and Drug Administration Office of Criminal Investigations, Virginia Medicaid Fraud Control Unit of the Office of the Attorney General, the Department of Health and Human Services Office of the Inspector General, the Drug Enforcement Administration, the Virginia State Police, and Internal Revenue Service – Criminal Investigations, and the Tennessee Bureau of Investigation. The prosecution of the case was conducted by the United States Attorneys’ Offices for the Western District of Virginia (Special Assistant United States Attorney and Assistant Attorney General Janine Myatt and Assistant United States Attorneys Whit Pierce, Krista Frith and Randy Ramseyer) and the Eastern District of Kentucky (Assistant United States Attorneys Andrew Smith and Gregory Rosenberg). The United States Attorney’s Office for the Eastern District of Tennessee provided valuable assistance.

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WACO – U.S. Attorney Ashley C. Hoff of the Western District of Texas announced today that Integrated Pain Associates, PLLC (“IPA”), a pain clinic headquartered in Killeen, and Central Texas Day Surgery Center, LLC (“CTDSC”), an affiliated ambulatory surgery center, have agreed to pay the United States and the State of Texas $836,702.88 to resolve allegations they violated the False Claims Act by overbilling federal healthcare programs.

The United States’ allegations arise from IPA and CTDSC’s submission of claims to Medicare, Medicaid, and TRICARE for facet joint injections, transforaminal injections, and radiofrequency ablation procedures. The United States contends that the defendants billed for more units or levels of these procedures than they performed. For example, the United States alleges that even when a patient received only a single injection, IPA and CTDSC would sometimes bill the government as though the patient had received two or three injections, thereby increasing the amount paid for the procedure.

“We will not allow health care providers to enrich themselves at taxpayer expense,” said U.S. Attorney Hoff. “We are grateful to our partners at the Department of Health and Human Services Office of Inspector General, the Defense Criminal Investigative Service, and the Civil Medicaid Fraud Division of the Office of the Attorney General of Texas for their assistance in obtaining this significant recovery.”

“Health care providers who try to boost their profits by overbilling federal health care programs will be held accountable for their actions,” said Special Agent in Charge Miranda L. Bennett of the Department of Health and Human Services Office of the Inspector General. “In coordination with our law enforcement partners, our agency will continue to safeguard critical health care programs from such schemes.”

“The Department of Defense Office of Inspector General, Defense Criminal Investigative Service (‘DCIS’) and our law enforcement partners diligently investigate allegations of fraud against individuals or companies attempting to take advantage of the military healthcare system, known as TRICARE,” said Special Agent in Charge Michael Mentavlos, DCIS Southwest Field Office. “Today’s outcome reflects DCIS’s steadfast commitment to protect our Warfighters and their families and hold accountable those who perpetrate the fraud.”

The civil settlement of these allegations includes the resolution of claims brought under the qui tam provisions of the False Claims Act by Susan Edwards. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States and Texas ex rel. Edwards v. Integrated Pain Associates, et al., 5:15-cv-00315-FB (W.D. Tex.).

Assistant U.S. Attorney Thomas Parnham represented the United States in this matter.

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

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A federal jury convicted a Tennessee physician and his wife yesterday in the Northern District of Alabama for unlawfully distributing opioids, providing unnecessary services and defrauding insurers from their now-shuttered Alabama clinics.  

According to court documents and evidence presented at trial, Mark Murphy, 65, and his wife, Jennifer Murphy, 65, both of Lewisburg, owned and operated North Alabama Pain Services (NAPS), which closed its Decatur and Madison offices in early 2017. Over the approximately five-year period leading up to the clinic closing its Alabama locations, Murphy and his wife, who was the office manager, caused over $50 million in fraudulent or unnecessary medical services to be charged to Medicare, TRICARE, Blue Cross Blue Shield of Alabama and others. Evidence at trial showed that NAPS provided pre-signed prescriptions to thousands of patients a month, including prescriptions written outside the usual course of professional practice without a legitimate medical purpose. The Murphys also solicited and received unlawful payments for referring fraudulent or unnecessary services to patients. Jennifer Murphy was also convicted of tax-related charges for underreporting clinic income.

Both defendants were convicted of conspiracy to unlawfully distribute controlled substances and conspiracy to commit health care fraud, along with various substantive counts related to the same. They were also convicted of conspiring to defraud the United States and receiving kickbacks. The Murphys face a maximum of 20 years in prison for the drug charges and a maximum of 10 years in prison for the health care fraud charges. Both defendants face a maximum of five years in prison for charges stemming from violations of the Anti-Kickback Statute, and Jennifer Murphy faces up to three years in prison for the tax charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for June 30.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Prim F. Escalona for the Northern District of Alabama; Special Agent in Charge Bradford L. Byerly of the Drug Enforcement Administration (DEA) New Orleans Field Division; Special Agent in Charge Johnnie Sharp Jr. of the FBI Birmingham Division; Special Agent in Charge James E. Dorsey of IRS Criminal Investigation (IRS-CI) Atlanta Field Office; and Special Agent in Charge Tamala E. Miles of the Department of Health and Human Service Office of the Inspector General (HHS-OIG) Atlanta Region made the announcement.

FBI, HHS-OIG, IRS-CI and DEA investigated the case.

Assistant Chief Jillian Willis and Trial Attorney Emily Gurskis of the Criminal Division’s Fraud Section and Assistant U.S. Attorney J.B. Ward of the Northern District of Alabama are prosecuting the case.

The Fraud Section leads the Appalachian Regional Prescription Opioid (ARPO) Strike Force. Since its inception in October 2018, the ARPO Strike Force, which operates in 10 districts, has charged more than 90 defendants who are collectively responsible for distributing more than 105 million pills. The ARPO Strike Force is part of the Health Care Fraud Strike Force Program, which since March 2007 has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at:https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

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A federal jury in the Eastern District of Michigan convicted a Michigan doctor today for his role in masterminding and executing a complex scheme to defraud Medicare and other health insurance programs by administering medically unnecessary spinal injections in exchange for prescriptions of high doses of opioids to patients.

According to court documents and evidence presented at trial, Francisco Patino, 66, of Wayne County, excessively prescribed highly addictive opioids to his patients at his medical clinic in Livonia. In exchange for opioids, these patients would receive (or be billed as if they had received) facet joint or nerve block injections, both lucrative spinal injections. Although these spinal injections were purportedly intended to treat chronic pain, evidence at trial demonstrated that Patino injected patients without regard to medical necessity. Evidence also revealed that if patients refused to accept the injections, Patino would withhold their prescriptions for opioids. From January 2012 through July 2017, Patino billed Medicare for more of these injections than any provider in the country. The evidence at trial also showed that in 2016 and 2017, Patino prescribed more 30-milligram Oxycodone pills than every other provider in the state of Michigan.

Patino also developed illegal kickback relationships with at least one diagnostic laboratory, under which he was paid in exchange for referring his patients’ samples to that lab. The evidence showed that the labs funneled money into bank accounts held by others, who then distributed the money to Patino or spent it on his behalf. Patino also spent funds he derived from these various schemes on jewelry, cars, and vacations. A sizable portion of Patino’s fraud proceeds were devoted toward the promotion of Patino’s specialized diet program and lifestyle and wellness book. Patino paid Ultimate Fighting Championship and other mixed martial arts fighters to promote the Patino Diet.

Patino was convicted of one count of conspiracy to commit health care fraud and wire fraud, two counts of health care fraud, one count of conspiracy to defraud the United States and pay and receive health care kickbacks, one count of conspiracy to commit money laundering, and one count of money laundering. He is scheduled to be sentenced on Jan. 20, 2022, and faces a maximum total penalty of life 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; Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division; and Special Agent in Charge Lamont Pugh III of the Department of Health and Human Services, Office of Inspector General (HHS-OIG) made the announcement.

The FBI’s Detroit Field Office and HHS-OIG investigated the case.

Trial Attorneys Steven Scott and Kathleen Cooperstein of the Criminal Division’s Fraud Section are prosecuting the case.

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A Pakistani man was sentenced today in the Northern District of Illinois for a health care fraud scheme and money laundering conspiracy.

Muhammad Ateeq, 33, of Rawalpindi, Pakistan, was sentenced to 12 years in prison and ordered to pay approximately $48 million in restitution. In addition, Judge Manish Shah ordered the forfeiture of a $2.4 million cashier’s check and over $1 million in cash.

According to court documents, Ateeq worked in the Islamabad office of Home Health Care Consulting, an entity that controlled Medicare billing and maintenance of electronic medical records for over 20 home health agencies located in Illinois, Indiana, Nevada and Texas. While working at Home Health Care Consulting, Ateeq used a variety of fake identities, including “Nilesh Patel,” “Sanjay Kapoor” and “Rajesh Desai,” to acquire and manage home health agencies in the United States. Once the agencies were under Ateeq’s control, Ateeq caused the agencies to submit fraudulent claims to Medicare for home health services, resulting in over $40 million in payments for services that were never rendered.

As part of the money laundering conspiracy, Ateeq directed his U.S. employees to deposit checks of fraud proceeds into U.S. bank accounts designated by overseas customers of overseas money transmitting businesses. The money transmitting businesses then issued cash payments to Ateeq in Pakistan, as well as deposits into bank accounts in Pakistan under Ateeq’s control. Ateeq also directed U.S. employees to use fraud proceeds to purchase expensive watches and other luxury items in the United States and then deliver the items to Ateeq’s associates in Dubai.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney John R. Lausch, Jr. for the Northern District of Illinois; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent-in-Charge Emmerson Buie Jr. of the FBI Chicago Field Office; and Principal Deputy Inspector General Christi A. Grimm of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

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

Trial Attorney Sarah Wilson Rocha of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jeremy Daniel and Patrick Mott of the Northern District of Illinois prosecuted the case.

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Construction Firm Illegally Received Contracts Set Aside for Veterans, Minorities

KANSAS CITY, Mo. – A Parkville, Missouri, man who was charged in two federal cases pleaded guilty in federal court today to his role in a $335 million scheme to defraud federal programs that award contracts to firms owned by minorities, Veterans, and service-disabled Veterans, and in a separate case to filing false tax returns that cheated the government out of more than $615,000 in taxes owed.

Patrick Michael Dingle, 50, pleaded guilty before U.S. District Judge Roseann Ketchmark to the charges contained in both federal cases. Dingle pleaded guilty to one count of conspiracy to commit wire and major program fraud. Dingle also pleaded guilty, in a separate case, to one count of filing a false tax return.

$335 Million Fraud Conspiracy

By pleading guilty today, Dingle admitted that he conspired with Matthew C. McPherson, 45, of Olathe, Kansas, to fraudulently obtain contracts set aside by the federal government for award to small businesses owned and controlled by Veterans, service-disabled Veterans and certified minorities.

Dingle was the operations manager for Zieson Construction Company located in North Kansas City, Mo. Dingle and his co-conspirators controlled and operated Zieson, which was originally formed in 2009 with Stephon Ziegler – an African-American service-disabled Veteran – as the nominal owner. Zieson’s primary business was obtaining federal construction contracts set aside for award to small businesses owned and controlled by service-disabled Veterans or certified minorities. However, Ziegler did not control the day-to-day operations or the long-term decision making of Zieson. Dingle and his co-conspirators actually controlled and operated Zieson, and received most of the profits from Zieson.

Ziegler signed Zieson checks when requested to do so, signed bids for government jobs when requested to do so and served as a courier of checks and invoices when requested to do so. Ziegler did not participate in any way in the management and control of either day-to-day operations or long-term decision-making for Zieson.

Dingle and McPherson were not eligible for these set-aside contracts because they were not certified minorities or Veterans. Although Zieson was not eligible, the firm received approximately 199 federal contracts set aside for award to minority-owned small businesses and Veteran-owned small businesses between 2009 and 2018. The government paid Zieson approximately $335 million for those contracts. Several of the set-aside contracts awarded to Zieson were valued in excess of $1 million, including a contract at Topeka, Kan., awarded on July 13, 2012, valued at approximately $4,125,800.

Dingle, McPherson, and others submitted false and fraudulent Past Performance Questionnaires in support of Zieson bids for set aside contracts.

McPherson pleaded guilty on June 3, 2019, to one count of conspiracy to commit wire fraud and major program fraud and awaits sentencing.

False Tax Returns

Dingle also pleaded guilty, in a separate case, to filing a false tax return. Dingle admitted that he claimed $799,425 in fraudulent business expenses on his tax return for 2016. As a result of the false and fraudulent expenses offset on Dingle’s 2016 tax return, the government suffered a loss of approximately $349,784.

Dingle also admitted that he filed false tax returns over a four-year period from 2013 to 2016, which resulted in a total loss to the government of $615,847. Under the terms of today’s plea agreement, Dingle must pay restitution to the government in the total amount of federal tax loss as determined by the court at sentencing.

Under federal statutes, Dingle is subject to a sentence of up to eight years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

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

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A Florida man was sentenced today to 10 years in prison for conspiracy to commit health care fraud in connection with a scheme that resulted in the submission of approximately $3.3 million in fraudulent claims to Medicare for genetic testing.

Ivan Andre Scott, 36, of Kissimmee, was convicted by a federal jury on Jan. 8, 2021, of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to pay and receive unlawful health care kickbacks, and three counts of receiving unlawful kickbacks. According to court documents, Scott was the owner of Scott Global, a telemarketing call center located in Orlando. The evidence showed that Scott targeted Medicare beneficiaries with telemarketing phone calls falsely stating that Medicare covered expensive cancer screening genetic testing, or “CGx” tests. Each test cost as much as $6,000. After beneficiaries agreed to take the test, the evidence showed Scott paid unlawful bribes and kickbacks to telemedicine companies to obtain doctor’s orders authorizing the tests.

The evidence at trial showed that the telemedicine doctors approved the expensive testing even though they were not treating the beneficiary for cancer or symptoms of cancer, and often without even speaking with the beneficiary. According to the evidence presented at trial, Scott then sold the genetic tests and doctor’s orders to laboratories in exchange for illegal kickbacks. To conceal the illegal kickbacks, Scott submitted invoices to the laboratories and other marketers making it appear as though he were being paid for hourly marketing services, rather than per referral.

Between November 2018 and May 2019, labs submitted more than $3.3 million in claims to Medicare for genetic tests that Scott had referred to them, of which Medicare paid over $1.3 million. In that timeframe, Scott personally received approximately $194,000 for his role in the scheme.

“The defendant used telemarketing and telemedicine to defraud Medicare of more than a million dollars for unnecessary genetic screening tests,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The department will continue working with our law enforcement partners to bring to justice those who seek to use new technologies to plunder our government health care programs.”

“Fraudsters who steal from taxpayer-funded federal health care programs and engage in predatory telemarketing calls are a threat to our country’s health care system and its most vulnerable beneficiaries,” said Special Agent in Charge Omar Pérez Aybar of the U.S. Health and Human Services, Office of Inspector General (HHS-OIG). “Our agents will continue to aggressively investigate health care fraud and hold criminals responsible for their actions.”

“The unscrupulous tactics used in this scheme to steal from taxpayers is what drives our investigators to combat healthcare fraud,” said Special Agent in Charge Michael McPherson of the FBI’s Tampa Field Office. “The FBI’s mission to protect the American people includes protecting them from fraudsters who cheat our nation’s federally funded healthcare systems.”

The case was investigated by HHS-OIG and the FBI and was brought as part of Operation Double Helix, a federal law enforcement action led by the Health Care Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section, focused on fraudulent genetic cancer testing and the use of telemedicine that has resulted in charges against dozens of defendants associated with telemedicine companies and cancer genetic testing laboratories for their alleged participation in one of the largest health care fraud schemes ever charged.

Trial Attorneys Alejandro Salicrup and Jamie de Boer of the Fraud Section prosecuted the case.

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SCRANTON, Pa. (WNEP) — A man has been incarcerated for making faulty purchases and stealing money from American Legion Post 568 on Birney Avenue in Scranton, Pennsylvania.

Christopher Crawford allegedly spent nearly $17,000, took personal trips, and used Uber. He’s also charged with faking his status as a Veteran.

“Usually when you join a club like this you have to look at their DDW-214, which tells you how many years you were in the service what you do, what medals and stuff you got,” said Thomas Benson from the legion. “I think he falsified a lot of his stuff.”

Crawford portrayed himself as a combat Veteran claiming he left the service by honorable discharge.

According to the district attorney’s office, Crawford went AWOL after 2 months and 25 days while he was still in boot camp.

Veterans in the area aren’t surprised to see the new charge against Crawford.

The commander at VFW Post 25 in Scranton said he spent time there for about 2 years; officials suspect he was lining up similar fraud at that organization.

Crawford offered to help run the VFW before he was even a member, offering to handle finances and recruiting.

“He brought 3 or 4 guys with him in uniform and said ‘ I’ll bring all these young guys in’ and he just sent a flag,” said Commander James Kuchwara.

Commander Kuchwara said he couldn’t produce proper paperwork to get into the VFW and eventually he stopped coming around.

“This man didn’t just do what he did to the legion he took from the community because that’s what VFWs and legions are,” Commander Kuchwara added. “We support the community.”

In a statement, from District Attorney Mark Powell said Crawford’s actions were breathtakingly brazen and unprecedented. He’s charged with misrepresentation of military service and misrepresentation of a decoration or medal.

“I’m really happy to see the district attorney is stepping up and bringing the charges that are so well deserved by this young man,” said District Commander Chester Potoski of VFW District 10.

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NEWARK, N.J. – A Pennsylvania man today admitted his role in a conspiracy to receive kickbacks and bribes from laboratories in exchange for referrals of patient DNA samples and genetic tests, Acting U.S. Attorney Rachael A. Honig announced.

Jeremy Richey, 40, of Mars, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with conspiracy to commit an offense against the United States in connection with a scheme to violate the Anti-Kickback Statute. Richey and five co-defendants were previously charged by indictment in September 2019 in connection with the conspiracy and a related health care fraud scheme.

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

Richey and certain conspirators operated Ark Laboratory Network LLC (Ark), a company that purported to operate a network of laboratories that facilitated genetic testing. Through Ark, Richey and others submitted or caused to be submitted referrals for genetic tests and patients’ DNA samples to various clinical laboratories across the country. Richey and certain conspirators entered into kickback agreements with certain clinical laboratories under which the laboratories paid Ark bribes in exchange for delivering DNA samples and orders for genetic tests. Ark concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received from Medicare or an amount paid for each DNA sample. From January 2018 through January 2019, Medicare paid these laboratories at least approximately $4.6 million for genetic tests that resulted from the referrals and DNA samples that Ark delivered to the laboratories in exchange for bribes. In turn, the laboratories paid Ark at least $1.8 million in bribes.

The charge to which Richey pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense. Richey’s sentencing is scheduled for Aug. 9, 2021.

Co-defendants Kacey C. Plaisance, of Altamonte Springs, Florida; Kyle D. McLean, of Arlington Heights, Illinois; and Edward B. Kostishion, of Lakeland, Florida, previously pleaded guilty. Plaisance is scheduled to be sentenced on June 21, 2021. McLean is scheduled to be sentenced on July 26, 2021. Kostishion is scheduled to be sentenced on July 26, 2021.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Supervisory Special Agent Thomas J. Mahoney, with the investigation leading to today’s guilty plea.

The government is represented by Bernard J. Cooney, Chief of the Government Fraud Unit, and Assistant U.S. Attorney José R. Almonte of the Health Care Fraud Unit in Newark.

The charge and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

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Three generic pharmaceutical manufacturers, Taro Pharmaceuticals USA, Inc., Sandoz Inc. and Apotex Corporation, have agreed to pay a total of $447.2 million to resolve alleged violations of the False Claims Act arising from conspiracies to fix the price of various generic drugs. These conspiracies allegedly resulted in higher drug prices for federal health care programs and beneficiaries according to the Justice Department.

The government alleges that between 2013 and 2015, all three companies paid and received compensation prohibited by the Anti-Kickback Statute through arrangements on price, supply and allocation of customers with other pharmaceutical manufacturers for certain generic drugs manufactured by the companies.

Taro Pharmaceuticals USA, Inc., headquartered in New York, has agreed to pay $213.2 million. The Taro drugs allegedly implicated in this scheme address a wide variety of health conditions, and include etodolac, a nonsteroidal anti-inflammatory drug used to treat pain and arthritis, and nystatin-triamcinolone cream and ointment, a combination of an antifungal medicine and steroid used to treat certain kinds of skin infections.

Sandoz Inc., headquartered in New Jersey, has agreed to pay $185 million. The Sandoz drugs at issue include benazepril HCTZ, used to treat hypertension, and clobetasol, a corticosteroid used to treat skin conditions.

Apotex Corporation, headquartered in Florida, has agreed to pay $49 million in connection with its sale of pravastatin, a drug used to treat high cholesterol and triglyceride levels.

“Illegal collaboration on the price or supply of drugs increases costs both to federal health care programs and beneficiaries,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department will use every tool at its disposal to prevent such conduct and to protect these taxpayer-funded programs.”

“These civil settlements are another achievement in my office’s efforts to hold generic drug companies accountable for the consequences arising from price-fixing schemes, including the harm to federal health care programs,” said Acting U.S. Attorney Jennifer Arbittier Williams for the Eastern District of Pennsylvania. “We will continue to aggressively pursue these violations of the Anti-Kickback Statute and the False Claims Act and obtain significant recoveries.”

“Conspiring to raise prices on generic medications is illegal and could prevent patients from being able to afford their needed prescription drugs. Americans have the right to purchase generic drugs set by fair and open competition, not collusion,” said Special Agent in Charge Maureen R. Dixon of the Philadelphia Regional Office of the Inspector General, Department of Health and Human Services (HHS-OIG). “HHS-OIG along with our law enforcement partners will continue to investigate allegations of companies engaging in actions that put the public and the Medicare program at risk.”  

In connection with its settlement agreement, each company also entered a five-year corporate integrity agreement (CIA) with OIG. The CIAs include unique internal monitoring and price transparency provisions. They also require the companies to implement compliance measures including risk assessment programs, executive recoupment provisions and compliance-related certifications from company executives and board members.

“These kickback schemes harm Medicare, Medicaid and patients,” said Chief Counsel Gregory E. Demske for the Inspector General at HHS. “The CIAs promote transparency and accountability by requiring the companies to report price-related information to OIG and mandating individual certifications by key executives involved in pricing and contracting functions.”

“Protecting TRICARE, the healthcare system for U.S. military members and their dependents, is a top priority for the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service (DCIS),” said Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office. “When pharmaceutical corporations artificially inflate prices, they undermine the integrity of TRICARE and place an unnecessary financial burden on the program. The settlement agreements announced today are the result of a joint effort and demonstrate the ongoing commitment of DCIS to work with our law enforcement partners, DOJ Civil Frauds and the USAO-EDPA, to investigate healthcare fraud.”

The Anti-Kickback Statute prohibits companies from receiving or making payments in return for arranging the sale or purchase of items such as drugs for which payment may be made by a federal health care program. These provisions are designed to ensure that the supply and price of health care items are not compromised by improper financial incentives. These settlements reflect the important role of the False Claims Act to ensure that the United States is fully compensated when it is the victim of kickbacks paid to further anticompetitive conduct.      

All three companies previously entered into deferred prosecution agreements with the Antitrust Division to resolve related criminal charges. Taro paid a criminal penalty of $205.6 million and admitted to conspiring with two other generic drug companies to fix prices on certain generic drugs. Sandoz paid a criminal penalty of $195 million and admitted to conspiring with four other generic drug companies to fix prices on certain generic drugs. Apotex paid a criminal penalty of $24.1 million and admitted to conspiring to increase and maintain the price on pravastatin. The civil settlement payments announced today are in addition to the criminal penalties paid by the companies.  

Today’s civil settlements are the third, fourth and fifth arising from this investigation and were handled by the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the Eastern District of Pennsylvania with support from the Office of Inspector General for the Department of Health and Human Services, the Defense Health Agency Program Integrity Office, DCIS and the Office of Inspector General for the Department of Veterans Affairs.

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

The matters were handled by Senior Trial Counsels Jennifer L. Cihon and Laurie A. Oberembt and Assistant U.S. Attorneys Landon Y. Jones III, Rebecca S. Melley and Anthony D. Scicchitano.

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

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Defendant Ordered a “Hit” on the Person He Believed Had Cooperated with Law Enforcement Investigating his Drug Distribution Operation

Baltimore, Maryland – U.S. District Judge George L. Russell, III today sentenced David Robinson, age 51, of Baltimore, Maryland, to 171 months in federal prison, followed by three years of supervised release, for the federal charges of conspiracy to distribute oxycodone and alprazolam and for murder for hire. Robinson, formerly a licensed pharmacist who owned and operated the Frankford Family Pharmacy, located in the 5400 block of Sinclair Lane in Baltimore pleaded guilty on October 10, 2018, to a federal drug conspiracy involving the distribution of oxycodone and alprazolam outside the scope of professional practice and not for a legitimate medical purpose. On December 17, 2020, Robinson pleaded guilty to a federal charge of murder for hire, admitting that he ordered a “hit” on the person he believed had cooperated with law enforcement that led to his indictment on those charges. Robinson’s pharmacist license was suspended on August 7, 2017.

The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Commissioner Michael Harrison of the Baltimore Police Department; and Secretary Robert L. Green of the Maryland Department of Public Safety and Correctional Services.

“Pharmacists who divert pharmaceutical drugs for illegal purposes further the tragic cycle of addiction and the epidemic of opioid overdose deaths,” said Acting U.S. Attorney Jonathan F. Lenzner. “David Robinson not only betrayed the trust placed in him by diverting drugs in order to line his own pockets, he then attempted to have the person killed whom he believed had reported his abuses. We have zero tolerance for any effort to intimidate or retaliate against witnesses.”

According to Robinson’s plea agreement for the drug distribution conspiracy, a confidential source (CS-1) advised law enforcement that the pharmacist at Frankford Family Pharmacy knowingly filled fraudulent prescriptions for alprazolam and oxycodone at the pharmacy. During the DEA’s investigation, between January and July 2016, the confidential source made a number of controlled purchases from Robinson at the pharmacy, using blank prescriptions provided to the source by DEA. Robinson knew that the prescriptions were fraudulent because he told the confidential source what name to use on the prescriptions and what quantity of oxycodone tablets to write on the prescriptions. Robinson also told the source to include non-controlled medications on the same prescriptions in order to evade law enforcement. Between April 2015 and June 2017, Robinson fraudulently distributed approximately 12,330 units of alprazolam and 10,000 milligrams of oxycodone.

On June 22, 2017, a federal grand jury in Maryland indicted Robinson for a drug conspiracy involving the distribution of oxycodone and alprazolam. Robinson was arrested on June 27, 2017 and was released from custody on June 29, 2017, under the supervision of U.S. Pretrial Services. On October 10, 2018, Robinson pled guilty to one count of conspiracy to distribute and possess with intent to distribute oxycodone and alprazolam and one count of distribution and possession with intent to distribute oxycodone and alprazolam. Robinson was allowed to continue on conditions of release until his sentencing, scheduled for February 15, 2019.

DEA investigators also learned that during Robinson’s tenure as a pharmacist working the night shift at a pharmacy in Waldorf, Maryland, Robinson also filled fraudulent prescriptions for oxycodone. Robinson admitted that he wrote prescriptions using the names of prominent athletes provided to him as the purported patients. Between September and December 2015, Robinson admitted that he dispensed at least 85,500 milligrams of oxycodone outside the scope of professional practice and not for a legitimate medical purpose.

On October 27, 2018, Baltimore City’s Citi-Watch camera system captured a drug transaction, which led to the arrest of an individual, CS-2. A search of CS-2’s vehicle resulted in the recovery of two shoeboxes containing a total of 35 stock pharmacy bottles of the prescription medications promethazine and clonidine.

CS-2 had obtained the prescription medications from David Robinson. CS-2 had known Robinson for approximately three years, and had previously purchased oxycodone, Xanax, clonidine, and promethazine from Robinson at the Frankford Family Pharmacy. After the search warrant was executed at Robinson’s pharmacy on June 27, 2017, Robinson began providing CS-2 with boxes of medications in exchange for cash without requiring a prescription. Robinson continued to sell promethazine and clonidine and six months after the raid, Robinson was still ordering pills from his vendors.

As detailed in his plea agreement for the murder for hire, following his arrest in 2017, Robinson told CS-2 about an individual that Robinson believed had cooperated with law enforcement and led to his arrest (i.e., CS-1). CS-2 and Robinson had a discussion about CS-1 being killed. After some time, the two agreed to have CS-1 killed. Robinson provided CS-2 with some information about CS-1. CS-2 told Robinson that he/she knew someone that could do a “hit” on CS-1. CS-2 told Robinson that the fee would be $5,000 up front and $5,000 when CS-l was killed.

Robinson admitted that from December 13, 2018 through February 7, 2019, CS-2 made three controlled purchases of drugs from Robinson, at the direction of law enforcement, using cash provided by DEA agents. CS-2 purchased a total of 118 stock pharmacy bottles of clonidine, each containing 100 tablets; and 24 stock pharmacy bottles of 50 mg promethazine tablets, with each bottle containing 100 tablets. Robinson did not request, nor did CS-2 provide, a prescription for any of the drugs.

During a controlled purchase on January 24, 2019, CS-2 and Robinson discussed the murder of CS-1 (which was audio-recorded). During this conversation, they discussed a $5,000 fee that had already been paid to the hitman, and that an associate of the hitman had information about the location of CS-1. The associate wanted an additional $3,000 to be paid to him/her in order to provide CS-1’s location to the hitman. Robinson was upset over this additional fee required to identify the location and accomplish the murder of CS-1 and did not agree to pay the additional fee. On February 4, 2019, CS-2 sent a text message to Robinson’s cell phone advising that he had provided the additional $3,000 in order to obtain CS-1’s address.

On February 14, 2019, CS-2 called Robinson and told Robinson that the murder was done and that the hitman would want his money. CS-2 then met with Robinson, who provided CS-2 with $2,000. CS-2 put the cash in his pocket and Robinson asked CS-2 for proof that the murder had been completed. CS-2 showed Robinson several fake photos in which it appeared that CS-l had been bound with zip ties, shot several times, and killed. After the meeting, law enforcement arrested Robinson.

Robinson will also forfeit items seized on June 27, 2017 during the execution of search warrants at his residence, the Frankford Family Pharmacy, his vehicle, and a safe deposit box rented by Robinson. These include: $159,862 in cash from Robinson’s home; $46,927 in a briefcase, blank prescriptions, a prescription pad, and a loaded 9mm pistol from Robinson’s car; $60,486 in cash, an AR-15 rifle with a magazine, several boxes of ammunition for the rifle from the pharmacy; and $25,041 in cash, $4,500 in gold coins, and $1,010 in silver coins from the safe deposit box.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

Acting United States Attorney Jonathan F. Lenzner commended the DEA, HHS OIG, the Baltimore Police Department, and the Maryland Department of Public Safety and Correctional Services for their terrific work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Kenneth S. Clark and Samika N. Boyd, who are prosecuting the case.

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TRENTON, N.J. – The former co-owner of a Union City, New Jersey, pharmacy was sentenced today to 41 months in prison for his role in a scheme to pay bribes to health care professionals and evading taxes on $33.9 million in income, Acting U.S. Attorney Rachael A. Honig announced.

Igor Fleyshmakher, 59, of Holmdel, New Jersey, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with conspiring to violate the federal anti-kickback statute and tax evasion. Judge Shipp imposed the sentence today in Trenton federal court.

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

The Prime Aid Pharmacies – now closed – operated as “specialty pharmacies” out of locations in Union City, New Jersey, and Bronx, New York. They processed expensive medications used to treat various conditions, including Hepatitis C, Crohn’s disease, and rheumatoid arthritis. Igor Fleyshmakher was a co-owner of Prime Aid Union City. Samuel “Sam” Khaimov was the other co-owner of Prime Aid Union City and the lead pharmacist of Prime Aid Bronx. Yana Shtindler was Khaimov’s wife and managing director of Prime Aid Union City. Ruben Sevumyants was Prime Aid Union City’s operations manager, and Alex Fleyshmakher worked at Prime Aid Union City and was an owner of Prime Aid Bronx. Eduard “Eddy” Shtindler (Yana Shtindler’s brother) was a Prime Aid Union City employee.

Starting in 2010, to obtain a higher volume of prescriptions, Igor Fleyshmakher, Khaimov, Sevumyants, Alex Fleyshmakher, Eddy Shtindler, and other Prime Aid employees paid bribes to doctors and doctors’ employees to induce doctors’ offices to steer prescriptions to the Prime Aid Pharmacies. The bribes included expensive meals, designer bags, and payments by cash, check, and wire transfers. The bribes and kickbacks were paid to, among others, doctors and doctors’ employees in New Jersey and New York.

As part of his plea agreement, Igor Fleyshmakher agreed that the improper benefit conferred as part of the conspiracy to violate the federal anti-kickback statute was between $3.5 million and $9.5 million.

In addition, between 2012 and 2014, Igor Fleyshmakher diverted a substantial amount of Prime Aid Union City income into a secret bank account that he opened and controlled. He concealed the account from the pharmacy’s tax preparers and did not report any of the funds he deposited into it on his personal income tax returns. In total, he diverted $33.9 million of income into the secret account, all of which he failed to report to the IRS. As a co-owner of the pharmacy, his conduct resulted in a $5.8 million tax loss to the IRS on his share of that income for tax years 2012 through 2014.

In addition to the prison term, Judge Shipp sentenced Fleyshmakher to three years of supervised release and ordered him to pay $5.8 million in restitution and a $100,000 fine.

Khaimov, Yana Shtindler, and Sevumyants have been charged together by superseding indictment with health care fraud offenses and violations of the anti-kickback statute, and that matter is pending. In addition, the following individuals associated with the Prime Aid Pharmacies have pleaded guilty for their respective roles in the kickback and bribery scheme described above: Joel Grimshaw, a former Prime Aid sales representative, Yudelka “Vicky” Ayala, a doctor’s employee who received over $200,000 in bribes and kickbacks as part of the scheme, and Alex Fleyshmakher, who also pleaded guilty to conspiring to defraud the IRS, resulting in losses to the IRS of over $9,000,000. Eddy Shtindler also pleaded guilty for his role in a related kickback conspiracy. These four defendants have not yet been sentenced.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and the N.J. Office of the State Comptroller, under the direction of Acting Comptroller Kevin D. Walsh, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.

The charges against and allegations in the information pertaining to Khaimov, Yana Shtindler, and Sevumyants are merely accusations, and those three defendants are presumed innocent unless and until proven guilty.

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A New York woman was sentenced today to 78 months in prison for defrauding health care programs, including more than $6.5 million from Medicare Part D plans and Medicaid drug plans.

According to court documents, Aleah Mohammed, 37, of Queens, pleaded guilty to one count of mail fraud, one count of health care fraud, and one count of conspiracy to commit health care fraud.

According to court documents, Mohammed was an owner and operator of five pharmacies: Superdrugs Inc., Superdrugs I Inc., Superdrugs II Inc., S&A Superdrugs II Inc. and Village Stardrugs Inc. Between 2015 and 2020, Mohammed used these pharmacies to defraud health care programs, including Medicare and Medicaid, by submitting claims for prescription drugs that were not dispensed, not prescribed as claimed, not medically necessary, or that were purportedly dispensed during a time when the pharmacy was no longer registered with the State of New York. The fraudulent claims included claims for expensive prescription drugs for the treatment of the human immunodeficiency virus (HIV). Mohammed used proceeds of the scheme to purchase herself luxury items, such as jewelry and a Porsche.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations; Assistant Director Luis Quesada of the FBI's Criminal Investigative Division; and Assistant Director-in-Charge Michael J. Driscoll of the FBI’s New York Field Office made the announcement.

HHS-OIG and the FBI investigated the case.

Trial Attorneys Andrew Estes and Patrick J. Campbell of the Criminal Division’s Fraud Section prosecuted the case.

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MINNEAPOLIS – RehabAuthority, LLC, a physical therapy company with operations in Minnesota, has agreed to pay $4 million to resolve allegations that it submitted false claims for payment for outpatient physical therapy services in violation of the False Claims Act.

The settlement resolves allegations that, from January 1, 2014, to December 31, 2018, RehabAuthority clinics submitted or caused to be submitted false claims for payment to the government for outpatient physical therapy. The clinics, located in Minnesota, North Dakota, Idaho, and Wyoming, improperly billed Medicare Part B, Minnesota Medicaid, TRICARE, and the Veterans Health Administration for one-on-one outpatient physical therapy, including therapeutic exercises, manual therapy, ultrasounds, therapeutic activities, and gait training. The resolution centered on allegations that the company billed the government for direct, one-one-one care with physical therapists, but did not provide it when it overbooked government beneficiaries for certain outpatient physical therapy services.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against RehabAuthority. 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 recovery. The qui tam case is captioned United States and the State of Minnesota ex rel. Cami Lane v. RehabAuthority, LLC, et al., No. 17-cv-5103 (DWF/ECW).

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the District of Minnesota, the Office of Inspector General of the U.S. Department of Health and Human Services, the Defense Health Agency, the U.S. Department of Veterans Affairs, the Office of the Minnesota Attorney General, and the Minnesota Department of Human Services.

Acting U.S. Attorney W. Anders Folk of the District of Minnesota made the announcement.

Assistant U.S. Attorney Ann M. Bildtsen handled the matter.

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A New York physician was charged in an indictment unsealed today in the Eastern District of New York for an alleged $10 million health care fraud scheme involving the submission of false and fraudulent claims to Medicare and Medicare Part D plans.

According to court documents, Elemer Raffai, 56, of Rome, between approximately July 2016 and June 2017, allegedly signed prescriptions and order forms via purported telemedicine services for durable medical equipment (DME) that were not medically necessary. Raffai caused these claims to be submitted based solely on a short telephone conversation for beneficiaries he did not physically examine and evaluate and that were induced, in part, by the payments of bribes and kickbacks to Raffai. The indictment further alleges that Raffai, with others, submitted or caused the submission of approximately $10 million in false and fraudulent claims to Medicare for DME, and Medicare paid more than $4 million on those claims.

Raffai is charged with health care fraud. He was arrested and is making his initial court appearance today in the U.S. District Court for the Northern District of New York. If convicted, Raffai faces a maximum total 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; U.S. Attorney Breon Peace for the Eastern District of New York; Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge Janeen DiGuiseppi of the FBI’s Albany Field Office made the announcement.

HHS-OIG and the FBI investigated the case.

Trial Attorneys Kelly M. Lyons and Andrew Estes of the Criminal Division’s Fraud Section prosecuted the case.

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

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A New York physician was charged in an indictment unsealed today in the Eastern District of New York for an alleged $10 million health care fraud scheme involving the submission of false and fraudulent claims to Medicare and Medicare Part D plans.

According to court documents, Elemer Raffai, 56, of Rome, between approximately July 2016 and June 2017, allegedly signed prescriptions and order forms via purported telemedicine services for durable medical equipment (DME) that were not medically necessary. Raffai caused these claims to be submitted based solely on a short telephone conversation for beneficiaries he did not physically examine and evaluate and that were induced, in part, by the payments of bribes and kickbacks to Raffai. The indictment further alleges that Raffai, with others, submitted or caused the submission of approximately $10 million in false and fraudulent claims to Medicare for DME, and Medicare paid more than $4 million on those claims.

Raffai is charged with health care fraud. He was arrested and is making his initial court appearance today in the U.S. District Court for the Northern District of New York. If convicted, Raffai faces a maximum total 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; U.S. Attorney Breon Peace for the Eastern District of New York; Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge Janeen DiGuiseppi of the FBI’s Albany Field Office made the announcement.

HHS-OIG and the FBI investigated the case.

Trial Attorneys Kelly M. Lyons and Andrew Estes of the Criminal Division’s Fraud Section prosecuted the case.

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

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Physician Partners of America LLC (PPOA), headquartered in Tampa, Florida, its founder, Rodolfo Gari, and its former chief medical officer, Dr. Abraham Rivera, have agreed to pay $24.5 million to resolve allegations that they violated the False Claims Act by billing federal healthcare programs for unnecessary medical testing and services, paying unlawful remuneration to its physician employees and making a false statement in connection with a loan obtained through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). Certain PPOA affiliated entities are jointly and severally liable for the settlement amount, including the Florida Pain Relief Group, the Texas Pain Relief Group, Physician Partners of America CRNA Holdings LLC, Medical Tox Labs LLC and Medical DNA Labs LLC.

The United States alleged that PPOA caused the submission of claims for medically unnecessary urine drug testing (UDT), by requiring its physician employees to order multiple tests at the same time without determining whether any testing was reasonable and necessary, or even reviewing the results of initial testing (presumptive UDT) to determine whether additional testing (definitive UDT) was warranted. PPOA’s affiliated toxicology lab then billed federal healthcare programs for the highest-level UDT. In addition, PPOA incentivized its physician employees to order presumptive UDT by paying them 40% of the profits from such testing in violation of the Stark Law, which prohibits physicians from referring patients to receive “designated health services” payable to Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.

The United States further alleged that PPOA required patients to submit to genetic and psychological testing before the patients were seen by physicians, without making any determination as to whether the testing was reasonable and necessary, and then billed federal healthcare programs for the tests.

The United States further alleged that when Florida suspended all non-emergency medical procedures to reduce transmission of COVID-19 in March 2020, PPOA sought to compensate for lost revenue by requiring its physician employees to schedule unnecessary evaluation and management (E/M) appointments with patients every 14 days, instead of every month as had been PPOA’s prior practice. PPOA then instructed its physicians to bill these E/M visits using inappropriate high-level procedure codes. Moreover, the United States alleged that at the same time PPOA was engaged in this unlawful overbilling, PPOA falsely represented to the SBA that it was not engaged in unlawful activity in order to obtain a $5.9 million loan through the PPP. The settlement announced today resolves liability under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) arising from the false claims submitted to federal healthcare programs for the E/M visits as well for PPOA’s false statement in connection with its PPP loan.

“Billing federal healthcare programs for services that providers know are unnecessary or unreasonable undermines the quality of care that patients receive and increases the costs of these taxpayer-funded programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to ensuring that healthcare providers base their treatment decisions on their patients’ needs rather than their own financial interests.”

“Holding healthcare providers accountable for inflated claims and false statements helps ensure the integrity of the healthcare system as a whole,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “Settlements like this one are an important step in that direction.”

“Since the beginning of the pandemic, the SBA has been focused on providing relief swiftly, equitably and efficiently to millions of struggling small business owners – ensuring that relief has been distributed with the utmost integrity has been central to that mission under Administrator Guzman,” said General Counsel Peggy Delinois Hamilton for the SBA. “The SBA takes fraud seriously and will continue to make it our priority to work alongside the Office of the Inspector General to identify and address any potential fraud to ensure sound administration of relief programs.”

In connection with the settlement, PPOA also entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). Under the CIA, PPOA agreed to undertake significant compliance efforts, including: maintain a compliance department, medical director and oversight board; retain a compliance expert; provide management certifications; maintain written standards, training and education; obtain multiple annual claims reviews by an Independent Review Organization; establish a risk assessment and internal review process; and implement monitoring of testing referrals.

“When health care providers bill taxpayer-funded health care programs for medically unnecessary services, they divert government funds designed to assist business owners during this pandemic,” said Special Agent in Charge Omar Pérez Aybar of HHS-OIG. “Our agency will work with our law enforcement partners to thoroughly investigate health care fraud schemes.”

“This settlement allows OWCP to recover medical bill payments under the Federal Employees’ Compensation Act and return those funds to the Employees’ Compensation Fund,” said Director Christopher Godfrey of the Department of Labor (DOL) Office of Workers’ Compensation Programs (OWCP). “The Department of Labor’s Office of Inspector General, as well as various other agencies’ offices of inspector general (OIG), devote significant investigative resources to detecting cases of possible abuse within the FECA program, and this settlement demonstrates the commitment of the DOL and its OIG in helping to ensure that funds issued through the program are paid appropriately.”

“When actors within our health care system are focused on profit rather than patient care, it undermines the integrity of the medical decision-making process,” said Special Agent in Charge Cynthia A. Bruce of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS will continue to work with our investigative partners to protect the funding entrusted to the Defense Health Agency that serves our military members and their families.”

“Veterans Affairs' Community Care programs provide veterans and their families the ability to obtain critical healthcare services from providers within their own communities,” said Special Agent in Charge David Spilker of the Department of Veterans Affairs Office of Inspector General’s (VA OIG) Southeast Field Office. “This civil settlement reinforces the VA OIG’s commitment to safeguarding the integrity of VA’s healthcare programs and operations and preserving taxpayer funds.”

“When providers submit false claims for medically unnecessary tests, they are not only violating their patients’ trust but also compromising the integrity of the Federal Employees Health Benefits Program (FEHBP),” said Special Agent in Charge Amy K. Parker of the U.S. Office of Personnel Management, Office of the Inspector General (OPM OIG). “This settlement demonstrates the OPM OIG’s commitment to protecting patients from tests that are not medically reasonable or necessary and safeguarding the FEHBP from fraudulent claims.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Donald Haight, Dawn Baker, Dr. Harold Cho, Dr. Venus Dookwah-Roberts and Dr. Michael Lupi, who are current or former employees of PPOA or its affiliated entities. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam cases are captioned United States ex rel. Haight v. Physician Partners of Am.; United States ex rel. Baker v. Physician Partners of Am LLC; United States ex rel. Lupi v. Physician Partners of Am. LLC; and United States ex rel. Dookwah-Roberts v. Physician Partners of Am. LLC.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; the U.S. Attorney’s Office for the Middle District of Florida; HHS-OIG; VA OIG; DCIS; DOL OIG; and OPM OIG.

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

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 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. Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also 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.

The matter was handled by Senior Trial Counsel David W. Tyler of the Civil Division and Assistant U.S. Attorney Lindsay Saxe Griffin for the Middle District of Florida.

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HOUSTON – A doctor of osteopathic medicine from Bellaire has paid to resolve allegations he falsely certified patients for home health services and received improper payments, announced Acting U.S. Attorney Jennifer B. Lowery.

Truc Le, 51, is a primary care physician in southwest Houston.

In 2016, authorities began an investigation into a home health agency known as Unified Medical Group Inc. That investigation appeared to show Le had certified patients for home health services without any knowledge of the patients’ medical condition or homebound status. Instead, Le signed forms that Unified representatives provided to him on a regular basis.   

In addition, Unified sent improper payments to Le in violation of the Anti-Kickback Statute. It prohibits offering or paying remuneration to induce the referral of items or services that Medicare, Medicaid and other federally-funded programs cover. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.

“Medical professionals put the integrity of our federal health care programs at risk when they just rubber-stamp forms,” said Lowery. “It is made worse when improper payments are the source of their motivation. With the investigative assistance of our federal and state partners, we will continue to do what we can to protect our nation’s systems and the citizens they are designed to serve.

Le has agreed to pay $475,000 to resolve the allegations.

The Department of Health and Human Services - Office of Inspector General, FBI and Texas Medicaid Fraud Control Unit conducted the investigation.

Assistant U.S. Attorneys Melissa Green, Brad Gray and Andrew Bobb handled the matter on behalf of the United States.

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A California man pleaded guilty today to conspiracy to commit health care fraud.

According to court documents, Keyvan Amirikhorheh, M.D, 61, of Seal Beach, worked as a physician at Los Angeles Community Clinic. Together with his co-defendants, Amirikhorheh defrauded the Family Planning, Access, Care and Treatment (Family PACT) program administered by Medi-Cal, the California Medicaid program, by submitting and causing the submission of fraudulent claims for family planning services, diagnostic testing, and prescriptions for non-existent patients.

Amirikhorheh is the final defendant to plead guilty. Hilda Haroutunian, 61, of Sun Valley, California pleaded guilty on Sept. 25, 2020, and is scheduled to be sentenced on Dec. 17; Lorraine Watson, 57, a physician’s assistant, of Valley Village, California, pleaded guilty on Oct. 9, 2020, and is scheduled to be sentenced on Sept. 10; Edmond Sarkisyan, 41, of North Hollywood, California, pleaded guilty on Jan. 29, and is scheduled to be sentenced on July 16; and Noem Sarkisyan, 65, of North Hollywood, California, pleaded guilty on March 5, 2020, and is scheduled to be sentenced on Sept. 3.

As alleged in court documents, between approximately March 2016 and April 2019, Los Angeles Community Clinic and associated laboratories and pharmacies submitted approximately $8,406,204 in claims to Medi-Cal and were paid approximately $6,660,028 as the result of this fraudulent scheme.

Amirikhorheh pleaded guilty to conspiracy to commit health care fraud. He is scheduled to be sentenced on Oct. 1, 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.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Tracy L. Wilkison of the Central District of California; Assistant Director in Charge Kristi Koons Johnson of the FBI’s Los Angeles Field Office; Special Agent in Charge Timothy DeFrancesca of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Regional Office; and Special Agent in Charge Kris Lyle of the California Department of Justice made the announcement.

The FBI, Department of Health and Human Services-Office of Inspector General, and California Department of Justice are investigating the case, which was charged as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Trial Attorneys Alexis Gregorian and Claire Yan of the Criminal Division’s Fraud Section are prosecuting the case.

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

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PITTSBURGH, Pa. – A resident of Pittsburgh, Pennsylvania, was sentenced in federal court for conspiracy to defraud the Pennsylvania Medicaid program, health care fraud, and aggravated identity theft, United States Attorney Cindy K. Chung announced today.

United States District Judge Cathy Bissoon sentenced Tamika Adams, 45, to sixty-five months of imprisonment, followed by two years of supervised release, for her role in a years-long conspiracy. Adams was also ordered to pay restitution to the Pennsylvania Medicaid program in the amount of $445,131.67.

During her plea hearing on March 13, 2020, Adams admitted that at various times between 2011 and 2014 she was an employee of three related entities operating in the home health care industry—Moriarty Consultants, Inc. (MCI), Activity Daily Living Services, Inc. (ADL), and Everyday People Staffing, Inc. (EPS). MCI, ADL, and a fourth entity, Coordination Care, Inc. (CCI), were approved under the Pennsylvania Medicaid program to offer certain services to qualifying Medicaid recipients (“consumers”), including personal assistance services (PAS), service coordination, and non-medical transportation, among other services. EPS nominally performed back-office functions for MCI, ADL, and CCI.

Between January 2011 and the defendant’s departure from the entities in and around 2014, MCI, ADL, and CCI collectively received tens of millions of dollars in Medicaid payments based on claims submitted for home health services, with PAS payments accounting for the vast majority of the total amount. During that time, Adams admitted that she participated in a wide-ranging conspiracy to defraud the Pennsylvania Medicaid program for the purpose of obtaining millions of dollars in illegal Medicaid payments through the submission of fraudulent claims for services that were never provided to the consumers identified on the claims, or for which there was insufficient or fabricated documentation to support the claims.

As part of the conspiracy, Adams admitted that she fabricated timesheets to reflect the provision of in-home PAS care that, in fact, she never provided to the consumer identified on the timesheets. In one instance, Adams admitted submitting false timesheets claiming that she provided more than 80 hours of care in a single week to a consumer, while also working full-time as the nominal president of ADL. During a two-year period in which the same consumer lived with Adams, the defendant admitted taking steps to conceal their co-habitation and the fact that she served as the consumer’s power of attorney (both disqualifying circumstances) from the Medicaid program.

Likewise, Adams admitted that she paid kickbacks to at least one consumer—her spouse at the time—in exchange for his participation in the scheme. Specifically, Adams admitted that she and her father, co-defendant Tony Brown, used Brown’s name on time sheets for fabricated care of Adams’s then-spouse. At various times, Adams admitted that she, Tony Brown, and her spouse would meet at an MCI office on the day that Brown received payment for the fraudulent care so that the three individuals could divide the proceeds. In total, Adams acknowledged causing losses to the Pennsylvania Medicaid program in excess of $250,000 related to her spouse.

Adams also admitted that during the conspiracy, she caused the submission of Medicaid claims for PAS care that her friend, an MCI employee, purportedly provided to various consumers, without the friend’s knowledge and when in fact no such care had been provided to the consumers. During this time, Adams admitted that her friend was recovering from a serious injury and unable to work. Adams further misused her friend’s personally identifiable information to obtain and misappropriate the resulting salary payments. Finally, Adams admitted that during the course of audits of MCI, ADL, and CCI, she fabricated documentation for submission to state authorities in an effort to conceal the Medicaid fraud scheme. Among other things, Adams fabricated PAS timesheets, criminal history checks for attendants, child-abuse clearance forms for attendants, and certain consumer affidavits to ensure that files requested as part of the audits appeared complete.

To date, a total of sixteen defendants have been charged in connection with this investigation. Adams was the twelfth defendant to enter a guilty plea. The remaining defendants, including Tony Brown, are presumed innocent unless and until proven guilty.

Assistant United States Attorney Eric G. Olshan and Special Assistant United States Attorney Edward Song are prosecuting this case on behalf of the government. The Federal Bureau of Investigation, Pennsylvania Office of the Attorney General – Medicaid Fraud Control Unit, Internal Revenue Service – Criminal Investigation, U.S. Department of Health and Human Services – Office of Inspector General, and United States Postal Inspection Service conducted the investigation.

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Acting U.S. Attorney Bridget M. Brennan announced that a federal jury found William R. Bauer, 84, of Port Clinton, Ohio, guilty of prescribing powerful controlled substances, including opioids, to patients without medical necessity and outside the usual course of medical practice.

Following a two-week trial, Bauer was convicted on Wednesday, July 21, 2021, of 76 counts of distribution of controlled substances and 25 counts of health care fraud. Bauer was initially indicted in August of 2019, and a superseding indictment was filed in October of 2019. The indictment was amended again in June of 2021.

Evidence presented at trial established that between 2015 and 2019, Bauer, at his practice in Bellevue, Ohio, repeatedly prescribed controlled substances including Oxycodone, Fentanyl, Morphine, and Tramadol, outside the usual course of professional practice and not for a legitimate medical purpose. The indictment focused on Bauer’s treatment of 14 patients. The evidence presented at trial showed that Bauer prescribed high doses of opioids and other controlled substances to patients without regard to any improvement in pain level, function, or quality of life; prescribed dangerous drug combinations; failed to consider a patient’s state of addiction and ignored warning signs of abuse and diversion such as patient family members stealing medications, patients frequently requesting early refills, patients losing medications and other actions.

Bauer was also convicted of health care fraud. Evidence introduced at trial established that Bauer regularly administered epidural injections and trigger point injections, without medical necessity, that failed to meet certain procedural requirements. Because these injections failed to meet the procedural requirements, they were rendered ineffective and were fraudulently billed to insurers. Evidence at trial also showed that between January 2007 and August 16, 2019, Bauer prescribed controlled substances outside the usual course of medical practice and not for a legitimate medical purpose, thus resulting in insurers paying for medically unnecessary controlled substances.

Sentencing will be determined at a later date.

This case was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Department of Health and Human Services – Office of Inspector General and the Ohio Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorneys Ava R. Dustin, Michael A. Sullivan, Robert N. Melching and Payum Doroodian.

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Acting U.S. Attorney Michelle M. Baeppler announced that William Bauer, 85, of Port Clinton, Ohio, was sentenced today by U.S. District Judge Jack Zouhary to 5 years in prison and was ordered to pay $464,099.14 in restitution, of which $253,300.55 will be paid to Medicare and $210,798.59 to Medicaid. In addition, Judge Zouhary ordered Bauer to pay $100,000 in community restitution. The community restitution will be distributed 65% to the Ohio Attorney General, Crime Victim Services Section, and 35% to the Ohio Department of Mental Health & Addiction Services. The Court strongly recommended that the community restitution amount go to the Mental Health and Recovery Services Board of Seneca, Ottawa, Sandusky and Wyandot Counties.

Judge Zouhary pronounced the sentence after Bauer was convicted at trial of 76 counts of distribution of controlled substances and 25 counts of health care fraud.

“This defendant unnecessarily distributed dangerous and highly addictive controlled substances and repeatedly ignored warning signs that his actions were causing detrimental harm to his patients and the community,” said Acting U.S. Attorney Michelle M. Baeppler. “No matter your title, those who flood the streets with dangerous drugs and prey upon vulnerable individuals will answer for their actions.”

“Criminal misconduct within the healthcare system is harmful and destructive,” said FBI Special Agent in Charge Eric B. Smith. “Not only does healthcare fraud impact insurers through monetary loss, but also to physicians, hospitals, and taxpayers who were unwitting participants to the deceitful actions. We will continue to work diligently to uncover fraudulent schemes that risk public health.”

“The sentencing of William Bauer demonstrates our commitment to stopping those who fuel the opioid epidemic,” said Kent R. Kleinschmidt, Acting Special Agent in Charge of the U.S. Drug Enforcement Administration’s Detroit Field Division. “Medical professionals who disregard their oath and instead seek to profit at the expense of their patients and community will be brought to justice.”

According to court documents and evidence presented at trial, between 2007 and 2019, Bauer, at his practice in Bellevue, Ohio, repeatedly prescribed medically unnecessary controlled substances, including Oxycodone, Fentanyl, Morphine and Tramadol, outside the usual course of professional practice and not for a legitimate medical purpose.

During the trial, prosecutors showed that Bauer prescribed high doses of opioids and other controlled substances to patients without regard to any improvement in pain level, function, or quality of life; prescribed dangerous drug combinations; failed to consider a patient’s state of addiction and ignored warning signs of abuse and diversion such as patients’ stealing medications, frequently requesting early refills, losing medications and other actions.

The case focused on Bauer’s treatment of 14 patients. Throughout the trial, prosecutors showed that these patients suffered a loss of employment, fractured families and experienced deteriorating mental health conditions as a result of their drug dependency. In one instance, court documents state that in 2015 a patient of Dr. Bauer died from an accidental overdose.

In addition to his conviction for distributing controlled substances, Bauer was also convicted of health care fraud. As part of the health care fraud scheme, Bauer billed insurers after prescribing medically unnecessary controlled substances and administered needless epidural and trigger point injections that failed to meet certain procedural requirements. Because these injections failed to meet the procedural requirements, they were rendered ineffective and fraudulently billed to insurers.

“This doctor contributed to the tidal wave of opioid overdoses that flooded our communities,” Ohio Attorney General Dave Yost said. “I am proud of the state and federal partnerships that continue to work to stem the tide of addiction.”

“Providers sow distrust in our nation’s health care system when they participate in health care fraud and activities that endanger their patients,” said Mario M. Pinto, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General. “Along with our law enforcement partners, HHS-OIG will continue to hold accountable those who threaten the safety of beneficiaries through overprescribing and engaging in health care fraud.”

Court documents state that the total loss amount to Medicare and Medicaid due to the fraudulent billing practices was $464,099.14.

This case was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Department of Health and Human Services – Office of Inspector General and the Ohio Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorneys Ava R. Dustin, Michael A. Sullivan, Robert N. Melching and Payum Doroodian.

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NEWPORT NEWS, Va. – A Portsmouth woman pleaded guilty today to wire fraud and aggravated identity theft in connection with a scheme to defraud Veterans.

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

According to court documents, Rita Copeland, 59, operated an entity known as “Veteran Services of the Commonwealth.” Copeland purported to provide caregiving, contracting, and rental assistance services to various Veterans from 2016 through 2020. Copeland caused a number of victims to apply for Home Improvements and Structural Alterations (HISA) grants through the U.S. Department of Veterans Affairs. Such grant payments are to be used for certain designated improvements to the residences of Veterans. Copeland failed to perform all of the promised work and used a portion of these payments to her own benefit, contrary to the designated purposes of the funds.

Copeland also diverted the income and retirement fund payments of another Veteran to a bank account that she had opened. In addition, Copeland fraudulently obtained and diverted loan funds and used the credit and debit cards of this elderly victim. Finally, Copeland engaged in a rental fraud scheme, purporting to link Veterans and others with landlords, but then diverting rental and security deposit payments to her own benefit.

Copeland pleaded guilty to one count of wire fraud and one count of aggravated identity theft, and she is scheduled to be sentenced on August 27. She faces a maximum penalty of 20 years for wire fraud and a mandatory consecutive term of two years for aggravated identity theft. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office; and Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs, made the announcement after Senior U.S. District Judge Henry E. Hudson accepted the plea.

Assistant U.S. Attorney Brian Samuels is prosecuting the case.

This case is being investigated by the FBI’s Norfolk Division’s Peninsula Resident Agency.

Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. Elder abuse is an intentional or negligent act by any person that causes harm or a serious risk of harm to an older adult. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, psychological abuse, and sexual abuse. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with our federal, state, local, and tribal partners, the Department of Justice is steadfastly committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:20-cr-63.

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NEWPORT NEWS, Va. – A Portsmouth woman was sentenced today to 9.5 years in prison for wire fraud and aggravated identity theft in connection with a scheme to defraud Veterans.

“What is most egregious about the defendant’s conduct is that she used her own status as a former Veteran to defraud and take advantage of other Veterans,” said Raj Parekh, Acting U.S. Attorney in the Eastern District of Virginia. “The sentence imposed in this case reflects the serious nature of these fraud schemes and the potential consequences that those who victimize Veterans, who have sacrificed so much for our country, could face in the Eastern District of Virginia.”

According to court documents, Rita Copeland, 59, operated an entity known as “Veteran Services of the Commonwealth.” From 2016 through 2020, Copeland purported to provide caregiving, contracting, and rental assistance services to various Veterans. Copeland caused a number of victims to apply for Home Improvements and Structural Alterations (HISA) grants through the U.S. Department of Veterans Affairs. Such grant payments are to be used for certain designated improvements to the residences of Veterans. Copeland failed to perform all of the promised work and used a portion of these payments to her own benefit, contrary to the designated purposes of the funds.

Copeland also diverted the income and retirement fund payments of another Veteran to a bank account that she had opened. In addition, Copeland fraudulently obtained and diverted loan funds and used the credit and debit cards of this elderly victim. Finally, Copeland engaged in a rental fraud scheme, purporting to link Veterans and others with landlords, but then diverted rental and security deposit payments to her own benefit. In total, from at least 2017-2020, Copeland’s fraud schemes impacted at least 29 victims, resulting in a combined loss of approximately $430,000.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office; and Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs, made the announcement after sentencing by Senior U.S. District Judge Henry E. Hudson.

Assistant U.S. Attorney Brian Samuels prosecuted the case.

Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. Elder abuse is an intentional or negligent act by any person that causes harm or a serious risk of harm to an older adult. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, psychological abuse, and sexual abuse. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with our federal, state, local, and tribal partners, the Department of Justice is steadfastly committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:20-cr-63.

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Defendant Used Proceeds of Schemes to Purchase Luxury Items, Including a Porsche and Jewelry

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, Aleah Mohammed pleaded guilty before United States District Judge Eric N. Vitaliano to mail fraud, health care fraud, and conspiracy to commit health care fraud stemming from multiple schemes to defraud health care programs, including obtaining more than $6.5 million from Medicare Part D Plans and Medicaid drug plans. When sentenced, the defendant faces up to 40 years’ imprisonment. As part of her plea agreement, Mohammed has agreed to forfeit $5.1 million and pay over $6.5 million in restitution.

Mark. J. Lesko, Acting United States Attorney for the Eastern District of New York; Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); announced the guilty plea.

“With today’s guilty plea, Mohammed is held accountable for stealing millions of dollars from the taxpayer-funded Medicare and Medicaid programs to line her own pockets,” stated Acting U.S. Attorney Lesko. “This Office and our law enforcement partners are committed to safeguarding these vital health care programs and recovering ill-gotten proceeds from corrupt healthcare operators.”

“In attempting to finance a lavish lifestyle, Mohammed stole millions of dollars intended to provide medical and health services to the elder population, individuals with disabilities, and other HHS beneficiaries,” stated HHS-OIG Special Agent-in-Charge Lampert. “HHS-OIG, in collaboration with our law enforcement partners, is boldly committed to investigating illegal acts that target Federal health care programs and bringing the fraudsters to justice.”

According to court filings, Mohammed, 36, of Queens, New York, was an owner and operator of Superdrugs Inc., Superdrugs I Inc., Superdrugs II Inc., S&A Superdrugs II Inc. and Village Stardrugs Inc. From approximately May 2015 to January 2018 and December 2018 to March 2020, Mohammed submitted fraudulent claims to Medicare and Medicaid, for reimbursement for prescription drugs that were not dispensed, prescribed as claimed, or medically necessary, or that were purportedly dispensed during a time when Village Stardrugs was no longer registered with the State of New York. The fraudulent claims included claims for prescription drugs for the treatment of the human immunodeficiency virus (HIV). Mohammed used the proceeds of the scheme, among other things, to purchase luxury items such a Porsche and jewelry.

The FBI and HHS-OIG are investigating the case, which was brought as part of the Medicare Fraud Strike Force under the supervision by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. Trial Attorney Andrew Estes of the Fraud Section is in charge of the prosecution.

The Defendant:

ALEAH MOHAMMED

Age: 36

Queens, New York

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Defendant Falsely Claimed He Was a Pharmacist and Distributed Over 10,000 Oxycodone Pills

Earlier today, in federal court in Brooklyn, Harris Hussnain, the owner of a pharmacy in Queens, was sentenced by United States District Court Judge Rachel P. Kovner to 36 months in prison for his participation in a health care fraud conspiracy, distribution of Oxycodone and illegal financial transactions. Hussnain pleaded guilty to the charges in September 2020.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; Scott Lampert, Special Agent-in- Charge, U.S. Department of Health and Human Services - Office of Inspector General, Office of Investigations, New York Regional Office (HHS-OIG); Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); Frank Walsh, Acting Medicaid Inspector General, New York State Office of the Medicaid Inspector General (OMIG); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the sentence.

“Hussnain masqueraded as a health care professional when, in reality, he is a drug-dealing criminal who abused the trust of the Medicare and Medicaid systems, put New Moon Pharmacy’s customers in harm’s way and introduced thousands of Oxycodone pills into the community during an opioid epidemic,” stated Acting United States Attorney Lesko. “With today’s sentence, the defendant has been held accountable for his flagrant falsehoods and fraud.”

“Hussnain brazenly deceived the pharmacy’s customers and threatened their safety in exchange for profit,” stated HHS-OIG Special Agent-in-Charge Lampert. “After inappropriately and dangerously dispensing opioid pills and stealing from Medicare and Medicaid, Hussnain has been brought to justice. OIG continues to work with our law enforcement partners to pursue individuals who endanger beneficiaries and cheat the Federal health care programs on which they depend.”

“The defendant’s past transgressions speak for themselves. What a shame that a pharmacy owner who had the means and the opportunity to serve his community, did quite the opposite all in the name of greed,” stated DEA Special Agent-in-Charge Donovan. “Together with our incredible law enforcement partners, DEA stands committed to protecting our healthcare system from fraud, all while keeping our communities safe. I commend and appreciate all of our partners, as well as our colleagues at the United States Attorney’s Office for their hard work on this investigation.”

“Hussnain has been appropriately punished for his shameful actions and behavior,” stated IRS CI Special Agent-in-Charge Larsen. “His criminal activity not only negatively impacted the finances of our social safety net, but more importantly the lives of those who potentially suffer from addiction.”

“Today’s sentencing is proof positive of the effectiveness of the strong partnerships that exist among city, state, and federal program integrity agencies and law enforcement organizations in combatting those that have fueled the opioid crisis in our communities. The message is abundantly clear to anyone who seeks to line their pockets by exploiting the Medicaid program, particularly at these challenging times: you will be caught and held accountable to the fullest extent of the law,” stated Acting Medicaid Inspector General Walsh.

Between July 2016 and December 2019, Hussnain falsely claimed to be the pharmacist at New Moon Pharmacy in South Richmond Hill. Although Hussnain lawfully owned the business, he was not a licensed pharmacist and was not permitted to dispense prescription medications to patients. Hussnain operated the pharmacy on a daily basis, dispensing prescription medications for years with no medical oversight, including controlled substances and over 10,000 Oxycodone pills, billing Medicare and Medicaid for the medications dispensed. Hussnain paid a co-conspirator, Nisha Diler, a licensed pharmacist, to hold herself out as the full-time pharmacist despite the fact that she visited the pharmacy only sporadically. Hussnain filed, and caused Diler to file, falsified paperwork with government entities in New York State in order to cover up Diler’s absences from New Moon Pharmacy. Between 2016 and 2019, Medicare and Medicaid reimbursed New Moon Pharmacy approximately $3 million for pharmaceutical claims. Hussnain transferred significant amounts of the reimbursed funds to accounts in his and his family’s names. In September 2020, Diler pleaded guilty to conspiring to defraud Medicare and Medicaid and subscribing a false tax return.

The case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Department of Justice Criminal Division’s Fraud Section and the United States Attorney’s Office for the Eastern District of New York. The case is being prosecuted by United States Department of Justice Trial Attorney Miriam L. Glaser Dauermann and Assistant U.S. Attorney Tanisha R. Payne of the Office’s Asset Forfeiture Unit.

The Defendant:

HARRIS HUSSNAIN

Age: 41

Queens, New York

E.D.N.Y. Docket No. 20-CR-280 (RPK)

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Defendant’s husband also pled guilty in January for his role in the conspiracy to fake her death at the New River Gorge

CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Julie M. Wheeler received a sentence of 12 months and one day for her role in a federal conspiracy to obstruct justice. Wheeler’s sentence was ordered to be served consecutively to her 42 month sentence previously imposed for her federal health care fraud conviction. The consecutive sentence increases Julie Wheeler’s total sentence of incarceration to 54 months of federal incarceration. In a separate criminal hearing last month, Rodney Wheeler pled guilty to the federal felony offense of conspiracy to obstruct justice. Rodney Wheeler faces up to five years of incarceration, a $250,000 fine, and three years of supervised release when he is sentenced on April 5, 2021.

“Julie Wheeler faked a traumatic death to avoid her judgment day with the courts. While she was found hiding in a closet she was also hiding from justice. The scheme put many lives at risk and wasted valuable resources,” said United States Attorney Mike Stuart. “By conspiring to avoid her federal sentence for health care fraud, she, with the aid of her husband, only made matters worse. Julie added another year to her sentence and Rodney now has a federal felony conviction for which he will soon be sentenced.”

In a case that garnered national media attention, Rodney and Julie Wheeler conspired to fake her death at the New River Gorge to avoid her federal court sentencing for health care fraud. To fake her death, Rodney Wheeler and another family member placed a 911 call on May 31, 2020, claiming Julie Wheeler had fallen from the Grandview Overlook in the New River Gorge in West Virginia. The overlook is a steep cliff with a series of ledges leading down to the New River. This 911 call prompted a massive search and rescue operation with hundreds of volunteers, law enforcement, and professional search and rescue personnel looking for Julie Wheeler at the base of the overlook and the surrounding area. Helicopters, rescue dogs, and repelling experts also scoured the area looking for her. Additional false statements were given to state and federal investigators by Rodney Wheeler as part of the conspiracy, including statements to National Park Service officers and the United States Probation Office. The purpose of these statements was to continue the Wheelers’ ruse that she had fallen and was missing. In reality, she was hiding in her own home and planning to go into permanent hiding with her husband.

After two days of searching, the West Virginia State Police located Julie Wheeler hiding in a closet inside her home. Once removed from her closet, Rodney and Julie Wheeler were both taken into custody. In statements to state and federal investigators, Rodney Wheeler and Julie Wheeler admitted they conspired to fake her disappearance to avoid Julie Wheeler’s pending federal sentencing in a health care fraud case.

Instead of avoiding her federal sentencing hearing for health care fraud, Julie Wheeler was incarcerated and subsequently sentenced on June 30, 2020, to 42 months in prison and three years of supervised release for health care fraud relating to her overbilling a VA program for spina bifida care. She was also ordered to pay restitution in the amount of $289,055.07 for the overbilling scheme. The Federal Bureau of Investigation (FBI) and the Veterans Affairs - Office of Inspector General (VA-OIG), the Office of Veterans Affairs (VA), and the United States Department of Health and Human Services - Office of Inspector General (HHS-OIG) conducted the investigation of the underlying health care fraud.

The National Park Service and the West Virginia State Police conducted the criminal investigation concerning the conspiracy to obstruct justice. The United States Probation Office in the Southern District of West Virginia also conducted an independent investigation of Julie Wheeler’s disappearance and conduct related to the obstruction. The Raleigh County Prosecuting Attorney’s Office also assisted with the investigation and the Wheelers are both presently charged with numerous felony and misdemeanor offenses in Raleigh County Circuit and Magistrate Courts relating to the false reporting of an emergency.

Senior United States District Judge John T. Copenhaver, Jr. presided over the plea and sentencing hearings. Assistant United States Attorney Erik S. Goes is handling the prosecutions.

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

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PROVIDENCE, R.I. – A Warwick woman who is alleged to have (1) fraudulently claimed to be a wounded United States Marine Corps (USMC) veteran and recipient of a Purple Heart and Bronze Star, and (2) schemed to collect hundreds of thousands of dollars in veteran benefits and charitable contributions, was arrested today by federal agents and made her initial appearance in federal court in Providence, announced United States Attorney Zachary A. Cunha.

Sarah Jane Cavanaugh, 31, is charged by way of a federal criminal complaint with using forged or counterfeited military discharge certificates, wire fraud, fraudulently holding herself out to be a medal recipient with intent to obtain money, property, or other tangible benefit, and aggravated identity theft.

Charging documents allege the following:

• Cavanaugh used the personal identifying information of an actual Marine, and falsely claimed that she served in the USMC from 2009-2016; was honorably discharged; achieved the rank of Corporal; and was wounded in action in Iraq/Afghanistan.
• Cavanaugh used an official Veterans Administration (VA) email account, which was issued to her as a VA employee, to purchase and later display on a Marine uniform a Purple Heart and Bronze Star. She had not been awarded either award. In fact, a search of the Defense Personnel Records Information Retrieval System, a database containing military-service records, provided no records or information pertaining to Cavanaugh.

         It is further alleged that Cavanaugh:

• Created and submitted falsified military discharge documents, medical diagnosis, and medical bills to “HunterSeven,” an organization that provides monetary aid to veterans in need. Cavanaugh did so to request financial assistance and falsely claim that she was being treated for cancer from exposure to burn pits in Iraq/Afghanistan and inhaling particulate matter in the aftermath of an Improvised Explosive Device.
• Posing as a combat veteran, Cavanaugh contacted “Code of Support,” and collected $18,472 in financial assistance for mortgage payments, repairs to her home furnace, a gym membership, and for other unspecified bills,
• Posing as a combat veteran diagnosed with cancer related to her military service, Cavanaugh collected approximately $4,700 from an internet-based fundraising website,
• Claiming to be a Purple Heart and Bronze Star recipient, Cavanaugh collected approximately $16,000 from a charity that provides therapy for veterans through art programs, and
• Posing as a wounded combat veteran, Cavanaugh collected $207,000 from the Wounded Warrior organization to pay for groceries and physical therapy sessions.

A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.

Cavanaugh was arrested by federal agents on Monday and appeared before U.S. District Court Magistrate Judge Lincoln D. Almond. She was released on $50,000 unsecured bond.

The matter is being prosecuted by Assistant U.S. Attorney Ronald R. Gendron and investigated by the U.S. Department of Veterans Affairs Office of Inspector General, U.S. Department of Veterans Affairs Police Service, and the FBI, with the assistance of the U.S. Defense Criminal Investigative Service, U.S. Naval Criminal Investigative Service, U.S. Postal Inspection Service, and Internal Revenue Service Criminal Investigations.

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Richland, Washington – Judith K. Caporiccio, N.D., a Richland-based naturopathic doctor, has agreed to pay $70,096 to resolve allegations under the Controlled Substances Act and the False Claims Act, which allege that she improperly prescribed controlled substances between July 2016 and July 2021. The Controlled Substances Act regulates certain drugs that pose a risk of abuse and dependence. To protect public safety and prevent misuse and diversion, the Act requires practitioners to register with the Drug Enforcement Administration (“DEA”) to prescribe these controlled substances.

During the relevant time period, Dr. Caporiccio was a naturopathic doctor licensed in the State of Washington and practicing in Richland, Washington. Under state and federal law, as a naturopathic doctor, Dr. Caporiccio was only authorized to prescribe two types of controlled substances: codeine and testosterone products. In the settlement agreement recently reached between the United States and Dr. Caporiccio, she admitted issuing at least 421 prescriptions for controlled substances that she was not authorized to prescribe. These controlled substances included the sleep aid zolpidem (often sold under the brand name Ambien); the anti-anxiety drug alprazolam (sometimes sold under the brand name Xanax); the benzodiazepine lorazepam; the stimulant modafinil (typically prescribed for narcolepsy and sleep apnea); and the sedative pregabalin (sold by Pfizer under the brand name Lyrica).

The settlement agreement also indicates that Dr. Caporiccio ceased her improper prescribing practices in 2021 after being contacted by the DEA, and that she voluntarily surrendered her DEA registration. Additionally, the settlement agreement requires Dr. Caporiccio to implement additional controls and procedures to ensure that this conduct does not recur.

“My office is committed to protecting our community from drug misuse and diversion. I am relieved that it appears no patient was seriously harmed by the medications improperly prescribed by Dr. Caporiccio, but when a healthcare practitioner prescribes controlled substances that she is not licensed or qualified to prescribe, the public is placed at serious risk of potentially dangerous side effects, drug interactions, and contraindications,” said Vanessa R. Waldref, United States Attorney for the Eastern District of Washington. “This resolution demonstrates our commitment to protecting public health, keeping our families safe, and building strong communities. In particular, I commend the excellent investigative work conducted by DEA’s Diversion Group and the Department of Health and Human Services Office of Inspector General. We will continue to work with our law enforcement partners to hold health care practitioners accountable to their patients and the public.”

“Doctor Caporiccio’s careless and irresponsible prescribing habits are a violation of federal law and in serious breach of her naturopathic license, presenting a clear and present danger to our nation’s health and security,” said Frank A. Tarentino III, Special Agent-in Charge of the DEA’s Seattle Field Division. “The DEA is working closely with our federal partners in a joint effort to increase community outreach and education, while simultaneously using our civil and administrative enforcement authorities to hold accountable pharmacies who fail to exercise their corresponding responsibility and prescribers who are writing prescriptions outside their scope of practice. Today’s settlement sends a strong message that we will seek justice and hold those accountable, like Dr. Caporiccio, who intentionally distribute highly addictive drugs to patients with reckless abandon and no concern for their safety.”

The settlement was the result of a joint investigation conducted by DEA’s Seattle Field Office, Diversion Group, the U.S. Department of Health and Human Services, Office of Inspector General, Seattle Field Office, and the U.S. Attorney’s Office for the Eastern District of Washington. Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene handled this matter on behalf of the United States.

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Acting U.S. Attorney Bridget M. Brennan announced that a federal grand jury returned an indictment charging Gregory J. Gerber, 55, of Port Clinton, Ohio, with 51 counts of distribution of controlled substances and two counts of health care fraud. According to the indictment, the Defendant was a licensed medical physician practicing in Sandusky, Ohio, specializing in physical medicine and rehabilitation and anesthesiology with a sub-specialty in pain medicine.

“The Northern District of Ohio, like many districts throughout the country, continues to combat a staggering opioid crisis," said Acting U.S. Attorney Bridget M. Brennan. “A common theme in this crisis is that many who now struggle with opioid use disorder do so because of a physician who unlawfully prescribed medically unnecessary opioid prescriptions or, in some cases, over-prescribed in a medically unnecessary way. Physicians alleged to have engaged in such conduct will be held accountable."

"Healthcare fraud impacts the cost of medical care and more importantly, puts patients at risk," said FBI Special Agent in Charge Eric B. Smith. " Dr. Gerber allegedly abused his oath by prescribing unnecessary medications, causing harm to his patients, and over billed medical visits.   "Dr. Gerber is accused of contributing to the growing opioid epidemic thru his dangerous, criminal behavior and will now be held accountable.

“Issuing prescriptions outside the usual course of professional practice and not for a legitimate medical purpose only aggravates the ongoing opioid epidemic,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “Medical professionals are relied upon to perform appropriate physical exams, establish evidence-based, objective diagnoses, and prescribe medications only in a manner that will aid their patients. The OIG continues to investigate instances of alleged improper prescribing that potentially harms patients and wastes vital taxpayer dollars.”

“More Ohioans are dying from opioid overdoses than at any point in this devastating epidemic and this doctor helped put us here one prescription at a time,” Ohio Attorney General Dave Yost said. “Ending this scheme was vital to an area that has been devastated by the opioid crisis.”

The indictment states that the Defendant repeatedly prescribed controlled substances outside the usual course of professional practice and not for a legitimate medical purpose, including powerful painkillers such as fentanyl, oxycodone, oxymorphone and other drugs. It further alleges that from January 2010 through August 2018, the Defendant devised a scheme to defraud federal health care benefit programs by causing insurers to pay for medically unnecessary controlled substance prescriptions.

As part of the scheme, Defendant improperly performed patient physical and historical examinations, failed to establish evidence-based, objective diagnoses, and used these diagnoses to prescribe excessive doses of controlled substances for long periods of time without evidence of efficacy and while ignoring signs of addiction and drug abuse among his patients. It is also alleged that the Defendant improperly sought reimbursement from Medicare, Medicaid and private insurers using billing codes that reflected a service more costly than what was performed.

The indictment states that as part of the scheme, the Defendant wrote over approximately 835 prescriptions for Subsys, a fentanyl-based cancer pain treatment medication manufactured by Insys Therapeutics, Inc. According to the indictment, some of the prescriptions written for Subsys were medically unnecessary and for patients who did not have cancer pain. It is alleged that the Defendant received compensation from Insys by participating in the company’s speaker’s bureau, a program that paid representatives to engage with other medical professionals and promote the Subsys medication.

While working as an Insys speaker, it is alleged that the Defendant received between approximately $1,500 and $3,700 per engagement, totaling approximately $175,000 in payments and other items of value.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

If convicted, the Defendant’s sentence will be determined by the Court after review of factors unique to this case, including the Defendant’s prior criminal record, if any, the Defendant’s role in the offense, and the characteristics of the violation.

In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.

This case was investigated by the Cleveland Federal Bureau of Investigation, Drug Enforcement Administration, Health and Human Services – Office of Inspector General, Ohio Attorney General’s Healthcare Fraud Section and Ohio Board of Pharmacy. This case is being prosecuted by Assistant United States Attorney Megan R. Miller.

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LOS ANGELES – Authorities today arrested a physician and a marketer on federal charges stemming from a scheme that bilked Medicare out of more than $30 million for medically unnecessary hospice services provided to patients who were obtained through illegal kickbacks.

Dr. Victor Contreras, 66, of Santa Paula, and Callie Jean Black, 63, of Lancaster, are scheduled to be arraigned this afternoon in United States District Court.

A 14-count indictment unsealed today also names the former Pasadena resident who controlled the hospices, Juanita Antenor, 59, who remains at large and is believed to be in the Philippines.

According to court documents, Antenor owned a Pasadena hospice company called Arcadia Hospice Provider, Inc., and she controlled a second, Saint Mariam Hospice, Inc., that billed Medicare and Medi-Cal for hospice services for patients who were not terminally ill. In some case, the companies submitted bills for services that were never provided.

Contreras, who was on probation imposed by the California Medical Board while he was part of the scheme, provided fraudulent certifications for some of these patients, including patients he claimed to have examined, but never actually saw, according to the indictment.

Antenor allegedly paid marketers, including Black, illegal kickbacks for the patients referred to Arcadia and Saint Mariam.

From approximately September 2014 until April 2019, Arcadia submitted to Medicare nearly $23 million in claims for hospice services provided to beneficiaries and was paid approximately $18,853,757 for those claims, according to the indictment. Between February 2015 and April 2019, St. Mariam submitted to Medicare approximately $13,742,116 in claims for hospice services and was paid approximately $11,395,849 for those claims. Contreras is linked to about $5.1 million of the total claims paid by Medicare.

Additionally, Arcadia and St. Mariam submitted more than $5.5 million in claims to Medi-Cal, which paid the companies a total of just over $1.35 million.

Antenor and Contreras are charged in the indictment with health care fraud – six counts name Antenor, and Contreras is charged with five counts. Additionally, Antenor is charged with four counts of paying illegal kickbacks for health care referrals, and Black is charged with four counts of receiving illegal kickbacks.

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

If convicted of the charges in the indictment, Contreras would face a statutory maximum sentence of 50 years in prison, while Black would face up to 40 years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The United States Department of Health and Human Services, Office of the Inspector General; the FBI; and California Department of Justice investigated this matter.

Assistant United States Attorney Kristen A. Williams of the Major Frauds Section is prosecuting this case.

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NEWARK, N.J. – A New Jersey senior care company will pay $714,996 to resolve allegations that it 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:

CareOne Management LLC, now known as ABC1857 LLC (CareOne), submitted claims for payment to Medicare for reimbursement of Medicare bad debt from Jan. 1, 2012, to July 2, 2018. Medicare reimburses health care providers for uncollectable deductible and coinsurance amounts from Medicare beneficiaries – known as “bad debts.” The company made false representations of compliance with applicable statutory and regulatory criteria, including “criteria for allowable bad debt,” which require a provider to “be able to establish that reasonable collection efforts were made” of amounts owed by beneficiaries before a provider submits the claim as bad debt to Medicare.

The allegations were originally made in a lawsuit filed by Margaret Gathman under the whistleblower provisions of the False Claims Act. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Ms. Gathman will receive $143,000 from the federal share of the settlement.

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 FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; 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.

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PHILADELPHIA – United States Attorney William M. McSwain announced that Ralph Johnson, 54, of Kinzers, PA, former Chief of Environmental Management Services at the Corporal Michael J. Cresenz Veterans Affairs Medical Center (VAMC) in Philadelphia, PA, was charged by Indictment for soliciting and accepting bribes in connection with contracts and purchase orders at the medical center.

As the Chief of Environmental Management Services, Johnson was responsible for a range of sanitation, waste removal, linen and uniform services for the Philadelphia VAMC, and participated in the solicitation and award of contracts to vendors for those services. According to the Indictment, Johnson is charged with asking for, and receiving, thousands of dollars in cash from two Florida-based companies in return for steering purchase orders and contracts to those companies several times from about July 2018 until August 2019. He is also charged with seeking a $10,000 kickback on an $84,000 contract for tree trimming and removal awarded to one of those vendors, for which Johnson had fraudulently and grossly inflated the estimate of the work to be done and the price for that work under the contract.

“The allegations here are shameful. By giving us their best, we owe our veterans the same in return. As a senior official tasked with maintaining a healthy and safe environment for the care and treatment of our nation’s veterans, Ralph Johnson had a responsibility to do that job with honesty and integrity,” said U.S. Attorney McSwain. “Rather than being concerned about serving our veterans, Johnson was allegedly concerned with serving himself by lining his own pockets at taxpayers’ expense.”

David Spilker, Special Agent in Charge at the Veterans Affairs Office of Inspector General (OIG) stated, “VA OIG will vigorously investigate alleged instances when government employees solicit and accept bribes and kickbacks from vendors and contractors who seek to obtain business with the VA. As alleged in the indictment, Johnson’s actions breached the public’s trust, undermined the integrity of VA’s operations, and besmirched the vital work that honest hardworking VA employees do every day in support of our nation’s veterans.”

If convicted, the defendant faces a possible sentence of 45 years imprisonment, 3 years supervised release, and up to a $750,000 fine.

The case was investigated by the United States Department of Veteran Affairs, Office of Inspector General, and is being prosecuted by Assistant United States Attorney K.T. Newton.

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McALLEN, Texas – A compound pharmacy owner, three marketers, a referring physician and two clinic office staff have been taken into custody in connection with a multi-million dollar health care fraud and kickback scheme, announced Acting U.S. Attorney Jennifer B. Lowery.

A federal grand jury sitting in McAllen returned a 15-count indictment charging John Ageudo Rodriguez, 51, Mohammad Imtiaz Chowdhury, 40, his father Dr. Tajul Shams Chowdhury, 71, and Alex Flores Jr., 51, all of McAllen; Hector DeLaCruz, Jr., 50, Edinburg; Araceli Gaona, 35, Mission; and Erika Hernandez Salinas, 38, Donna.

All are expected to have their initial appearances tomorrow before U.S. Magistrate Judge J. Scott Hacker.

The indictment includes charges of conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal kickbacks and conspiracy to commit money laundering.

Rodriguez was the owner of Pharr Family Pharmacy (PFP), according to the indictment. From May 2014 to September 2016, PFP allegedly billed various federal health care programs more than $110 million, including claims that were false, fraudulent and the result of illegal kickbacks.

According to the indictment, Mohammad Chowdhury, Flores and DeLaCruz were purported marketers for PFP who were the conduits for several million dollars in kickbacks relating to the referral of prescriptions for high-reimbursing compound drugs to the pharmacy. In numerous instances, the marketers allegedly received kickbacks from Rodriguez, which they shared with referring physicians.

Dr. Chowdhury is a physician with a medical practice in Edinburg known as Center for Pain Management, according to the charges, while Gaona and Salinas were employees at the clinic. The indictment alleges Mohammad Chowdhury paid kickbacks to his father for referring prescriptions to PFP, including prescriptions for high-reimbursing compound drugs that were not medically necessary nor what the patients wanted. Gaona and Salinas are charged with conspiring to pay and receive kickbacks and conspiracy to commit money laundering in connection with their alleged receipt of kickbacks to help coordinate the flow of prescriptions from the medical clinic to the pharmacy.

The indictment alleges Rodriguez and his co-conspirators targeted specific health care benefit programs known to pay high reimbursements for compound drugs, such as Federal Employee’s Compensation Program, TRICARE, Medicare and various private insurance plans.

As part of the scheme, Rodriguez allegedly provided PFP marketers with pre-filled prescription pads intended to be given to physicians. The charges allege these included compound drugs and other prescription items that would yield the highest possible reimbursement to PFP, without regard to medical necessity.

If convicted of health care fraud and conspiracy to commit health care fraud, they face up to 10 years in prison and a maximum $250,000 possible five. The penalty for conspiracy to pay and receive illegal kickbacks is five years with a $25,000 maximum fine. Those charged and convicted of conspiracy to commit money laundering face up to 20 years in prison and fine of up to $500,000.

The U.S. Postal Service-Office of Inspector General (OIG), FBI, Defense Criminal Investigative Service, Department of Labor-OIG, Veterans Affairs-OIG, Texas Health and Human Services—OIG, Department of Health and Human Services-OIG, and Texas Attorney General, Medicaid Fraud Control Unit conducted the investigation.

Assistant U.S. Attorneys Andrew Swartz and Asha Natarajan are prosecuting the case.

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Columbia, South Carolina --- Acting United States Attorney M. Rhett DeHart announced today that seven criminal defendants have pleaded guilty to charges related to a Medicaid fraud conspiracy arising from the false billing of behavioral health services for children.

The defendants are all former owners, employees, or business associates of Wrights Care Services, LLC, a North Carolina-based provider of rehabilitative behavioral health services. Today’s guilty plea of former owner Daniel Wright marks the seventh guilty plea in the case, the result of a years-long investigation and prosecution led by the United States Attorney’s Office and Federal Bureau of Investigation (FBI) in cooperation with the South Carolina Attorney General’s Office.

“Health care fraud will be prosecuted to the fullest extent of the law.” said Acting U.S. Attorney DeHart. “It is a betrayal of public trust and diverts scarce resources from Americans who need health care coverage.”

“For several years, Wright and the other defendants took advantage of Medicaid, which benefits over one million low-income South Carolinians,” said Susan Ferensic, Special Agent in Charge of the FBI Columbia Field Office. “Healthcare fraud continues to be at the forefront of crimes our office investigates, and this case should serve as an example to individuals and businesses that these schemes will not be tolerated.”

“Not only did this fraud scheme steal millions of dollars from our hardworking taxpayers, it took that money away from legitimate programs to help children who needed it,” South Carolina Attorney General Alan Wilson said. “This case is another example of the close and productive working relationship our office has with the U.S. Attorney’s Office and the FBI and I want to commend them for their diligence in this case.”

Evidence obtained in the investigation revealed that, in 2014, Wrights Care Services was approved by South Carolina Medicaid to provide behavioral health services. Wrights Care maintained associated franchise locations throughout South Carolina, including Columbia, Spartanburg, Pickens, Cheraw, Society Hill, Bennettsville, Hartsville, and Conway. From its inception, Wrights Care Services failed to provide qualified behavioral health services to the children in its care. Nevertheless, in order to receive payment from Medicaid, members of the conspiracy submitted inflated bills and false medical records. In the case of one franchise, members of the conspiracy began billing Medicaid for services before the franchise opened its doors.

In 2015, South Carolina Medicaid sought to audit Wrights Care Services, and members of the conspiracy met in Columbia at a “note party” to forge signatures and falsify records to support the audit. During the course of the scheme, Wrights Care and its affiliated franchises submitted bills to Medicaid in the amount of $6,657,810.43.

The following defendants have pleaded guilty so far:

• Daniel Wright, 39, of Greensboro, North Carolina
• Glenn Pair, 35, of Baltimore, Maryland
• John David Zachariah Wallace, 40, of Sugar Land, Texas
• Kathleen Dubose, 54, of Greensboro, North Carolina
• Sherel Lawson, 47, of Summerfield, North Carolina
• Latasha Bethea, 37, of Fayetteville, North Carolina
• Tonya Strickland Hall, 47, of Greensboro, North Carolina

Each defendant faces a maximum penalty of five years in federal prison for conspiracy to defraud the United States. Each defendant also faces a fine of up to $250,000 and 3 years of supervision to follow the term of imprisonment. United States District Judge Mary G. Lewis accepted the guilty pleas and will sentence the defendants after receiving and reviewing presentencing reports prepared by the United States Probation Office.

This case was investigated by Special Agents Neil Power and Mark McMahon of the FBI, and Assistant Attorney General Brent Yandle and Assistant Chief Investigator Jamie Seales of the South Carolina Attorney General’s Office Medicaid Fraud Control Unit. Assistant United States Attorney Brook Andrews is prosecuting the case.

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Leonard C Boyle, United States Attorney for the District of Connecticut, announced that DAVID CIANCIMINO, 62, of Trumbull, waived his right to be indicted and pleaded guilty today via videoconference before U.S. District Judge Omar A. Williams to a controlled substance offense related to his illegal distribution of prescription medication.

According to court documents and statements made in court, Ciancimino was a sole practitioner practicing psychiatry and neurology/psychiatry from an office located at 4 Corporate Drive in Shelton. In October 2020, law enforcement began investigating Ciancimino’s prescribing practices of various benzodiazepines, such as Xanax, and stimulants, such as Adderall. During the investigation, federal task force officers acting in an undercover capacity paid Ciancimino $200 during visits to receive a prescription for Xanax or Adderall, or their generic equivalents, with little to no medical examination.

Ciancimino pleaded guilty to one count of distribution of a controlled substance without a legitimate medical purpose and outside the scope of professional practice, an offense that carries a maximum term of imprisonment 20 years.

As part of his plea, Ciancimino has agreed to forfeit $175,773.45.

Ciancimino is released on a $500,000 bond pending sentencing, which is not scheduled.

As disclosed during today’s court proceedings, Ciancimino surrendered his medical license last week.

This investigation has been conducted by the DEA New Haven Tactical Diversion Squad and HHS-OIG’s Office of Investigations, with the assistance of the Connecticut Department of Consumer Protection – Drug Control Division and the Middlebury Police Department. The DEA’s Tactical Diversion Squad includes personnel from the DEA and the Bristol, East Windsor, Glastonbury, Hamden, Manchester, New Britain, Newington, Watertown and West Haven Police Departments.

This case is being prosecuted by Assistant U.S. Attorney Heather L. Cherry.

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Leonard C Boyle, Acting United States Attorney for the District of Connecticut, Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration for New England, and Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced that Dr. DAVID CIANCIMINO, 62, of Trumbull, was arrested today on a federal criminal complaint charging him with health care fraud and controlled substances offenses related to the illegal distribution of prescription medication.

Ciancimino appeared before U.S. Magistrate Judge Robert M. Spector and was released on a $500,000 bond.

As alleged in court documents and statements made in court, Ciancimino has been a sole practitioner practicing psychiatry and neurology/psychiatry from an office located at 4 Corporate Drive in Shelton. Since October 2020, law enforcement has been investigating Ciancimino’s prescribing practices of various benzodiazepines, such as Xanax, and stimulants, such as Adderall. The investigation, which has included the use of federal task force officers acting in an undercover capacity, revealed that Ciancimino was providing prescriptions for Adderall or Xanax to numerous individuals in exchange for $200 in cash, typically with little to no medical examination of his patients. Many of Ciancimino’s patients used Medicaid to pay for the prescriptions Ciancimino wrote for them.

It is alleged that between July 2020 to September 2021, Ciancimino deposited approximately $356,000 in cash into his bank account. Ciancimino also received dozens of payments of $200 through his Venmo account.

Ciancimino is charged with making false statements relating to health care matters, health care fraud, and distribution of controlled substances outside the scope of professional practice and not for legitimate medical purpose.

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

This investigation is being conducted by the DEA New Haven Tactical Diversion Squad and HHS-OIG’s Office of Investigations, with the assistance of the Connecticut Department of Consumer Protection – Drug Control Division and the Middlebury Police Department. The DEA’s Tactical Diversion Squad includes personnel from the DEA and the Bristol, East Windsor, Glastonbury, Hamden, Manchester, New Britain, Newington, Watertown and West Haven Police Departments.

This case is being prosecuted by Assistant U.S. Attorney Heather L. Cherry.

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ALEXANDRIA, Va. – The last of six defendants were sentenced today for participating in multiple health care fraud conspiracies involving kickbacks and fraudulent billings that resulted in nearly $8 million in losses to federal, state, and private health care benefit programs.

“Health insurance programs, and the American public, rely on pharmacy professionals to safeguard the system from harmful kickback schemes, and to make truthful representations about the services they provide,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “The defendants betrayed their duties as health care professionals, performed illegal kickbacks, and defrauded essential benefit programs out of millions of dollars. EDVA is committed to prosecuting those who exploit taxpayers and engage in the unacceptable fleecing of these important public institutions and programs.”

According to court documents, Mohamed Abdalla, 48, of Allendale, New Jersey, owned multiple pharmacies in northern Virginia, including Medex Health Pharmacy in Falls Church and Royal Care Pharmacy in Fairfax. As the owner of these pharmacies, Abdalla oversaw and executed two related schemes to defraud health care benefit programs. One scheme involved the payment or receipt of unlawful kickbacks for expensive drugs and devices in violation of the federal Anti-Kickback Statute. Another scheme involved billing federal, state, and private health care benefit programs for numerous expensive drugs and devices that were not medically necessary, not prescribed by a physician, or were not received by a beneficiary.

“Health care professionals who use fraud and deceit to steal funds and scam the system will be held accountable for their actions,” said James A. Dawson, Special Agent in Charge of the FBI Washington Field Office Criminal Division. “These individuals, who are supposed to be trusted by the American public, were fueled by greed and their own interests to exploit their profession and pad their pockets. The FBI and our law enforcement partners will continue to root out fraud in the health care industry and protect the public from their illegal schemes.”

From at least January 2014 through at least the end of 2018, Abdalla participated in several schemes to pay kickbacks for the referral of prescriptions for compound medications and for an expensive naloxone auto-injector device used to treat opioid emergencies. Abdalla and his conspirators then billed federal health care benefit programs, including Medicare and TRICARE, which is the Department of Defense’s health care program, in violation of the Anti-Kickback Statute. Abdalla obtained over $2 million from these schemes.

“This investigation is a prime example of how kickback schemes undermine the integrity of the U.S. military healthcare system, and degrade the acquisition process,” said Christopher Dillard, Special Agent in Charge of the DCIS Mid-Atlantic Field Office. “These sentencings should send a clear warning that DCIS and its investigative partners will vigorously pursue fraudsters intent on lining their pockets with tax dollars earmarked for the care of our Warfighters.”

In addition, Abdalla and employees at his pharmacies conspired to defraud federal, state, and private health care benefit programs by engaging in numerous other schemes, including billing for prescriptions in the names of themselves, family members, and other pharmacy employees that were not medically necessary and/or not prescribed by a licensed physician, and billing for prescriptions for pharmacy customers that were never filled. These additional schemes resulted in a loss to these health care benefit programs of approximately $6,216,434.39.

“Health care providers are trusted to recommend and provide prescription medications that their patients need,” said Maureen R. Dixon, Special Agent in Charge, HHS Office of Inspector General, Philadelphia Regional Office. “Today’s sentencing shows individuals who commit fraud and pay kickbacks will be held responsible for their illegal actions. HHS-OIG and our law enforcement partners will continue to work together to investigate allegations of health care fraud and ensure the integrity of Federal programs.”

On March 19, Abdalla was sentenced to four years in prison for his role in the conspiracies. Five additional defendants have pleaded guilty and been sentenced for their respective roles in conspiring to pay kickbacks and defraud health insurance providers:

Onkur Lal, 30, of Alexandria, worked for Abdalla as a pharmacy technician and pharmacy intern before ultimately working as a licensed pharmacist. From approximately January 2014 to April 2019, Lal engaged in numerous health care fraud schemes resulting in millions of dollars in losses. At times, Lal used his specialized knowledge to circumvent audits and investigations by third parties, who were investigating fraud on behalf of health benefit programs. On March 5, Lal was sentenced to three years in prison.

Mohammed Tariq Amin, 35, of Fairfax, worked for Abdalla as a pharmacy technician and was the general manager of Royal Care for almost two years. From approximately January 2015 to November 2018, Amin conspired with Abdalla and others to pay kickbacks for the referral of prescriptions of an expensive naloxone auto-injector device. He also engaged in numerous other schemes that defrauded health care benefit programs and used his specialized knowledge to circumvent audits and investigations. Amin was sentenced today to two years in prison.

Daniel Tyler Walker, 51, of Lewes, Delaware, worked as a pharmaceutical sales specialist for a pharmaceutical company and was responsible for marketing an expensive naloxone auto-injector device used to treat opioid emergencies. From approximately August 2015 to April 2017, Walker accepted kickbacks from Abdalla and Amin for the referral of prescriptions for this device, which were then billed to federal health care programs. Walker was sentenced today to 15 months in prison.

Seth Michael Myers, 53, of Crystal Lake, Illinois, from approximately spring of 2013 to mid-2016, conspired with Abdalla, another individual who was a licensed physician, and others to accept kickbacks for the referral of expensive compound medications that were billed to federal health care benefit programs. A company that was created by Myers and the licensed physician was paid over $2.5 million during the scheme. On March 19, Myers was sentenced to two years in prison.

Michael Beatty, 53, of Finksburg, Maryland, worked as a licensed pharmacist at Fallston Pharmacy in Fallston, Maryland. From approximately the summer of 2013 to the fall of 2014, Beatty conspired with Myers and a licensed physician to pay kickbacks for the referral of expensive compound medications, which were billed to federal health care benefit programs. On March 5, Beatty was sentenced to one year and one day in prison.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; James A. Dawson, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division; Chris Dillard, Special Agent in Charge for the Defense Criminal Investigative Service’s Mid-Atlantic Field Office; Maureen R. Dixon, Special Agent in Charge, HHS Office of Inspector General, Philadelphia Regional Office; Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, U.S. Office of Personnel Management, Office of the Inspector General; and Mark S. McCormack, Special Agent in Charge, FDA Office of Criminal Investigations, Metro Washington Field Office, made the announcement after sentencing by Senior U.S. District Judge Claude M. Hilton.

Assistant U.S. Attorneys Monika Moore, Carina Cuellar, and Jamar Walker prosecuted the cases.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-250.

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NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that SLOANE SIGNAL-DEBOSE, age 51, a resident of Slidell, pled guilty to misappropriating funds from a veteran while SIGNAL was the veteran’s fiduciary.

The government filed a one-count bill of information that charged SIGNAL with misappropriation by a veteran’s fiduciary, in violation of Title 38, United States Code, Section 6101. According to court documents, from 2016 until 2018 SIGNAL was a fiduciary for a veteran who needed assistance with the management of his affairs, and controlled the veteran’s finances and bank accounts. During that time, SIGNAL took over $100,000 from the veteran’s accounts, routed it through bank accounts in her own name, ultimately using it as the down payment on a home for SIGNAL that was only in SIGNAL’s name. SIGNAL also used additional funds from the veteran to pay contractors working on SIGNAL’s home. SIGNAL then submitted false records to the Department of Veteran’s Affairs to hide her misuse of the veteran’s funds.

SIGNAL faces up to five years in prison, up to three years of supervised release after release from prison, a fine of up to $250,000 or twice the gross gain to SIGNAL or the gross loss to any victims, and a mandatory $100 special assessment fee. Judge Sarah S. Vance set the sentencing hearing for February 15, 2023.

U.S. Attorney Evans praised the work of the Department of Veterans Affairs Office of Inspector General. Assistant United States Attorney Nicholas D. Moses is in charge of the prosecution.

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NEW ORLEANS – United States Attorney Duane A. Evans announced that BONNIE JEAN LAWLESS DIAZ (“DIAZ”) has been sentenced on January 18, 2022 to 36 months of probation after pleading guilty in federal court relating to her role in a health care fraud conspiracy.

DIAZ, age 46, a resident of Slidell, Louisiana, pled guilty on September 23, 2021 before U.S. District Judge Jay C. Zainey to Count One of a Superseding Bill of Information charging her with misprision (or knowing concealment) of the commission of a felony, in violation of Title 18, United States Code, Section 4.

According to the Indictment, in or around March 2014, continuing through in or around October 2016, co-defendants conspired to knowingly and willfully execute a scheme and artifice to defraud TRICARE, a federal health care benefit program affecting commerce, and other health care benefit programs.

According to the Superseding Bill of Information, DIAZ had knowledge of the commission of the health care fraud. DIAZ concealed the fraud by knowingly submitting or caused to be submitted compounded medications for which there was no medical necessity and did not as soon as possible make known the same to some judge or other person in civil or military authority under the United States.

The owner, on behalf of Prime Pharmacy, contracted with various entities, including Pharmacy Benefit Managers (“PBMs”), obligating Prime Pharmacy to collect copayments from beneficiaries in order to be reimbursed by various health care benefit programs, including TRICARE. Additionally, the owner of Prime worked with codefendant Donald Auzine to market the compounded medications produced by Prime Pharmacy. Auzine found other marketers outside of the state to find beneficiaries that were willing to receive medically unnecessary compounds and doctors willing to prescribe compounds without medical necessity.

Beginning in or around March 2014, and continuing through in or around April 2016, Prime Pharmacy dispensed prescriptions for High-Yield Compounded Medications to beneficiaries of TRICARE and other health care benefit programs that were not medically necessary, induced by kickback payments, or where copayments were either waived or credited by Prime Pharmacy, and accordingly, submitted or caused to be submitted false and fraudulent claims for reimbursement to TRICARE, other health care benefit programs, and PBMs.

DIAZ was also ordered to repay TRICARE $180,000 in restitution.

“Individuals involved in this scheme illegally billed TRICARE out of close to $15 million and I am pleased that the U.S. Attorney’s Office is requiring justice,” said Special Agent in Charge Cynthia Bruce, Office of Inspector General, Defense Criminal Investigative Service, Southeast Field Office. “There are no victimless crimes and DCIS agents will continue to pursue unscrupulous greedy individuals who steal from our military health care system and all taxpayers.”

“Those entrusted with providing health care services to Veterans and their family members will be held accountable should they violate that trust,” said Special Agent in Charge Jeffrey Breen of the Department of Veterans Affairs Office of Inspector General’s South Central Field Office. “The VA OIG is grateful to the United States Attorney’s Office and our law enforcement partners for their efforts to achieve justice in this case.”

U.S. Attorney Evans praised the work of the Office of Inspector General, Defense Criminal Investigative Service, the Department of Homeland Security, the Department of Veterans Affairs – Office of Inspector General, and the United States Postal Service – Office of Inspector General.

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

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LOS ANGELES – A Hawthorne-based physician has settled allegations that he violated the False Claims Act by receiving kickbacks and other improper payments in exchange for referring patients to Memorial Hospital of Gardena, the Justice Department announced today.

Dr. Ashok Kumar paid $215,228 on March 1 to settle the allegations brought against him in a whistleblower lawsuit that Memorial Hospital of Gardena provided compensation to Kumar, whom they hired as a medical director, that both exceeded the fair market value of his services and was an attempt to incentivize him to refer patients to their hospital.

The lawsuit alleged that Kumar violated the federal Anti-Kickback Statute as well as the Physician Self-Referral Law. The Anti-Kickback Statute imposes civil liability on those who willingly offer, solicit, receive or pay any sort of compensation in exchange for the referral of services provided by a federal health care program, including Medicare. The Physician Self-Referral Law, commonly known as the Stark Law, bans doctors from referring patients to receive designated health care services payable by Medicare or Medicaid from entities with which the doctor or an immediate family member has a financial relationship.

The settlement resolves allegations originally brought in a lawsuit by Dr. Joshua Luke, the former chief executive officer of Memorial Hospital of Gardena, against Kumar and other defendants under the whistleblower provisions of both the federal and California False Claims acts. Both statutes permit private parties to sue on behalf of the state and federal governments for false claims for government funds, and to receive a share of any recovery.

Dr. Luke will receive $42,529 from the federal government as his share of the recovery announced today. His allegations against the other defendants were resolved in 2018 when they agreed to pay the federal government an $8.1 million settlement. The allegations brought on behalf of the State of California have been resolved pursuant to a separate agreement.

This case was handled by Assistant United States Attorney Frank D. Kortum of the Civil Fraud Section, who worked closely with the U.S. Department of Health and Human Services – Office of Inspector General. 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 case is United States of America ex rel. Luke, State of California ex rel. Luke v. Gardena Hospital, L.P. DBA Memorial Hospital of Gardena, Avanti Hospitals, LLC, et al., CV 15-8732-MCS. The claims resolved by the settlement are allegations only; there has been no determination of liability.

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Columbia, South Carolina --- Acting United States Attorney M. Rhett DeHart announced today that Joseph Benjamin Barton, 47, of Mount Pleasant, the owner and operator of Midlands Physical Medicine LLC in Richland County, has pleaded guilty to a felony count of health care fraud for billing Medicare for $194,000 that was not due.

Evidence presented in court showed that, from June 2016 until February 2017, Barton, through Midlands Physical Medicine, fraudulently submitted false claims to Medicare Part B for implantable neuro-stimulator pulse generators that beneficiaries did not receive and submitted “approvals” for such devices by a doctor no longer affiliated with the practice.

While Barton submitted claims to Medicare stating that another affiliated physician rendered the procedure, that physician was not a part of the practice, was living in Florida at the time, and was unaware that Barton submitted these claims using his identifiers as the provider that rendered the services.  In actuality, a physician’s assistant was providing Medicare beneficiaries an auricular electrical nerve stimulation device not covered by Medicare, in place of an implantable stimulator device, to provide relief from pain and/or headaches.

United States District Judge J. Michelle Childs accepted Barton’s guilty plea and will sentence Barton at a later date.  The maximum penalties Barton faces include ten years of imprisonment, a $250,000 fine, and three years of supervised release.

The Office of the Inspector General for United States Department of Health and Human Services is investigating the case, and Assistant United States Attorney Winston Holliday is prosecuting the case.

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Columbia, South Carolina --- Acting United States Attorney for the District of South Carolina M. Rhett DeHart announced today that Doctors Care, P.A. (“Doctors Care”) – South Carolina’s largest urgent care provider network – and its management company, UCI Medical Affiliates of South Carolina, Inc. (“UCI”), will pay $22.5 million to resolve civil allegations of healthcare fraud in violation of the False Claims Act.

The case began with a whistleblower complaint alleging that Doctors Care, UCI, and UCI Medical Affiliates, Inc. (a related holding company), falsely certified that certain urgent care visits were performed by providers who were credentialed to bill Medicaid, Medicare, and TRICARE for medical services. Whereas, the services were performed by non-credentialed providers, according to the complaint.

Federal health insurance companies require physicians and midlevel providers to apply for and receive approval to bill any services to the insurer. This approval is known as a provider’s “billing credentials.” Providers are obligated to renew these billing credentials periodically and must obtain new credentials with new employment.

As early as 2013 and continuing to 2018, it is alleged that UCI was unable to secure and maintain necessary billing credentials for most Doctors Care providers. UCI knew that federal insurance programs would deny claims submitted with the billing number of a provider who had not yet received their billing credentials. But instead of solving its credentialing problem – or holding claims while a temporary solution could be found – UCI allegedly submitted the claims falsely, “linking” the uncredentialed rendering providers to credentialed billing providers in order to get the claims paid.

With each “linked” bill, it is alleged that UCI knowingly submitted a false claim for payment. Evidence obtained in support of the allegations includes emails memorializing UCI’s “linking” scheme and well-organized “cheat sheets,” as employees called them, which UCI used to keep track of properly-credentialed billing providers whose names could be substituted on uncredentialed providers’ bills.

The “billing credentials” at issue in this case are distinct from a provider’s degree or license to practice medicine. There is no evidence in this case that any Doctors Care provider lacked a medical license or that patient care was compromised due to the conduct at issue.

“When healthcare companies do business with the federal government, they must follow the rules like everyone else,” said Acting U.S. Attorney DeHart. “All companies with this distinction – regardless of size – should honor their commitment to provide competent care to the full letter of the law. Our office will continue to protect tax dollars and ensure the rule of law is followed.”

“Taxpayers and Medicare patients rightly expect medical providers to be properly credentialed before billing for their services,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services (“HHS-OIG”). “Working with our law enforcement partners, we will continue protecting Federal healthcare programs.”

"The results of this investigation exemplify the commitment of the United States Department of Defense Criminal Investigative Service (“DCIS”) and its law enforcement partners to root out fraud and corruption involving unscrupulous companies that undermine the integrity of the Department of Defense," said Special Agent in Charge Christopher Dillard of the DCIS Mid-Atlantic Field Office. "This case should serve as a stark warning to those who attempt to exploit Department of Defense resources for personal gain."

The settlement of $22.5 million is the result of over three years of investigation, led by the United States Attorney’s Office in coordination with the HHS-OIG and DCIS. Upon receiving the first investigative subpoena in early 2018, management for UCI and Doctors Care acted promptly to investigate and stop the conduct subject to this settlement.

In addition to the monetary settlement, UCI and Doctors Care also entered into a Corporate Integrity Agreement with the Office of Inspector General. Among other things, the Corporate Integrity Agreement requires that for the next five years UCI must retain an Independent Review Organization to perform a claims review in accordance with the specific requirements of the Corporate Integrity Agreement, and it requires that UCI routinely be monitored by the Office of Inspector General.

This matter was investigated and negotiated by Assistant United States Attorney Brook Andrews and Assistant United States Attorney Nancy Cote, with the assistance of Special Agent Ryan Schubert of HHS-OIG and Special Agent Doyle Mullis of DCIS. The whistleblowers were represented by Bert Louthian, John Simmons, Bill Nettles, and Fran Trapp.

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Acting United States Attorney Bob Murray announced today that HOLLI TELFORD LUNDAHL, age 64, of Oelrichs, South Dakota, was sentenced by U.S. District Court Judge Nancy Freudenthal on August 27, 2021 to 27 months imprisonment, with three years of supervised release, and ordered to pay $76,626.65 in restitution, payable to the Wyoming Medicaid program, and a $500 special assessment.

The sentence comes after a jury found Lundahl guilty on three counts of health care fraud and two counts of aggravated identity theft after a one-week trial held in April of 2021 in the United States District Court for the District of Wyoming.

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, including Lundahl’s niece, in furtherance of two of the charged schemes.

“Lundahl deserves every bit of that sentence. She robbed Wyomingites of receiving legitimate funds for necessary care through Wyoming’s Medicaid System,” said Acting United States Attorney Bob Murray. “The sentence speaks to the hard work put into investigating and prosecuting the case, and we thank the Wyoming Medicaid Fraud Control Unit and our prosecution team for putting a stop to this injustice.”

Wyoming Attorney General Bridget Hill complimented the work of both the U.S. Attorney's Office and her office's Medicaid Fraud Control Unit, noting that, “It was nice to have the opportunity to partner together to root out Medicaid fraud and protect the Medicaid program from these sorts of abuses. This is important work as it helps assure that the Medicaid program is available to provide medical care for those citizens who truly need it.”

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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After a seven-week trial, a federal jury in the Southern District of Florida convicted two operators of two South Florida addiction treatment facilities for fraudulently billing approximately $112 million for services that were never provided or were medically unnecessary, and for paying kickbacks to patients through patient recruiters, and receiving kickbacks from testing laboratories. One defendant was also convicted of money laundering, and of separate charges of bank fraud connected to Paycheck Protection Program (PPP) loans.

According to court documents and evidence presented at trial, Jonathan Markovich, 37, and his brother, Daniel Markovich, 33, both of Bal Harbour, conspired to and did unlawfully bill for approximately $112 million of addiction treatment services that were never rendered and/or were medically unnecessary, and that were procured through illegal kickbacks, at two addiction treatment facilities that they operated, Second Chance Detox LLC, dba Compass Detox (Compass Detox), an inpatient detox and residential facility, and WAR Network LLC (WAR), a related outpatient treatment program. Jonathan Markovich, who owned both facilities, was also convicted of bank fraud in connection with PPP loan applications in which he falsely stated that Compass Detox and WAR were not engaged in illegal conduct.

The evidence showed that defendants obtained patients through patient recruiters who offered illegal kickbacks to patients (such as free airline tickets, illegal drugs, and cash payments). The defendants then shuffled a core group of patients between Compass Detox and WAR to fraudulently bill for as much as possible. Patient recruiters gave patients illegal drugs prior to admission to Compass Detox to ensure admittance for detox, which was the most expensive kind of treatment offered by the defendants’ facilities, therapy sessions were billed for but not regularly provided or attended, and excessive, medically unnecessary urinalysis drug tests were ordered. Compass Detox patients were given a so-called “Comfort Drink” to sedate them, and to keep them coming back. Patients were also given large and potentially harmful amounts of controlled substances, in addition to the “Comfort Drink,” to keep them compliant and docile, and to ensure they stayed at the facility. Certain patients were also routinely re-admitted and repeatedly cycled through Compass Detox and WAR to maximize revenue.

“These substance abuse treatment facility operators orchestrated a massive, multi-year fraudulent billing scheme by taking advantage of patients seeking treatment,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The convictions today further demonstrate the success of the Department of Justice’s Sober Homes Initiative in protecting patients and prosecuting fraudulent substance abuse treatment facilities.”

“Their tactics were brazen and the dollar losses immense,” said Special Agent in Charge George L. Piro of FBI’s Miami Field Office. “These health care fraudsters, driven by greed, sought to cheat their way to riches by billing tens of millions of dollars from various health care programs. The FBI and our law enforcement partners will investigate and criminally prosecute such fraud to the fullest extent of the law.”

Both defendants were convicted of conspiracy to commit health care fraud and wire fraud. Jonathan Markovich was convicted of eight counts of health care fraud and Daniel Markovich was convicted of two counts of health care fraud. They were also convicted of conspiracy to pay and receive kickbacks and two counts of paying and receiving kickbacks. Jonathan Markovich was separately convicted of conspiring to commit money laundering, two counts of concealment money laundering, and six counts of laundering at least $10,000 in proceeds of unlawful activities, as well as two counts of bank fraud related to his fraudulently obtaining PPP loans for both Compass Detox and WAR during the COVID-19 pandemic. Both defendants are scheduled to be sentenced on Jan. 13, 2022. They each face a maximum of 20 years for the health care fraud and wire fraud conspiracy count, 10 years for each substantive count of health care fraud and paying and receiving kickbacks, and five years for the kickbacks conspiracy. Jonathan Markovich faces additional maximum sentences of 20 years for conspiracy to commit money laundering, 20 years for each substantive count of concealment money laundering, 10 years for each additional count of money laundering, and 30 years for each substantive count of bank fraud. A federal district court judge will determine the sentences after considering the U.S. Sentencing Guidelines and other statutory factors. A related trial is scheduled to begin on Feb. 28, 2022, in the Southern District of Florida, for four other defendants charged in this case.

The FBI, the Department of Health and Human Services, Office of Inspector General, and Broward Sheriff's Office investigated the case.

Senior Litigation Counsel Jim Hayes and Trial Attorney Jamie de Boer of the Criminal Division’s Fraud Section are prosecuting the case.

The National Rapid Response Strike Force and Los Angeles Strike Force lead the Department of Justice’s Sober Homes Initiative, which was announced in the 2020 National Health Care Fraud Takedown to prosecute defendants who exploit vulnerable patients seeking treatment for drug and/or alcohol addiction.

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Tampa, FL – U.S. District Judge Virginia Hernandez Covington today sentenced Patsy Truglia (54, Parkland) to 15 years in federal prison for his role in two consecutive conspiracies to commit health care fraud and for making a false statement in a matter involving a health care benefit program. As part of his sentence, the Court ordered Truglia to pay $18.3 million to the affected government health programs and an insurance company. The Court also entered a money judgment against Truglia in the amount of $10,117,738 and ordered him to forfeit numerous assets, including $9,308,235.86 seized from various financial accounts, high-end automobiles (Rolls Royce, Lamborghini, and Mercedes), jewelry, and Truglia’s lakefront home, all of which were traceable to the charged criminal conduct. Truglia had pleaded guilty on October 5, 2021.

According to court documents, beginning in January 2018 and continuing into April 2019, Truglia and other conspirators, including co-defendant Ruth Bianca Fernandez (who worked under Truglia’s supervision), generated medically unnecessary physicians’ orders via their telemarketing operation for certain orthotic devices—knee braces, back braces, wrist braces, and other braces—referred to as durable medical equipment (“DME”). Through the telemarketing operation, federal health care program beneficiaries’ (i.e., Medicare beneficiaries’) personal and medical information was harvested to create the unnecessary DME brace orders.

The brace orders were then forwarded to purported “telemedicine” vendors that, in exchange for a fee, paid illegal bribes to physicians to sign the orders, often without ever contacting the beneficiaries to conduct the required telehealth consultations. The fraudulent, illegal brace orders were then returned to Truglia’s telemarketing operation, which used the orders as support for millions of dollars in false and fraudulent claims submitted to the Medicare program. To avoid Medicare scrutiny, Truglia and Fernandez spread the fraudulent claims across five DME storefronts operated under Truglia’s ownership and control and Fernandez’s day-to-day management. In all, through their five storefronts, Truglia, Fernandez, and other conspirators caused approximately $25 million in fraudulent DME claims to be submitted to Medicare, resulting in approximately $12 million in payments.

On April 9, 2019, multiple federal law enforcement agencies participated in a nationwide action referred to as “Operation Brace Yourself.” The Operation targeted ongoing schemes, such as Truglia’s, in which companies were paying illegal bribes to secure signed physicians’ DME brace orders for use as support for fraudulent claims submitted to the federal programs. In the Middle District of Florida, the April 2019 Operation included, among other efforts, the execution of search warrants at several of Truglia’s DME storefronts and a civil action under which, among other ramifications, enjoined Truglia and (by extension) his five storefronts from engaging in any further health care fraud conduct.

Undeterred, beginning in or around April 2019 and continuing into July 2020, Truglia and other conspirators—some of whom had worked with Truglia in the earlier conspiracy and some of whom were new conspirators—carried out a similar conspiracy using three new DME storefronts and different “telemedicine” vendors. Through this conspiracy, Truglia and his conspirators caused an additional approximately $12 million in fraudulent DME claims to be submitted to Medicare, resulting in approximately $6.3 million in payments.

“Every defendant in this case shared a common trait—greed,” said IRS-CI Special Agent in Charge Brian Payne. “The desire for money fueled them to commit crimes against our healthcare system and prey upon those in our society who deserve our highest respect, the elderly and military Veterans. Thanks to the financial expertise and diligence of IRS-CI special agents, as well as our partner federal, state, and local law enforcement officers, these criminals are off the street and are facing the consequences of their actions.”

“The significant sentence and financial restitution imposed today reflects the serious nature of Mr. Truglia’s criminal conduct and underscores that the Government will continue to vigorously prosecute health care fraud cases and seek the recovery of all illicitly obtained assets of these greed-fueled fraud schemes,” said Special Agent in Charge Omar Pérez Aybar of HHS-OIG. “Collaborating closely with our law enforcement partners, we will continue to thoroughly investigate fraudsters who seek to enrich themselves at the expense of vulnerable members of the public.”

“We have dedicated agents and analysts focused on uncovering the deceitful tactics used to cheat our federal healthcare system,” said FBI Tampa Division Special Agent in Charge Michael McPherson. “The cost of healthcare fraud impacts all of us. The FBI will continue to engage with our partners to protect taxpayers from fraudsters like Mr. Truglia and those identified in Operation Brace Yourself.”

“The sentence imposed today holds this defendant accountable for his prominent role in a reprehensible healthcare fraud scheme involving CHAMPVA and Medicare,” said Special Agent in Charge David Spilker, Department of Veterans Affairs Office of Inspector General, Southeast Field Office. “The VA OIG is committed to ensuring healthcare spending is directed only to deserving Veterans and those who serve them. We thank and commend our outstanding law enforcement partners in this important joint investigation.”

This case was investigated by U.S. Department of Health and Human Services – Office of Inspector General, the Federal Bureau of Investigation, the Department of Veterans Affairs – Office of Inspector General, and the Internal Revenue Service –Criminal Investigation, Tampa Field Office. The criminal case was prosecuted by Assistant United States Attorneys Jay G. Trezevant, Tiffany E. Fields, and James A. Muench. The civil action is being handled by Assistant United States Attorney Carolyn B. Tapie.

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PITTSBURGH, PA - A South Hills pharmacist pleaded guilty in federal court to charges of obtaining controlled substances by fraud, misbranding of drugs, and health care fraud conspiracy, Acting United States Attorney Stephen R. Kaufman announced today.

Timothy W. Forester, 46, of Venetia, PA pleaded guilty to three counts before Senior United States District Judge David S. Cercone.

In connection with the guilty plea, the court was advised that Forester was a licensed pharmacist who owned four pharmacies – Century Square Pharmacy in West Mifflin, PA and Prescription Center Plus with locations in South Park, PA, McMurray, PA and Eight Four, PA. From on or about November 14, 2018, to on or about February 14, 2019, Forester admitted he knowingly, intentionally and unlawfully obtained oxycodone and hydrocodone, Schedule II controlled substances, by misrepresentations, fraud, and deception. Forester admitted he did not place the controlled substances into the inventories of the four pharmacies and did not maintain records to show the controlled substances were dispensed. In addition, Forester admitted he relabeled generic drugs as name brand medications and then sold them as if they were the more expensive drugs. Finally, Forester admitted filling prescriptions with generic drugs, but billing Medicare and Medicaid for the more expensive name brand drugs, thereby committing health care fraud and causing a loss to Medicare and Medicaid of approximately $680,000.

“Timothy Forester ordered opioids without adding them to inventory, mislabeled generic drugs as name-brand medications, and billed Medicare and Medicaid for name-brand drugs when he provided generics, all in violation of federal law,” said Acting U.S. Attorney Kaufman, “We will continue to pursue medical professionals who engage in fraud schemes to enrich themselves at the expense of their patients.”

“U.S. consumers rely on health care professionals to follow FDA requirements pertaining to prescription medications. When they take actions to evade these requirements, they put patient health at risk,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to investigate and bring to justice those who threaten the safety of the nation’s drug supply and, ultimately, the patients who take those drugs.”

“Pharmacy professionals who mishandle opioids in an effort to enrich themselves only exacerbate the challenges and devastation families and communities experience as a result of our nation's opioid epidemic," said Maureen R. Dixon, Special Agent in Charge for the Inspector General’s Office of the U.S. Department of Health and Human Services in Philadelphia. “We will continue to work with our law enforcement partners to bring unscrupulous health professionals to justice.”

“Pharmacists such as Forester have an obligation to properly dispense and safeguard controlled substances such as oxycodone and hydrocodone,” said Thomas Hodnett, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Forester used his position of trust and access to obtain these powerful painkillers for his own use through fraud and deception.”

Judge Cercone scheduled sentencing for February 8, 2020 at 11:30 a.m. As to Count 1, the law provides for a maximum sentence of four years in prison, a fine of $250,000 or both. As to Count 11, the law provides for a maximum sentence of three years in prison, a fine of $250,000 or both. As to Count 12, the law provides for a maximum sentence of 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 offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Robert S. Cessar is 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, which combines personnel and resources from the following agencies to combat the growing prescription opioid epidemic: 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, 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 and the Pennsylvania Bureau of Licensing.

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ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Asheville-based Southeastern Physical Therapy (SEPT) and owner Darren Cady have agreed to resolve allegations that Cady received illegal kickbacks and violated the False Claims Act by submitting claims for reimbursement for certain durable medical equipment to the Veterans Affairs (VA) while participating in the VA “Choice Provider” program.

The Veterans Access, Choice, and Accountability Act of 2014 provided Veterans with expanded access to third-party providers outside the VA system. In 2018, the program was replaced by the VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018 (“Mission Act”). The Mission Act provided for the same access to third-party providers. Under the 2014 Act and the Mission Act, Veterans could use third-party providers like SEPT for certain services. Provider participation in the program was memorialized in contracts with third-party administrators. The contracts required providers to comply with applicable local, State, and federal laws, rules, regulations and institutional and professional standards of care.

The United States alleges that, among other things, SEPT and Cady made materially false, fictitious, and fraudulent statements and representations, or material omissions, regarding the medical necessity of a medical device and received illegal kickbacks from the device manufacturer for prescribing the devices to VA patients. The United States alleges that Cady entered into a contract with the device manufacturer, which paid Cady for prescribing the devices. The United States also alleges that Cady gave a copy of his signature to a medical device salesperson, who used Cady’s signature to complete at least some medical necessity forms for VA patients, which forms accompanied invoices to the United States for payment for the devices. The United States alleges that Cady did not examine or personally treat the VA patients for whom he prescribed the devices, and further alleges that the patients were not instructed on how to safely or effectively use the product.

“Prescribing devices to VA patients that are not medically necessary is dangerous and wastes important resources intended to help our nation’s Veterans,” said U.S. Attorney Murray. “My office will vigorously pursue providers and other actors that seek to take advantage of VA benefits through the submission of false claims that promote fraud and abuse in these critical government programs.”

This settlement resolves allegations investigated by the government under the False Claims Act. The settlement is a result of the coordinated effort between the VA Office of Inspector General and the U.S. Attorney’s Office for the Western District of North Carolina.

The claims resolved in this settlement are allegations only and there has been no determination of liability against SEPT, Cady, or any other entity.

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Spokane, Washington – Christopher M. Valley, N.D., a Spokane-based naturopathic doctor, has agreed to pay $47,700 to resolve allegations under the Controlled Substances Act that he improperly prescribed controlled substances between December 2015 and December 2020. The Controlled Substances Act regulates certain drugs deemed to pose a risk of abuse and dependence. To protect public safety and prevent misuse and diversion, the Act requires practitioners to register with the Drug Enforcement Administration (“DEA”) to prescribe these controlled substances.

During the relevant time period, Dr. Valley was a naturopathic doctor licensed in the State of Washington. Under state and federal law, as a naturopathic doctor, Dr. Valley was only authorized to prescribe two types of controlled substances: codeine and testosterone products. In the settlement agreement between the United States and Dr. Valley, Dr. Valley acknowledged prescribing at least 318 controlled substances that he was not authorized to prescribe, including stimulants such as modafinil (typically prescribed for narcolepsy and sleep apnea); the sedative pregabalin (sold by Pfizer under the brand name Lyrica); the diet drug phentermine; the sleep aid zopidem (often sold under the brand name Ambien), and one prescription for ketamine, a Schedule III anesthetic that is commonly abused recreationally.

The settlement agreement also further sets forth that Dr. Valley ceased his improper prescribing practices in September 2020 when pharmacists contacted him regarding his improper prescribing, and that he cooperated with the United States’ investigation, including acknowledging his prior improper prescribing and voluntarily surrendering his DEA registration. Additionally, the settlement agreement sets forth that Dr. Valley has implemented additional controls and procedures to ensure that this conduct does not recur.

“I am relieved that it does not appear anyone was seriously harmed by any medications prescribed by Dr. Valley, and I am heartened by Dr. Valley’s acknowledgment of his conduct and commitment to strict compliance going forward. But when a healthcare practitioner prescribes controlled substances that he is not qualified or authorized to prescribe, the public is placed at risk of potentially dangerous side effects, drug interactions, and contraindications,” said Vanessa R. Waldref, United States Attorney for the Eastern District of Washington. “This resolution demonstrates our strong commitment to protecting public health and to keeping our communities strong and safe. In particular, I commend the excellent investigative work conducted by DEA’s Diversion Group and the Department of Health and Human Services. We will continue to partner with DEA, HHS, and other law enforcement agencies to hold health care practitioners accountable.”

“Dr. Valley’s careless and irresponsible prescribing habits violated federal law and constituted a serious breach of his naturopathic license, which presented a clear and present danger to the health and safety of our communities,” said Frank A. Tarentino III, Special Agent in Charge of DEA’s Seattle Field Division. “We will continue to work with our federal, state, local, and tribal partners in the relentless pursuit of all those involved in the trafficking of opioids and other controlled substances.”

The settlement was the result of a joint investigation conducted by DEA’s Seattle Field Office, Diversion Group, and the U.S. Attorney’s Office for the Eastern District of Washington, with support and assistance from the U.S. Department of Health and Human Services, Office of Inspector General, Seattle Field Office. Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene handled this matter on behalf of the United States.

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Tampa, Florida – David Naylor (58, Spring Hill) has pleaded guilty to theft of government funds. He faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been set.

According to the plea agreement, Naylor engaged in a scheme to defraud the Department of Veterans Affairs (VA). In order to deceive and steal from the VA, Naylor made false representations regarding his physical limitations in connection with his application for VA Disability Compensation. Based on these false representations, the VA found that Naylor was entitled to Disability Compensation and other related benefits. In total, Naylor received $549,426.23 in VA benefits to which he was not entitled. Naylor also received $181,135.50 in Social Security Disability Insurance Benefits.

This case was investigated by the Department of Veterans Affairs, Office of Inspector General and the Social Security Administration, Office of the Inspector General. It is being prosecuted by Special Assistant United States Attorney Suzanne Huyler.

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SPRINGFIELD, Mo. – An elected Missouri state representative has been indicted by a federal grand jury for a 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.

“This defendant abused her privileged position to enrich herself through deception,” said U.S. Attorney Tim Garrison. “The indictment alleges she lied to her patients and she lied to federal agents. As an elected official and a health care provider, she deserves to be held to a high standard. This grand jury indictment exposes her deception and holds her accountable for her actions.”

Patricia “Tricia” Ashton Derges, 63, of Nixa, Missouri, was charged in a 20-count indictment returned under seal by a federal grand jury in Springfield, Mo. The indictment was unsealed and made public today following Derges’s self-surrender and initial court appearance.

This investigation began as a result of false or misleading statements made by Derges in April 2020 to a Springfield television station regarding her potential use of stem cells to treat COVID-19. 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 Ozark Valley Medical Clinic locations in Springfield, Ozark, and Branson, Mo.

“We place our hope and our trust in health care providers and government officials,” said Timothy Langan, Special Agent in Charge of FBI Kansas City. “The defendant’s actions are not only a betrayal of that trust, but her actions erode the very core of our confidence in a system we rely on. Derges vowed to do no harm as a health care professional and was elected to serve the people, not deceive them. She used her position for personal gain and damaged the public’s trust.”

“Medical professionals who knowingly abuse their power by prescribing medications, without ensuring they are for legitimate medical purposes, take advantage of the public’s trust,” said Inez Davis, St. Louis Division Diversion Program Manager for the Drug Enforcement Administration. “With the support of our enforcement partners, DEA will investigate to the maximum extent of our ability to ensure these individuals are prevented from risking lives within our communities.”

“Ms. Derges knowingly provided false information and made false claims about the medical treatment she was providing, and these falsehoods may have significant consequences for the patients she served,” said Curt L. Muller, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to hold accountable individuals who abuse their positions of power to prey on unsuspecting individuals.”

Wire Fraud Scheme

The federal indictment charges Derges with eight counts of wire fraud related to five specific victims (identified by their initials).These five victims were among those who lost a total of nearly $200,000 in the fraud scheme, which lasted from December 2018 to May 2020.

During this time, Derges exclusively obtained amniotic fluid, which she marketed under the name Regenerative Biologics, from the University of Utah. Derges advertised Ozark Valley Medical Clinic as a “Leader in … Regenerative Medicine,” including stem cells, and marketed her “stem cell” practice through seminars, media interviews, and social media. The federal indictment cites an August 2019 seminar in which Derges told her audience that the amniotic fluid she used in her stem cell practice was a “stem cell shot” and that it contained “mesenchymal stem cells.” According to the indictment, Derges made similar claims in personal consultations.

In fact, however, the amniotic fluid Derges administered to her patients did not contain mesenchymal stem cells, or any other stem cells. The amniotic fluid she obtained from the University of Utah was a sterile filtered amniotic fluid allograft (a tissue graft comprised of human amniotic membrane and amniotic fluid components derived from placental tissue). The amniotic fluid allograft was “acellular,” meaning it did not contain any cells, including stem cells.

Despite being told that the University of Utah’s amniotic fluid allograft was “acellular” and did not contain mesenchymal stem cells, Derges allegedly continued to tell her patients and the public that the amniotic fluid allograft contained stem cells.

Derges administered amniotic fluid, which she falsely claimed contained stem cells, to patients who suffered from, among other things, tissue damage, kidney disease, chronic obstructive pulmonary disease (COPD), Lyme disease, erectile dysfunction, and urinary incontinence. In an April 11, 2020, Facebook post Derges wrote of amniotic fluid allograft: “This amazing treatment stands to provide a potential cure for COVID-19 patients that is safe and natural.”

The University of Utah sold its amniotic fluid allograft to Derges for approximately $244 per milliliter and $438 for two milliliters. Derges charged her patients $950 to $1,450 per milliliter. In total, Derges’s patients paid her approximately $191,815 for amniotic fluid that did not contain stem cells.

The Controlled Substances Act

The federal indictment charges Derges with 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.

Because none of the assistant physicians whom Derges employed at Ozark Valley Medical Clinic could prescribe Schedule II controlled substances, the indictment says, it was the standard practice of the assistant physicians to see a patient and later communicate to Derges the controlled substances they wanted her to prescribe to their patients. Derges, allegedly without conducting an in-person medical evaluation of the patients, wrote electronic prescriptions for the patients and transmitted the prescriptions over the internet to pharmacies.

False Statements

The federal indictment charges Derges with two counts of making false statements to federal agents investigating this case in May 2020.

Derges allegedly told agents that the amniotic fluid allograft that she used in her practice contained mesenchymal stem cells, which she knew was false. Derges also allegedly told federal agents that she had not treated a patient for urinary incontinence with amniotic fluid allograft, which she knew was false.

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.

Assistant Physician

Derges is not a physician but is licensed as an assistant physician. An assistant physician is a mid-level medical professional in the state of Missouri. Under Missouri law, medical school graduates who have not been accepted into a residency program but have passed Step 1 and Step 2 of the United States Medical Licensing Examination may apply to become an assistant physician. State law mandates that assistant physicians practice pursuant to a collaborative practice arrangement with a licensed physician.

Derges obtained her medical degree from the Caribbean Medical University of Curacao in May 2014 but was not accepted into a post-graduate residency program. Derges was licensed as an assistant physician by the state of Missouri on Sept. 8, 2017.

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.

Derges Indictment.pdf

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Six Medical Practices and a Physician-Owner to Pay Over $7.4 Million to Resolve Claims of Improper Billing of Medicare and the Federal Employees Health Benefit Program for Acupuncture Procedures

Breon Peace, United States Attorney for the Eastern District of New York, Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of the Inspector General, New York Region (HHS-OIG), and Norbert E. Vint, Deputy Inspector General, Office of Personnel Management (OPM), announced today that six surgery centers and medical offices affiliated with Interventional Pain Management Center P.C. (“IPMC”), a company owned by Dr. Amit Poonia, have agreed to pay $7,447,340.75 to resolve liability under the False Claims Act for claims submitted to federal health care programs for acupuncture treatment.

“This settlement holds the defendants accountable for mischaracterizing acupuncture as a surgical procedure in order to dishonestly obtain millions of dollars from Medicare and the Federal Employees Health Benefit Program,” said United States Attorney Peace. “Working with our partners at the Department of Health and Human Services Office of the Inspector General and the Office of Personnel Management, we identified the false claims that enabled our Office to negotiate resolutions that resulted in a significant recovery of taxpayer dollars.”

“Medical professionals are expected to bill taxpayer funded health care programs correctly to ensure that they remain solvent and available to those that need their services,” stated HHS-OIG Special Agent-in-Charge Lampert. “Along with our law enforcement partners, this settlement affirms our commitment to ensuring that individuals and entities that bill federal health care programs do so in an honest manner.”

“Today’s settlement reminds all providers that if they submit false claims, they will be held accountable,” stated OPM Deputy Inspector General Vint.        

The defendants treated patients with electro-acupuncture devices called P-Stim and NeuroStim/NSS (“NSS”). P-Stim and NSS procedures transmit electrical pulses through needles placed just under the skin on a patient’s ear. Both treatments are considered acupuncture under Medicare and Federal Employees Health Benefit Program (“FEHBP”) guidelines and are therefore ineligible for reimbursement by the government. From January 2012 through April 2017, the IPMC surgery centers and medical offices submitted claims to Medicare and FEHBP for P-Stim and NSS treatment and associated administration of anesthesia. In submitting the claims, the defendants used a billing code that mischaracterized the acupuncture treatment as a surgical implantation of a neurostimulator.

In addition to paying the civil settlement, Dr. Poonia, New Jersey Interventional Pain Management Center, PC; Advanced Interventional Pain Management Center, LLC; Global Anesthesia Group, LLC; Springfield Surgery Center, LLC; Park Avenue Surgery Center, LLC; and Endo Surgi Center of Old Bridge, LLC, have agreed to enter into an Integrity Agreement with the HHS-OIG. The Integrity Agreement requires that these entities and their owners implement specific measures intended to prevent future health care fraud and address evolving compliance risks. These measures include training for staff on applicable health care fraud laws and submitting to a claims review conducted by an Independent Review Organization to ensure compliance with Medicare billing requirements.

The allegations were brought to the government’s attention through the filing of a complaint captioned United States ex rel. Anu Doddapaneni and Christian Reyes v. Amit Poonia, MD., New Jersey Interventional Pain Management Center, P.C. et al., 18-CV-5214 pursuant to the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery. The claims resolved by the settlement are allegations only; there has been no determination of liability, nor a concession by the United States that its claims are not well founded.

The government’s case was handled by Assistant U.S. Attorney Jolie Apicella of the Office’s Civil Division with assistance from Civil Investigator Joseph Giambalvo.

The Defendants:

1. Dr. Amit Poonia, M.D.
2. New Jersey Interventional Pain Management Center P.C.
3. Advanced Interventional Pain Management Center LLC
4. Global Anesthesia Group LLC
5. Park Avenue Surgery Center LLC
6. Springfield Surgery Center LLC
7. Endo Surgi Center of Old Bridge LLC
8. E.D.N.Y. Docket No. 18-CV-5214 (ENV)

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LANSING – Two people were arraigned on charges recently for defrauding the U.S. Department of Veterans Affairs (VA) and Michigan Department of Treasury out of hundreds of thousands of dollars by submitting fraudulent documents in support of claims for VA survivor benefits and Michigan Unclaimed Property, Attorney General Dana Nessel announced today. A third individual has been charged in connection with this fraud but has not yet been arraigned.

The Attorney General's enforcement operation was conducted in close collaboration with the U.S. Department of Veterans Affairs Office of the Inspector General.

Melissa R. Flores, 53, and a co-conspirator allegedly created aliases and obtained or created fraudulent documents, including vital records like birth certificates, to make it appear that they were heirs to various individuals who had died.

Through this scheme, between 2013 and 2019, it’s alleged that the two individuals obtained more than $40,000 of Unclaimed Property from the Michigan Department of Treasury and more than $430,000 from the VA. Meanwhile, Steven Decker, 32, received proceeds from the scheme and used some of the money to conceal property used to conduct the fraud.

“Committing fraud against our state or federal agencies that directly give back to their communities will not be tolerated,” Nessel said. “Our Veterans voluntarily put their lives on the line in service to this country to protect the freedoms and liberties we as U.S. citizens enjoy. For someone to take advantage of the public benefits set aside for their families is a slap in the face to servicemen and women across the country.”

Flores, of Westland, is subject to sentencing as a habitual offender, fourth notice. She was arraigned on the charges Wednesday before Judge Sandra Cicirelli in 18th District Court. Flores is scheduled for a probable cause conference at 8:30 a.m. June 4 before Judge Mark A. McConnell and a preliminary hearing at 8:30 a.m. June 11 before Judge Cicirelli. She is charged with:

one count of conducting a criminal enterprise, a felony punishable by up to 20 years’ imprisonment, $100,000 fine and forfeiture of proceeds and items used during the crime;  two counts of false pretenses between $20,000 and $50,000, a felony punishable by 15 years’ imprisonment, $15,000 fine or three times the value of the money or property involved, whichever is greater;  forgery of documents affecting real property, a 14-year felony; and  four counts of false pretenses between $1,000 and $20,000, a felony punishable by up to five years’ imprisonment and a $10,000 fine or three times the value of the money or property involved, whichever is greater.

Decker, of Wyandotte, is charged with one count of criminal enterprises – racketeering proceeds, a felony punishable by up to 20 years’ imprisonment, $100,000 fine and forfeiture of proceeds and items used during the crime. He was arraigned Friday before Judge Elizabeth DiSanto in 27th District Court. He is scheduled to appear in court for a probable cause conference at 1:30 p.m. June 4. DiSanto set a $10,000 cash or 10 percent surety bond.

A third individual has been charged with conducting a criminal enterprise and multiple counts of false pretenses. The identity of that individual is being withheld pending arraignment on the charges.

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A federal grand jury in Newark, New Jersey, returned a superseding indictment today charging a Florida owner of multiple telemedicine companies with orchestrating a health care fraud and illegal kickback scheme that involved the submission of over $784 million in false and fraudulent claims to Medicare. This is one of the largest Medicare fraud schemes ever charged by the Justice Department. The superseding indictment also charges the defendant with concealing and disguising the proceeds of the scheme in order to avoid paying income taxes.

Creaghan Harry, 53, of Highland Beach, Florida, is charged in the superseding indictment with one count of conspiracy to commit health care fraud and wire fraud, and four counts of income tax evasion. Harry previously was charged in an indictment along with co-conspirators Lester Stockett and Elliot Loewenstern with one count of conspiracy to defraud the United States and to pay and receive kickbacks, four counts of receipt of kickbacks, and one count of conspiracy to commit money laundering. Stockett and Loewenstern previously pleaded guilty. If convicted, Harry faces a maximum penalty of 20 years’ imprisonment for the conspiracy to commit health care fraud and wire fraud, five years’ imprisonment on each count of tax evasion, five years’ imprisonment for the conspiracy to defraud the United States and pay and receive kickbacks, 10 years’ imprisonment for each count of receipt of kickbacks, and 20 years’ imprisonment on the conspiracy to commit money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

According to allegations in the superseding indictment, Harry and his co-conspirators solicited illegal kickbacks and bribes from durable medical equipment (DME) suppliers and marketers in exchange for orders for DME braces and medications. Harry’s telemedicine companies then allegedly paid physicians to write medically unnecessary orders for these braces and medications. Harry’s telemedicine companies provided orders to DME suppliers that fraudulently billed Medicare over $784 million. Medicare ended up paying over $247 million.

In order to conceal and disguise the health care fraud and illegal kickback scheme, the superseding indictment alleges, Harry directed DME suppliers and marketers not to directly pay his telemedicine companies and instead to pay shell companies that had been opened in the names of straw owners in the United States and foreign countries, such as the Dominican Republic. Harry then transferred the funds from the shell companies to his telemedicine companies in order to pay physicians to write the unnecessary orders.

The superseding indictment alleges that Harry falsely claimed to prospective investors, lawyers and others that his telemedicine companies had not received any kickbacks. Harry instead falsely represented that the telemedicine companies had been receiving revenue of “about $10 million per year” from fees paid by patients to receive telemedicine services, when in fact the revenue of the telemedicine companies was derived from illegal kickbacks and bribes.

The superseding indictment further alleges that Harry committed income tax evasion in the calendar years between 2015 and 2018 by receiving the proceeds of the illegal scheme in the accounts of shell companies belonging to nominee owners and using those proceeds to live a lavish lifestyle. Harry did not file an income tax return or pay taxes on this income.

Assistant Attorney General Kenneth A. Polite of the Justice Department’s Criminal Division; Acting U.S. Attorney Rachael A. Honig for the District of New Jersey; Special Agent in Charge George M. Crouch of the FBI’s Newark Field Office; Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Special Agent in Charge Michael Montanez of IRS-Criminal Investigations, Newark, made the announcement.

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

Assistant Chief Jacob Foster of the Criminal Division’s Fraud Section’s National Rapid Response Strike Force and Trial Attorney Darren Halverson of the Newark Strike Force 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 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.

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WASHINGTON – Ten Florida residents were charged in an indictment unsealed today in the Southern District of Florida for their alleged roles in a $67 million health care fraud, wire fraud, kickback, and money laundering scheme involving the submission of false and fraudulent claims to Medicare for medically unnecessary genetic tests and durable medical equipment.

Daniel M. Carver, 35, of Coral Springs; Thomas Dougherty, 39, of Royal Palm Beach; and John Paul Gosney Jr., 39, of Parkland, the owners and managers of independent clinical laboratories and marketing companies, were each charged with conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive health care kickbacks and bribes, paying and receiving kickbacks and bribes, conspiracy to commit money laundering, and money laundering offenses.

Galina Rozenberg, 39, and Michael Rozenberg, 58, both of Hollywood, were arrested on Feb. 6, attempting to board a flight to Moscow. Each were charged with one count of conspiracy to commit health care fraud, health care fraud, and conspiracy to commit money laundering. Galina Rozenberg was also charged with additional money laundering offenses.

Louis Carver, 30, of Delray Beach; Timothy Richardson, 29, of Lantana; Ethan Macier, 22, of Coral Springs; and Jose Goyos, 35, of West Palm Beach were each charged with conspiracy to commit health care fraud, health care fraud, conspiracy to commit money laundering, and money laundering offenses. Ashley Cigarroa, 29, of North Lauderdale was charged with one count of conspiracy to commit health care fraud and committing health care fraud.

The indictment alleges that, between January 2020 and July 2021, the defendants referred Medicare beneficiaries for medically unnecessary genetic tests and durable medical equipment. In exchange for doctors’ orders for such tests and equipment, the defendants allegedly paid kickbacks and bribes to telemedicine companies. The indictment further alleges that the defendants falsified Medicare enrollment forms to conceal the true owners and managers of certain laboratories, and submitted false and fraudulent claims to Medicare.

The defendants are anticipated to make their initial appearances in federal court beginning the week of Feb. 28. Federal charges for conspiracy to commit health care fraud and wire fraud, conspiracy to commit money laundering, and money laundering are each punishable by a maximum penalty of 20 years in prison. Health care fraud and anti-kickback violations are each punishable by a maximum penalty of 10 years in prison. Conspiracy to pay and receive kickbacks is punishable by a maximum penalty of five 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; Assistant Director Luis Quesada of the FBI’s Criminal Investigative 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 HHS-OIG Miami Region and FBI’s Miami Field Office investigated the case.

Trial Attorneys Patrick J. Queenan and Reginal Cuyler Jr. of the Criminal Division’s Fraud Section are prosecuting the case. Assistant U.S. Attorney Sara Michele Klco of the Southern District of Florida is handling asset forfeiture matters.

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.

Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine or genetic testing marketing schemes should call to report this conduct to the FBI hotline at 1-800-CALL-FBI.

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Ten people, including two medical doctors, have been indicted in a $300 million healthcare fraud, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

The defendants – who stand accused of accused of conspiracy to commit healthcare fraud, conspiracy to pay and receive healthcare kickbacks, offering or paying illegal kickbacks, and soliciting or receiving illegal kickbacks – were charged in a 26-count indictment filed Wednesday afternoon.

“Anti-kickback laws are designed to ensure that financial considerations do not cloud physicians’ judgement,” said U.S. Attorney Chad Meacham. “The Justice Department is determined to prosecute those flouting our nation’s healthcare fraud laws. Patients – and taxpayers – deserve rigorous enforcement.”

“Illegal kickback schemes corrupt the healthcare system. They cause billions of dollars in losses each year, generate business for dishonest service providers and erode trust in our health care system,” said Dallas FBI Special Agent in Charge Matthew DeSarno. “The FBI will continue to work with our law enforcement partners to expose fraud and protect the public from illegal schemes.”

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

The medical professionals -- including internal medicine specialist Eduardo Canova, family medicine practitioner Jose Maldonado, and nurse practitioner Keith Wichinski – allegedly accepted the bribes and ordered millions of dollars’ worth of tests.

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

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

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

As a result of these kickbacks, laboratories controlled by the defendants were able to submit more than $300 million in billing to federal government healthcare programs. Between 2015 and 2018, Dr. Maldonado alone received more than $400,000 in kickbacks for ordering more than $4 million worth of lab tests and Dr. Canova received more than $300,000 in kickbacks for ordering more than $12 million worth of lab tests.

Defendants indicted are:

• Jeffrey Paul Madison, 56, founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory
• Mark Christopher Boggess, 49, chief operating officer for Spectrum and Unified
• Biby Ancy Kurian, 49, co-founder of Reliable Labs, LLC
• Abraham Phillips, 50, co-founder of Reliable Labs, LLC
• Keith Allen Wichinski, 50, board-certified nurse practitioner based in San Antonio
• David Michael Lizcano, 56, ]owner of DCLH, a marketing firm engaged by Unified, Spectrum, and Reliable
• Laura Ortiz, 58, sister of David Lizcano and employee at his marketing firm
• Juan David Rojas, 34, owner of Rojas & Associates, another marketing firm engaged by Unified, Spectrum, and Reliable

An indictment is merely an allegation of criminal conduct, not evidence. Defendants are presumed innocent until proven guilty in a court of law.

If convicted, the defendants face up to 55 years or more in federal prison.

The Federal Bureau of Investigation’s Dallas Field Office, the U.S. Department of Health and Human Services’ Office of Investigations, the Defense Criminal Investigative Service, and the Veterans Affairs’ Office of Inspector General conducted the investigation. Assistant U.S. Attorney P.J. Meitl is prosecuting the case.

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A Tennessee doctor pleaded guilty yesterday in the Eastern District of Tennessee to maintaining his Knoxville, Tennessee, pain clinic as an illegal drug premises.

According to court documents, Dr. David Newman, 61, of Maryville, owned, operated, and was Medical Director of Tennessee Valley Pain Specialists (TVPS), a non-insurance, cash-equivalent pain clinic. Newman owned this clinic with Dr. Steven Mynatt. Newman continued to operate and serve as Medical Director of TVPS, despite knowing that Mynatt was prescribing opioids to patients outside professional practice and for no legitimate medical purpose. Newman and Mynatt were charged with drug-related offenses as part of the April 2019 Appalachian Regional Prescription Opioid Strick Force Surge. Mynatt entered a guilty plea related to his distribution of controlled substances at TVPS in February 2020 and will be sentenced on Feb. 9, 2022.

Newman pleaded guilty to unlawfully maintaining a drug premises. He is scheduled to be sentenced on Feb. 9, 2022, and faces a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee; Special Agent in Charge J. Todd Scott of the Drug Enforcement Administration (DEA); Special Agent in Charge Joseph Carrico of the FBI’s Knoxville Field Office; Special Agent in Charge Derrick L. Jackson of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG); and Special Agent in Charge Andy Corbitt of the Tennessee Bureau of Investigation (TBI) made the announcement.

The DEA, FBI, HHS-OIG, and TBI are investigating the case.

Trial Attorney Louis Manzo and Assistant Chief Jillian Willis of the Justice Department’s Fraud Section and Assistant U.S. Attorney Anne-Marie Svolto of the Eastern District of Tennessee are prosecuting the case.

The Fraud Section leads the Appalachian Regional Prescription Opioid (ARPO) Strike Force. Since its inception in October 2018, the ARPO Strike Force, which operates in 10 federal districts, has charged more than 85 defendants who are collectively responsible for distributing more than 65 million pills.

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A Texas man wanted in connection to a roof repair scam that tricked senior citizens, including a Vietnam War Veteran, out of thousands of dollars was arrested Friday, investigators said.

Joshua Bell, 36, was caught after the U.S. Marshals North Texas Fugitive Task Force located him in Dallas, the Arlington Police Department wrote on Facebook.

Bell was living out of his car and had plans to go to casinos in Oklahoma, a source told FOX4 Dallas-Fort Worth.

Bell was wanted in multiple fraud cases in Mesquite, Arlington and Flower Mound, where he posed as a roof repairman and took large sums of money for repairs he did not do, police said. He is accused of swindling a Vietnam Veteran out of $17,000, and two other senior citizens for $1,200 each.

In some cases, Bell would use the name of a reputable local roofing company he had no connection with to take advantage of the homeowners, police have said.

Bell has been convicted of two similar schemes in the past, and was released early each time only to repeat his offenses, FOX4 reported.

He was sentenced to 20 years in prison in 2004 after pleading guilty to theft and burglary, but records obtained by the station show he was released in 2011. In 2013, he was sentenced to nine years for similar roof repair scams in Cooke and Grayson Counties, but only served three years.

Before his latest release, Bell had begged a judge for leniency in a written letter, blaming his actions on his drug addiction, according to the station.

He is being held in the Dallas County Jail.

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Adam Gallardo Arredondo, 59, of Waxahachie, Texas, pleaded guilty Monday to illegal remuneration for health care referrals. Arredondo admitted that he solicited and received checks from OK Compounding, a Tulsa pharmacy, in exchange for referring his patients’ compounding prescriptions. The compounding prescriptions were paid for by federal healthcare programs; therefore, the kickbacks paid to Arredondo violated federal law.

According to the plea agreement, the United States and Arredondo agreed to the following sentence – 36 months of supervised probation and restitution to be paid in the amount of $216,624.75. Arredondo further agreed to surrender his medical license. U.S. District Judge Gregory K. Frizzell will determine Arredondo’s final sentence at a hearing set for Sept. 24.

In the agreement, Arredondo stated that on January 1, 2013, he signed a Consulting Physicians Agreement with OK Compounding, located in Tulsa. The agreement stated that Arredondo would provide services in exchange for an hourly payment from OK Compounding. In his plea, Arredondo stated that he never provided the services listed in the Agreement but was instead paid for sending all of his patients’ compounding prescriptions to OK Compounding to be filled.

Arredondo also created the company, Taffinder Marketing, LLC, and recruited other physicians to enter into similar contracts with OK Compounding. Like Arredondo, those physicians did not perform the services in their contract; rather, they were paid to send their compounding prescriptions to OK Compounding. Arredondo’s company was paid a monthly fee for the recruitment services. On August 14, 2013, Arredondo received a $10,000 check from OK Compounding as payment for referring the prescriptions. The payment included prescriptions that were paid in whole or in part by the federal programs TRICARE, VA, Medicare and/or Office of Worker's Compensation Programs-Department of Labor.

TRICARE suffered a loss of $16,547.75 as a result of the crime.

Further losses incurred from other offenses not included in the plea agreement totaled $200,077.00. Those losses include:

Department of Labor: $14,746.58

Medicare $53,272.67

Tricare: $119,567.76

VA: $ 12,489.99

The Defense Criminal Investigative Service, the Department of Labor-Office of Inspector General, the Internal Revenue Service, the United States Postal Service-Office of Inspector General, Federal Bureau of Investigation, and United States Department of Health and Human Services-Office of Inspector General conducted the investigation. Assistant U.S. Attorney Melody Noble Nelson is prosecuting the case.

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HOUSTON – A 58-year-old resident of Richmond has been ordered to prison for 25 years following her convictions of conspiracy and aiding and abetting health care fraud, announced Acting U.S. Attorney Jennifer B. Lowery.

A Houston jury returned guilty verdicts against Brenda Rodriguez in January 2019 following a three-day trial.

Today, U.S. District Judge Lynn H. Hughes ordered her to serve a total of 300 months in federal prison to be immediately followed by three years of supervised release. At the hearing, the court heard additional evidence of her role in the scheme. In handing down the sentence, the court noted that as part of a larger conspiracy Rodriguez was responsible for all of the loss to taxpayers the scheme generated.

Brenda Rodriguez owned and operated the QC Medical Clinic in Richmond.

At trial, the jury heard Rodriguez paid doctors to approve patients for home health care regardless of whether it was medically necessary. Rodriguez then sold those approvals to various corrupt home health care providers. These providers then billed Medicare for services that were either unnecessary or never provided.  

During the trial, jurors were able to watch video that captured the fraud committed at Rodriguez’s clinic. Potential clients were given brief exams, often by unlicensed people posing as doctors, and then quickly approved for medical services that were unnecessary.  

As a result of the investigation and prosecution, several other doctors and administrators have also been convicted of crimes ranging from Medicare fraud to the payment of kickbacks.  

Ultimately, the providers billed Medicare for over $11 million as a result of patients Rodriguez provided.

Rodriguez was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The Department of Health and Human Service (DHHS)-Office of Inspector General and FBI conducted the investigation. Assistant U.S. Attorneys Tina Ansari and Thomas Carter prosecuted the case along with Trial Attorney Scott Armstrong of the Fraud Section in the Department of Justice’s Criminal Division.

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

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

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

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

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

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

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

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

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

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

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

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

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A Texas woman was sentenced to 18 months in prison today for her role in a $5.5 million scheme to overbill the U.S. Department of Labor Office of Workers’ Compensation Program for physical therapy and other services.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas, Special Agent in Charge Robert Bourbon of the U.S. Department of Justice Office of the Inspector General’s (DOJ-OIG) Dallas Field Office, Special Agent in Charge Steven Grell of the U.S. Department of Labor Office of Inspector General’s (DOL-OIG) Dallas Regional Office, Special Agent in Charge Scott Pierce of the U.S. Postal Service Office of Inspector General’s (USPS-OIG) Southern Area Field Office, Acting Special Agent in Charge Patrick Roche of the U.S. Department of Veterans Affairs Office of Inspector General’s (VA-OIG) Criminal Investigations Division South Central Field Office, and Special Agent in Charge Ray Rayos of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit (MPFU) Southwest Fraud Field Office made the announcement.

Melissa Sumerour, 49, of Lorena, Texas, was sentenced by U.S. District Judge Karen Gren Scholer of the Northern District of Texas to 18 in prison followed by three years of supervised release. After a trial in December 2019, Sumerour was convicted of six counts of health care fraud.

According to evidence presented at trial, from approximately January 2011 to March 2017, Sumerour engaged in a scheme to defraud the DOL’s Office of Workers’ Compensation Program by overbilling for physical therapy. The evidence established that the fraud, in which Sumerour billed for more physical therapy than was provided, cost the Office of Workers’ Compensation Program in excess of $5.5 million.

One other defendant has been charged in this matter. Latosha Morgan, 42, of Grand Prairie, Texas, pleaded guilty and is awaiting sentencing.  

This case was investigated by DOJ-OIG, DOL-OIG, USPS-OIG, VA-OIG, and Army CID-MPFU. Trial Attorneys Brynn Schiess and Amy Markopoulos of the Criminal Division’s Fraud Section are prosecuting the case.

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

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

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The Department of Veterans Affairs and Consumer Financial Protection Bureau are warning consumers about a new scam targeting Veterans with VA guaranteed home loans.

According to a news release, there has been a recent jump in scams targeting Veterans with home loans. The scammers usually pretend to be affiliated with the government or a mortgage company and attempt to scam Veterans out of money by some new and novel methods, along with some techniques that have been around for years, albeit with either a new COVID-19 related twist or new technology that makes it easier for the scammers to conceal their identity.

The fraudsters try to get Veterans to refinance their homes, agree to loan modifications or even start sending their mortgage payments to a new address, according to the release.

With the recent financial crisis resulting from the COVID-19 epidemic, fraudsters are also trying to convince Veterans that their homes are facing foreclosure or they owe late fees.

Some Veterans have reported phone calls that appear to come from the local VA office, with the caller telling the Veteran their mortgage has been transferred to a new servicer. As a result of this supposed mortgage transfer, the Veteran now owes months' worth of mortgage payments, the fraudster claims. To avoid foreclosure, the Veteran is told they must make several hundreds or thousands of dollars worth of back payments to the new mortgage holder at a new address, usually through a money order or gift cards. These methods of payment cannot be traced.

Other calls and letters promise unusually low interest rates for refinancing a mortgage, but require the Veteran to pay several fees upfront, before receiving any services. Once the Veteran pays the fees, the "mortgage company" either denies the application or ceases communications with the Veteran, the release states.

Other new scams cite existing federal mortgage assistance programs related to COVID-19 financial relief initiatives. The scammers tell homeowners that the Veteran either must turn over the title to their property or sign confusing paperwork without reviewing it, claiming the relief programs are about to end and things must be done quickly.

As usual, the scammers play upon fear and confusion and rapidly disappear once they get what they seek -- your money.

The Consumer Financial Protection Board warns that if you suspect a scam, you should first contact the VA or your mortgage lender to determine whether the offer is real. If it is not, you should cease all communications with the scammer and contact your State Attorney General's Office and the Federal Trade Commission so that they hopefully can bring the bad actors to justice.

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FORT SMITH – A Fort Smith physician, Donald E. Hinderliter, was sentenced today to 4 years in federal prison followed by 1 year of supervised release on one count of Distribution of a Controlled Substance without an Effective Prescription. The Honorable Judge P. K. Holmes III presided over the sentencing hearing in the U.S. District Court in Fort Smith.

According to court documents, Hinderliter, 85, of Fort Smith, pleaded guilty to a felony Information charging unlawful distribution of a controlled substance namely, alprazolam. From approximately January 2016 and through November 8, 2018, Hinderliter was an owner and practitioner at Hinderliter Pain Clinic that operated as a pain management clinic in Barling, Arkansas. In May 2017, the Drug Enforcement Administration (DEA) received several anonymous complaints that Hinderliter was operating a “pill mill” under the name Hinderliter Pain Clinic. The complaints stated that Hinderliter and his associate, Dr. Cecil W. Gaby, charged cash, prescribed hydrocodone and benzodiazepines in the same amount to patients regardless of a particular patient’s prognosis or need, and that patients traveled great distances within the state of Arkansas and surrounding states seeking large quantities and dangerous combinations of oxycodone, hydrocodone, alprazolam, and methadone, among other controlled substances. As part of the plea, Hinderliter admitted that he prescribed opioids and benzodiazepines to more than 150 individuals, often not for a legitimate medical purpose and not in the usual course of professional practice. Specifically, on October 17, 2016, Hinderliter prescribed 84 alprazolam 2mg pills, a Schedule IV controlled substance to a patient that was not for a legitimate medical purpose and not in the usual course of professional practice.

On May 27, 2021, Dr. Cecil W. Gaby was sentenced to 120 months imprisonment for his role in the Hinderliter Pain Clinic and Gaby Medical Clinic in Fort Smith, Arkansas. On the same date, Dr. Robin Cox was sentenced to 36 months imprisonment for distribution of opioid medications outside legitimate medical practice at an unrelated clinic in Rogers, Arkansas.

U.S. Attorney David Clay Fowlkes of the Western District of Arkansas made the announcement.

The Drug Enforcement Administration (DEA), DEA Diversion Little Rock, Federal Bureau of Investigation (FBI), the United States Department of Health and Human Services Office of Inspector General (HHS), Arkansas State Medical Board and the Fort Smith Police Department investigated the case.

Special Assistant U.S. Attorney Anne Gardner and Assistant U.S. Attorney Brandon Carter prosecuted the case for the United States.

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

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

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

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

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

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

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

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Three telemarketing company owners were charged for their alleged participation in a $47 million health care fraud, kickback, and money laundering scheme involving the referral of medically unnecessary cancer genetic tests to labs in exchange for kickbacks.

An indictment, unsealed today, charges Christian McKeon, 35, and Athanasios Ziros, 42, each of Boca Raton, Florida, with one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks, multiple counts of substantive health care fraud and kickback offenses, conspiracy to commit money laundering, and substantive counts of money laundering offenses. Also, an information, unsealed today, charges Gregory Orr, 64, of Boca Raton, with one count of conspiracy to pay and receive kickbacks and one substantive count of receipt of kickbacks for his alleged role in this scheme.

According to the indictment, McKeon and Ziros allegedly participated in a scheme to operate a telemarketing campaign targeting Medicare beneficiaries in an effort to induce them to accept cancer genetic tests regardless of whether the tests were medically necessary or eligible for Medicare reimbursement. As part of the scheme, McKeon and Ziros allegedly offered and paid illegal kickbacks and bribes to telemedicine companies in exchange for doctors’ orders for expensive cancer genetic tests. The doctors’ orders were written by doctors contracted with telemedicine companies, even though those telemedicine doctors had no prior relationship with the beneficiaries, were not treating the beneficiaries for cancer or symptoms of cancer, did not use the test results in the treatment of the beneficiaries, and did not conduct a proper telemedicine visit.

According to court documents, all three men sold these signed doctors’ orders for cancer genetic tests to labs in exchange for illegal kickbacks. The indictment and information allege that the defendants caused one of the labs to submit approximately $46 million in claims to Medicare, of which over $27 million was paid. The indictment further alleges that the lab paid McKeon, Ziros, and others kickbacks totaling over $14 million, and that McKeon and Ziros laundered these unlawful proceeds knowing that the transactions at issue had been designed to conceal and disguise the nature, source, and control of the proceeds.

McKeon made his initial court appearance today before U.S. Magistrate Judge William Matthewman of the U.S. District Court for the Southern District of Florida, West Palm Division. Ziros and Orr are scheduled to appear for their initial appearances in front of Magistrate Judge Matthewman on May 5.

The counts charging conspiracy to commit health care fraud and wire fraud count, conspiracy to commit money laundering, and substantive money laundering are each punishable by a maximum potential penalty of 20 years in prison. The counts charging health care fraud and anti-kickback violations are each punishable by a maximum potential penalty of 10 years in prison. Finally, the conspiracy to pay and receive kickbacks count is punishable by a maximum potential penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; and Special Agent in Charge Omar Perez of the U.S. Department of Health and Human Services (HHS) Office of Inspector General’s (HHS-OIG) Miami Region made the announcement.

Trial Attorney Patrick Queenan of the Criminal Division’s Fraud Section is prosecuting the case. Assistant U.S. Attorney Richard Brown of the Southern District of Florida is handling the forfeiture aspect of the case.

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

Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine or genetic testing marketing schemes should call to report this conduct to the FBI hotline at 1-800-CALL-FBI.

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

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NEWARK, N.J. – Three men today admitted their roles in a health care fraud and kickback schemes, U.S. Attorney Rachael A. Honig announced.

Nicholas Defonte, 73, and Christopher Cirri, 63, both of Toms River, New Jersey, and Pat Truglia, 53, of Parkland, Florida, each pleaded guilty before U.S. district Judge Kevin McNulty in Newark federal court to conspiracy to commit health care fraud.

According to documents filed in these cases and statements made in court:

Each defendant played a role in defrauding health care benefit programs by offering, paying, soliciting, and receiving kickbacks and bribes in exchange for completed doctors’ orders for durable medical equipment, namely orthotic braces (DME orders):

• Truglia and his conspirators had financial interests in multiple DME companies. The DME companies paid kickbacks to suppliers of DME orders, including Cirri, Defonte, and Truglia, in exchange for DME orders, which the DME companies subsequently fraudulently billed to Medicare, TRICARE, CHAMPVA, and other health care benefit programs. Truglia and his conspirators concealed their ownership of the DME companies by using straw owners who were falsely reported to Medicare as the owners of the companies.

• Truglia, Cirri, Defonte, and their conspirators owned and operated multiple call centers through which they obtained DME orders for beneficiaries of Medicare and other federal health care programs. The call centers paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these beneficiaries. The telemedicine companies then paid physicians to write medically unnecessary DME orders. The DME orders were provided to DME supply companies owned by Truglia and others in exchange for bribes. The DME supply companies in turn provided the braces to beneficiaries and fraudulently billed the health care programs.

• Cirri, Defonte, and their conspirators had business relationships with call centers through which they obtained prescriptions for compounded medications and other medical products reimbursable by federal and private health care benefit programs. Cirri and Defonte provided these prescriptions for compounded medical prescriptions and other medical products in exchange for kickbacks and bribes from companies that fraudulently billed them to health care programs.

The defendants caused losses to Medicare, TRICARE, and CHAMPVA of approximately $50 million.

The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. Sentencing for all three defendants is scheduled for March 22, 2022.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty; and the U.S. Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorneys Sean M. Sherman and Ryan L. O’Neill of the Opioid Abuse Prevention & Enforcement and Health Care Fraud Units in Newark, Senior Trial Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit in Newark, and Trial Attorney Darren Halverson of the Criminal Division’s Fraud Section.

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Tampa, Florida – U.S. District Judge Mary S. Scriven has sentenced Marcus Lloyd Anderson (36, St. Petersburg) to one year and a day in federal prison for health care fraud. As part of his sentence, the court also entered a money judgment in of $323,248, which were the proceeds of the offense.

Anderson had pleaded guilty on April 30, 2020.

According to court documents, Anderson submitted bogus claims to the Florida Medicaid program and related managed care organizations for services that were never provided to patients. Anderson falsely claimed that patients had received counseling at his treatment facility when, as he knew, they were not there. In fact, some patients were hospitalized or placed in assisted living facilities elsewhere when Anderson lied, claiming they were in his care. Anderson also stole and misused the billing credentials of multiple doctors by billing for services he claimed they had rendered to patients at his facility, when those doctors had left his employment many months before. By lying about the services rendered and misusing billing credentials, Anderson stole more than $300,000 from these programs.

“Stealing from Medicaid, a taxpayer-funded safety net program, is a reprehensible crime that diverts funds intended to serve some of the most vulnerable individuals in our country,” said Special Agent in Charge Omar Pérez Aybar of U.S. Department of Health and Human Services Office of Inspector General. “Such greed-fueled scams will not be tolerated. Thanks to our hardworking investigators and our law enforcement partners, fraudsters are being held accountable for engaging in these illicit activities.”

“We are thankful that this matter has been resolved and Mr. Anderson is being held accountable for his actions,” said Anthony Holloway, Chief of St. Petersburg Police. “We appreciate our partnership with the U.S. Attorney’s Office and their continued commitment to seek justice for those who are victimized by schemes to defraud.”  

Attorney General Ashley Moody said, “This fraudster misused billing credentials of physicians and charged the government for services not rendered to steal from taxpayers. Thankfully, our Medicaid Fraud Control Unit investigators, working with federal authorities, uncovered the scheme and now, this fraudster will serve time in a federal prison.”

The case was investigated by Health and Human Services, Office of Inspector General, the Florida Office of Attorney General’s Medicaid Fraud Control Unit, and the St. Petersburg Police Department. It was prosecuted by Assistant U.S. Attorney Kristen A. Fiore.

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A Mississippi man described as the “mastermind of the largest health care fraud scheme” in that state’s history has been sentenced to 18 years in prison and ordered to pay nearly $350 million in connection to his role in a scheme to defraud Tricare, Justice officials said.

Wade Ashley Walters, 54, of Hattiesburg, Miss., who earlier pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering, was sentenced Jan. 15 in federal court in Mississippi, according to an announcement from the Justice Department. He is co-owner of numerous pharmaceutical distributors and compounding pharmacies — companies that make individualized medications for people.

He was ordered to pay nearly $288 million in restitution, and to pay an additional $57 million to forfeit his personal profit from the scheme, officials stated.

The sentencing “is another mile marker on the long road to justice for victims, our Veterans, our military, and all American taxpayers, as the mastermind of the largest health care fraud scheme in Mississippi history has been held to answer for his crimes,” said Mike Hurst, U.S. Attorney for the Southern District of Mississippi, in the Justice Department announcement.

Since 2007, federal officials have been engaged in a coordinated, large-scale investigation of health care fraud. Some involve schemes to submit claims to Medicare, Medicaid and Tricare for treatments that weren’t medically necessary, and sometimes never provided. Some schemes resulted in convincing Tricare beneficiaries to fill prescriptions for pain creams, ointments and other topical medicines they didn’t necessarily need, resulting from illegal kickback schemes.

Between 2012 and 2016, Walters ran a scheme to defraud Tricare and other health care benefits programs by distributing compounded medications that weren’t medically necessary, officials stated.

According to Justice officials, Walters and his co-conspirators:

*adjusted prescription formulas to ensure the highest reimbursement without regard to effectiveness; and solicited recruiters to get prescriptions for high-margin compounded medications, *paid those recruiters commissions based on the percentage of reimbursements paid, including claims reimbursed by Tricare, and set up a system to make it appear that the pharmacies were collecting copayments, while waiving or reducing copayments paid by beneficiaries.

*solicited medical practitioners to authorize prescriptions for high-profit compounded medications, and sometimes paid kickbacks to those practitioners.

The investigation into this specific scheme began in the FBI’s Jackson, Miss., field office. Among the federal agencies that investigated are the Defense Criminal Investigative Service’s southeast field office, the Internal Revenue Service’s Atlanta field office, and the Mississippi Bureau of Narcotics.

The Justice Department Criminal Division’s Fraud Section leads the Health Care Fraud Strike Force, formed in 2007. That has resulted in charging more than 4,200 defendants who have collectively billed Medicare for about $19 billion, according to Justice officials.

In May, 2015, a Tricare policy change required screening of all ingredients in the compounded prescriptions and rejecting any that contained non-FDA approved ingredients. These prescriptions were increasingly costly to the Defense Health Agency, which spent nearly $1 billion on compounded prescriptions in the first four months of 2015 alone.

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LOS ANGELES – The owner of a San Fernando Valley trucking school was sentenced today to 48 months for leading a sophisticated scheme to defraud the United States Department of Veterans Affairs out of more than $4 million in education benefits involving over 100 Veterans who did not attend classes.

Emmit Marshall, 53, of Woodland Hills, was sentenced by United States District Judge Stephen V. Wilson, who also ordered him to pay $4.1 million in restitution. Marshall pleaded guilty in July 2019 to five counts of wire fraud.

At the hearing, Judge Wilson stated that this “was a very serious fraud on the government,” which involved “calculated, criminal acts that cannot be condoned.”

Marshall is the owner and president of the Chatsworth-based Alliance School of Trucking (AST). Marshall and a co-defendant, AST Vice President Robert Waggoner, 57, of Canyon Country, recruited eligible Veterans to take trucking classes paid under the Post-9/11 GI Bill. AST was certified to offer classes under the Post-9/11 GI Bill, including a 160-hour Tractor Trailer & Safety class and a 600-hour Select Driver Development Program.

Under the Post-9/11 GI Bill, the VA paid tuition and fees directly to the school at which Veterans were enrolled. The VA also paid a housing allowance to Veterans enrolled full-time in an approved program, and, in some cases, the VA paid for books and supplies for Veterans’ benefit.

From July 2011 to April 2015, Marshall and Waggoner convinced more than 100 Veterans to participate by telling them they were entitled to VA education benefits, even if they did not attend classes. Despite not taking classes, the Veterans who agreed to join the scheme accepted education benefits for housing while AST collected the benefits for tuition, resulting in a total loss to the VA of at least $4.1 million.

In addition, Marshall resorted to occasionally using Veterans’ personal information to sign them up for benefits, forging signatures, sometimes without the Veterans’ permission. Finally, in an attempt to obfuscate the overall scheme and the forgeries of student enrollment paperwork, Marshall directed the Veteran-students to lie to VA investigators and ordered the destruction of AST paperwork by co-schemers.

“[Marshall] profited most from this conduct, pocketing nearly $1 million himself, which he used for jewelry, a cruise, a trip to Hawaii, property taxes on his Woodland Hills residence, purchase of a Ford F-150 and purchase of semi-tractor trailers for a new business,” prosecutors wrote in their sentencing memorandum.

Waggoner pleaded guilty on February 24 to five counts of wire fraud. His sentencing hearing is scheduled for March 15, 2021, at which time he will face a statutory maximum sentence of 100 years in federal prison.

This matter was investigated by the U.S. Department of Veterans Affairs Office of Inspector General, the U.S. Department of Justice Office of the Inspector General, and the FBI.

This case was prosecuted by Assistant United States Attorney Kimberly D. Jaimez of the Major Frauds Section.

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FORT SMITH – Fort Smith physician and Rogers physician were sentenced today on one count each of Distribution of a Controlled Substance without an Effective Prescription. The Honorable Judge P. K. Holmes III presided over the sentencing hearings in the U.S. District Court in Fort Smith.

According to court documents, Cecil W. Gaby, 71, of Fort Smith, a licensed physician in the State of Arkansas, pleaded guilty on December 18, 2019 to acting and intending to act outside the usual course of professional practice without a legitimate medical purpose in dispensing a Schedule II controlled substance namely, oxycodone, to an individual, thereby causing the death of the individual. Between January 2016 and July 2018, Gaby was an owner and operator of the Hinderliter Pain Clinic in Barling, Arkansas and from July 2018 through November 2018, was owner and operator of the Gaby Medical Clinic in Fort Smith, Arkansas. From January 2016 through November 2018, Gaby issued more than 11,000 prescriptions for opioids and/or benzodiazepines. Gaby prescribed approximately 1,156,044 dosage units of Schedule II controlled substances to 347 patients (3,332 pills per patient over the course of 2 years); 98% of Gaby’s patients were prescribed at least one opioid (hydrocodone, oxycodone, methadone, etc.); 94% of Gaby’s patients received either multiple narcotics or a combination of narcotics and sedatives; and 27% of Gaby’s patients were age 40 or younger. Evidence in the case revealed that Gaby issued a large number of prescriptions without a legitimate medical purpose and not in the usual course of professional practice. From 2016 through 2018, several of Gaby’s patients died of drug overdose or related causes. As part of his plea, Gaby admitted that prescriptions he issued directly resulted in the death of one of his patients. Gaby was sentenced to 120 months in federal prison followed by 3 years of supervised release.

Robin Ann Cox, 64, of Rogers, was employed by the Arkansas Medical Clinic (AMC) in Rogers, Arkansas. Cox and the owner of AMC contacted the DEA by telephone to report that prescriptions from Cox's previous employment had been fraudulently written and filled. Cox specifically identified a prescription for a patient written and filled on May 17, 2019, and a prescription for a patient dated May 19, 2019 and filled on May 20, 2019. During the investigation into these prescriptions, the DEA discovered that the prescriptions were for Schedule II opioid medications, and that Cox had written one of the prescriptions while meeting with the patient in the parking lot of a restaurant in Fort Smith, Arkansas, in the Western District of Arkansas, Fort Smith Division. The prescription was not written in conjunction with an appropriate medical examination and therefore was issued outside the course of a legitimate medical practice. Cox was sentenced to 30 months in federal prison followed by 3 years of supervised release

“The abuse of opioids and other pain medications is an epidemic that is destroying the lives of many people across the Western District of Arkansas. We will continue to use all the investigation and prosecution tools available to us to identify and prosecute those who are responsible for the over-prescription of these dangerous drugs. It is my sincere hope that these cases today send a strong message to all of those in our District who would consider operating a “pill mill” or otherwise seeking to profit from the over-prescribing of opioid drugs and other pain-killers,” said Acting U.S. Attorney David Clay Fowlkes.

“The abuse of prescription drugs remains a significant problem in our communities. This abuse often leads to addiction, shattered lives, and even death. For the health and safety of our citizens, DEA and our law enforcement partners in Arkansas and beyond will continue to target those who illegally distribute these potentially dangerous drugs. It is particularly disappointing when trusted medical professionals are engaged in the diversion of controlled substances. We hope that the convictions and sentencings of these Physicians will serve as a reminder to anyone who might illegally divert pharmaceuticals that they will be held accountable for the harm they cause,” said DEA Special Agent in Charge Brad L. Byerley.

The Drug Enforcement Administration (DEA), DEA Diversion Little Rock, Federal Bureau of Investigation (FBI), the United States Department of Health and Human Services Office of Inspector General (HHS), Arkansas State Medical Board, the Fort Smith Police Department, the Springdale Police Department, and the Rogers Police Department investigated the case.

Special Assistant U.S. Attorney Anne Gardner prosecuted the case for the United States.

Cox’s prosecution is part of the Western District of Arkansas’ Operation Pillusional, which is part of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program. The OCDETF program is the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s illicit drug supply.

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DETROIT - Two defendants have been charged via criminal complaint for their roles in separate frauds related to Covid-19 Vaccination Record Cards, announced Acting United States Attorney Saima S. Mohsin.

Joining in the announcement were Gavin McClaren, Acting Special Agent in Charge, VA-OIG, Central Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG) – Chicago Region and Vance R. Callender, Special Agent in Charge of Homeland Security Investigations (HSI) field offices in Michigan and Ohio.

The first complaint charges Bethann Kierczak, 37, of Southgate with theft of government property and theft or embezzlement related to a healthcare benefit program. Kierczak, a registered nurse, was arrested this morning and will be appearing in federal court this afternoon on the charges.

According to the complaint, Kierczak is responsible for stealing or embezzling authentic Covid-19 Vaccination Record Cards from the VA hospital—along with vaccine lot numbers necessary to make the cards appear legitimate—and then reselling those cards and information to individuals within the metro Detroit community. The complaint alleges that Kierczak’s theft of Covid-19 Vaccination Record Cards began at least as early as May of this year and continued until the present. It is further alleged that Kierczak sold the cards for $150-$200 each and communicated with buyers primarily via Facebook Messenger.

The second complaint charges Rapheal Jarrell Smiley, 32, of Detroit with fraud involving department or agency seals, identity document fraud, and trafficking in counterfeit goods. Smiley was arrested earlier today and will also be making his initial appearance in federal court as well.

According to the complaint, Smiley is responsible for conducting an ongoing scheme to import and sell or otherwise distribute fraudulent Covid-19 Vaccination Record Cards. It is alleged that Smiley ordered the cards from two shippers in China, both of which have been previously identified by law enforcement as importers of fraudulent Covid-19 Vaccination Record Cards. Further, the complaint alleges that Smiley advertised the cards for sale via his Facebook and Instagram accounts.

“These arrests reflect our deep commitment to protecting the health of our community and preventing this dangerous fraud from affecting our most vulnerable citizens,” said Acting US Attorney Mohsin. “Regardless of whether an individual choses to get vaccinated, we urge everyone to avoid turning to schemes like these to evade vaccination requirements. Importing these cards is a crime. Selling these cards is a crime. We will continue to investigate these crimes and prosecute them accordingly.”

“VA’s COVID-19 safety protocols, including ensuring accurate vaccination records, exist to keep both Veterans and VA’s healthcare workers safe during this global pandemic,” said Gavin McClaren, Acting Special Agent in Charge, VA-OIG, Central Field Office. “These charges symbolize VA OIG’s commitment to protecting the integrity of VA’s healthcare delivery system, and diligently investigating any potential criminal activity that could threaten the safety of its patients and employees.”

“The theft of government property is a serious crime, particularly when it involves documents that are used in recording patient health information,” said Special Agent in Charge Lamont Pugh III of the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG) - Chicago Region. "Stealing and selling COVID-19 vaccination cards is an inexcusable act and will not be tolerated. HHS is committed to working with our law enforcement partners to protect the health and safety of the public during this pandemic.”

“At a time when Americans eagerly want to return to a normal way of life, these counterfeit vaccine cards undermine our confidence in COVID-19 vaccines,” said Vance R. Callender, Special Agent in Charge of Homeland Security Investigations (HSI) field offices in Michigan and Ohio. “HSI dedicates significant resources to investigate a wide variety of pandemic-related fraud schemes. This arrest and seizure demonstrates HSI’s ongoing commitment to support the integrity of our public healthcare system by preventing the illegal importation and sale of counterfeit vaccine cards.”

A complaint is only a charge and is not evidence of guilt. Trial cannot be held on felony charges in a complaint. When the investigations are completed, determinations will be made whether to seek felony indictments.

The cases are both being prosecuted by Assistant United States Attorney Ryan A. Particka. The Kierczak investigation is being conducted by the U.S. Department of Veterans Affairs-Office of Inspector General (VA-OIG), VA Police Detroit and the Medicare Fraud Strike Force (MFSF) partners, a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI and U.S. Health and Human Services-Office of Inspector General (HHS-OIG). The Smiley investigation is being conducted by agents from Homeland Security Investigations, the principal investigative arm of the Department of Homeland Security.

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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Opioid Prescribing Conspiracy Allegedly Contributed to at Least Six Overdose Deaths

A federal grand jury in Kentucky returned an indictment Wednesday charging two doctors for their alleged involvement in conspiracies to illegally distribute opioids and commit health care fraud.

According to court documents, Drs. William Lawrence Siefert, 67, of Dayton, Ohio, and Timothy Ehn, 48, of Union, Kentucky, orchestrated their alleged illegal prescribing and health care fraud conspiracies through Northern Kentucky Center for Pain Relief, a pain clinic in Florence, Kentucky. Siefert, a medical doctor, was employed by the clinic, while Ehn, a chiropractor, was the clinic’s owner. Siefert and Ehn allegedly offered drug-seeking patients who should not have received opioids easy access to these dangerous controlled substances, then billed Medicaid for millions of dollars in medically unnecessary urinalysis testing related to these patients.

The indictment alleges that Siefert and Ehn’s alleged illegal opioid prescribing conspiracy was a contributing factor in the opioid overdose deaths of at least six former clinic patients.

Siefert and Ehn are each charged with one count of conspiracy to unlawfully distribute controlled substances and one count of conspiracy to commit health care fraud. Separately, Siefert was charged with three counts of health care fraud and 11 counts of illegal distribution of controlled substances, including oxycodone, hydrocodone, and clonazepam, and Ehn was charged with eight counts of health care fraud.

The announcement was made by Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Carlton S. Shier IV of the Eastern District of Kentucky; Special Agent in Charge Keith W. Martin of the U.S. Drug Enforcement Administration’s (DEA) Detroit Field Division; Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Atlanta Region; Special Agent In Charge James “Robert” Brown Jr. of the FBI’s Louisville Field Office; and Executive Director W. Bryan Hubbard of the Kentucky Medicaid Fraud Control Unit (MFCU) in the Kentucky Attorney General’s Office made the announcement.

This case was investigated by the DEA’s Detroit Field Division, Cincinnati District Office Diversion Group; the FBI’s Louisville Field Office; HHS-OIG’s Louisville Field Office; and the Kentucky MFCU.

Trial Attorney Dermot Lynch and Assistant Chief Kilby Macfadden of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Appalachian Regional Prescription Opioid (ARPO) Strike Force. Since its inception in October 2018, the ARPO Strike Force, which operates in 10 districts, has charged 91 defendants, including 68 licensed medical professionals, and its casework has targeted the alleged illegal distribution of more than 65 million controlled substance pills involving more than 350,000 prescriptions. 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 approximately $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.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.

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

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Damian Williams, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”) New York Regional Office announced today the arrest of ZACHARY S. SEID and ANTHONY CRACCHIOLO on charges of conspiracy, health care fraud, wire fraud, and unlawfully receiving kickbacks in connection with Medicare. As alleged in an Indictment unsealed today in Manhattan federal court, SEID and CRACCHIOLO, ran companies dedicated to illegally buying and selling prescriptions for durable medical equipment (“DME”) such as leg, arm, and back braces, and then using those prescriptions to file fraudulent Medicare claims for more than $11 million, as well as selling such prescriptions to other DME supply companies, so that those companies in turn could also file fraudulent Medicare claims. The case has been assigned to U.S. District Judge John P. Cronan. SEID and CRACCHIOLO, who were arrested this morning in Florida, will be presented tomorrow before magistrate judges in the Southern District of Florida.

U.S. Attorney Damian Williams said: “Medicare is an invaluable taxpayer-funded program dedicated to providing affordable health care to beneficiaries over 65 or with disabilities, not to enriching those who would defraud the program by buying and selling false prescriptions.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “These allegations describe a greed-fueled scheme that undermined our health care system and the people it serves. Such scams threaten patient health, waste taxpayer funds, and drive up healthcare costs for all of us. Working closely with our law enforcement partners, we will continue to aggressively root out health care fraud and bring criminals to justice.”

As alleged in the Indictment:[1]

From at least July 2019 through at least October 2020, SEID and CRACCHIOLO engaged in a scheme to defraud Medicare in at least three ways. First, SEID and CRACCHIOLO illegally paid kickbacks of more than $565,000 to purchase fraudulent DME prescriptions, including prescriptions “signed” by doctors who never in fact signed or authorized those prescriptions and were unaware that their names and identities were being so used. These DME prescriptions were for such equipment as braces for ankles, knees, elbows, wrists, and backs. Second, SEID and CRACCHIOLO unlawfully received more than $425,000 in kickbacks, reselling some of these prescriptions to DME suppliers, so that those suppliers in turn could fraudulently bill Medicare for the DME. Finally, in about May and June 2020, SEID and CRACCHIOLO acquired five of their own fraudulent DME supply companies, and used the bogus prescriptions to file more than $11 million in fraudulent Medicare claims, seeking payment to the DME suppliers that SEID and CRACCHIOLO controlled.

Together, SEID and CRACCHIOLO sold to multiple DME supply companies, and established control over at least five DME supply companies of their own, which they used to submit their fraudulent Medicare claims. Those companies were: 1 Medical Supplies Corp., Ameri Med Supplies Corp., One Medical Health Supplies Corp., Sun Med Equip Corp., and Sunrise Med Service Group Corp. In addition, Seid owned a company called Seid Services, Inc., while Cracchiolo owned a company called Dataco.

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SEID, 35, of Boynton Beach, Florida, and CRACCHIOLO, 42, of Parkland, Florida, are each charged in four counts with conspiracy to commit health care fraud and wire fraud, health care fraud, wire fraud, and receiving kickbacks in violation of the Anti-Kickback Statute. The conspiracy and wire fraud counts each carry a maximum potential prison sentence of 20 years; the health care fraud count carries a maximum potential prison sentence of 10 years; and the count charging violation of the Anti-Kickback statute carries a maximum potential prison sentence of five years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the investigative work of HHS-OIG.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney David Raymond Lewis is in charge of the prosecution.

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

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NEWARK, N.J. – Two Florida men have been indicted for their roles in durable medical equipment and compound medication schemes involving kickbacks and fraud, Acting U.S. Attorney Rachael A. Honig announced.

Thomas Farese, 79, of Delray Beach, Florida, and Domenic J. Gatto Jr., 47, of Palm Beach Gardens, Florida, are charged in an 11-count indictment with conspiracy to commit wire fraud, conspiracy to commit health care fraud, health care fraud, conspiracy to transact in criminal proceeds, transacting in criminal proceeds, and conspiracy to violate the federal Anti-Kickback Statute.

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

Farese and Gatto played key roles in a scheme to defraud health care benefit programs by offering, paying, soliciting, and receiving kickbacks and bribes in exchange for doctors’ orders for durable medical equipment (DME) without regard to medical necessity, namely orthotic braces. Farese, Gatto, and their conspirators had financial interests in multiple DME companies that paid kickbacks to suppliers of DME orders, in exchange for DME orders. The suppliers, in turn, used telemedicine companies to obtain DME orders without regard to medical necessity. The DME companies owned by Farese and Gatto subsequently fraudulently billed Medicare, TRICARE, CHAMPVA, and other health care benefit programs for the DME orders. The defendants concealed their ownership of the DME companies by using straw owners who were falsely reported to Medicare as the owners of the companies. Gatto also brokered a kickback relationship whereby he received an illegal kickback each time specific DME suppliers provided DME orders to the DME companies controlled by him and his conspirators. Gatto and his conspirators then laundered the proceeds of the scheme through several layers of bank accounts under their control.

Gatto and his conspirators entered into a related kickback scheme involving prescriptions for compounded medications. They agreed that suppliers of compounded medications would receive kickbacks in exchange for submitting the orders to the pharmacies with whom Gatto and his conspirators had relationships. Gatto also agreed with others that he would receive kickbacks from those pharmacies for the compounded medication orders submitted by those suppliers. The compounding pharmacies then billed Medicare for the compounded medication orders.

The defendants caused losses to Medicare, TRICARE, and CHAMPVA of approximately $25 million.

The charge of conspiracy to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison. The charges of conspiracy to commit health care fraud, health care fraud, conspiracy to transact in criminal proceeds, and transacting in criminal proceeds are each punishable by a maximum potential penalty of 10 years in prison per count. The charge of conspiracy to violate the federal Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison. he maximum fine for each count is $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest.

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

The government is represented by Assistant U.S. Attorneys Sean M. Sherman of the Opioid Abuse Prevention & Enforcement Unit in Newark, Ryan L. O’Neill of the Health Care Fraud Unit in Newark, Senior Trial Counsel Barbara Ward of the Asset Recovery & Money Laundering Unit in Newark, and Trial Attorney Darren Halverson of the Health Care Fraud Unit of the Criminal Division’s Fraud Section.

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

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

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

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

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LOS ANGELES – An Inglewood woman and her mother-in-law, who both ran a South Los Angeles drug-and-alcohol abuse treatment program, were sentenced today to federal prison for scheming to defraud Medi-Cal out of over $500,000 for services to clients who did not medically need substance abuse treatment and for services that were never provided.

Mesbel Mohamoud, 48, was sentenced to 18 months’ imprisonment by United States District Judge Philip S. Gutierrez, who also sentenced Mohamoud’s mother-in-law, Erlinda Abella, 66, also of Inglewood, to one year and one day in federal prison. Each woman was ordered to pay $260,101 in restitution.

Mohamoud and Abella pleaded guilty in November 2020 to one count of health care fraud.

Mohamoud was the owner and executive director of The New You Center Inc. (TNYC), located in the Vermont Knolls neighborhood of South Los Angeles. Abella, who co-founded TNYC with Mohamoud in 2005, was the company’s program director. TNYC was authorized to provide medically necessary substance abuse treatment services through the Drug Medi-Cal program to adults and teenagers in Los Angeles County.

From January 2009 to December 2015, TNYC submitted false and fraudulent claims for counseling sessions that were not conducted at all, were not conducted at authorized locations, or did not comply with Drug Medi-Cal regulations regarding the length of sessions or the number of clients.

Mohamoud and Abella also caused TNYC to bill for clients who did not have a substance abuse problem, to falsify documents related to services supposedly provided to clients, and to forge client signatures on documents such as sign-in sheets.

In September 2013, TNYC submitted a fraudulent claim for Medi-Cal reimbursement in the amount of $62.15 for a three-hour counseling session for a client on August 17, 2013 – the same day when the client was hospitalized and did not receive any counseling from TNYC.

In her plea agreement, Mohamoud admitted she knew that Abella directed TNYC counselors to enroll clients in TNYC’s substance abuse treatment program even if the clients had used drugs or alcohol only occasionally or even just once.

TNYC submitted approximately $527,313 in false and fraudulent claims for group and individual substance abuse counseling services and was paid $260,101 on those claims.

The FBI, the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse, and the U.S. Department of Health and Human Services, Office of Inspector General investigated this matter.

Assistant United States Attorney Cathy J. Ostiller of the Major Frauds Section prosecuted this case.

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Two doctors who helped a local hospice agency scam Medicare were sentenced today to a combined 23 years in prison for healthcare fraud, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

In May, a federal jury found Novus Health Services Medical Directors Dr. Mark E. Gibbs and Dr. Laila Hirjee, along with Novus RN Tammie Little, guilty of conspiracy to commit healthcare fraud and other charges. Today, Chief U.S. District Judge Barbara M.G. Lynn sentenced Dr. Gibbs to 13 years in federal prison and ordered him to pay $27,978,903 in restitution; she sentenced Dr. Hirjee to 10 years in federal prison and ordered her to pay $16,253,281 in restitution. The judge also sentenced Ms. Little to 33 months in federal prison.

According to evidence presented at trial, the defendants helped Novus CEO Bradley Harris defraud Medicare by, among other things, illegally admitting patients who were not appropriate for hospice and submitting materially false claims for hospice services.

Mr. Harris, who pleaded guilty prior to trial, testified against his former employees.

He told the jury that instead of relying on the expertise of licensed medical professions, he and Novus nurses determined which patients would be admitted to or discharged from hospice care, as well as which drugs and dosages they would receive.

They relied upon Novus doctors, including Dr. Gibbs and Dr. Hirjee, to certify that they had examined these patients face-to-face, when no such examinations had occurred, Mr. Harris testified.

Witnesses also testified that Dr. Hirjee and Dr. Gibbs engaged in the prescription of Schedule II controlled substances, such as morphine, hydromorphone, and fentanyl, by pre-signing blank C2 prescriptions and giving those to Brad Harris and others at Novus to let them prescribe controlled substances without any physician oversight.

As Director of Operations Melanie Murphey testified on day five of trial, “I was the doctor.”

Mr. Harris and the nurses used pre-signed prescription pads, prepared by Dr. Gibbs, Dr. Hirjee, and other Novus doctors, to dispense medications like morphine to patients. When Medicare suspended payment to Novus over concerns about billing, Mr. Harris, Dr. Gibbs, and others moved patients and employees to a new hospice company and continued to bill Medicare for hospice services.

In total, Medicare and Medicaid paid the Novus entities approximately $40 million dollars for hospice services before the companies were shut down.

“These doctors allowed Bradley Harris – an accountant with no medical expertise – to dispense controlled substances like candy, with little to no medical oversight,” said U.S. Attorney Chad Meacham. “They claimed to have had hands-on experience with hospice patients, when in fact, they’d entrusted life-or-death medical decisions to untrained businesspeople. We are satisfied to know they will spend the next decade behind bars.”

“The defendants violated their Hippocratic Oath as doctors and instead focused on lining their pockets at the expense of patient safety. This case highlights the importance of thoroughly investigating any complaint of healthcare fraud,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “We encourage the public to help us identify, investigate, and prosecute this crime. If you suspect health care fraud, report it to the FBI at tips.fbi.gov, 1-800-CALL-FBI, or contact your health insurance provider.”

Several of their codefendants – Novus CEO Brad Harris, his wife, Novus Vice President of Patient Services Amy Harris, Novus Director of Operations Melanie Murphy, Novus Medical Director Charles Leach, Novus Medical Director Reziuddin Siddique (deceased), Novus Vice President of Marketing Samuel Anderson, Novus Director of Marketing Slade Brown, Novus RN Jessica Love, Novus triage RN Patricia Armstrong, Novus LVN Taryn Stewart, and Ali Rizvi, the owner of a separate physician home visit company – pleaded guilty to various offenses prior to trial. Love was sentenced 102 months, Stuart was sentenced to 96 months, Armstrong was sentenced to 84 months, Dr. Leach was sentenced to 57 months, and Anderson was sentenced to 33 months. The remaining defendants are facing statutory maximums of between two and 14 years in federal prison.

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 and Marty Basu are prosecuting the case with Assistant U.S. Attorneys Stephen Gilstrap, Gail Hayworth, and Brian McKay.

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SAN ANTONIO – This week, two San Antonio residents were sentenced for their roles in health care fraud schemes. Yesterday, Nancy Almaguer, 42, was sentenced to 18 months in prison and today, Christopher Felix Montoya, 47, was sentenced to two 18-month prison sentences to run consecutively.

According to court documents, Montoya was a licensed physician’s assistant and owner of TPC Family Care and Medical Clinics in San Antonio and Laredo. Almaguer was the Chief Operating Officer for the clinics. Beginning in September 2018 through June 2019, Montoya and Almaguer agreed to refer lab testing requests to specific laboratories. The labs billed insurance programs, including Medicare and TRICARE, and paid Almaguer and Montoya a percentage of their receipts in return for the referrals. The kickback schemes resulted in over $500,000 in billings to public and private insurance companies.

In July and September of 2021, Montoya and Almaguer, respectively, pleaded guilty to one count of conspiracy to defraud the U.S. and to pay and receive health care kickbacks.

In a separate case, in July 2021, Montoya pleaded guilty to one count of conspiracy to receive health care kickbacks. In this case, Montoya admitted that for five months beginning in February 2015 he received kickbacks to write prescriptions for compounded medication from a California-based pharmacy that had high TRICARE reimbursements. Based on the evidence, TRICARE was billed $8,832,268.73 for prescriptions Montoya wrote to which TRICARE paid out $6,690,598.77.

In addition to the prison sentence, Almaguer was ordered to forfeit $137,792.10 in criminal proceeds and pay $52,603.62 in restitution. Montoya was ordered to pay a total of $849,865.93 in restitution.

“Kickback regulations exist to protect patient choice and ensure that only medically necessary procedures are performed,” said U.S. Attorney Ashley C. Hoff. “Our office continues to help protect federal insurance programs from fraud. We hope that these sentences communicate that these regulations should be taken seriously.”

“Health care fraud significantly harms the U.S. economy by costing this country billions of dollars a year,” said FBI Special Agent in Charge Christopher Combs. “Those losses result in rising medical costs for all Americans. The FBI is committed to investigating those involved in this crime through investigative partnerships with other federal agencies.”

The FBI; Texas Attorney General’s Office Medicaid Fraud Control Unit; U.S. Department of Health and Human Services—Office of Inspector General; the U.S. Office of Professional Management—Office of Inspector General; and the Defense Criminal Investigation Service investigated this case.

Assistant U.S. Attorneys Justin Chung and William R. Harris prosecuted this case on behalf of the government and Assistant U.S. Attorney Antonio Franco handled the forfeiture aspects.

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MADISON, WIS. – Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin, announced that Fredericka DeCoteau, 63, Cloquet, Minnesota, and Edith Schmuck, 77, Rice Lake, Wisconsin, were sentenced today in federal court in Madison, Wisconsin for theft of federal program funds.

U.S. District Judge William M. Conley sentenced DeCoteau to 2 years in prison, and Schmuck to 1 year and 1 day in prison. Judge Conley also ordered the defendants to jointly pay restitution of $777,283. Both defendants were ordered to report to the Bureau of Prisons on December 29, 2021 to begin their sentences.

DeCoteau and Schmuck pleaded guilty to one count of theft of federal funds on July 15 and June 24, 2021, respectively. They worked at Ain Dah Ing (ADI) which has operated as a non-profit halfway house in Spooner, Wisconsin since 1971. DeCoteau worked as the Executive Director at ADI from 2002 to 2017. Schmuck worked as the bookkeeper from 1990 to 2017. They were fired after the thefts were discovered.

ADI offered mental health and alcohol and substance abuse services to Native Americans from Michigan, Minnesota, and Wisconsin tribes. ADI's services included a 90-day program at its 15-bed Community-Based Residential Facility in Spooner, Wisconsin. ADI's funding came from a federal commercial contract with the U.S. Department of Health and Human Services, Public Health Service, Indian Health Services Division.

Both DeCoteau and Schmuck pleaded guilty to embezzling a total of $777,283 from ADI by paying themselves unauthorized bonuses via payroll checks that were signed using a rubber signature stamp of the ADI Treasurer. The embezzlement lasted from 2007 to 2017.      

At today's sentencing, Judge Conley noted that DeCoteau and Schmuck stole over 67% of the total funds intended for programming at ADI, and that they gambled away most of this money at local Indian casinos. Judge Conley explained that the defendants violated the trust of the ADI Board of Directors and took advantage of vulnerable people with addictions. In imposing sentence, Judge Conley made clear to both defendants that the gravity of the offense, coupled with the long-term nature of the embezzlement, mandated that they serve prison time despite their claims of being addicted to gambling.

The charges against DeCoteau and Schmuck were the result of an investigation conducted by the U.S. Department of Health and Human Services, Office of Inspector General, and the Spooner Police Department. Assistant U.S. Attorney Daniel Graber handled the prosecution.

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Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington has sentenced Michael Nolan (48, Tampa) and Richard Epstein (29, Aurora, CO) for their roles in a conspiracy to defraud federal health benefit programs, Medicare and the Civilian Health and Medical Program of the Department of Veterans Affairs (“CHAMPVA”).

Nolan was sentenced to six years and six months in federal prison, followed by three years of supervised release. Epstein was sentenced to five years and three months in federal prison, followed by three years of supervised release. As part of their sentences, the court also entered a money judgment against each defendant in the amount of $2.1 million and $3 million, respectively, which were proceeds of the conspiracy. Noland and Epstein were also ordered to pay restitution, jointly and severally with each other and other conspirators, in the amount of $29,020,304.

Nolan and Epstein each had pleaded guilty on July 31, 2020.

According to court documents, from around October 2016 through around April 2019, Epstein and Nolan ran a telemarketing company in Tampa called REMN Management LLC that targeted the elderly to generate thousands of medically unnecessary physicians’ orders for durable medical equipment (“DME”) and cancer genetic testing (“CGx”). Epstein and Nolan also created and operated Comprehensive Telcare, LLC, a “telemedicine” company through which they illegally bribed physicians to sign the orders regardless of medical necessity. Epstein and Nolan then illegally sold the signed physicians’ orders to client-conspirators for use as support for false and fraudulent claims submitted to Medicare and CHAMPVA. The conspiracy resulted in the submission of at least $134 million in fraudulent claims to the federal health benefit programs, resulting in approximately $29 million in payments.

The investigation and prosecution of the case were a joint effort between the Middle District of Florida and the Department of Justice - Criminal Division, Fraud Section, Health Care Fraud Unit, as part of nationwide actions known as Operation Brace Yourself and Operation Double Helix. The operations targeted ongoing schemes, such as the conspiracy described above, in which DME companies, laboratories, and marketers were paying illegal bribes through “telemedicine” operators to secure signed physicians’ orders for DME and CGx, which were then used as support for fraudulent, illegal claims submitted to Medicare and other federal health benefit programs.

“These significant sentences and restitution of over $29,000,000 to our nation’s critical healthcare system – Medicare – are a result of law enforcement’s unified efforts to hold the perpetrators of one of the largest healthcare fraud schemes in history accountable for their crimes,” said Special Agent in Charge Omar Pérez Aybar of U.S. Department of Health and Human Services Office of Inspector General.

“We are all victims of these corrupt individuals because they cheated the taxpayer funded Medicare system,” said FBI Tampa Division Special Agent in Charge Michael McPherson. “Health care fraud investigations are given high priority within the FBI’s Criminal Investigative Division. Because this abuse impacts us all, protection of these federal health benefit programs is a shared responsibility which can be accomplished with the support of an engaged community willing to bring health care fraud to the attention of law enforcement.”

“Today’s sentence properly holds these defendants accountable for their fraudulent actions and reflects the magnitude of the crime committed against CHAMPVA and Medicare,” said Special Agent in Charge David Spilker of the Department of Veterans Affairs Office of Inspector General’s Southeast Field Office. “The VA OIG’s continued oversight of VA’s multiple healthcare programs, including CHAMPVA, is one of the agency’s highest priorities. We thank our outstanding law enforcement partners for their efforts in this joint investigation.”

"The significant prison terms and financial penalties will hopefully bring some closure to those victimized by Nolan and Epstein,” said IRS Criminal Investigation Special Agent in Charge Brian Payne. “They preyed on the elderly and military Veterans to subject them to unnecessary medical testing and to use unnecessary medical equipment for their own financial gain. We will continue to investigate these con artists and hold them accountable.”

This case was investigated by U.S. Department of Health and Human Services – Office of Inspector General, the Federal Bureau of Investigation, the Department of Veterans Affairs – Office of Inspector General, and the Internal Revenue Service –Criminal Investigation, Tampa Field Office. The criminal case is being prosecuted by Assistant United States Attorneys Tiffany E. Fields, Jay G. Trezevant, James A. Muench, and Department of Justice Trial Attorney Gary A. Winters.

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CHICAGO — Two suburban Chicago physicians have been indicted on federal criminal charges for allegedly prescribing opioids to individuals who lacked a legitimate medical need for the drugs.

STANLEY DAVID DEMOREST managed Demorest Consultants LLC, a medical practice in Melrose Park, Ill. NICHOLAS RECCHIA was employed there as a physician. From 2015 to 2020, Demorest and Recchia agreed to dispense hydrocodone, oxycodone, fentanyl, and other controlled substances to various individuals who visited Demorest Consultants but received no meaningful physical examination or medical tests, and whom Demorest and Recchia knew had no legitimate medical need for the drugs, according to an indictment returned Monday in U.S. District Court in Chicago. Demorest, who in 2015 voluntarily surrendered his DEA Registration Number and lost his ability to lawfully prescribe controlled substances, used Recchia’s name and DEA Registration Number to issue prescriptions for controlled substances to patients, the charges allege.

Demorest and Recchia also caused pharmacies to submit numerous claims to Medicare and Medicaid seeking payment for the improper prescriptions, the indictment states.

The indictment charges Demorest, 65, of Bloomingdale, Ill., and Recchia, 62, of River Grove, Ill., with conspiracy to dispense controlled substances outside the usual course of professional practice and without a legitimate medical purpose. The pair also face individual counts of health care fraud and unlawful dispensing of controlled substances. Arraignments in federal court in Chicago have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Robert J. Bell, Special Agent-in-Charge of the Chicago Division of the DEA; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Lamont Pugh III, Special Agent-in-Charge of the Chicago Division of the U.S. Department of Health and Human Services, Office of Inspector General; and Irene Lindow, Special Agent-in-Charge of the Chicago Division of the U.S. Department of Labor, Office of Inspector General. The government is represented by Assistant U.S. Attorneys Kaitlin G. Klamann and Valerie R. Raedy.

The charges were brought by the U.S. Attorney’s Office’s Opioid Task Force, which was formed in November 2019 for the purpose of combatting the growing number of unlawful distributions of controlled substances fueling the nation’s opioid crisis.

The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

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Government seeks civil forfeiture of five properties and 40 financial accounts and investments

BOSTON – Two women were arrested yesterday and charged in connection with a $100 million home health care fraud scheme. The government also filed a civil action seeking forfeiture of five properties and 40 financial accounts and investments involved in a scheme to launder the ill-gotten gains.  

Faith Newton, 52, of Westford, and Winnie Waruru, 41, of Lowell, were each indicted on one count of conspiracy to commit health care fraud; one count of health care fraud – aiding and abetting; and one count of conspiracy to pay and receive kickbacks. Newton was also indicted on one count of money laundering conspiracy and seven counts of money laundering. In addition, Waruru was indicted on two counts of making false statements and one count of making a false statement in a health care matter. Newton and Waruru were arrested yesterday and will make an initial appearance in federal court in Boston today at 1:30 p.m.            

According to the indictment, from January 2013 to January 2017, Newton was part owner and operator of Arbor Homecare Services LLC. Waruru was a Licensed Practical Nurse employed as a home health nurse at Arbor. It is alleged that Newton and Waruru engaged in a conspiracy to use Arbor to defraud MassHealth and Medicare of at least $100 million by committing health care fraud and paying kickbacks to induce referrals. Newton then allegedly laundered the ill-gotten gains.

Specifically, it is alleged that Arbor, through Newton and others, failed to train staff, billed for home health services that were never provided or were not medically necessary and billed for home health services that were not authorized. Arbor, through Newton and others, developed employment relationships as way to pay kickbacks for patient referrals, regardless of medical necessity requirements. They also entered sham employment relationships with patients’ family members to provide home health aide services that were not medically necessary and routinely billed for fictitious visits that Newton knew did not occur. As alleged in the civil complaint, Newton either directly or through Arbor, targeted particularly vulnerable patients who were low-income, on disability and/or suffering from depression and/or addiction.

According to the indictment, Waruru and Arbor billed MassHealth for Waruru’s skilled nursing visits, many of which she did not perform. Waruru also passed cash payments from Newton to an Arbor patient to retain that patient.

Newton allegedly used the laundered proceeds of the $100 million scheme to purchase multiple homes and a Maserati and to fund investment accounts, a lavish lifestyle and numerous financial transactions. The civil forfeiture case seeks to forfeit to the United States five properties in Westford, North Andover, Chelmsford and Dracut and to forfeit the contents of 40 bank accounts and/or investments.

The charges of health care fraud, conspiracy to commit health care fraud, money laundering conspiracy and money laundering each provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000 or twice the amount of the money involved in the laundering. The conspiracy to pay kickbacks, make false statements and make false statement in health care matter each provide for a sentence of up to five years in prison, three years of supervised release and a fine of up to $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 Andrew E. Lelling; Phillip M. Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorneys Rachel Y. Hemani of Lelling’s Health Care Fraud Unit and David G. Lazarus, Chief of Lelling’s Asset Recovery Unit, are prosecuting the cases.

The details contained in the court documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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