Wednesday, February 27, 2013

Former Owners of Los Angeles-Area Medical Equipment Wholesaler Plead Guilty to Conspiring with Customers to Defraud Medicare

WASHINGTON—Two former owners of a Los Angeles-area medical equipment wholesale supply company pleaded guilty today to conspiring with their customers to defraud Medicare.
The pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte, Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Joseph Fendrick, Special Agent in Charge of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse (Cal-DOJ).
Rajinder Singh Paul, 69, and Baljit Kaur Paul, 65, of Redlands, California, each pleaded guilty before U.S. District Judge Percy Anderson in the Central District of California to one count of conspiracy to commit health care fraud.
In court documents, Rajinder and Baljit Paul admitted that they were the president and vice president, respectively, and shareholders of AHPK Inc., a medical equipment wholesale supply company located in Redlands and Ontario, California, and formally known as Major’s Wholesale Medical Supply Inc. The Pauls later sold Major’s Wholesale Medical Supply Inc. to Major’s Wholesale Medical Supply LLC (collectively, “Major’s”) and, according to court documents, remained employed at Major’s Wholesale Medical Supply LLC as consultants until they were terminated in February 2009.
During the time the Pauls either owned or worked as consultants for Major’s, Major’s sold durable medical equipment (DME) almost exclusively to customers who owned and operated DME supply companies, according to court documents. A majority of Major’s customers were Medicare providers and relied on Medicare to make money, which they did by billing Medicare for the DME that they purchased from Major’s.
One of the more popular items of DME that the Pauls sold at Major’s were power wheelchairs. Court documents indicate that to attract customers, the Pauls sold power wheelchairs to Major’s customers wholesale for between $850 to $1,000 each. Major’s customers, however, billed these power wheelchairs to Medicare at a rate of between $3,000 to $6,000 per wheelchair.
The Pauls admitted they knew that Major’s customers were dependent on Medicare for their revenue and that Major’s customers could not pay Major’s unless Medicare paid the customers first. To foster customer loyalty, the Pauls engaged in a variety of conduct over a period of six years that helped Major’s customers defraud Medicare, including by providing Major’s customers with false inventory purchase agreements that showed they had higher credit limits than they really did. Major’s customers submitted these false inventory purchase agreements to Medicare to prove, as required by Medicare, the ability to purchase the volume of DME they billed.
The Pauls also admitted they provided Major’s customers with backdated invoices, knowing customers were billing Medicare for power wheelchairs and DME before the customers actually purchased or delivered the equipment. The Pauls admitted that by backdating these invoices, they provided Major’s customers with the paper trail the customers needed to prove to Medicare that they had both purchased the DME and purchased it before they submitted their claims to Medicare. According to court documents, the Pauls backdated or falsified invoices for more than 100 different customers.
Court documents indicate that two of many customers who conspired with the Pauls to defraud Medicare owned and operated a number of fraudulent DME supply companies in the Los Angeles area, including one customer who used “straw,” or nominee, owners to operate the customer’s companies. The Pauls admitted they provided these two customers with false inventory purchase agreements and backdated invoices that the customers used to defraud Medicare. The Pauls admitted that as a result of their conduct, these two customers were able to use their fraudulent DME supply companies to submit approximately $16,662,143 in false claims to and receive approximately $9,743,609.42 in ill-gotten reimbursement payments from Medicare.
At sentencing, scheduled for July 8, 2013, the Pauls each face a maximum penalty of 10 years in prison and a $250,000 fine.
This case is being prosecuted by Jonathan T. Baum of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, and Cal DOJ and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov

Old Saybrook Physical Therapist Sentenced, Agrees to Pay $328,828 to Resolve False Claims Act Liability

The United States Attorney for the District of Connecticut announced that Todd Roberts, 47, of Old Saybrook, was sentenced today by United States District Judge Stefan R. Underhill in Bridgeport to three years of probation for obstructing a federal audit. Roberts and his physical therapy practice, Roberts Physical and Aquatics Therapy, also have entered into a civil settlement agreement with the government in which they will pay $328,828 to resolve allegations that they violated the False Claims Act.
According to court documents and statements made in court, on January 23, 2009, a Medicare contractor informed Roberts Physical and Aquatics Therapy, located at 210 Main Street in Old Saybrook, that the contractor was performing an audit of the practice. Roberts instructed an employee to delay the audit by telling the contractor that medical records were stored at a nonexistent storage facility. Roberts then rented a storage unit at a local facility and used the delay to alter and augment patient records. Specifically, Roberts and an employee at his direction created and added patient progress notes when no notes had been created at the time of service. The notes made it appear as though Medicare beneficiaries had obtained direct, one-on-one service from a licensed physical therapist when, in fact, some of the services had been rendered by unlicensed auxiliary personnel.
On September 25, 2012, Roberts waived his right to indictment and pleaded guilty to one count of obstructing a federal audit.
The civil allegations against Roberts and Roberts Physical and Aquatics Therapy involve improper billing to Medicare for physical and aquatic therapy services between April 2007 and March 2010. The Medicare program only pays for outpatient therapy services that are provided by qualified personnel. Personnel qualified to provide outpatient therapy services are limited to physicians, licensed physical therapists, and licensed physical therapy assistants. The Medicare program does not pay for physical therapy services provided by supportive personnel, such as physical therapy aides, athletic trainers, or student trainees. In addition, Medicare regulations and policies make it clear that therapeutic procedures require direct, one-on-one contact between the licensed therapist and the patient.
The government alleges that Roberts and Roberts Physical and Aquatics Therapy regularly billed Medicare for direct, one-on-one therapeutic procedures when such services were not provided. At the clinic, physical therapists and physical therapy assistants would routinely provide therapy services to multiple patients at the same time. Nevertheless, the services provided to each patient were billed as if the physical therapist or physical therapy assistant had provided direct, one-on-one care. For example, patients were routinely left alone to perform exercises in the aquatic therapy pool, with no direct, one-on-one contact with licensed personnel.
In addition, Medicare regulations and policies make it clear that physical therapy services must be thoroughly and accurately documented in the patients’ medical chart. Therapy services are only payable when the medical record consistently and accurately records the covered therapy services. The government alleges that Roberts and Roberts Physical and Aquatics Therapy routinely failed to document their therapy services. This was particularly egregious during the first six months of its operation, when the clinic did not have any documentation at all showing that the services in question were actually provided.
To resolve their liability under the False Claims Act, Roberts Physical and Aquatics Therapy will pay $328,828 for conduct occurring between April 5, 2007 and March 31, 2010.
In addition, Roberts and Roberts Physical and Aquatics Therapy have entered into a six-year Integrity Agreement with the U.S. Department of Health and Human Services that is designed to ensure future compliance with the requirements of the Medicare program, including the proper rendering of therapy services and the submission of only valid claims to Medicare for payment.
In entering into the civil settlement agreement, Roberts and Roberts Physical and Aquatics Therapy did not admit liability.
Judge Underhill required Roberts, as conditions of his probation, to comply with the terms of the Integrity Agreement and to pay the entire $328,828.
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services, the Federal Bureau of Investigation, and the Office of the Inspector General for the Department of Veterans Affairs. The case was prosecuted by Assistant United States Attorneys David J. Sheldon and Richard M. Molot, and Auditor Susan Spiegel.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.

Miami Pharmacy Owner Sentenced to 14 Years in Prison in $23 Million Health Care Fraud Scheme

WASHINGTON—A co-owner and operator of three Miami discount pharmacies was sentenced today to 168 months in prison for his role in a health care fraud scheme that submitted more than $23 million in false claims to Medicare.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Jose Carlos Morales, 55, of Miami, was sentenced by U.S. District Judge Joan A. Lenard in the Southern District of Florida. In addition to his prison term, Morales was sentenced to serve three years of supervised release and to pay a $100,000 fine. A hearing to determine the amount of restitution Morales will pay has been scheduled for April 29, 2013.
On December 6, 2012, Morales pleaded guilty in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay illegal health care kickbacks.
According to court documents, Morales was the co-owner of Pharmovisa Inc. and PharmovisaMD Inc., which operated a total of three pharmacies in Miami. Morales paid illegal health care kickbacks to co-conspirators in return for a stream of beneficiary information to be used to submit claims to Medicare and Medicaid. The beneficiaries who were referred to the pharmacies in exchange for kickback payments resided at assisted living facilities (ALFs) located in Miami. Morales and his alleged co-conspirators also paid illegal health care kickbacks to physicians in exchange for prescription referrals, which the pharmacies ultimately billed to Medicare.
Court documents also reveal that beginning in approximately 2007, drivers working for Morales’ pharmacies, at his direction, delivered “bingo cards” containing pop-out medications to ALFs located throughout the Southern District of Florida. Morales instructed the drivers to pick up any unused “bingo cards” so that Morales pharmacy personnel could put the medications back into pill bottles. Unused and partially used medications were eventually re-billed to Medicare and Medicaid, and a majority of the previously submitted claims to Medicare and Medicaid were never reversed. Morales also instructed Morales pharmacy personnel to place unused and partially used medications into bottles to be sold directly to the general public from the “community” pharmacy shelves.
Morales and his alleged co-conspirators also engaged in sham financial transactions to facilitate and conceal the fraud schemes and the flow of fraud proceeds, according to court documents. In most instances, the sham transactions involved shell entities owned and/or controlled by Morales or his alleged co-conspirators.
According to court documents, Morales and his co-conspirators submitted and caused to be submitted approximately $23,367,755 in false and fraudulent claims to the Medicare and Florida Medicaid programs.
The case is being prosecuted by Trial Attorney Allan J. Medina and Special Trial Attorney William Parente of the Criminal Division’s Fraud Section. This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Manhattan Doctor Pleads Guilty to $8.5 Million Medicare Fraud Scheme

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Dr. Roberto Aymat, a medical doctor, pled guilty today in Manhattan federal court to participating in a scheme to defraud Medicare out of approximately $8.5 million through the use of fraudulent HIV/AIDS clinics in New York. As part of the scheme, Aymat and others billed Medicare for medications that were never administered or that were administered but were medically unnecessary. He pled guilty before U.S. District Judge George B. Daniels. Three other participants in the scheme, Asmed Barrera, Augusto Guzman, and Jorge Rivero, previously pled guilty.
Manhattan U.S. Attorney Preet Bharara said, “Roberto Aymat used his medical license to perpetrate a multi-million-dollar fraud on Medicare—a program that provides a lifeline to its beneficiaries and that is struggling financially to stay afloat. His exploitation of this vital, taxpayer-funded program was egregious and with his plea today, he has been held to account.”
According to the complaint and the indictment filed in this case:
Aymat, along with Barrera, Guzman, Rivero, also a medical doctor, and others operated three medical clinics in New York City that purported to provide drug treatments to Medicare-eligible HIV/AIDS patients, but that were, in reality, health care fraud mills.
The defendants executed the fraudulent scheme by recruiting HIV/AIDS patients eligible for Medicare and paying them kickbacks in exchange for signing on as patients at the clinics. The defendants then used these patients’ status as Medicare beneficiaries to submit claims for reimbursement to Medicare for drugs that had been prescribed to these patients. In fact, these medications were never purchased and never administered, or were administered, but were medically unnecessary.
From January 2007 to April 2009, Aymat and his co-conspirators billed Medicare for more than 10 times the number of units of prescription drugs they actually purchased, defrauding the Medicare system of at least $8.5 million.
Aymat, 44, a resident of Manhattan, pled guilty to conspiring to commit fraud in connection with a health care benefits program and to committing healthcare fraud and mail fraud. He faces a penalty of up to 50 years in prison and is scheduled to be sentenced by Judge Daniels on June 18, 2013.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and the Department of Health and Human Services, Office of Inspector General, New York Region.
The prosecution is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorneys Kan M. Nawaday and Jason H. Cowley are in charge of the prosecution.

Tuesday, February 26, 2013

Occupational Therapist Impersonator Sentenced to Prison for Mail Fraud and Identity Theft

ORLANDO—U.S. District Judge Roy Dalton sentenced James Lewis, a/k/a James Lee Lewis (44, Kissimmee), today to five years and five months in federal prison for mail fraud and aggravated identity theft. Lewis pleaded guilty on December 18, 2012.
According to court documents, in March 2009, Lewis fraudulently obtained a temporary occupational therapist (OT) license from the Florida Department of Health. To obtain the temporary license, Lewis used a false name and Social Security number and fabricated his education credentials. Between March 2009 and July 2011, Lewis worked as an OT at various health care facilities in Central Florida and New Mexico and received his wages using Electronic Funds Transfers. On January 17, 2013, Lewis’ bond was revoked after the government discovered that he had again applied to work as an occupational therapist in Central Florida, using fraudulent information.
This case was investigated by the Federal Bureau of Investigation, the Florida Department of Law Enforcement, and the Florida Department of Health’s Division of Medical Quality Assurance, Orlando Unlicensed Activity Office. It was prosecuted by Assistant United States Attorney David Haas.

Old Saybrook Physical Therapist Sentenced, Agrees to Pay $328,828 to Resolve False Claims Act Liability

The United States Attorney for the District of Connecticut announced that Todd Roberts, 47, of Old Saybrook, was sentenced today by United States District Judge Stefan R. Underhill in Bridgeport to three years of probation for obstructing a federal audit. Roberts and his physical therapy practice, Roberts Physical and Aquatics Therapy, also have entered into a civil settlement agreement with the government in which they will pay $328,828 to resolve allegations that they violated the False Claims Act.
According to court documents and statements made in court, on January 23, 2009, a Medicare contractor informed Roberts Physical and Aquatics Therapy, located at 210 Main Street in Old Saybrook, that the contractor was performing an audit of the practice. Roberts instructed an employee to delay the audit by telling the contractor that medical records were stored at a nonexistent storage facility. Roberts then rented a storage unit at a local facility and used the delay to alter and augment patient records. Specifically, Roberts and an employee at his direction created and added patient progress notes when no notes had been created at the time of service. The notes made it appear as though Medicare beneficiaries had obtained direct, one-on-one service from a licensed physical therapist when, in fact, some of the services had been rendered by unlicensed auxiliary personnel.
On September 25, 2012, Roberts waived his right to indictment and pleaded guilty to one count of obstructing a federal audit.
The civil allegations against Roberts and Roberts Physical and Aquatics Therapy involve improper billing to Medicare for physical and aquatic therapy services between April 2007 and March 2010. The Medicare program only pays for outpatient therapy services that are provided by qualified personnel. Personnel qualified to provide outpatient therapy services are limited to physicians, licensed physical therapists, and licensed physical therapy assistants. The Medicare program does not pay for physical therapy services provided by supportive personnel, such as physical therapy aides, athletic trainers, or student trainees. In addition, Medicare regulations and policies make it clear that therapeutic procedures require direct, one-on-one contact between the licensed therapist and the patient.
The government alleges that Roberts and Roberts Physical and Aquatics Therapy regularly billed Medicare for direct, one-on-one therapeutic procedures when such services were not provided. At the clinic, physical therapists and physical therapy assistants would routinely provide therapy services to multiple patients at the same time. Nevertheless, the services provided to each patient were billed as if the physical therapist or physical therapy assistant had provided direct, one-on-one care. For example, patients were routinely left alone to perform exercises in the aquatic therapy pool, with no direct, one-on-one contact with licensed personnel.
In addition, Medicare regulations and policies make it clear that physical therapy services must be thoroughly and accurately documented in the patients’ medical chart. Therapy services are only payable when the medical record consistently and accurately records the covered therapy services. The government alleges that Roberts and Roberts Physical and Aquatics Therapy routinely failed to document their therapy services. This was particularly egregious during the first six months of its operation, when the clinic did not have any documentation at all showing that the services in question were actually provided.
To resolve their liability under the False Claims Act, Roberts Physical and Aquatics Therapy will pay $328,828 for conduct occurring between April 5, 2007 and March 31, 2010.
In addition, Roberts and Roberts Physical and Aquatics Therapy have entered into a six-year Integrity Agreement with the U.S. Department of Health and Human Services that is designed to ensure future compliance with the requirements of the Medicare program, including the proper rendering of therapy services and the submission of only valid claims to Medicare for payment.
In entering into the civil settlement agreement, Roberts and Roberts Physical and Aquatics Therapy did not admit liability.
Judge Underhill required Roberts, as conditions of his probation, to comply with the terms of the Integrity Agreement and to pay the entire $328,828.
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services, the Federal Bureau of Investigation, and the Office of the Inspector General for the Department of Veterans Affairs. The case was prosecuted by Assistant United States Attorneys David J. Sheldon and Richard M. Molot, and Auditor Susan Spiegel.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.

Friday, February 22, 2013

Augusta Optometrist Pleads Guilty to Health Care Fraud Charge

AUGUSTA, GA—Jeffrey Sponseller, 47, of Augusta, Georgia, pleaded guilty today before United States District Court Judge J. Randal Hall to submitting over $800,000 in fraudulent claims to Medicare.
Evidence presented at today’s guilty plea hearing showed that Sponseller, an optometrist and an owner of Eye Care One, located at 3152 Washington Road in Augusta, Georgia, submitted claims to Medicare for payment for eye examinations of nursing home patients. Instead of billing Medicare for the actual service he was providing at the nursing homes, Sponseller claimed that he was conducting the most expensive type of eye examination, which typically lasts 45 minutes. An example of this health care fraud presented at today’s guilty plea hearing involved a July 27, 2009 visit by Sponseller to a nursing home in Americus, Georgia, where Sponseller billed Medicare for 177 patients that he claimed to have examined individually for 45 minutes each during that one-day visit. As a result of this type of fraudulent billing, Medicare paid Sponseller for that type of eye exam more than any other doctor in the United States in 2009.
United States Attorney Edward J. Tarver said, “Health care fraud is a cancer on the financial health of our nation. In many cases, such as with this defendant, it is committed by professionals who are well educated and highly regarded. Whether that fraud is perpetrated by an optometrist willing to claim that he worked the equivalent of five-and-a-half days during a one-day visit to a nursing home—like this defendant did—or a medical equipment supplier that bills Medicare without authorization, the ultimate injury is to the American taxpayer. The United States Attorney’s Office and its law enforcement partners will actively pursue those who abuse our country’s health care programs for financial gain.”
Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General for the Atlanta region, said, “Any time false claims are submitted for payment, our nation’s health insurance programs and beneficiaries suffer. Protecting precious Medicare funds remains a top priority for the Inspector General and our law enforcement partners.”
Sponseller faces a maximum penalty of five years’ imprisonment and a fine of up to $250,000, in addition to paying restitution. The date for Sponseller’s sentencing hearing has not yet been scheduled.
FBI Special Agents Paul Kubala and Jason Gustin, U.S. Attorney’s Office Investigator Kimberly Reinken, HHS-OIG Special Agent David Graupner, and IRS Special Agents Roger Garland and Jeffrey Hale participated in the investigation of this case. Assistant United States Attorney David Stewart is prosecuting in this case. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.

Golden Heart Executive Director Sentenced to Almost Four Years in Federal Prison for Conspiracy

CHARLESTON, WV—U.S. Attorney Booth Goodwin announced today that the founder and executive director of a St. Albans-based in-home care business was sentenced to 46 months in federal prison for conspiracy in connection with a health care fraud investigation. Shida S. Jamie, 63, owner of Golden Heart In Home Care, LLC (Golden Heart), previously pleaded guilty in October 2012. Jamie admitted that in or about August or early September 2009, she altered and falsified records and documents of Golden Heart. Golden Heart specialized in providing in-home care services to the elderly and disabled under a contract with Putnam Aging Inc., an authorized West Virginia Medicaid provider.
U.S. Attorney Booth Goodwin said, “Today’s sentencing underscores my office’s commitment to not only protect the nation’s health care services, but also to vigorously pursue the criminals who steal from it.”
Jamie admitted that she directed office staff to review the personnel files of caregivers who provided personal care services and directed staff members to place newly created and altered documents into personnel files that contained missing training documents. Jamie further admitted that she agreed with known Golden Heart employees to falsify signatures on training documents to make it appear as if caregivers had received training in compliance with the personal care program guidelines. Jamie also directed that those files be provided to Putnam Aging so that Putnam Aging would allow the Medicaid program to be billed for personal care services provided by Golden Heart.
Jamie also admitted that in late December and early January 2010, she learned about a West Virginia Department of Health and Human Resources Medicaid Fraud Control Unit (MFCU) investigation regarding transportation hours and mileage expenses that had been claimed by Golden Heart under the Aged and Disabled Waiver Program. Jamie admitted that she was aware that a known employee of Golden Heart lacked a valid driver’s license and she agreed to alter existing records to make it appear as if another known employee with a valid driver’s license had performed the services. The altered records were then provided to a MFCU investigator. By the defendant’s actions, she intended to prevent the MFCU from learning that Golden Heart had claimed transportation and mileage expenses to which it was not entitled to be reimbursed under Medicaid.
The court recognized that entitlement programs are a significant portion of the federal budget, funded by taxpayers. The court also noted that health care fraud is one of the reasons the country is in financial trouble and today’s sentencing must serve as a deterrent to others who attempt to defraud entitlement programs. The court further acknowledged that the government is not only justified but required to aggressively pursue such fraud, as they have done here.
In October 2012, the United States settled three civil cases that had been filed against Jamie and Golden Heart to recover losses associated with the fraud against Medicaid, to freeze assets to preserve them for restitution, and to forfeit assets derived from the proceeds of the fraud. The civil settlement resolves all three civil actions by recovering all known assets of Jamie and Golden Heart which represent proceeds of the fraud. The money derived from the settlement will be used to make restitution to Medicaid for the losses it sustained from Jamie and Golden Heart’s fraudulent conduct.
The United States Department of Health and Human Services, the Federal Bureau of Investigation, the West Virginia State Police, and the MFCU conducted the investigation. Assistant United States Attorneys Meredith George Thomas, Philip Wright, and Eumi Choi handled the prosecution. The sentence was imposed by United States District Judge Thomas E. Johnston.

Local Home Health Care Agency Owners Sentenced for Roles in Nearly $1.3 Million Health Care Fraud Conspiracy

DALLAS—Two owners of Alliance Healthcare Services, L.P., a Dallas home health care agency, were sentenced today by U.S. District Judge Jane J. Boyle for their roles in a nearly $1.3 million health care fraud conspiracy, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Richardson, Texas residents George Opurum, 62, and his wife, Agatha Opurum, 55, were each sentenced to 37 months in federal prison. They were ordered to surrender to the Bureau of Prisons on March 27, 2013.
George Opurum was the chief financial officer and alternate administrator of Alliance. Edith Opurum was the director of nursing at Alliance. Co-conspirator Ernest Amadi, 55, was the chief executive officer of Alliance, and his wife, Edith Amadi, 52, was a nurse at Alliance. Alliance was located on Estate Lane in Dallas.
The Amadis, residents of Wylie, Texas, also pleaded guilty to conspiracy to commit health care fraud. Edith Amadi was sentenced to 37 months in federal prison; a sentencing date has not been set for Ernest Amadi. Another co-conspirator in the case, Ollie Futrell, 57, of Garland, Texas, pleaded guilty to her role in the conspiracy and is currently serving a 33-month federal prison sentence.
The five defendants in the case billed a total of $1,296,357, and were ordered to pay restitution in the amount of $853,702.
According to documents filed in the case, as part of the conspiracy, from November 2008 through mid-February 2011, Alliance submitted claims to Medicare for home health services purportedly provided to Medicare beneficiaries. Alliance employees, including the owners, falsified Medicare documentation and skilled nursing notes indicating that the patients were homebound and eligible for home health care services. In fact, the majority of Alliance patients were not eligible for the services because they were not homebound. Alliance employees and owners falsified time sheets and patient visit logs for services that were not adequately rendered or were never provided at all. Alliance then billed Medicare as if the services were adequately provided.
Further, according to documents filed in the case, Alliance owners conspired with Futrell to recruit Medicare patients for the company so Alliance could increase its Medicare billing and revenue. Futrell, who was paid in cash by Alliance owners, recruited Medicare beneficiaries in a variety of ways and initiated Alliance services for them. She agreed to pay kickbacks—sometimes $100 a month—to patients so that they would continue to use Alliance. Alliance owners knew about, and at times facilitated, these kickbacks.
The case was investigated by the FBI, the Department of Health and Human Services Office of Inspector General (HHS OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit.
Assistant U.S. Attorney Katherine E. Pfeifle of the U.S. Attorney’s Office in Dallas and Trial Attorney Benjamin A. O’Neil of the Fraud Section in the Justice Department’s Criminal Division are in charge of the prosecution.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: http://www.stopmedicarefraud.gov/

Tuesday, February 19, 2013

Two Clinic Owners Plead Guilty for Their Roles in Massive No-Fault Insurance Fraud Scheme

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that five defendants have pled guilty for their roles in a systematic scheme to defraud private insurance companies of more than $400 million under New York’s no-fault automobile insurance law. The case is the largest single no-fault automobile insurance fraud scheme ever charged. Earlier today, Andrey Anikeyev, an owner and controller of various acupuncture clinics, pled guilty before U.S. District Judge J. Paul Oetken to conspiracy to commit mail fraud and health care fraud. Yesterday, Dmitry Slobodyansky, who owned and controlled chiropractic clinics, also pled guilty before Judge Oetken to conspiracy to commit mail fraud and health care fraud. Sergey Gabinsky, a medical doctor, pled guilty before Judge Oetken earlier this month, and Pavel Poznansky, an acupuncturist, and Constantine Voytenko, a chiropractor, pled guilty before Judge Oetken in December 2012. All five were arrested in February 2012 with 31 other defendants, some of whom were also charged with racketeering and money laundering. The 36 defendants include 10 doctors and three attorneys.
Manhattan U.S. Attorney Preet Bharara said, “These five defendants piled up fraud to the tune of $400 million in a scheme to exploit New York’s no-fault auto insurance laws. We remain committed to ensuring that all their alleged co-conspirators, including the corrupt medical and legal professionals charged with using their professional licenses and training to facilitate this brazen fraud, see justice.”
According to the indictment, superseding informations, and other publicly filed information in the case:
Under New York State law, every vehicle registered in New York State is required to have no-fault automobile insurance, which enables the driver and passengers of a registered and insured vehicle to obtain benefits of up to $50,000 per person for injuries sustained in an automobile accident, regardless of fault (the “No-Fault Law”). The No-Fault Law requires prompt payment for medical treatment, thereby obviating the need for claimants to file personal injury lawsuits in order to be reimbursed. Under the No-Fault Law, patients can assign their right to reimbursement from an insurance company to others, including medical clinics that provide treatment for their injuries. New York State law also requires that all medical clinics in thesState be incorporated, owned, operated, and/or controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No-Fault Law. Insurance companies will not honor claims for medical treatments from a medical clinic that is not actually owned, operated, and controlled by a licensed medical practitioner.
In order to mislead New York authorities and private insurers, some of the defendants in this case who were the true owners of these medical clinics (“No-Fault Clinic Controllers”) paid licensed medical practitioners, including doctors, to use the practitioners’ licenses to incorporate the professional corporations through which the medical clinics billed the private insurers for the bogus medical treatments. Gabinsky was one such doctor who admitted in open court to prescribing unnecessary medical treatments and to allowing co-conspirators to use his medical license to unlawfully open medical clinics in order to defraud insurance companies. Poznansky and Voytenko were medical practitioners who billed insurance companies for treatments to patients that were unnecessary.
The No-Fault Clinic Controllers also instructed the clinic doctors to prescribe excessive and unwarranted referrals for various “modality treatments” for nearly every patient they saw. The treatments included physical therapy, acupuncture, and chiropractic treatments—as much as five times per week for each—and treatments for psychology, neurology, orthopedics, and audiology. Clinic doctors also prescribed unnecessary MRIs, X-rays, orthopedics, and medical supplies. The No-Fault Clinic Controllers received thousands of dollars in kickbacks for patient referrals from the owners of the modality clinics (“modality controllers”). Anikeyev and Slobodyansky were two such Modality Controllers who admitted to billing insurance companies for treatments that patients did not need.
***
Anikeyev, 38, of Fort Lee, New Jersey; Slobodyansky, 42, of Brooklyn, New York; Gabinsky, 55, of Brooklyn, New York; Poznansky, 53, of Brooklyn, New York; and Voytenko, 41, of Brooklyn, New York, each face a maximum penalty of five years’ imprisonment, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory special assessment of $100. Poznansky, Voytenko, Gabinsky, Anikeyev, and Slobodyansky are scheduled to be sentenced by Judge Oetken on April 23, 2013; April 24, 2013; June 12, 2013; June 28, 2013; and June 13, 2013, respectively.
U.S. Attorney Preet Bharara thanked the Federal Bureau of Investigation and the New York City Police Department for their continued outstanding work in this investigation.
The case is being prosecuted by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Daniel S. Goldman, Nicholas L. McQuaid, Carolina A. Fornos, and Daniel Noble are in charge of the prosecution. Assistant U.S. Attorneys Jason L. Cowley and Martin Bell of the Office’s Asset Forfeiture Unit are responsible for the forfeiture of assets.

Doctor Enters Guilty Plea in Obstruction Case

Dr. Mahmoud Yassin, 60, of Robinson, Illinois, pled guilty in federal district court for obstructing a criminal health care fraud investigator, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Dr. Yassin will be sentenced for this felony offense on May 30, 2013, in Benton, Illinois, at which time he may be sentenced to up to 10 years in prison, a fine of up to $250,000, a special assessment of $100, and a period of up to three years of supervised release following prison.
Court proceedings revealed that the felony obstruction occurred on March 2, 2012, when an FBI agent, having served a subpoena for patient records on Dr. Yassin, was given a patient progress note that had been altered by the doctor to show an in-office examination previously claimed to an insurance carrier, but which had not taken place.
The case was investigated by agents of the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, the Drug Enforcement Administration, and the Illinois State Police Medicaid Fraud Control Bureau. The case is assigned to Assistant United States Attorney Michael Quinley.

Friday, February 15, 2013

Palm Beach County Health Department Employee Arrested for Stealing Patient Information

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Salita St. Simon, 30, of Belle Glade, was arrested today on a charge of identity theft, in violation of Title 18, United States Code, Section 1028(a)(7). If convicted, St. Simon faces up to five years’ imprisonment and three years of supervised release.
According to the criminal complaint and information provided in Court, St. Simon was a senior clerk at the Palm Beach County Health Department (PBCHD) until earlier today. For approximately the last year, St. Simon obtained patient identification information, including patient names and Social Security numbers, from the PBCHD’s computer system and provided that information to her accomplices. These accomplices, in turn, used the information to file fraudulent tax returns seeking the patients’ refunds. Over the last year, St. Simon stole more than 2,800 patients’ information in this way.
Mr. Ferrer commended the investigative efforts of the FBI and thanked the PBCHD for its substantial assistance in investigating this matter. This case is being prosecuted by Assistant U.S. Attorney Marc Osborne.
A complaint is only an accusation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Wednesday, February 13, 2013

Florida Physician to Pay $26.1 Million to Resolve False Claims Allegations

WASHINGTON—Steven J. Wasserman, M.D., a dermatologist practicing in Venice, Florida, has agreed to pay $26.1 million to resolve allegations that he violated the False Claims Act by accepting illegal kickbacks from a pathology laboratory and by billing the Medicare program for medically unnecessary services, the Justice Department announced today. The settlement is the largest ever with an individual under the False Claims Act in the Middle District of Florida and one of the largest with an individual under the False Claims Act in U.S. history.
The government alleged that, in or around 1997, Dr. Wasserman entered into an illegal kickback arrangement with Tampa Pathology Laboratory (TPL), a clinical laboratory in Tampa, Florida, and Dr. José SuarezHoyos, a pathologist and the owner of TPL, in an effort to increase the lab’s referral business. Under that agreement, Dr. Wasserman allegedly sent biopsy specimens for Medicare beneficiaries to TPL for testing and diagnosis. In return, TPL allegedly provided Dr. Wasserman a diagnosis on a pathology report that included a signature line for Dr. Wasserman to make it appear to Medicare that he had performed the diagnostic work that TPL had performed. The government alleged that Dr. Wasserman then billed the Medicare program for TPL’s work, passing it off as his own, for which he received more than $6 million in Medicare payments. In addition, the government asserted that, in furtherance of his agreement with TPL, Dr. Wasserman substantially increased the number of skin biopsies he performed on Medicare patients, thus increasing the referral business for TPL.
The government further alleged that, in addition to his involvement in the alleged kickback scheme, Dr. Wasserman also performed thousands of unnecessary skin surgeries known as adjacent tissue transfers on Medicare beneficiaries. Adjacent tissue transfers are complicated and often time-consuming procedures physicians sometimes use to close a defect resulting from the removal of a growth on a patient’s skin. The government alleged that Dr. Wasserman performed many of these procedures in order to obtain the reimbursement for them and not because they were medically necessary.
“Doctors who take illegal kickbacks and perform unnecessary procedures not only put their own financial self-interest over their duty to their patients, they raise the cost of health care for all of us as patients and as taxpayers,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice will not tolerate those who abuse the public health care programs to which we all contribute and on which we all depend.”
“This settlement represents a watershed achievement in our district’s civil healthcare fraud enforcement program,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida. “Schemes of this magnitude require extraordinary remedies, and we are proud to have reached such an outstanding resolution for the taxpayers and their health programs.”
The allegations resolved by today’s settlement were initiated by a lawsuit originally filed in the District Court for the Middle District of Florida by Alan Freedman, M.D., a pathologist who formerly worked at TPL. Dr. Freedman filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act. Under the False Claims Act, a private party may file suit on behalf of the United States for false claims and share in any recovery. The United States has the right to intervene in the action, which it did in this case, filing its own complaint in October 2010. Dr. Freedman will receive $4,046,000 of today’s settlement.
The United States previously settled with TPL and Dr. SuarezHoyos for $950,000 to resolve the allegations asserted against them in the same lawsuit.
“Anyone cheating patients and taxpayers should expect to pay a high price,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “Besides paying more than $26 million, Dr. Wasserman is excluded from treating patients and being paid under Medicare, Medicaid, and all other federal health care programs.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.
Principal Deputy Assistant Attorney General Delery and U.S. Attorney O’Neill thanked the joint investigation team, which includes special agents with the Department of Health and Human Services-OIG and the FBI, for their efforts in the investigation of this matter.
The claims settled by this agreement are allegations only; there has been no determination of liability.
The lawsuit is captioned U.S. ex rel. Freedman v. SuarezHoyos et al., No. 04-933 (M.D. Fla.).

Tuesday, February 12, 2013

Florida Physician to Pay $26.1 Million to Resolve False Claims Allegations

WASHINGTON—Steven J. Wasserman, M.D., a dermatologist practicing in Venice, Florida, has agreed to pay $26.1 million to resolve allegations that he violated the False Claims Act by accepting illegal kickbacks from a pathology laboratory and by billing the Medicare program for medically unnecessary services, the Justice Department announced today. The settlement is the largest ever with an individual under the False Claims Act in the Middle District of Florida and one of the largest with an individual under the False Claims Act in U.S. history.
The government alleged that, in or around 1997, Dr. Wasserman entered into an illegal kickback arrangement with Tampa Pathology Laboratory (TPL), a clinical laboratory in Tampa, Florida, and Dr. José SuarezHoyos, a pathologist and the owner of TPL, in an effort to increase the lab’s referral business. Under that agreement, Dr. Wasserman allegedly sent biopsy specimens for Medicare beneficiaries to TPL for testing and diagnosis. In return, TPL allegedly provided Dr. Wasserman a diagnosis on a pathology report that included a signature line for Dr. Wasserman to make it appear to Medicare that he had performed the diagnostic work that TPL had performed. The government alleged that Dr. Wasserman then billed the Medicare program for TPL’s work, passing it off as his own, for which he received more than $6 million in Medicare payments. In addition, the government asserted that, in furtherance of his agreement with TPL, Dr. Wasserman substantially increased the number of skin biopsies he performed on Medicare patients, thus increasing the referral business for TPL.
The government further alleged that, in addition to his involvement in the alleged kickback scheme, Dr. Wasserman also performed thousands of unnecessary skin surgeries known as adjacent tissue transfers on Medicare beneficiaries. Adjacent tissue transfers are complicated and often time-consuming procedures physicians sometimes use to close a defect resulting from the removal of a growth on a patient’s skin. The government alleged that Dr. Wasserman performed many of these procedures in order to obtain the reimbursement for them and not because they were medically necessary.
“Doctors who take illegal kickbacks and perform unnecessary procedures not only put their own financial self-interest over their duty to their patients, they raise the cost of health care for all of us as patients and as taxpayers,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice will not tolerate those who abuse the public health care programs to which we all contribute and on which we all depend.”
“This settlement represents a watershed achievement in our district’s civil healthcare fraud enforcement program,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida. “Schemes of this magnitude require extraordinary remedies, and we are proud to have reached such an outstanding resolution for the taxpayers and their health programs.”
The allegations resolved by today’s settlement were initiated by a lawsuit originally filed in the District Court for the Middle District of Florida by Alan Freedman, M.D., a pathologist who formerly worked at TPL. Dr. Freedman filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act. Under the False Claims Act, a private party may file suit on behalf of the United States for false claims and share in any recovery. The United States has the right to intervene in the action, which it did in this case, filing its own complaint in October 2010. Dr. Freedman will receive $4,046,000 of today’s settlement.
The United States previously settled with TPL and Dr. SuarezHoyos for $950,000 to resolve the allegations asserted against them in the same lawsuit.
“Anyone cheating patients and taxpayers should expect to pay a high price,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “Besides paying more than $26 million, Dr. Wasserman is excluded from treating patients and being paid under Medicare, Medicaid, and all other federal health care programs.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.
Principal Deputy Assistant Attorney General Delery and U.S. Attorney O’Neill thanked the joint investigation team, which includes special agents with the Department of Health and Human Services-OIG and the FBI, for their efforts in the investigation of this matter.
The claims settled by this agreement are allegations only; there has been no determination of liability.
The lawsuit is captioned U.S. ex rel. Freedman v. SuarezHoyos et al., No. 04-933 (M.D. Fla.).

Former Registered Nurse Sentenced in Miami to 111 Months in Prison in Connection with $63 Million Mental Health Care Fraud Scheme

WASHINGTON—A former registered nurse was sentenced today to serve 111 months in prison for his role in a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations, Miami Office.
John Thoen, 53, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to his prison term, Thoen was sentenced to serve three years of supervised release.
On November 20, 2012, Thoen pleaded guilty in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.
According to court documents, HCSN operated community mental health centers (CMHC) at three locations in Miami-Dade County, Florida, and one location in Hendersonville, North Carolina. HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness. A PHP is a form of intensive treatment for severe mental illness. According to court documents, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided. HCSN obtained those beneficiaries in Miami by paying kickbacks to owners and operators of assisted living facilities.
According to court documents, Thoen was a licensed registered nurse in both Florida and North Carolina. In Florida, Thoen participated in the admission to HCSN of patients who were ineligible for PHP services. Thoen participated in the routine fabrication of patient medical records that were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Medicaid.
In North Carolina, Thoen, according to court documents, routinely submitted fraudulent PHP claims for Medicare patients who were not even present at the CMHC on days PHP services were purportedly rendered. Thoen also caused the submission of fraudulent Medicare claims on days the CMHC was closed due to snow.
Thoen also admitted to his role in a money laundering scheme involving Psychiatric Consulting Network Inc. (PCN), a Florida corporation that was utilized by HCSN as a shell corporation to launder health care fraud proceeds. According to court documents, Thoen was president of PCN.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and nine defendants have pleaded guilty. Alleged co-conspirators Wondera Eason and Paul Layman are scheduled for trial on March 11, 2013, before Judge Altonaga in Miami. Alleged co-conspirators Alina Feas, Dana Gonzalez, Gema Pampin and Lisset Palmero are scheduled for trial on June 3, 2013. Defendants are presumed innocent until proven guilty at trial.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division’s Financial Crimes Section has funded the Special Trial Attorney position.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Leader of Armenian Organized Crime Ring Sentenced in Manhattan Federal Court to 37 Months in Prison for His Role in $100 Million Medicare Fraud Scheme

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Armen Kazarian was sentenced today in Manhattan federal court to 37 months in prison for his involvement with the Mirzoyan-Terdjanian Organization, an Armenian-American organized crime enterprise engaged in a wide range of criminal activity. Kazarian pled guilty to racketeering conspiracy in July 2011 and was sentenced today by U.S. District Judge Paul G. Gardephe.
Manhattan U.S. Attorney Preet Bharara said, “Armen Kazarian sat at the top of a criminal organization and now he will sit in a jail cell for a long time. International mobsters who think they can export their criminal enterprises to the United States and target our government programs and our citizens are in for a rude awakening—they will face U.S. justice and be made to answer for their crimes.”
According to the indictment, other documents filed in this case, and statements made during the guilty plea proceeding:
Kazarian was a “Vor,” a term translated as “Thief-in-Law.” The term refers to a member of a select group of high-level criminals from Russia and the countries that had been part of the former Soviet Union, including Armenia. Vors offer prestige and protection to criminal organizations in return for a share of criminal earnings and use their position of authority to resolve disputes among criminals. Kazarian used his status as a Vor within the criminal community to assist the Mirzoyan-Terdjanian Organization, an Armenian-American organized crime ring that engaged in an extensive range of criminal offenses including the operation of a $100 million Medicare fraud billing ring. As part of his involvement with the group, Kazarian engaged in extortion on the organization’s and his own behalf.
* * *
In addition to the prison term, Judge Gardephe sentenced Kazarian, 47, of Glendale, California, to three years of supervised release. He was also ordered to pay a $60,000 fine.
Mr. Bharara thanked the New York Field Office of the Federal Bureau of Investigation; the New York City Police Department; the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the New York Office of the Inspector General, Department of Health and Human Services for their work in the investigation.
The prosecution is being handled by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Jennifer Burns, Arlo Devlin-Brown, and Harris Fischman are in charge of the prosecution.

Friday, February 8, 2013

Health Care Fraud Fugitive Extradited from Colombia to Serve 2006 Sentence

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the return to South Florida of fugitive Magda Luz Lavin, 55, after her arrest and extradition from Colombia. Lavin fled South Florida during a 2006 health care fraud trial and was subsequently charged with bond jumping. She made her initial appearance in federal court earlier today on the bond jumping charge.
Lavin was the former owner of at least two HIV clinics in the Southern District of Florida. She was charged in a 25-count federal indictment with conspiracy to commit health care fraud, health care fraud, and money laundering. On September 18, 2006, after three weeks of trial before U.S. District Judge Joan A. Lenard, defendant Lavin failed to appear in court, and the court issued a bench warrant for her arrest. Thereafter, the court found that Lavin had fled the jurisdiction and had voluntarily waived her appearance during the remainder of the trial and permitted the government to proceed with the trial. On September 25, 2006, the jury convicted Lavin on all counts.
On December 19, 2006, Judge Lenard sentenced Lavin in absentia to 180 months in prison and ordered her to pay restitution in the amount of $5,037,356. Upon her return, Lavin will begin to serve her sentence and face the bond jumping charges.
U.S. Attorney Wifredo A. Ferrer stated, “This case should serve as a wakeup call to health care fraud defendants who seek to avoid justice by fleeing to other countries: the arm of the law is long, and we in law enforcement are patient. Sooner or later, we will catch you, and you will be brought back to face justice.”
“In 2006, Magda Luz Lavin, a convicted health care fraudster, attempted to cheat justice by fleeing the country during her trial,” said Michael B. Steinbach, Special Agent in Charge of FBI Miami. “Thanks to the support and close cooperation of our partners including Interpol and the Colombian National Police, she is again in the United States in federal custody. Justice is served.”
According to the evidence, the defendant used two medical clinics, Alternative Day Spa Corp., formerly in Kendall, and Alternative Treatment Programs, formerly in Key West, to defraud Medicare of more than $5 million between May 2000 and December 2002. The two clinics claimed to specialize in the treatment of HIV patients with “infusion therapy treatments.” The patients who attended the clinics were, in fact, HIV positive.
The evidence at trial showed that under Lavin’s direction, the clinics fraudulently billed Medicare for dosages of two expensive medications, Neupogen and Procrit. In fact, however, the patients received either no medication at all or minimal dosages of the medications diluted with vitamins and saline solution or dextrose solution. Lavin also paid kickbacks to patients to induce them to continue to attend the clinics.
During the trial, the evidence revealed that the defendants had caused the falsification of progress notes on “infusion therapy sheets” in the patients’ files to make it appear that the patients were receiving medications as billed to Medicare. In truth, however, patients were not receiving the medications as noted on the sheets and billed to Medicare. In addition, the government presented expert testimony that it was actually impossible for patients to receive the dosages of medications as billed to Medicare. The expert also testified that these medications were normally provided by injection, not by infusion, and that—contrary to the practice at the two clinics—Neupogen and Procrit should not be mixed together or with saline solution.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also thanked the U.S. Marshals Service for its assistance in returning this fugitive to the Southern District of Florida. The health care fraud case was prosecuted by Assistant U.S. Attorney Barbara Martinez.

Eleven People Arrested in New Jersey in Large-Scale Medicaid Fraud Scheme

NEWARK—Federal and state agents this morning arrested 11 people who are charged by complaint, along with two corporations, in connection with a large-scale scheme to defraud the Medicaid program of millions of dollars, U.S. Attorney Paul J. Fishman announced today.
The complaint also charges the owner of a home health aide business headquartered in Linden, New Jersey, with attempting on two occasions to hinder a state investigation by bribing a state regulator—who was working with the FBI—and with conspiring with the owner of another home health aide business in Elizabeth, New Jersey, to launder money.
The defendants arrested this morning are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.
“The defendants in this case allegedly enriched themselves by gaming the Medicaid system,” U.S. Attorney Fishman said. “The actions described in this complaint are especially egregious, because the taxpayer dollars that were stolen were intended to provide necessary health care for our most vulnerable citizens. I’m especially proud that federal and state law enforcement agencies worked together effectively to uncover this alleged fraud.”
David Velazquez, Acting Special Agent in Charge of the FBI, Newark, said, “The FBI views health care fraud as a severe crime problem that poses a potential risk to patients and increases health care costs for all. Today’s arrests are the result of a four-year investigation into a sophisticated scheme involving multiple layers of fraud, money laundering, and bribery, in order to defraud the New Jersey Medicaid program of millions of dollars. This case is indicative of how the FBI, along with its federal partners and the state of New Jersey, will continue to work together to pursue those that steal from our health care system.”
“Falsely billing Medicaid for millions of dollars as alleged in today’s complaint is a serious crime,” Internal Revenue Service (IRS) Criminal Investigation Acting Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, said. “Financial fraud schemes such as this are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible. IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
New Jersey Attorney General Jeffrey Chiesa said, “The New Jersey Division of Consumer Affairs regulates nurses, home health aides, and home health agencies in our state and the Division’s Enforcement Bureau aggressively investigates any allegations of fraud or wrongdoing by those regulated professionals and businesses. We are proud to have worked with the FBI on this investigation. Alleged billing fraud by health professionals affects the entire economy and will not be tolerated.”
According to the complaint filed in this case:
Irina Krutoyarsky, 58, of Springfield, New Jersey, was the owner and operator of HHCH Health Care Inc., a for-profit home health aide business located in Linden. HHCH billed Medicaid for services purportedly provided by home health aides to Medicaid-eligible patients. Medicaid is a jointly funded federal-state health insurance program that provides certain health benefits to the disabled and individuals and families with low incomes and resources. Paul Mil, 68, of Springfield, was the owner and operator of People Choice Home Care Inc., another for-profit home health business located in Linden and Elizabeth, which also billed Medicaid for services purportedly provided by home health aides.
Krutoyarsky, Mil, and their conspirators allegedly defrauded Medicaid of millions of dollars through a variety of schemes, including:
  • Billing Medicaid for treatment and services not actually rendered;
  • Obtaining fraudulent home health aide certifications for employees and others;
  • Using illegal aliens and/or non-certified individuals to provide home health aide services and billing Medicaid, claiming the services had been provided by certified home health aides.
According to the complaint:
During the investigation, an individual working with the FBI—“Cooperating Witness Three” (CW3)—met Krutoyarsky, Mil, and others at HHCH and consensually recorded a number of conversations. For example, on January 31, 2012, CW3 met with Krutoyarsky and Mil to discuss obtaining a home health aide license. During this consensually recorded conversation (audio and video), they discussed fraudulently billing Medicaid by providing false information about the patients, known as a “bait and switch”:
Krutoyarsky: You know, it’s just the free money...coming in.
CW3: That’s true.
Mil described how they billed Medicaid for services not actually rendered:
Mil: It’s a lot of people, a lot of people who...Medicaid. Government pay for the service. We can get, you know, between 10 and 18 hours [of Medicaid billing per week per patient]. Look, people can work in a week and get paid hundred bucks a week doing nothing. Why not?
* * * *
Krutoyarsky: ...But as long as these people doesn’t live in the same address, so Medicaid is not gonna trace.
CW3: Oh, so, otherwise they will trace. Okay.
Krutoyarsky: Because they do the tracings, you know. They gonna see who’s working, who’s not working, this and that....So this way, they gonna have a free money....Government, free money.
After meeting with Krutoyarsky and Mil, CW3 met with defendant Nekadam S. Galibova, an HHCH office employee who assisted CW3 in obtaining a home health aide license without taking the required course or test. CW3 underwent neither the required training nor testing, but in March 2012, CW3 received a home health aide license from the New Jersey. Krutoyarsky, Mil, and others billed Medicaid under CW3’s license, knowing that CW3 provided no treatment to any patients.
Galibova was also a purported HHCH home health aide. The investigation revealed that she conspired with Krutoyarsky and others to bill Medicaid for services not rendered. Galibova and HHCH billed Medicaid for a patient (referred to as Patient M.N.) from July 27 to 31, 2009 and August 3 to 4, 2009, periods when that patient was, in fact, out of the country.
Krutoyarsky and Mil also dispatched undocumented aliens and other unlicensed individuals to patients’ homes. Defendant Sonia Mesa was observed by the FBI visiting a patient’s home; however, Medicaid was billed using the names of others, including Alla Neymet and Leonora Popesku.
Krutoyarsky also bribed a New Jersey Department of Labor employee on two occasions to stop wage and hour investigations into HHCH and People Choice. This state employee, however, was cooperating with the FBI and is referred to in the Complaint as “Cooperating Witness Two” (CW2). On June 14, 2010, Krutoyarsky met CW2 about the state investigation into HHCH. Krutoyarsky did not want to provide CW2 with records related the HHCH and handed CW2 an envelope containing approximately $1,000 in cash.
Krutoyarsky and CW2 passed notes back and forth, negotiating the bribe. Eventually, Krutoyarsky agreed to pay CW2 $10,000, which she later paid. On April 14, 2011, Krutoyarsky paid another $15,000 to CW2 to subvert a state investigation into People Choice.
Krutoyarsky and Mil then allegedly laundered the proceeds of the Medicaid fraud to conceal their scheme and allow it to continue. Krutoyarsky and defendant Gulmira Shayakhmetova are alleged to have conspired to structure money by making numerous cash withdrawals in amounts under $10,000 to evade the banks requirement to file a report with the U.S. Treasury.
Count one charges conspiracy to commit health care fraud and carries a maximum penalty of 20 years in prison and a $250,000 fine. Counts two and three each charge bribery and each charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Count four charges conspiracy to commit money laundering and carries a maximum penalty of 20 years in prison and a $500,000 fine. Count five charges conspiracy to unlawfully structure financial transactions and carries a maximum penalty of five years in prison and a $250,000 fine.
In addition, HHCH and People Choice were charged in count one of the criminal complaint with conspiracy to commit health care fraud.
The criminal complaint also alleges forfeiture and provides notice of the federal government’s intent to forfeit at least $3.45 million in proceeds from the alleged offense and numerous properties in Krutoyarsky’s name in New Jersey, Florida, and New York.
U.S. Attorney Fishman praised agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; U.S. Citizenship and Immigration Services; New Jersey Attorney General Jeffrey Chiesa; New Jersey State Comptroller Matthew Boxer; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; New Jersey Division of Consumer Affairs, under the direction of Director Eric T. Kanefsky, Board of Nursing; Hal Wirth, Commissioner, New Jersey Department of Labor; U.S. Department of State-Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and Jonathan W. Romankow of the Organized Crime/Gangs Unit, Lakshmi Srinivasan Herman of the Economic Crimes Unit and Peter W. Gaeta of the Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Wednesday, February 6, 2013

Psychologist Sentenced for $1 Million Health Care Fraud

KANSAS CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a psychologist practicing in the Lebanon, Missouri area was sentenced in federal court today for engaging in a $1 million scheme to defraud Medicare and Medicaid.
“Those who defraud the government are stealing from the pockets of law-abiding taxpayers,” Dickinson said. “This psychologist flagrantly abused the system to enrich himself for more than three years, but today he is being held accountable for his actions.”
Rhett E. McCarty, 67, of Lake Ozark, Missouri, was sentenced by U.S. District Judge Howard F. Sachs to three years in federal prison without parole. The court also ordered McCarty to pay $1 million in restitution to Medicaid and Medicare.
McCarty was a licensed psychologist and private practitioner who provided psychotherapy services to recipients of both Medicare and Medicaid in their homes in the Lebanon area. On August 16, 2012, McCarty pleaded guilty to health care fraud and to forgery.
“Rhett McCarty violated the trust extended to him by the American taxpayers to provide medical services to our Medicare and Medicaid beneficiaries,” said Special Agent in Charge Gerry Roy of the Health and Human Services-Office of Inspector General. “He is now being held responsible for his violations. At HHS-OIG, we will continue to work with our federal and state law enforcement and prosecution partners to ensure the solvency and integrity of our federally funded health care programs.”
Between September 17, 2008 and April 5, 2012, McCarty submitted Medicare and Medicaid claims for daily or near daily psychotherapy services to 19 beneficiaries for which he was paid $1,276,334. According to the claims that McCarty submitted, he routinely saw beneficiaries seven days per week and worked long hours every day. Moreover, according to McCarty’s claims, he worked every single day of the calendar year from mid-September 2008 through early April 2012, except for Christmas day. McCarty routinely billed for every weekend day and for all holidays except Christmas day.
Although McCarty did provide some services for most of these beneficiaries, he admitted that he did not see those beneficiaries more than once a week. McCarty also admitted that the amount he was paid by Medicare and Medicaid for services he did not provide to these 19 beneficiaries was $1 million.
McCarty also admitted that he forged (or caused another person to forge) the signatures of five of the beneficiaries on patient sign-in sheets in order to obtain $418,507 in Medicare and Medicaid payments.
This case was prosecuted by Assistant U.S. Attorney Lucinda S. Woolery. It was investigated by Health and Human Services-Office of Inspector General, the FBI, and the Medicaid Fraud Control Unit.

Former Topeka Non-Profit Executive Sentenced to Federal Prison for Scheme to Steal Kansas Medicaid Funds

TOPEKA—A former executive with a Topeka-based non-profit corporation has been sentenced to three years in federal prison for scheming to steal more than $2 million in Kansas Medicaid funds, U.S. Attorney Barry Grissom said today. He also was ordered to pay $2,077,251 in restitution.
Jason Sellers, 44, Lyndon, Kansas, pleaded guilty to one count of wire fraud. In his plea, he admitted that while he was chief financial officer of Kansas Health Solutions, he diverted Medicaid funds to Advanced Business Consulting, which was a shell company he created. Sellers fraudulently billed Kansas Health Solutions for information technology services ostensibly performed by the sham business. He also billed Kansas Health Solutions for sports equipment and uniforms for sports teams with which he associated, as well as computer equipment for an area school, for him, and for his family.
From about 2007 to 2011, Sellers was involved with several Topeka-area sports teams. In addition to billing Kansas Health Solutions for sports equipment and uniforms for sports teams, Sellers used some of the stolen money to build and furnish a $375,000, 3,755-sq. ft. home on 11 acres in Lyndon, Kansas.
Medicaid funds are state and federal money that were administered in Kansas by the Kansas Health Policy Authority and the Kansas Department of Health and Environment, Division of Healthcare Finance. In order to manage community-based mental health services for Medicaid recipients, Kansas Medicaid contracted with Kansas Health Solutions in Topeka. Kansas Health Solutions was responsible for overseeing a provider network that provided all community-based health services covered under the contract with Kansas Medicaid.
Grissom commended the U.S. Department of Health and Human Services, the FBI, Kansas Attorney General Derek Schmidt’s Office, and Assistant U.S. Attorney Tanya Treadway for their work on the case.

Apple Valley Woman Pleads Guilty to Defrauding a Home Health Care Company and Medica

MINNEAPOLIS—Earlier today in federal court, an Apple Valley woman pleaded guilty to defrauding both her employer and Medica. Lori Jo Mueller, age 48, pleaded guilty to one count of wire fraud and one count of health care fraud in connection to the crime. Mueller, who was charged on January 9, 2013, entered her plea before United States District Court Judge David S. Doty. In her plea agreement, Mueller admitted that from June 2006 through June 2012, she embezzled approximately $840,000 from Edelweiss Home Health Care, using the funds for her personal use.
Mueller began working for Edelweiss, located in Maple Grove, in 2002, and was ultimately promoted to the position of vice president of operations. In that capacity, she was responsible for the review and payment of corporate invoices, bookkeeping, and other financial matters. Mueller admitted using her access to the corporate checking account to issue payments to herself. She also concealed her actions from the company owners and made misrepresentations concerning the company’s financial state.
In addition, from March 2010 through June 2012, Mueller defrauded Medica, a non-profit corporation that provides health insurance products to individuals and families. She submitted claims to various insurers, seeking reimbursement for services provided by Edelweiss nursing staff. In some instances, Mueller double-billed by allowing claims for the same services to multiple insurance providers. For example, Mueller allowed both Minnesota Medicaid and Medica to be billed for identical services provided to one client. The particular double-billing resulted in a double-payment to Edelweiss, with Medicaid being the proper payer and Medica being the overpayer. As a result of this criminal behavior, Mueller caused more than $631,000 in fraudulent proceeds to be paid by Medica.
For her crimes, Mueller faces a potential maximum penalty of 30 years in federal prison for wire fraud and 10 years for health care fraud. Judge Doty will determine her sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services-Office of Inspector General (DHHS-OIG). It is being prosecuted by Assistant U.S. Attorney David M. Genrich.
The U.S. Attorney’s Office participates in a task force with the Medicaid Fraud Control Unit at the Minnesota Attorney General’s Office that focuses on home health care fraud trends. The task force includes the DHHS-OIG, the FBI, the Internal Revenue Service, and other federal, state, and local law enforcement partners.
As a result of federal convictions for health care fraud, defendants are excluded from participating in federal health benefit programs, including Medicare and Medicaid. Exclusion determinations are made by the U.S. Department of Health and Human Services. Nationwide, more than 3,000 individuals were excluded from program participation in fiscal year 2010 based upon criminal convictions or patient abuse or neglect, license revocations, or other factors.

Pharmacist/Pharmacy Owner Sentenced to 17 Years for Health Care Fraud, Drug Offenses

A 50-year-old Canton pharmacist who owned and operated 26 pharmacies in the metro-Detroit area was sentenced today to 17 years in prison, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Robert D. Foley, III, Special Agent in Charge, Federal Bureau of Investigation; Robert Corso, Special Agent in Charge, Drug Enforcement Administration; and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.
U.S. District Judge Arthur J. Tarnow sentenced Babubhai “Bob” Patel on 26 convictions for a health care fraud conspiracy, a drug conspiracy, and related fraud and drug violations.
Evidence presented at a six-week jury trial concluding in August 2012 showed between 2006 and 2011, the pharmacies billed Medicare and Medicaid more than $57 million. At least 25 percent of those billings were for drugs that were either medically unnecessary never dispensed. Additional amounts were fraudulently billed to private insurers such as Blue Cross Blue Shield of Michigan. The pharmacies operated on a business model that paid kickbacks to physicians in exchange for writing prescriptions for expensive medications. The affiliated doctors would also write prescriptions for controlled substances, without regard to medical necessity, which would be filled at the pharmacies and distributed to paid “patients” and patient recruiters. The expensive, non-controlled medications would be billed but not dispensed.
In sentencing the defendant, the court told the defendant that “what you have done is reprehensible.” The criminal conduct engaged in by other health care fraud violators sentenced by the court was “small scale compared to this.”
“Taxpayers fund Medicare and Medicaid to provide health care to needy Americans,” McQuade said. “It is gratifying to see courts impose strong sentences on defendants who exploit these programs for personal gain.”
FBI Special Agent in Charge Foley stated, “Those individuals who engaged in this health care fraud scheme stole millions of dollars over several years from a system designed to provide health care to those in need. The FBI is committed to stopping these illegal acts and prosecuting these criminals.”
“The conduct that occurred in this case was deplorable, inexcusable, and dangerous,” said Lamont Pugh, III, Special Agent in Charge of the Chicago Region of the U.S. Department of Health and Human Services, Office of Inspector General. “The OIG will continue to work with our law enforcement partners to combat prescription drug fraud in the Medicare and Medicaid programs and seek to ensure the safety of program beneficiaries and taxpayer dollars.”
Of the 26 defendants charged in the original indictment in this case, 20 defendants have either pleaded guilty or been convicted at trial. Six defendants are scheduled for trial in June. Out of 12 pharmacists charged, 11 have been convicted at trial or pleaded guilty, with one waiting to be tried. Out of four doctors charged, two have pleaded guilty, with two waiting to be tried.
Earlier this week, Judge Tarnow sentenced several of the other pharmacists who were convicted at trial. Brijesh Rawal, 36, of Canton; Ashwini Sharma, 34, of Novi; and Lokesh Tayal, 36, of Northville, were each sentenced to terms of imprisonment of 68 months for their participation as pharmacists in these criminal offenses. These three pharmacists were non-U.S. citizens who entered the United States under a visa program for certain skilled workers, and each will be deported to the country of their citizenship upon the completion of their sentences. Defendant Rawal is a citizen of Canada, while defendants Sharma and Tayal are citizens of India.
In addition to the prison sentence, defendant Babubhai Patel was ordered to pay restitution to the Medicaid and Medicare programs in the amount of $17.3 million and restitution to Blue Cross Blue Shield in the amount of $1.5 million. Defendant Patel, who has been held without bond since his arrest on August 2, 2011, will receive credit toward his sentence for the time he has served.
U.S. Attorney McQuade thanked the Drug Enforcement Administration; the FBI; the Department of Human Services, Office of Inspector General; and Blue Cross and Blue Shield of Michigan for their tireless work in the investigation and prosecution of the case. The case is being prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.

Tuesday, February 5, 2013

Boca Raton Chiropractor Sentenced for Conspiracy to Commit Mail Fraud in Connection with Staged Accident Scheme

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge; Federal Bureau of Investigation (FBI), Miami Field Office; Jose A. Gonzalez, Special Agent in Charge-Internal Revenue Service, Criminal Investigation (IRS-CI); and Jeff Atwater, Florida Chief Financial Officer, announced that defendant Jennifer Adams, 39, of Boca Raton, a chiropractic doctor, was sentenced yesterday to 54 months in prison, to be followed by three years of supervised release. She was also ordered to pay restitution of $1,920,424.83. Adams previously pled guilty to a one-count information charging her with conspiring with others to commit mail fraud for her role in a staged accident fraud scheme.
According to court documents, to execute the fraud scheme, the recruiters sought out drivers and their friends/family members to participate in staged accidents. Under Florida’s “No Fault” insurance law, insurers are required to provide Personal Injury Protection (PIP) coverage of $10,000 per person. The recruiters referred to the individuals whom they recruited as the “Perro” and the “Perra.” The “Perro” was the person who “caused” the staged accident. The “Perra” was the person who was the “victim” of the staged accident and whose car was struck by the “Perro’s” car. Thus, if the recruiter found a Perro with a wife and two children and a Perra with two friends, for a total of seven participants, the maximum PIP benefit was $70,000.
Once the recruiters found the participants, they coached the participants on how to perform the staged accident, what to say to the police officer who responded to the scene, and on how to claim that they had been injured. Thereafter, the accident was staged. After impact, a police officer was called, and a police report was filed. After the staged accident, the Perro and Perra filed false claims with their insurance companies, alleging that they and their family members were injured.
Court documents state that the accident participants were then directed by the recruiters to chiropractic clinics that were controlled by co-defendants. The staged accident participants completed paperwork falsely asserting that they suffered injuries during the staged accident. The co-conspirators advised the participants on how to fill out the paperwork and what to say if an insurance investigator interviewed them about their injuries or treatment. The staged accident participants were instructed to sign numerous blank treatment forms that would later be submitted indicating that they had visited the clinic on a number of separate occasions for treatment, although they may have visited the clinic only once or twice. During their visits, some staged accident participants received no treatment at all or may have received only a short exam or treatment from the chiropractor or LMT but the paperwork completed by the LMTs and chiropractors, including Dr. Adams, indicated that a full and lengthy exam and treatment was given.
According to court documents, Adams agreed to place her name on the corporate paperwork for two clinics, thus utilizing her status as a licensed chiropractic physician, to allow the clinics to bill insurance companies directly for PIP claims without obtaining additional licensure from the state of Florida. Those clinics were Ovy Rehabilitation Medical Center Inc. (OVY) in West Palm Beach, Florida, and Chiropractic Office of South Florida LLC (COSF) in Palm Springs, Florida. Although Adams was named as the owner of the clinic on the corporate paperwork, the co-conspirators maintained control of the bank account and running the operations of the clinics.
Court documents state that Adams initially believed the clinics to be operating legitimately. Sometime thereafter, Adams became aware that her license and status as a chiropractor was being used to fraudulently submit claims by U.S. mail to insurance companies. Adams realized these patients did not require the medical treatment they sought. Adams continued to work at both clinics signing prescriptions for plans of treatment that she knew were not medically necessary and that she knew were being submitted for reimbursement to numerous insurance companies. According to court documents, from the time that Adams was told about the fraud until the clinics were closed by law enforcement, the clinics submitted fraudulent claims that resulted in more than 10 insurance companies making total payments of $1,920,424.83. Defendant Adams received a salary for her work as a chiropractic physician paid from the COSF and OVY checking accounts. The bulk of the proceeds of the fraud were taken by co-conspirators.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and the Florida Department of Insurance Fraud and issued a special thanks to the National Insurance Crime Bureau (NICB) for its assistance in this investigation. Mr. Ferrer also thanked the members of the Greater Palm Beach Health Care Fraud Task Force. The case is being prosecuted by Assistant U.S. Attorney A. Marie Villafaña.

Two Patient Recruiters of Miami Home Health Company Plead Guilty in $20 Million Health Care Fraud Scheme

WASHINGTON—Two patient recruiters for a Miami home health care company have pleaded guilty for their participation in a $20 million home health Medicare fraud scheme. The guilty pleas were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations, Miami Office.
Manuel Lozano, 65, and Vladimir Jimenez, 43, pleaded guilty today and January 22, 2013, respectively, to one count each of conspiracy to receive health care kickbacks. They entered their guilty pleas before U.S. District Judge Joan A. Lenard in Miami federal court.
According to the court documents, both Lozano and Jimenez were patient recruiters who worked for Serendipity Home Health, a Miami home health care agency that claimed to provide home health and therapy services to Medicare beneficiaries.
The pair admitted that from approximately April 2007 through March 2009, Lozano and Jimenez would recruit patients, for which Serendipity could bill Medicare, in exchange for kickbacks and bribes they would solicit from Serendipity’s owners and operators. Medicare was billed for home health care and therapy services on behalf of these beneficiaries that were medically unnecessary and/or not provided.
Lozano and Jimenez each face a maximum potential penalty on the conspiracy charge of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for April 15 and April 1, 2013, for the respective defendants.
In a related case, on June 21, 2012, Serendipity owners and operators Ariel Rodriguez and Reynaldo Navarro were sentenced to 73 and 74 months in prison, respectively, following guilty pleas in March 2012 to one count each of conspiracy to commit health care fraud. According to court documents, from approximately January 2006 through March 2009, Serendipity submitted approximately $20 million in claims for home health services that were not medically necessary and/or not provided. Medicare actually paid approximately $14 million for these fraudulent claims.
This case is being prosecuted by Senior Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 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.

Friday, February 1, 2013

Doctor and Owner of Medical Supply Company Plead Guilty in Million-Dollar Power Wheelchair Scam

United States Attorney Laura E. Duffy announced that a California medical doctor and the owner of the Oceanside Medical Supply in Long Beach, California, have both pled guilty to participating in a conspiracy to defraud the Medicare trust fund by submitting more than $1 million in fraudulent power wheelchair claims. Dr. Irving Schwartz and Jose Melendez entered their guilty pleas before Magistrate Judge Nita L. Stormes in federal court in San Diego, and, pursuant to their plea agreements, the defendants are obligated to pay restitution to the Medicare trust fund for the losses caused by their scheme.

According to court papers and admissions by the defendants, the fraudulent conspiracy focused on the sale of bogus prescriptions, with the ultimate goal being to obtain reimbursements from Medicare for expensive power wheelchairs that patients did not need and, in some cases, did not want. Dr. Irving Schwartz admitted today during his guilty plea that in 2007-2008, he would travel to El Centro, California, in search of elderly Medicare patients. Dr. Schwartz would write prescriptions for power wheelchairs, even though the patients did not need the equipment and could walk without assistance. In exchange, Schwartz collected a $300 cash kickback for each fraudulent power wheelchair prescription. One of Schwartz’s co-conspirators would then sell the power wheelchair prescriptions to Melendez, a medical supply company owner, charging him $1,000 per fraudulent prescription.

According to court papers and admissions at today’s hearing, Melendez sold some of the power wheelchair prescriptions to other co-conspirators, charging them an additional mark-up on each fraudulent prescription. As the last step in the scheme, Melendez and other co-conspirators would submit the fraudulent prescriptions to Medicare for reimbursement, billing the government thousands more per wheelchair than it had cost them to purchase and deliver the equipment. Often the unneeded equipment would sit unused in patients’ homes for years.

Dr. Schwartz admitted today in open court that he wrote at least 186 fraudulent power wheelchair prescriptions for Medicare beneficiaries in exchange for more than $55,000 in bribes and kickbacks. Melendez, the owner and operator of Oceanside Medical Services, admitted that he purchased these 186 fraudulent prescriptions and used them to submit over $830,000 in false claims to Medicare.

In a related case, co-conspirators Aristeo and Laura Tavares have pled guilty and admitted to submitting more than $250,000 in false claims based on Dr. Schwartz’s fraudulent prescriptions. In total, the scheme resulted in more than $1 million in false claims to the Medicare trust fund.

United States Attorney Duffy said, “Combating health care fraud is a top priority of the Department of Justice. When Medicare dollars are wasted on expensive and unnecessary equipment, senior citizens run the risk of not being able to obtain the legitimate medical treatment they need. In this time of fiscal austerity, we must aggressively prosecute those who pilfer Medicare dollars to line their own pockets.”

“Health care fraud schemes involving false claims of durable medical equipment cost U.S. taxpayers billions of dollars each year,” said Daphne Hearn, Special Agent in Charge of the San Diego FBI Office. “This prosecution should serve notice that the FBI will aggressively pursue those individuals and criminal enterprises who would line their own pockets at the expense of U.S. taxpayers.”

“There can be no doubt that the federal government will crack down on physicians and other individuals defrauding the Medicare program,” said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s Los Angeles region. “When business owners conspire with doctors to pay kickbacks and write phony prescriptions, they both should expect to be brought to justice.”

The pleas are subject to final acceptance by United States District Judge Marilyn L. Huff. The defendants are scheduled to be sentenced by Judge Huff on May 6, 2013, at 9:00 a.m.

Defendants in Criminal Case No. 12cr2599-H
Irving J. Schwartz, age 67, Yuba City, California
Jose Melendez, age 51, Long Beach, California

Summary of Charges
Count one: Conspiracy to pay and receive health care kickbacks and defraud-Title 18, United States Code, Section 371
Maximum penalties: Five years in custody; $250,000 fine; three years of supervised release; and mandatory restitution

Investigating Agencies
Federal Bureau of Investigation
Department of Health and Human Services, Office of Inspector General