Health Care Business Owner is Sentenced to Four Years in Prison, Pays a Million-Dollar Civil Settlement, and Agrees to 20-Year Exclusion from Medicare and Medicaid in Connection with Illegal Kickback Scheme

GRAND RAPIDS, MI—U.S. Attorney Patrick Miles announced today that Babubhai Rathod, age 44, of Okemos, Michigan, was sentenced to four years in prison and two years of supervised release for his lead role in a conspiracy to pay illegal kickbacks to health care practitioners and others to induce the referral of patients to medical clinics, physical therapy clinics, and a home health care agency. U.S. District Judge Janet T. Neff also ordered Rathod to pay $950,000 in restitution, $900,000 of which Rathod paid prior to sentencing under the terms of a related $1,000,000 civil False Claims Act settlement. As part of that civil settlement, Rathod also agreed to a 20-year exclusion from federal health care programs, including Medicare and Medicaid. In sentencing Mr. Rathod, Judge Neff described the kickback charges as “very, very serious” and having “consequences to...very important government programs in which millions of Americans participate.”
Rathod’s conviction and the related civil settlement arose from a superseding indictment and civil complaint which alleged that between at least January 2007 and January 2012, Rathod directed a scheme to pay physicians, mid-level practitioners, and others for referring patients to medical clinics (Lakeshore Spine & Pain P.C., based in Ludington, Michigan), physical therapy clinics (U.S. Rehab Services P.C., among others, based in Mt. Pleasant, Michigan), and a home health care agency (Lakeshore Home Health Care Inc., based in Lansing, Michigan). The illegal payments were made in cash and checks disguised as bonuses, mileage reimbursements, and payments under sham contracts for medical director and consulting services that were never performed. During the sentencing hearing, Judge Neff specifically noted that the physicians who received such kickbacks stole from government programs that provide “crucial medical services.” Judge Neff further emphasized, with respect to such medical professionals, that “[a] thief is a thief.”
The superseding indictment and civil complaint also alleged that between at least January 2007 and January 2012, Rathod directed a scheme where Lakeshore Spine & Pain P.C. routinely submitted claims for medical services in order to fraudulently obtain higher insurance reimbursements than those to which the company was entitled, a practice known as upcoding. Notably, Rathod was able to own and operate this network of affiliated health care companies and direct these kickback and upcoding schemes, despite the fact that in 2003, Rathod pleaded one of his physical therapy companies guilty to a felony charge of falsifying medical records and subsequently lost his physical therapy license as the result of an assault conviction involving a patient.
Rathod’s sentencing follows the felony convictions of five other persons who paid or received illegal kickbacks in exchange for referring patients to Rathod’s health care companies for physical therapy, electrodiagnostic testing, and home health care services. Judge Neff imposed the following sentences for those individuals:

• Lino S. Dial, Jr., D.O. (Physician, Edmore, Michigan). Dial was sentenced to four months’ imprisonment and $70,000 in restitution. Dial has also been excluded from federal health care programs for five years.

• Clinton J. Cornell, P.A. (Physician Assistant, Mt. Pleasant, Michigan). Cornell was sentenced to fourteen months’ imprisonment and $38,430 in restitution. Cornell is also subject to a minimum five-year exclusion from federal health care programs.

• John E. Roberts, P.A. (Physician Assistant, Mt. Pleasant, Michigan). Roberts was sentenced to four months’ imprisonment and $70,000 in restitution. Roberts has also been excluded from federal health care programs for five years.

• Natalie J. Schutte, P.A. (Physician Assistant, Edmore, Michigan). Schutte was sentenced to two years’ probation and $120,000 in restitution. Schutte has also been excluded from federal health care programs for five years.

• Raju G. Nakum (Practice Administrator, Mt. Pleasant, Michigan). Nakum was sentenced to three months’ imprisonment and $345,000 in restitution. Nakum is also subject to a minimum five-year exclusion from federal health care programs.

Two other individuals employed by Lakeshore Spine & Pain P.C. were convicted of felony health care fraud for their roles in the illegal upcoding scheme. Judge Neff imposed the following sentences for those individuals:

• Rajesh Makwana (Practice Administrator, Ludington, Michigan). Makwana was sentenced to twelve months and one day imprisonment and $71,000 in restitution. Makwana is also subject to a minimum five-year exclusion from federal health care programs.

• Sandeepkumar Patel (Biller, Ludington, Michigan). Patel was sentenced to two years’ probation. Patel has been excluded from federal health care programs for five years and will be deported from the United States.

In addition to these individuals and Rathod, a ninth individual, Kevin Witt, D.O., of Jackson, Michigan, was charged and convicted by the Michigan Attorney General’s Office on a related state felony charge for accepting kickback payments from Rathod. Witt has been excluded from federal health care programs for five years.
This case resulted from a civil lawsuit filed by a whistleblower who worked in one of Rathod’s offices. The lawsuit, known as a qui tam action, was filed under the False Claims Act and Michigan Medicaid False Claims Act, which allow private whistleblowers to bring lawsuits on behalf of the United States and the state of Michigan and receive a share of any recoveries. In this case, the United States and state of Michigan intervened in the whistleblower’s lawsuit, recovered $1,140,000 to date, and are pursuing additional claims against over a dozen other physicians and mid-level practitioners. The whistleblower has received $240,100 of these settlement proceeds, as well as additional amounts for attorney’s fees and costs.
“Whistleblowers play a key role in protecting federal health care programs from fraud and abuse, including kickback schemes that are often difficult to detect and result in the referral of unnecessary and upcoded services,” said U.S. Attorney Miles. “Paying kickbacks for patient referrals distorts the motives of health care professionals. The U.S. Attorney’s Office will continue to aggressively investigate and prosecute such kickback schemes and seek all available civil and criminal remedies including treble civil damages, monetary penalties, and felony prosecutions.”
“It is essential to maintain integrity in our health care system. Patients deserve to know that when a doctor refers them for additional treatment, the decision to do so is based upon quality health advice—not what is best for the doctor’s bottom line,” said Attorney General Bill Schuette. “Kickbacks with the Medicaid program do not just hurt patients, they affect the taxpayers whose hard-earned dollars subsidize healthcare for those in need.”
FBI Special Agent in Charge Robert D. Foley, III stated, “Those who provide health care must be held to the highest standards of ethics and integrity. The FBI remains committed to pursuing and prosecuting such criminals who abuse the system by receiving illegal kickbacks.”
“Paying kickbacks for the referral of Medicare or Medicaid patients is a serious crime,” said Lamont Pugh, III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General-Chicago Region. “Kickbacks inappropriately influence health care practitioners’ medical decision making process, lead to overutilization and/or upcoding of services, and further increase program costs. The OIG will continue to aggressively pursue all available remedies whether criminal, civil, or administrative to ensure the integrity of the Medicare and Medicaid programs and protect vital taxpayer dollars.”
These convictions and settlements were the result of a coordinated effort by the U.S. Attorney’s Office for the Western District of Michigan, the Michigan Attorney General’s Office, the Federal Bureau of Investigation, the U.S. Department of Health and Human Services-Office of Inspector General, and Blue Cross Blue Shield of Michigan.

Two Area Women Convicted in Home Health Services Conspiracy

CORPUS CHRISTI, TX—Sylvia Salinas Ramirez, of Driscoll, and Debra Jean Velasquez, of Robstown, have been convicted of wire fraud and conspiring to do so as part of a scheme to defraud the Texas Medicaid program through fraudulent home health billings, United States Attorney Kenneth Magidson announced today along with Texas Attorney General Greg Abbott.
Ramirez, 52, and Velasquez, 41, were charged in a 14-count federal indictment returned Wednesday, May 8, 2013. Today, they appeared before U.S. District Judge Nelva Gonzales Ramos and entered pleas of guilty to conspiring to submit false and fraudulent bills to the Texas Medicaid Program by wire transmissions, as well as wire fraud for using interstate wire transmissions to bill.
The two women admitted that from or about August 1, 2009 through on or about June 15, 2010, they were employed by the Corpus Christi office of MRNG Inc. doing business as Caring Touch Home Health. During that time, they conspired to submit false and fraudulent bills through wire transmissions to the Texas Medicaid program and the Medicaid funded managed care organizations known as Evercare of Texas LLC and Superior Health Plan Inc. for home health services that had not been provided. Ramirez and Velasquez admitted they created false and fraudulent time sheets for former Caring Touch employees for home health services that had not been provided and then fraudulently billed Medicaid, Evercare, and Superior in the name of Caring Touch for those non-existent services. They sent approximately 562 of those false and fraudulent bills by wire.
Ramirez and Velasquez also admitted that in order to personally profit from their fraudulent billings, they created phony payroll records from the fraudulent time sheet which they then sent to Caring Tough’s payroll staff. Ramirez and Velasquez then obtained the payroll checks generated from the false and fraudulent time records, forged the signatures of the former Caring Touch employees, and then cashed the checks and divided the money among themselves. Caring Touch and the former employees whose names were used on the false time sheets and checks were not accused of any wrongdoing.
Ramirez and Velasquez admitted that as a result of their false and fraudulent claims, Texas Medicaid, Evercare, and Superior paid the approximate aggregate sum of $155,127.72. As part of their pleas, the women have agreed to pay restitution in that amount.
Conspiracy to commit wire fraud and wire fraud each carry a maximum punishment of 20 years in federal prison without parole as well as a possible $250,000 fine. Judge Ramos has set sentencing December 3, 2013. Ramirez and Velasquez were permitted to remain on bond pending that hearing.
The charges were the result of a joint investigation conducted by officers and agents of the Corpus Christi Police Department, the FBI, Department of Health and Human Services-Office of Inspector General, and the Texas Attorney General’s Medicaid Fraud Control Unit. Special Assistant United States Attorney Rex Beasley and Assistant United States Attorney Jeffery Preston are prosecuting the case.

Abilene Dentist Pleads Guilty in Medicaid Fraud Scheme

ABILENE, TX—A dentist who practiced pediatric dentistry at Kool Smiles in Abilene, Texas, has admitted that he made false and fraudulent statements and entries on patient records, which caused Medicaid to be billed for, and pay, at least $120,000 for services falsely claimed to have been performed, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Dr. Tuan Truong, aka “Terry Truong,” of Abilene, pleaded guilty this afternoon before U.S. District Judge Jorge A. Solis to an information charging one count of making a false statement in connection with a health care matter. Truong, who will remain on bond, faces a maximum statutory penalty of five years in federal prison, a $250,000 fine, and restitution. A sentencing date was not set.
According to documents filed in the case, in summer 2008, Truong began working for Kool Smiles, which paid him a base salary and offered opportunities for bonuses based on additional procedures he performed in excess of daily targets set by Kool Smiles management. Dentists were required to use professional judgment in the treatment and management of patient care.
Beginning on June 30, 2008 and continuing to July 10, 2009, Truong made false entries on Kool Smiles patient records, purporting to have performed dental services for Medicaid beneficiaries that he well knew he had not performed. As a result of the false and fraudulent statements and entries Truong made, Kool Smiles billed Medicaid for procedures that were not performed. In fact, during this time period, Truong made false entries in the Kool Smiles electronic database that caused Kool Smiles to bill and receive payment from Medicaid (and Medicaid affiliates) of more than $120,000 but less than $200,000 for services he claimed to have performed but did not.
In addition, according to the factual resume filed, Truong personally benefitted from this scheme by receiving bonuses of $32,749 to which he would not have been otherwise entitled.
Kool Smiles has cooperated throughout the investigation, which was conducted by the Medicaid Fraud Control Unit of the Office of the Attorney General for the state of Texas and the FBI. Assistant U.S. Attorney Amy Burch, of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

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.

Four Sentenced to Prison in Community Mental Health Center Case

WASHINGTON—The owners of three Miami-area assisted living facilities and an affiliated psychologist were sentenced to prison today in connection with a health care fraud scheme involving now-defunct Miami-area health provider Health Care Solutions Network Inc. (HCSN) in which Medicare was billed for mental health treatments that were unnecessary or not provided.
The sentences were 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, Acting 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.
U.S. District Judge Cecilia M. Altonaga sentenced Serena Joslin, 32, of Looneyville, West Virginia, to 63 months in prison, following her previous guilty plea to conspiracy to commit health care fraud. Raymond Rivero, 55, Daniel Martinez, 46, and Ivon Perez, 50, all of Miami, were each sentenced to 28 months in prison. All three had previously pleaded guilty to conspiracy to violate the anti-kickback statute.
According to court documents, HCSN operated community mental health centers both in Miami and North Carolina, including partial hospitalization programs (PHP)—a form of intensive treatment for severe mental illness. HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not provided.
In Miami, HCSN obtained beneficiaries by paying kickbacks to owners and operators of assisted living facilities (ALF) or by otherwise recruiting them from the facilities and from nursing homes. Rivero, Martinez, and Perez admitted during their guilty pleas to referring Medicare beneficiaries to HCSN in exchange for cash bribes. Rivero, former owner of Miami-based God Is First ALF; Martinez, former owner of Homestead, Florida-based Mi Renacer ALF; and Perez, former owner of Homestead-based Kayleen and Denis Care Corp., are no longer permitted to operate such facilities as a condition of their guilty pleas.
According to court documents, ALF residents referred to HCSN by Rivero, Martinez, and Perez were not qualified to be placed in PHP and were only selected because they had Medicare or state of Florida Medicaid benefits. In some cases, ALF patients suffered from dementia, Alzheimer’s disease, mental retardation, or were otherwise unable to benefit from mental health services.
According to court documents, Joslin, a licensed psychologist, was hired by HCSN in North Carolina in April 2010 as a clinical coordinator and later promoted to clinical director. In those roles, she conspired with other HCSN employees to fabricate medical documents to substantiate alleged PHP treatment that was medically unnecessary and, in many instances, not even provided to the beneficiaries. Joslin admitted that many of the HCSN patients were unqualified for the PHP program because they suffered from conditions such as mental retardation and dementia and that she directed therapists to fabricate medical records to support HCSN’s fraudulent billing to the Medicare program. Joslin was also required to surrender her North Carolina license to provide mental health treatment as part of her plea agreement.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
In addition to the prison terms, Judge Altonaga sentenced Joslin, Rivero, Martinez, and Perez each to serve three years of supervised release and ordered them to pay $4,464,728; $90,896; $76,358; and $89,245 in restitution, respectively.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG and were 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, 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.

Provider of Home Health Care Services Sentenced for Medicaid Fraud

NORFOLK, VA—Janice W. Holland, 42, of Suffolk, Virginia, was sentenced today to 51 months in prison for health care fraud and alteration of records and a mandatory consecutive sentence of 24 months in prison for aggravated identity theft, for a total sentence of 75 months. She was also ordered to pay restitution to the Virginia Medicaid program in the amount of $630,339.30.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Virginia Attorney General Ken Cuccinelli made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.
Holland pled guilty on September 18, 2012. According to court documents, Holland owned and operated A Caring Hand Home Health Care Services Inc., a business located in Suffolk that was authorized to provide respite care to Medicaid recipients. Respite care is designed to provide temporary, substitute care for a Medicaid recipient that is normally provided by the family or another unpaid primary caregiver of the recipient. These services are provided on a short-term basis because of the emergency absence or need for routine or periodic relief of the primary caregiver. Between January 2008 and October 2011, Holland filed approximately 939 false and fraudulent claims with the Virginia Medicaid program, representing that respite care had been provided by her company to 30 Medicaid recipients, when, in fact, no such care had been provided. She filed these claims using, without authority, the recipients’ names, dates of birth,and Medicaid identification numbers. As a result, Holland obtained health care benefit payments in the approximate amount of $630,339.30, to which she was not entitled. She also altered and falsified her office records to conceal and cover up her false billings.
This case was investigated by the FBI and the Office of the Virginia Attorney General, Medicaid Fraud Control Unit. Assistant United States Attorney Alan M. Salsbury and Special Assistant United States Attorney David W. Tooker prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.

Home Health Care Agency Operator Charged with Health Care Fraud

MINNEAPOLIS—Yesterday in federal court, the operator of Lucky Home Health Care Inc., a home health care agency in Minneapolis, was charged with defrauding Medicaid. On January 8, 2013, Abshir Mohammed Ahmed, age 40, of Minneapolis, was charged via an information with one count of health care fraud.
Allegedly, from January 2008 through June 2011, Ahmed defrauded Medicaid, a federal health care benefit program, out of more than $400,000 by submitting fraudulent billings. Ahmed submitted claims that falsely represented that home health care services were purportedly provided by identified Personal Care Assistants (PCA) that were not, in fact, provided by those PCAs.
For example, a claim for reimbursement submitted on July 16, 2009, billed Medicaid $1,330.56 for PCA services allegedly, but not actually, provided by the identified PCA.
The Medicaid program provides medical care and services to low-income people who meet certain income and eligibility requirements. Home health care, provided by PCAs, is one of the services reimbursed by Medicaid.
If convicted, Ahmed faces a potential maximum penalty of 10 years in federal prison. All sentences will be determined by a federal district court judge.
This case is the result of an investigation by the Federal Bureau of Investigation. 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 U.S. Department of Health and Human Services-Office of Inspector General, 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.
For more information, visit http://www.stopmedicarefraud.gov.
A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

Golden Living Nursing Homes Settle Allegations of Substandard Wound Care

ATLANTA—The United States Attorney’s Office today announced that the United States and the state of Georgia have reached a settlement with GGNSC Holdings LLC of Plano, Texas, the operator of skilled nursing facilities located in Atlanta, Georgia, to resolve allegations under the False Claims Act and the Georgia State False Medicaid Claims Act that GGNSC provided inadequate and worthless wound care services to residents at two of its Atlanta-area nursing homes. GGNSC operates nursing homes under the “Golden Living” name. GGNSC has agreed to pay $613,300 to resolve these allegations. The United States’ share of the settlement is $423,544.
Sally Quillian Yates, United States Attorney for the Northern District of Georgia, said, “Our office is committed to protecting our most vulnerable citizens and improving the lives of nursing home residents. By failing to provide adequate wound care services to its nursing home residents, Golden Living placed at risk the life and health of individuals who were entrusted to its care. This type of threat to the health and well-being of the elderly in our communities will not be tolerated.”
“Golden Living fraudulently billed Medicaid for nursing services which were substandard and, tragically, resulted in harm to patients,” said Attorney General Sam Olens. “The nursing home patients depended on Golden Living to provide them with quality wound care services to help them heal, but, instead, were mistreated. We will not stand for such egregious misconduct by a Medicaid provider.”
“Quality of care in nursing homes is a top priority for the Office of Inspector General,” said 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. “Health care providers need to know that if they provide worthless services to those most in need, they will pay the price.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “The FBI will continue to dedicate its investigative personnel and resources toward such cases of Medicaid and Medicare fraud as was seen here. These federally funded programs provide much needed services but are limited and health care providers that abuse these programs will be held accountable.”
“The Defense Criminal Investigative Service is committed to ensuring that TRICARE beneficiaries receive the high quality medical care that they deserve,” said John F. Khin, Special Agent in Charge, Southeast Field Office, Defense Criminal Investigative Service. “This settlement sends the message that providers of substandard care will be brought to justice through the collaborative efforts of law enforcement agencies and the Department of Justice.”
The government alleges that GGNSC submitted false claims to Medicare, Medicaid, and the Veterans Administration because it provided residents at Golden LivingCenter–Glenwood (GLCG) and Golden LivingCenter–Dunwoody (GLCD), f/k/a Golden LivingCenter–Northside, with inadequate and worthless monitoring, documentation, and prevention and treatment of wounds during the period from January 1, 2006 through May 31, 2011. The claims settled in the civil settlement are allegations only, and there has been no determination of liability.
GGNSC executed a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of Inspector General, which will require six GGNSC facilities in the Atlanta area (in addition to GLCG and GLCD, Golden LivingCenter–Briarwood, Golden LivingCenter–Decatur, Golden LivingCenter–Kennestone, and Golden LivingCenter–Medical Arts) to continue to implement certain policies and procedures to ensure compliance with applicable statutes and regulations governing patient care. In addition, an independent monitor was appointed to oversee operations at the six Atlanta-area GGNSC facilities for up to five years to verify that the policies and procedures are working effectively and that patients receive appropriate care.
The civil settlement resolves some of the claims in a lawsuit filed by Dr. Joseph L. Micca under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The case, pending in the Northern District of Georgia, is filed under United States & State of Georgia ex rel. Micca v. GGNSC Holdings, LLC, et al., No. 1:10-cv-1055-ODE (Northern District of Georgia, April 9, 2010). Dr. Micca will receive a share of the settlement payment that resolves certain claims in the qui tam suit that he filed.
This case was investigated by special agents of the Federal Bureau of Investigation; the U.S. Department of Health & Human Services, Office of Inspector General; the Defense Criminal Investigative Service; and the Georgia Medicaid Fraud Control Unit.
The civil settlement was reached by Assistant United States Attorneys Amy Berne and Lena Amanti.
For further information please contact the U.S. Attorney’s Public Information Office at USAGAN.Pressemails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.

Shelby Woman Pleads Guilty to Defrauding Medicaid of $8 Million, Aggravated Identity Theft, and Tax Fraud

CHARLOTTE—A Shelby, North Carolina woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return.
U.S. Attorney Tompkins is joined in making today’s announcement by North Carolina Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Roger A. Coe, Acting Special Agent in Charge of the FBI, Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Brewton pleaded guilty today before U.S. Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft, and one count of filing a false tax return. At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services that were never provided.
According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services, and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker and, in other instances, stole the identity of Medicaid-approved providers in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.
Filed documents also indicate that Brewton hired licensed therapist K.S.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although K.S.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M. In or about October 2011, K.S.M. left Healing Hearts after learning that Brewton had submitted false claims through K.S.M.’s Medicaid provider number. Thereafter, Brewton misappropriated K.S.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after K.S.M. was no longer employed at Healing Hearts. Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through K.S.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through K.S.M.’s provider number which K.S.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.
As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 that intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation.
Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison, and a $250,000 fine for the health care fraud charges; and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge. In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the court at Brewton’s sentencing hearing, which has not been scheduled yet.
Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012, and is awaiting sentencing.
The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG. Special assistance to the task force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. The prosecution was handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The task force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The task force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistleblower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The task force builds upon existing partnerships between the agencies, and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.