Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS‑OIG), Miami Regional Office, announce that U.S. District Judge Federico A. Moreno sentenced Yiral Cardona, 39, of Miami, and Susan Chi, 42, of Miami, to 10 years in prison, stemming from their leadership roles in a conspiracy to pay health care kickbacks.
At trial, Cardona and Chi were convicted on October 22, 2013, of one count of conspiracy to pay health care kickbacks and to defraud the United States, in violation of Title 18, United States Code, Section 371, and three counts of unlawful payment of health care kickbacks, in violation of Title 42, United States Code, Section 1320a-7b(b)(2)(A).
According to the evidence presented at trial and the sentencing hearing, Cardona and Chi owned Vista Home Health Services Inc. (Vista), a Miami-Dade based home health agency that purportedly provided skilled nursing and home health services to Medicare beneficiaries. The defendants illegally obtained Medicare patients by paying bribes and kickbacks of at least $141,000 to patient recruiters to induce the referral of Medicare patients to Vista for home health services. Cardona and Chi billed the Medicare program for home health services that were not medically necessary and/or not provided. Between approximately May 15, 2009 and April 26, 2012, Medicare paid Vista more than $4.1 million in claims. The court ordered the defendants to pay more than $733,000 in restitution.
Showing posts with label conspiracy. Show all posts
Showing posts with label conspiracy. Show all posts
Tuesday, 24 December 2013
Thursday, 24 October 2013
Owner, Executives, and Physicians at Closed Sacred Heart Hospital Indicted in Alleged Medicare Referral Kickback Conspiracy
CHICAGO―The owner and three other executives of the now-closed Sacred Heart Hospital and four physicians affiliated with the former west side facility were indicted on federal charges alleging that they collectively paid and received hundreds of thousands of dollars in illegal kickbacks in exchange for the referral of hospital patients who were insured by Medicare and Medicaid. Sacred Heart allegedly paid physicians bribes and kickbacks to induce patient referrals and increase the patient census, which, in turn, increased hospital revenue.
Sacred Heart Hospital was a 119-bed acute care facility located at 3240 West Franklin Blvd. in Chicago. The hospital closed and filed for bankruptcy this summer after Medicare payments were suspended in the aftermath of criminal charges that were first filed in April. The indictment charges only conduct involved in the alleged kickback conspiracy while a broader investigation that was outlined in the earlier criminal complaint continues.
The eight defendants were charged in a 17-count indictment that was returned by a federal grand jury late yesterday and announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois. Five of the eight defendants were charged and arrested on April 16 this year, while three new defendants were charged in the indictment for the first time. A fifth physician associated with Sacred Heart was indicted separately for illegally prescribing prescription medications. No new arrests occurred in connection with the indictments.
Mr. Fardon announced the charges with Lamont Pugh, III, Special Agent in Charge of the Chicago Region of the U.S. Department of Health and Human Service Office of Inspector General, and Robert J. Shields, Jr., Acting Special Agent in Charge of the Chicago Office of the Federal Bureau of investigation.
The five defendants charged previously in the conspiracy case are: Edward J. Novak, 58, of Park Ridge, Sacred Heart’s owner and chief executive officer; Roy M. Payawal, 64, of Burr Ridge, executive vice president and chief financial officer; and Drs. Percy Conrad May, Jr., 75, of Chicago, Subir Maitra, 73, of Chicago, and Shanin Moshiri, also known as “Shawni Moshiri,” 58, of Chicago. All five of these defendants remain free on various bonds after they were arrested in April.
The three new defendants are: Dr. Rajiv Kandala, 41, of Chicago; Anthony J. Puorro, 57, formerly of Chicago, who was Sacred Heart’s chief operating officer; and Noemi Velgara, 64, of Chicago, who was Sacred Heart’s vice president of geriatric services and was responsible for overseeing the Golden L.I.G.H.T. medical clinics, including managing employees responsible for marketing, and recruiting and transporting patients.
All eight defendants will be ordered to appear for arraignment in U.S. District Court.
Four defendants―Novak, Payawal, Puorro, and Velgara―were each charged with one count of conspiracy to violate the federal healthcare anti-kickback statute by offering and paying kickbacks and bribes, directly and indirectly, from Sacred Heart to Drs. May, Maitra, Moshiri, and Kandala and other physicians to induce them to refer patients to the hospital for services that would be reimbursed by Medicare and Medicaid. Sacred Heart’s chief operating officer before Puorro, identified as “Administrator A,” is named as an unindicted co-conspirator.
In addition, Novak and Payawal were each charged with eight substantive counts of paying kickbacks for patients, while Drs. May, Maitra, Moshiri, and Kandala were charged with two counts each of accepting kickbacks for patient referrals. The indictment also seeks forfeiture of illegal proceeds from Novak, Payawal, and the four physicians, including the unspecified total amount of Medicare and Medicaid reimbursements made on claims submitted on behalf of hospital patients whose referral involved kickbacks and the total amount of kickbacks paid to the four physicians.
According to the indictment, Sacred Heart’s owner, executives, and administrators conspired between 2004 and April 2013 to pay physicians bribes concealed as consulting, employment, and personal services compensation, rent, and instructional stipends in return for referrals of Medicare and Medicaid patients. Although styled as payments for legitimate services, the payments actually contained disguised bribes paid to and for the benefit of Drs. May, Maitra, Moshiri, and Kandala in exchange for patient referrals.
The indictment alleges that Novak, Payawal, Puorro, and Administrator A caused Sacred Heart to pay May hundreds of thousands of dollars in bribes disguised as rent and Moshiri more than $150,000 in bribes disguised as payments for purportedly teaching podiatric surgery residents. Novak, Payawal, and Puorro allegedly caused Sacred Heart to pay Maitra at least $68,000 in bribes disguised as payments for purportedly teaching medical students at the hospital; and Kandala at least $32,000 in bribes disguised as compensation for consulting and instructional services purportedly provided to the hospital and its staff.
Payawal, Puorro, and Velgara allegedly agreed to have Sacred Heart offer to pay bribes to the hospital’s transportation staff to recruit and refer patients to the hospital, and those three defendants, together with Novak, also caused Sacred Heart to pay individuals employed as “marketers” to recruit patients.
As part of the same investigation, a fifth physician associated with Sacred Heart was indicted separately this month for allegedly illegally prescribing hydrocodone or lorazepam to four different patients without having a valid license and registration to prescribe controlled substances. The defendant, Dr. Kenneth S. Nave, 51, of Chicago, who also was arrested and charged last April, allegedly illegally used the Drug Enforcement Administration registration number of another physician when he prescribed the prescription narcotics between October and December 2012. Nave pleaded not guilty at his arraignment this week.
Each count in the eight-defendant Novak indictment carries a maximum penalty of five years in prison and a $250,000 fine and restitution is mandatory. Each count in the Nave indictment carries a maximum penalty of four years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Joel Hammerman, Ryan Hedges, and Terra Reynolds.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The case falls under the umbrella of the Medicare Fraud Strike Force, which expanded operations to Chicago in February 2011 and is part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Dozens of defendants have been charged in health care fraud cases since the strike force began operating in Chicago.
To report health care fraud to learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Sacred Heart Hospital was a 119-bed acute care facility located at 3240 West Franklin Blvd. in Chicago. The hospital closed and filed for bankruptcy this summer after Medicare payments were suspended in the aftermath of criminal charges that were first filed in April. The indictment charges only conduct involved in the alleged kickback conspiracy while a broader investigation that was outlined in the earlier criminal complaint continues.
The eight defendants were charged in a 17-count indictment that was returned by a federal grand jury late yesterday and announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois. Five of the eight defendants were charged and arrested on April 16 this year, while three new defendants were charged in the indictment for the first time. A fifth physician associated with Sacred Heart was indicted separately for illegally prescribing prescription medications. No new arrests occurred in connection with the indictments.
Mr. Fardon announced the charges with Lamont Pugh, III, Special Agent in Charge of the Chicago Region of the U.S. Department of Health and Human Service Office of Inspector General, and Robert J. Shields, Jr., Acting Special Agent in Charge of the Chicago Office of the Federal Bureau of investigation.
The five defendants charged previously in the conspiracy case are: Edward J. Novak, 58, of Park Ridge, Sacred Heart’s owner and chief executive officer; Roy M. Payawal, 64, of Burr Ridge, executive vice president and chief financial officer; and Drs. Percy Conrad May, Jr., 75, of Chicago, Subir Maitra, 73, of Chicago, and Shanin Moshiri, also known as “Shawni Moshiri,” 58, of Chicago. All five of these defendants remain free on various bonds after they were arrested in April.
The three new defendants are: Dr. Rajiv Kandala, 41, of Chicago; Anthony J. Puorro, 57, formerly of Chicago, who was Sacred Heart’s chief operating officer; and Noemi Velgara, 64, of Chicago, who was Sacred Heart’s vice president of geriatric services and was responsible for overseeing the Golden L.I.G.H.T. medical clinics, including managing employees responsible for marketing, and recruiting and transporting patients.
All eight defendants will be ordered to appear for arraignment in U.S. District Court.
Four defendants―Novak, Payawal, Puorro, and Velgara―were each charged with one count of conspiracy to violate the federal healthcare anti-kickback statute by offering and paying kickbacks and bribes, directly and indirectly, from Sacred Heart to Drs. May, Maitra, Moshiri, and Kandala and other physicians to induce them to refer patients to the hospital for services that would be reimbursed by Medicare and Medicaid. Sacred Heart’s chief operating officer before Puorro, identified as “Administrator A,” is named as an unindicted co-conspirator.
In addition, Novak and Payawal were each charged with eight substantive counts of paying kickbacks for patients, while Drs. May, Maitra, Moshiri, and Kandala were charged with two counts each of accepting kickbacks for patient referrals. The indictment also seeks forfeiture of illegal proceeds from Novak, Payawal, and the four physicians, including the unspecified total amount of Medicare and Medicaid reimbursements made on claims submitted on behalf of hospital patients whose referral involved kickbacks and the total amount of kickbacks paid to the four physicians.
According to the indictment, Sacred Heart’s owner, executives, and administrators conspired between 2004 and April 2013 to pay physicians bribes concealed as consulting, employment, and personal services compensation, rent, and instructional stipends in return for referrals of Medicare and Medicaid patients. Although styled as payments for legitimate services, the payments actually contained disguised bribes paid to and for the benefit of Drs. May, Maitra, Moshiri, and Kandala in exchange for patient referrals.
The indictment alleges that Novak, Payawal, Puorro, and Administrator A caused Sacred Heart to pay May hundreds of thousands of dollars in bribes disguised as rent and Moshiri more than $150,000 in bribes disguised as payments for purportedly teaching podiatric surgery residents. Novak, Payawal, and Puorro allegedly caused Sacred Heart to pay Maitra at least $68,000 in bribes disguised as payments for purportedly teaching medical students at the hospital; and Kandala at least $32,000 in bribes disguised as compensation for consulting and instructional services purportedly provided to the hospital and its staff.
Payawal, Puorro, and Velgara allegedly agreed to have Sacred Heart offer to pay bribes to the hospital’s transportation staff to recruit and refer patients to the hospital, and those three defendants, together with Novak, also caused Sacred Heart to pay individuals employed as “marketers” to recruit patients.
As part of the same investigation, a fifth physician associated with Sacred Heart was indicted separately this month for allegedly illegally prescribing hydrocodone or lorazepam to four different patients without having a valid license and registration to prescribe controlled substances. The defendant, Dr. Kenneth S. Nave, 51, of Chicago, who also was arrested and charged last April, allegedly illegally used the Drug Enforcement Administration registration number of another physician when he prescribed the prescription narcotics between October and December 2012. Nave pleaded not guilty at his arraignment this week.
Each count in the eight-defendant Novak indictment carries a maximum penalty of five years in prison and a $250,000 fine and restitution is mandatory. Each count in the Nave indictment carries a maximum penalty of four years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Joel Hammerman, Ryan Hedges, and Terra Reynolds.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The case falls under the umbrella of the Medicare Fraud Strike Force, which expanded operations to Chicago in February 2011 and is part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Dozens of defendants have been charged in health care fraud cases since the strike force began operating in Chicago.
To report health care fraud to learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Monday, 21 October 2013
Father and Son Who Owned/Operated a Physician House Call Company and Billed for Services Not Rendered Convicted on Conspiracy and Health Care Fraud Charges
DALLAS—A federal jury has convicted two local men on conspiracy and health care fraud charges related to their operation of a physician house call company in North Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
On October 4, 2013, following a five-day trial before U.S. District Judge David C. Godbey, Lawrence Dale St. John, 66, and his son, Jeffrey Dale St. John, 41, both of Grand Prairie, Texas, were convicted on conspiracy and health care fraud charges related to their operation of A Medical House Calls, a physician house call company.
Specifically, each defendant was convicted on one count of conspiracy to commit health care fraud and 13 substantive counts of health care fraud. Each count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine. Restitution could also be ordered. Judge Godbey remanded Jeffrey St. John into custody; Lawrence St. John was already in custody. Sentencing is set for January 27, 2014.
Co-defendant Dr. Nicolas Alfonso Padron, 54, of Garland, Texas, pleaded guilty on September 10, 2013, to one count of conspiracy to commit health care fraud. Dr. Padron, who joined A Medical as its medical director in December 2009, testified—as did a number of nurse practitioners, physician assistants, and company staff—that services billed had never been performed.
In a separate case, Dr. Padron also entered a guilty plea to one count of conspiracy to unlawfully distribute a controlled substance stemming from his operation of Padron Wellness Clinic, a pill-mill that he operated in Dallas. Dr. Padron has been in custody since his arrest in June 2012 on a related federal criminal complaint.
A Medical provided physician visits to Medicare beneficiaries in their homes rather than at a doctor’s office. A Medical, which was also known as A+ Medical House Calls and ANM Physician House Calls, was owned by Lawrence St. John; Jeffrey St. John ran its daily operations. A Medical had locations in Mesquite, Texas; Dallas; and Carrollton, Texas. Its primary purpose was to certify and re-certify Medicare beneficiaries for home health services, regardless of the true condition of the patient.
Once A Medical established a Medicare beneficiary for physician home visit services, A Medical would submit billing for fraudulent care plan oversight claims. The company did not provide primary care physician services to Medicare beneficiaries.
According to documents filed in the case and evidence presented at trial, from May 2010 to January 2012, the defendants conspired together and with others to defraud the Medicare program. A Medical, at the direction of Lawrence and Jeffrey St. John, submitted claims to Medicare using Dr. Padron’s unique Medicare number, with Dr. Padron’s permission, regardless of the claim’s merit.
The defendants conspired together to bill Medicare for care plan oversight by Dr. Padron for numerous beneficiaries when Dr. Padron was out of town, including dates when he was out of the country and on a cruise.
In total, the defendants billed taxpayers for $1.4 million of services that were either not medically necessary or not rendered at all. Through the fraudulent certifications, Medicare was billed an additional $9.7 million by home health agencies.
The investigation was conducted by U.S. Department of Health and Human Services-Office of Inspector General, the FBI, and the Medicaid Fraud Control Unit of the Office of the Attorney General of Texas. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are in charge of the prosecution.
On October 4, 2013, following a five-day trial before U.S. District Judge David C. Godbey, Lawrence Dale St. John, 66, and his son, Jeffrey Dale St. John, 41, both of Grand Prairie, Texas, were convicted on conspiracy and health care fraud charges related to their operation of A Medical House Calls, a physician house call company.
Specifically, each defendant was convicted on one count of conspiracy to commit health care fraud and 13 substantive counts of health care fraud. Each count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine. Restitution could also be ordered. Judge Godbey remanded Jeffrey St. John into custody; Lawrence St. John was already in custody. Sentencing is set for January 27, 2014.
Co-defendant Dr. Nicolas Alfonso Padron, 54, of Garland, Texas, pleaded guilty on September 10, 2013, to one count of conspiracy to commit health care fraud. Dr. Padron, who joined A Medical as its medical director in December 2009, testified—as did a number of nurse practitioners, physician assistants, and company staff—that services billed had never been performed.
In a separate case, Dr. Padron also entered a guilty plea to one count of conspiracy to unlawfully distribute a controlled substance stemming from his operation of Padron Wellness Clinic, a pill-mill that he operated in Dallas. Dr. Padron has been in custody since his arrest in June 2012 on a related federal criminal complaint.
A Medical provided physician visits to Medicare beneficiaries in their homes rather than at a doctor’s office. A Medical, which was also known as A+ Medical House Calls and ANM Physician House Calls, was owned by Lawrence St. John; Jeffrey St. John ran its daily operations. A Medical had locations in Mesquite, Texas; Dallas; and Carrollton, Texas. Its primary purpose was to certify and re-certify Medicare beneficiaries for home health services, regardless of the true condition of the patient.
Once A Medical established a Medicare beneficiary for physician home visit services, A Medical would submit billing for fraudulent care plan oversight claims. The company did not provide primary care physician services to Medicare beneficiaries.
According to documents filed in the case and evidence presented at trial, from May 2010 to January 2012, the defendants conspired together and with others to defraud the Medicare program. A Medical, at the direction of Lawrence and Jeffrey St. John, submitted claims to Medicare using Dr. Padron’s unique Medicare number, with Dr. Padron’s permission, regardless of the claim’s merit.
The defendants conspired together to bill Medicare for care plan oversight by Dr. Padron for numerous beneficiaries when Dr. Padron was out of town, including dates when he was out of the country and on a cruise.
In total, the defendants billed taxpayers for $1.4 million of services that were either not medically necessary or not rendered at all. Through the fraudulent certifications, Medicare was billed an additional $9.7 million by home health agencies.
The investigation was conducted by U.S. Department of Health and Human Services-Office of Inspector General, the FBI, and the Medicaid Fraud Control Unit of the Office of the Attorney General of Texas. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are in charge of the prosecution.
Tuesday, 12 February 2013
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.
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:
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.
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, 8 February 2013
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:
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?
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.
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.
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, 6 February 2013
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.
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.
Tuesday, 5 February 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.
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.
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, 1 February 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
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
Friday, 25 January 2013
Former Miami Clinic Director Sentenced to 70 Months in Prison for Role in HIV Infusion Fraud Scheme
WASHINGTON—A former Miami HIV infusion clinic director was sentenced today to serve 70 months in prison for his role in a $26.2 million HIV infusion fraud scheme, announced Assistant Attorney General Lanny Breuer of the Criminal Division, U.S. Wifredo A. Ferrer of the Southern District of Florida, Acting Special Agent in Charge Michael B. Steinbach 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.
Enrique Gonzalez, 67, formerly of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to his prison term, Judge Altonaga sentenced Gonzalez to serve three years of supervised release and ordered him to pay $17,590,896 in restitution to HHS.
On November 13, 2012, Gonzalez pleaded guilty to one count of conspiracy to defraud the United States, to cause the submission of false claims, and to pay health care kickbacks, and one count of conspiracy to commit health care fraud.
Gonzalez admitted that between August 2002 and March 2004, he conspired with co-defendant Ronald Harris, a Miami physician, and alleged co-conspirators to operate Physicians Med-Care and Physicians Health (together the “Physicians Clinics”), two Miami HIV infusion clinics. According to court documents, the Physicians Clinics were owned and controlled by alleged co-conspirators Carlos Benitez and his brother Luis Benitez. The Physicians Clinics purported to specialize in treating patients with HIV but were operated for the sole purpose of committing Medicare fraud, according to court documents. Gonzalez was a director of Physicians Med-Care and, at the direction of his co-conspirators, was responsible for the finances of the Physicians Clinics.
Gonzalez admitted that he agreed with his co-conspirators to handle the finances for the Physicians Clinics, moving the money paid by the Medicare program out of the Physicians Clinics’ accounts and into accounts owned and controlled by his co-conspirators. According to court documents, Harris signed blank checks that Gonzalez used to transfer funds to various Benitez-owned entities and others, as directed by his co-conspirators. In addition, Gonzalez agreed to provide cash to various co-conspirators at the Physicians Clinics to be used to pay bribes and kickbacks to the Medicare beneficiaries in return for those beneficiaries allowing the Physicians Clinics to bill the Medicare program for HIV infusion services that were not medically necessary and often not provided.
Gonzalez admitted that during his association with Physicians Med-Care, the clinic billed the Medicare program approximately $24.5 million in HIV infusion therapy claims, for which the clinic received $16.7 million in payments. Gonzalez also admitted that during his time with Physicians Health, the clinic billed Medicare approximately $1.7 million and received approximately $800,000 in payment from the Medicare program for fraudulent services.
Gonzalez was a fugitive from justice from the time of his indictment in 2008, until he was located and detained in Peru in late 2011. Gonzalez was extradited to the United States in July of 2012. Gonzalez’s daughter, Carmen Gonzalez, was indicted in a related case and is currently a fugitive.
Co-defendant Harris pleaded guilty on August 26, 2008, to one count of conspiracy to defraud the United States, to cause the submission of false claims and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims to the Medicare program. Harris pleaded guilty in connection with his role as the medical director for the Physicians Clinics. On November 4, 2008, Harris was sentenced to serve 84 months in prison for his role in the scheme.
Carlos and Luis Benitez and Thomas McKenzie were charged separately with health care fraud and money laundering crimes in an indictment unsealed on June 11, 2008. According to the separate indictment, the defendants provided the money and staff necessary to open the Physicians Clinics, the Medicare patients that the clinics needed to bill the Medicare program and transportation for the HIV patients who visited the clinics. Carlos and Luis Benitez and McKenzie were charged for their role in committing approximately $109 million in HIV infusion fraud and money laundering through the Physicians Clinics and nine other HIV infusion clinics.
On September 18, 2008, McKenzie pleaded guilty to one count of conspiracy to commit health care fraud and one count of submitting false claims to the Medicare program and admitted to his role in a $119 million HIV infusion fraud scheme. On December 18, 2008, McKenzie was sentenced to serve 14 years in prison.
Carlos and Luis Benitez are also fugitives. Anyone with information regarding the whereabouts of the fugitives is urged to contact HHS-OIG fugitive reporting phone line at 888-476-4453.
The defendants who have not been convicted are presumed innocent unless and until proven guilty.
The Physicians Med-Care and Physicians Health case is being prosecuted by Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section. The case was investigated by the FBI and the DHS Office of Inspector General.
The case 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. The Department also thanks the Peruvian National Police Interpol Unit for their assistance.
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.
Enrique Gonzalez, 67, formerly of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to his prison term, Judge Altonaga sentenced Gonzalez to serve three years of supervised release and ordered him to pay $17,590,896 in restitution to HHS.
On November 13, 2012, Gonzalez pleaded guilty to one count of conspiracy to defraud the United States, to cause the submission of false claims, and to pay health care kickbacks, and one count of conspiracy to commit health care fraud.
Gonzalez admitted that between August 2002 and March 2004, he conspired with co-defendant Ronald Harris, a Miami physician, and alleged co-conspirators to operate Physicians Med-Care and Physicians Health (together the “Physicians Clinics”), two Miami HIV infusion clinics. According to court documents, the Physicians Clinics were owned and controlled by alleged co-conspirators Carlos Benitez and his brother Luis Benitez. The Physicians Clinics purported to specialize in treating patients with HIV but were operated for the sole purpose of committing Medicare fraud, according to court documents. Gonzalez was a director of Physicians Med-Care and, at the direction of his co-conspirators, was responsible for the finances of the Physicians Clinics.
Gonzalez admitted that he agreed with his co-conspirators to handle the finances for the Physicians Clinics, moving the money paid by the Medicare program out of the Physicians Clinics’ accounts and into accounts owned and controlled by his co-conspirators. According to court documents, Harris signed blank checks that Gonzalez used to transfer funds to various Benitez-owned entities and others, as directed by his co-conspirators. In addition, Gonzalez agreed to provide cash to various co-conspirators at the Physicians Clinics to be used to pay bribes and kickbacks to the Medicare beneficiaries in return for those beneficiaries allowing the Physicians Clinics to bill the Medicare program for HIV infusion services that were not medically necessary and often not provided.
Gonzalez admitted that during his association with Physicians Med-Care, the clinic billed the Medicare program approximately $24.5 million in HIV infusion therapy claims, for which the clinic received $16.7 million in payments. Gonzalez also admitted that during his time with Physicians Health, the clinic billed Medicare approximately $1.7 million and received approximately $800,000 in payment from the Medicare program for fraudulent services.
Gonzalez was a fugitive from justice from the time of his indictment in 2008, until he was located and detained in Peru in late 2011. Gonzalez was extradited to the United States in July of 2012. Gonzalez’s daughter, Carmen Gonzalez, was indicted in a related case and is currently a fugitive.
Co-defendant Harris pleaded guilty on August 26, 2008, to one count of conspiracy to defraud the United States, to cause the submission of false claims and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims to the Medicare program. Harris pleaded guilty in connection with his role as the medical director for the Physicians Clinics. On November 4, 2008, Harris was sentenced to serve 84 months in prison for his role in the scheme.
Carlos and Luis Benitez and Thomas McKenzie were charged separately with health care fraud and money laundering crimes in an indictment unsealed on June 11, 2008. According to the separate indictment, the defendants provided the money and staff necessary to open the Physicians Clinics, the Medicare patients that the clinics needed to bill the Medicare program and transportation for the HIV patients who visited the clinics. Carlos and Luis Benitez and McKenzie were charged for their role in committing approximately $109 million in HIV infusion fraud and money laundering through the Physicians Clinics and nine other HIV infusion clinics.
On September 18, 2008, McKenzie pleaded guilty to one count of conspiracy to commit health care fraud and one count of submitting false claims to the Medicare program and admitted to his role in a $119 million HIV infusion fraud scheme. On December 18, 2008, McKenzie was sentenced to serve 14 years in prison.
Carlos and Luis Benitez are also fugitives. Anyone with information regarding the whereabouts of the fugitives is urged to contact HHS-OIG fugitive reporting phone line at 888-476-4453.
The defendants who have not been convicted are presumed innocent unless and until proven guilty.
The Physicians Med-Care and Physicians Health case is being prosecuted by Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section. The case was investigated by the FBI and the DHS Office of Inspector General.
The case 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. The Department also thanks the Peruvian National Police Interpol Unit for their assistance.
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.
Thursday, 10 January 2013
Two More Plead Guilty in Patient Data Theft Case
ORLANDO—Sergei Kusyakov (38, Davenport) today pleaded guilty to one count of conspiracy and four counts of wrongful disclosure of individually identifiable health information. Kusyakov faces a maximum penalty of 45 years in federal prison. Sentencing has been set for March 25, 2013.
On December 27, 2012, another conspirator, Katrina Munroe (30, Winter Haven) pleaded guilty to one count of conspiracy. She faces a maximum penalty of five years in federal prison. Sentencing for her has been set for March 11, 2013.
A third conspirator, Dale Munroe, II (35, Winter Haven), pleaded guilty to one count of conspiracy and one count of wrongful disclosure of individually identifiable health information on October 22, 2012. He faces a maximum penalty of 15 years in federal prison. His sentencing has been set for January 14, 2013.
According to their plea agreements, in July 2006, Dale Munroe, II was hired at the Celebration, Florida location of Florida Hospital. During his employment, he worked as a registration representative in the Emergency Department, where he would register patients as they came in the main emergency entrance. From January 2009 until his termination in July 2011, Dale Munroe, II used his position to obtain individually identifiable health information of Florida Hospital patients who had been involved in motor vehicle accidents. Munroe, II would then disclose that information to Kusyakov, who was involved in the operation of two chiropractic clinics (Metro Chiropractic and Wellness Center and City Lights Medical Center). Kusyakov and other conspirators would then use the stolen information to solicit patients of Florida Hospital for chiropractic and legal services. Kusyakov would then pay Munroe for his role in providing the stolen information.
On July 12, 2011, Dale Munroe, II was terminated by Florida Hospital for a patient data breach that was unrelated to the conspiracy described above. Starting about a week after her husband’s termination, Katrina Munroe, who was hired as an insurance representative by Florida Hospital in 2009, was recruited to take over her husband’s role of stealing patient data to be provided to Kusyakov. In August 2012, the data breach was discovered, and Florida Hospital terminated Katrina Munroe shortly after identifying her as a possible suspect. In total, Florida Hospital has identified more than 12,000 patients whose individually identifiable health information was illegally accessed as a part of the conspiracy.
These cases were investigated by the Federal Bureau of Investigation and the Florida Department of Financial Services, Division of Insurance Fraud. They are being prosecuted by Assistant United States Attorney Roger B. Handberg.
On December 27, 2012, another conspirator, Katrina Munroe (30, Winter Haven) pleaded guilty to one count of conspiracy. She faces a maximum penalty of five years in federal prison. Sentencing for her has been set for March 11, 2013.
A third conspirator, Dale Munroe, II (35, Winter Haven), pleaded guilty to one count of conspiracy and one count of wrongful disclosure of individually identifiable health information on October 22, 2012. He faces a maximum penalty of 15 years in federal prison. His sentencing has been set for January 14, 2013.
According to their plea agreements, in July 2006, Dale Munroe, II was hired at the Celebration, Florida location of Florida Hospital. During his employment, he worked as a registration representative in the Emergency Department, where he would register patients as they came in the main emergency entrance. From January 2009 until his termination in July 2011, Dale Munroe, II used his position to obtain individually identifiable health information of Florida Hospital patients who had been involved in motor vehicle accidents. Munroe, II would then disclose that information to Kusyakov, who was involved in the operation of two chiropractic clinics (Metro Chiropractic and Wellness Center and City Lights Medical Center). Kusyakov and other conspirators would then use the stolen information to solicit patients of Florida Hospital for chiropractic and legal services. Kusyakov would then pay Munroe for his role in providing the stolen information.
On July 12, 2011, Dale Munroe, II was terminated by Florida Hospital for a patient data breach that was unrelated to the conspiracy described above. Starting about a week after her husband’s termination, Katrina Munroe, who was hired as an insurance representative by Florida Hospital in 2009, was recruited to take over her husband’s role of stealing patient data to be provided to Kusyakov. In August 2012, the data breach was discovered, and Florida Hospital terminated Katrina Munroe shortly after identifying her as a possible suspect. In total, Florida Hospital has identified more than 12,000 patients whose individually identifiable health information was illegally accessed as a part of the conspiracy.
These cases were investigated by the Federal Bureau of Investigation and the Florida Department of Financial Services, Division of Insurance Fraud. They are being prosecuted by Assistant United States Attorney Roger B. Handberg.
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