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

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

Health Care Fraud Fugitive Extradited from Colombia to Serve 2006 Sentence

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

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

NEWARK—Federal and state agents this morning arrested 11 people who are charged by complaint, along with two corporations, in connection with a large-scale scheme to defraud the Medicaid program of millions of dollars, U.S. Attorney Paul J. Fishman announced today.
The complaint also charges the owner of a home health aide business headquartered in Linden, New Jersey, with attempting on two occasions to hinder a state investigation by bribing a state regulator—who was working with the FBI—and with conspiring with the owner of another home health aide business in Elizabeth, New Jersey, to launder money.
The defendants arrested this morning are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.
“The defendants in this case allegedly enriched themselves by gaming the Medicaid system,” U.S. Attorney Fishman said. “The actions described in this complaint are especially egregious, because the taxpayer dollars that were stolen were intended to provide necessary health care for our most vulnerable citizens. I’m especially proud that federal and state law enforcement agencies worked together effectively to uncover this alleged fraud.”
David Velazquez, Acting Special Agent in Charge of the FBI, Newark, said, “The FBI views health care fraud as a severe crime problem that poses a potential risk to patients and increases health care costs for all. Today’s arrests are the result of a four-year investigation into a sophisticated scheme involving multiple layers of fraud, money laundering, and bribery, in order to defraud the New Jersey Medicaid program of millions of dollars. This case is indicative of how the FBI, along with its federal partners and the state of New Jersey, will continue to work together to pursue those that steal from our health care system.”
“Falsely billing Medicaid for millions of dollars as alleged in today’s complaint is a serious crime,” Internal Revenue Service (IRS) Criminal Investigation Acting Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, said. “Financial fraud schemes such as this are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible. IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
New Jersey Attorney General Jeffrey Chiesa said, “The New Jersey Division of Consumer Affairs regulates nurses, home health aides, and home health agencies in our state and the Division’s Enforcement Bureau aggressively investigates any allegations of fraud or wrongdoing by those regulated professionals and businesses. We are proud to have worked with the FBI on this investigation. Alleged billing fraud by health professionals affects the entire economy and will not be tolerated.”
According to the complaint filed in this case:
Irina Krutoyarsky, 58, of Springfield, New Jersey, was the owner and operator of HHCH Health Care Inc., a for-profit home health aide business located in Linden. HHCH billed Medicaid for services purportedly provided by home health aides to Medicaid-eligible patients. Medicaid is a jointly funded federal-state health insurance program that provides certain health benefits to the disabled and individuals and families with low incomes and resources. Paul Mil, 68, of Springfield, was the owner and operator of People Choice Home Care Inc., another for-profit home health business located in Linden and Elizabeth, which also billed Medicaid for services purportedly provided by home health aides.
Krutoyarsky, Mil, and their conspirators allegedly defrauded Medicaid of millions of dollars through a variety of schemes, including:

• Billing Medicaid for treatment and services not actually rendered;
• Obtaining fraudulent home health aide certifications for employees and others;
• Using illegal aliens and/or non-certified individuals to provide home health aide services and billing Medicaid, claiming the services had been provided by certified home health aides.

According to the complaint:
During the investigation, an individual working with the FBI—“Cooperating Witness Three” (CW3)—met Krutoyarsky, Mil, and others at HHCH and consensually recorded a number of conversations. For example, on January 31, 2012, CW3 met with Krutoyarsky and Mil to discuss obtaining a home health aide license. During this consensually recorded conversation (audio and video), they discussed fraudulently billing Medicaid by providing false information about the patients, known as a “bait and switch”:
Krutoyarsky: You know, it’s just the free money...coming in.
CW3: That’s true.
Mil described how they billed Medicaid for services not actually rendered:
Mil: It’s a lot of people, a lot of people who...Medicaid. Government pay for the service. We can get, you know, between 10 and 18 hours [of Medicaid billing per week per patient]. Look, people can work in a week and get paid hundred bucks a week doing nothing. Why not?

* * * *

Krutoyarsky: ...But as long as these people doesn’t live in the same address, so Medicaid is not gonna trace.
CW3: Oh, so, otherwise they will trace. Okay.
Krutoyarsky: Because they do the tracings, you know. They gonna see who’s working, who’s not working, this and that....So this way, they gonna have a free money....Government, free money.
After meeting with Krutoyarsky and Mil, CW3 met with defendant Nekadam S. Galibova, an HHCH office employee who assisted CW3 in obtaining a home health aide license without taking the required course or test. CW3 underwent neither the required training nor testing, but in March 2012, CW3 received a home health aide license from the New Jersey. Krutoyarsky, Mil, and others billed Medicaid under CW3’s license, knowing that CW3 provided no treatment to any patients.
Galibova was also a purported HHCH home health aide. The investigation revealed that she conspired with Krutoyarsky and others to bill Medicaid for services not rendered. Galibova and HHCH billed Medicaid for a patient (referred to as Patient M.N.) from July 27 to 31, 2009 and August 3 to 4, 2009, periods when that patient was, in fact, out of the country.
Krutoyarsky and Mil also dispatched undocumented aliens and other unlicensed individuals to patients’ homes. Defendant Sonia Mesa was observed by the FBI visiting a patient’s home; however, Medicaid was billed using the names of others, including Alla Neymet and Leonora Popesku.
Krutoyarsky also bribed a New Jersey Department of Labor employee on two occasions to stop wage and hour investigations into HHCH and People Choice. This state employee, however, was cooperating with the FBI and is referred to in the Complaint as “Cooperating Witness Two” (CW2). On June 14, 2010, Krutoyarsky met CW2 about the state investigation into HHCH. Krutoyarsky did not want to provide CW2 with records related the HHCH and handed CW2 an envelope containing approximately $1,000 in cash.
Krutoyarsky and CW2 passed notes back and forth, negotiating the bribe. Eventually, Krutoyarsky agreed to pay CW2 $10,000, which she later paid. On April 14, 2011, Krutoyarsky paid another $15,000 to CW2 to subvert a state investigation into People Choice.
Krutoyarsky and Mil then allegedly laundered the proceeds of the Medicaid fraud to conceal their scheme and allow it to continue. Krutoyarsky and defendant Gulmira Shayakhmetova are alleged to have conspired to structure money by making numerous cash withdrawals in amounts under $10,000 to evade the banks requirement to file a report with the U.S. Treasury.
Count one charges conspiracy to commit health care fraud and carries a maximum penalty of 20 years in prison and a $250,000 fine. Counts two and three each charge bribery and each charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Count four charges conspiracy to commit money laundering and carries a maximum penalty of 20 years in prison and a $500,000 fine. Count five charges conspiracy to unlawfully structure financial transactions and carries a maximum penalty of five years in prison and a $250,000 fine.
In addition, HHCH and People Choice were charged in count one of the criminal complaint with conspiracy to commit health care fraud.
The criminal complaint also alleges forfeiture and provides notice of the federal government’s intent to forfeit at least $3.45 million in proceeds from the alleged offense and numerous properties in Krutoyarsky’s name in New Jersey, Florida, and New York.
U.S. Attorney Fishman praised agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; U.S. Citizenship and Immigration Services; New Jersey Attorney General Jeffrey Chiesa; New Jersey State Comptroller Matthew Boxer; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; New Jersey Division of Consumer Affairs, under the direction of Director Eric T. Kanefsky, Board of Nursing; Hal Wirth, Commissioner, New Jersey Department of Labor; U.S. Department of State-Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and Jonathan W. Romankow of the Organized Crime/Gangs Unit, Lakshmi Srinivasan Herman of the Economic Crimes Unit and Peter W. Gaeta of the Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Psychologist Sentenced for $1 Million Health Care Fraud

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

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.

Houston Man Sentenced for Health Care Fraud

SHREVEPORT, LA—United States Attorney Stephanie A. Finley announced today that Godspower Joseph Essang, 35, of Houston, Texas, was sentenced today, to 37 months in federal prison with three years’ supervised release for Medicare fraud.
Essang was also ordered to pay $613,096 in restitution to Medicare. Judge Maurice S. Hicks immediately remanded Essang into the custody of the U.S. Marshals Service to begin serving his sentence.
Essang was sentenced based on his September 28, 2012 guilty plea to one count of health care fraud. During the guilty plea hearing, Essang admitted owning and operating Shalom Equipment, a durable medical equipment company located on Woodward Avenue in Shreveport. Shalom engaged in the business of providing what were referred to as “ortho kits,” which were braces for various parts of the body. Essang admitted paying individuals to provide him with their Medicare beneficiaries and physicians information. He then used this identifying information to file false claims with Medicare for providing the “ortho kits” to Medicare beneficiaries who did not need, were not prescribed, and/or did not receive the items. Essang admitted that between August 12, 2007 and October 21, 2008, he filed approximately 736 claims, billing Medicare for $1,223,255. Medicare actually paid out $613,096 on the claims.
“Mr. Essang’s scheme was designed to defraud a program whose sole purpose is providing medical services to the elderly and the disabled,” U.S. Attorney Stephanie A. Finley stated. “His actions defrauded the program and, ultimately, U.S. taxpayers. This office will continue to vigorously pursue charges against those who steal from such programs.”
“Durable medical equipment fraud is a major problem that costs taxpayers billions in lost and wasted dollars,” said William W. Root, Assistant Special Agent in Charge, U.S. Department of Health and Human Services. “Today’s sentencing is the culmination of a concerted and joint effort by our Inspector General’s Office, the U.S. Attorney’s Office, and the Federal Bureau of Investigation to quickly bring to justice those who prey on our elderly for financial gain.”
The Federal Bureau of Investigation and the U.S. Department of Health and Human Services-Office of the Inspector General conducted the investigation. Assistant U.S. Attorney C. Mignonne Griffing prosecuted the case.

Social Worker Indicted for Health Care Fraud

BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo has returned a five-count indictment charging Nina Jafari, a licensed clinical social worker, 62, of Amherst, New York, with health care fraud. The charge carries a maximum penalty of 10 years years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Michael DiGiacomo, who is handling the case, stated that according to the indictment, the defendant defrauded Blue Cross Blue Shield of Western New York. The scheme involved Jafari submitting reimbursement claim forms to Blue Cross Blue Shield for services that were not rendered. The amount totaled approximately $125,000.
The indictment is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.

EMH Regional Medical Center and North Ohio Heart Center to Pay U.S. $4.4 Million to Resolve False Claims Act Allegations

WASHINGTON—EMH Regional Medical Center (EMH) has agreed to pay the United States $3,863,857, and North Ohio Heart Center Inc. (NOHC) has agreed to pay the United States $541,870 to settle allegations that they submitted false claims to Medicare, the Justice Department announced today.
EMH is a non-profit community hospital system located in Lorain County, Ohio. During the relevant time period, NOHC was an independent physician group located in Lorain County that practiced at EMH. The settlement resolves allegations that between 2001 and 2006, EMH and NOHC performed unnecessary cardiac procedures on Medicare patients. Specifically, the United States alleged that EMH and NOHC performed angioplasty and stent placement procedures on patients who had heart disease but whose blood vessels were not sufficiently occluded to require the particular procedures at issue.
“Billing Medicare for cardiac procedures that are not necessary or appropriate contributes to the soaring costs of health care and puts patients at risk. The settlement demonstrates the Department of Justice’s efforts both to protect public funds and safeguard Medicare beneficiaries,” said Stuart F. Delery, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division.
“Most doctors act responsibly,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “These few didn’t. Patient health and taxpayer dollars have to come before greed.”
This matter was initiated by the filing of a whistleblower complaint under the False Claims Act (FCA). Under the FCA, private citizens can bring suit for false claims on behalf of the United States and receive a share of the recovery obtained by the government. The whistleblower in this matter, Kenny Loughner, was the former manager of EMH’s catheterization and electrophysiology laboratory. As a result of the settlement, Mr. Loughner will receive $660,859 of the United States’ recovery.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion.
The investigation was jointly handled by the U.S. Attorney’s Office for the Northern District of Ohio, the Justice Department’s Civil Division, the Office of the Inspector General of the Department of Health and Human Services Cleveland Field Office, and the FBI. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The case is captioned United States ex rel. Loughner v. EMH Regional Medical Center et al., Case