On June 23, 2011, Dr. Earnest Rankin, age 64, pleaded guilty to count one of an indictment which charged him with violating the anti-kickback statute (Title 18, United States Code, Section 371), announced Daniel McMullen, Special Agent in Charge (SAC) of the Jackson Field Office of the Federal Bureau of Investigation (FBI), and John Dowdy, United States Attorney for the Southern District of Mississippi. Dr. Rankin’s private family medical practice is located on Bailey Avenue in Jackson, Mississippi.
Before the Honorable Judge Tom S. Lee, United States District Court, Southern District of Mississippi, Rankin stipulated that he and a co-conspirator conspired with each other to receive kickbacks from Longwind Products and Services, a supplier of wheelchairs, in the following manner: Medicare Beneficiaries were recruited to receive Certificates of Medical Necessity from Dr. Rankin. Dr. Rankin would then refer the beneficiaries to Longwind for a power wheelchair. Dr. Rankin issued these Certificates when, in fact, the beneficiaries were not medically eligible to receive a Medicare-funded power wheelchair. Dr. Rankin received a kickback for each Longwind wheelchair and has agreed to make full restitution to Medicare. He is scheduled to be sentenced on September 15, 2011, and faces up to five years in prison.
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Thursday, June 30, 2011
Dr. Earnest Rankin Pleads Guilty in Kickback Scheme
Wednesday, June 29, 2011
Michael Shook Sentenced Four Years for Pill Conspiracy
LEXINGTON—A Florida doctor who previously admitted in federal court that he illegally prescribed thousands of pain pills to Kentuckians was sentenced to 48 months in prison today and three years of supervised release.
U.S. District Court Judge Gregory Van Tatenhove sentenced Michael Shook, 52, to conspiracy to distribute Oxycodone and Methadone before U.S. District Court Judge Gregory Van Tatenhove.
Shook acknowledged that he unlawfully prescribed approximately 25,000 pain pills to Eastern Kentuckians who traveled to see him at Lauderhill Medical Clinic located in Oakland Park, Fla.
According to the plea agreement, Shook wrote prescriptions for numerous Kentuckians who were arrested in October of 2009 as part of the largest drug roundup in Kentucky’s history that included more than 500 people.
Court documents state that by late 2008 and early 2009, 90 percent of the clinic’s patients were from Kentucky. During some of the visits by Kentucky patients, Shook performed a limited examinations if any at all before writing the prescription. All the Kentuckians paid for their examination in cash. After Shook wrote the prescriptions, the patients filled them at the clinic’s in house pharmacy.
Shook was the only doctor employed by the clinic. He was paid as much as $6,000 per week and split all the profits with two men identified in the plea agreement. These individuals provided the funds to open the clinic and filled the prescriptions written by Shook.
The FBI has seized more than $200,000 from the clinic representing the profits gained from the conspiracy.
Shook is the second Florida doctor to enter into a plea agreement with the U.S. Attorney’s Office in the Eastern District of Kentucky for conspiring with Kentuckians to illegally distribute pills. In November 2008, Roger Browne, who practiced medicine in Coral Springs, Fla., pleaded guilty to a conspiracy that involved nine defendants from Eastern Kentucky.
Also, former doctors Lloyd Naramore in Ohio and Randy Weiss in Philadelphia were previously convicted for pill conspiracies with Eastern Kentuckians. Court documents show that some of the patients that visited Shook also received prescriptions from Weiss and Naramore.
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Tuesday, June 28, 2011
Rene De Los Rios Sentenced to 235 Months in Prison for Medicare Fraud Scheme
WASHINGTON – Miami doctor Rene De Los Rios, 72, was sentenced today to 235 months in prison for his participation in a $23 million HIV injection and infusion Medicare fraud scheme , announced the Departments of Justice and Health and Human Services (HHS).
U.S. District Court Judge Joan A. Lenard of the Southern District of Florida also sentenced De Los Rios to three years of supervised release following his prison term and ordered him to pay a minimum of $11.7 million in restitution, jointly with his co-defendants. The final amount of restitution will be determined at a later hearing. On April 14, 2011, De Los Rios was convicted by a jury of one count of conspiracy to commit health care fraud and four counts of submission of false claims. De Los Rios was remanded to the custody of the U.S. Marshals Service after his conviction and has been detained since that time.
According to evidence presented at trial and sentencing, De Los Rios worked at multiple fraudulent medical clinics and signed medical documents authorizing tests and treatments that were medically unnecessary or never provided. The court found De Los Rios responsible for a total of $46 million in fraudulent billings to Medicare.
According to evidence presented at trial, De Los Rios was hired by the owner of Metro Med of Hialeah Corporation, an HIV infusion clinic that purportedly provided injection and infusion therapies to HIV-positive Medicare beneficiaries. Evidence presented at trial established that De Los Rios ordered unnecessary tests, signed medical analysis and diagnosis forms, and authorized treatments to make it appear that legitimate medical services, including injection and infusion therapies, were being provided to Medicare beneficiaries at Metro Med. However, the injection and infusion therapies were medically unnecessary and never provided. De Los Rios also signed medical charts, often without seeing the patient, indicating that certain treatments were medically necessary, when, in fact, he knew they were not.
Evidence at trial established that De Los Rios diagnosed almost all of the patients at Metro Med with the same rare blood disorders, which the patients did not have, in order to ensure maximum reimbursement from Medicare. The evidence at trial also showed that De Los Rios prescribed expensive medications, including Winrho, Procrit and Neupogen, to patients for the sole purpose of receiving reimbursement from the Medicare program. From approximately April 2003 through October 2005, Metro Med submitted approximately $23 million in claims to the Medicare program for injection and infusion treatments that were not medically necessary and were never provided. The Medicare program paid approximately $11.7 million in claims.
The owner and operator of Metro Med, Damaris Oliva, and three other individuals have each pleaded guilty for their roles in the Metro Med fraud scheme. Oliva was sentenced in December 2010 to 82 months in prison. Co-defendants Estrella Rodriguez, Jose Diaz and Lisandra Aguilera were sentenced to 57 months in prison, 54 months in prison and 70 months in prison, respectively.
Evidence at trial and sentencing also established that De Los Rios engaged in almost identical conduct at additional sham HIV injection and infusion therapy clinics in South Florida during the same time period. At J&F Community Medical Center Inc. and Rochris Medical Center Inc., De Los Rios prescribed the same medications that he prescribed at Metro Med to patients who he knew did not need them.
In a two-and-half-year period, De Los Rios made more than $587,000 in profits from the fraud schemes.
At sentencing, the court also found that De Los Rios obstructed justice by testifying falsely at his trial; that as a doctor, De Los Rios occupied a position of trust, which he violated; and that by prescribing medically unnecessary injections and infusions for HIV-positive patients, De Los Rios caused a reckless risk of serious bodily injury to those patients.
The court declared a mistrial in De Los Rios’ first trial in March 2011.
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Monday, June 27, 2011
Andrew L. Sokol Sentenced to Over Four Years for Health Care Fraud
ATLANTA, GA—ANDREW L. SOKOL, 43, of Marietta, Georgia, was sentenced today by Chief United States District Judge Julie E. Carnes to federal prison on charges of conspiracy to commit health care fraud by fraudulently submitting millions of dollars of insurance claims to Blue Cross Blue Shield and other private insurers for physical therapy services that were not actually provided.
United States Attorney Sally Quillian Yates said, “We are all painfully aware of skyrocketing health costs, and when pain is left untreated, the public should not have to cover a phony bill. This defendant received over $6.5 million in payments from Blue Cross Blue Shield and other private insurers after billing them for physical therapy services he did not provide. Frauds like these ultimately affect everyone—individuals, families, and communities—in higher premiums and higher service costs. The prison sentence imposed today shows that health care fraud is a serious crime.”
Brian D. Lamkin, Special Agent in Charge, FBI Atlanta, said, “The FBI continues to dedicate vast investigative resources to its health care and medicare fraud programs primarily because of the high loss amounts to the U.S. Government that these cases can bring. Individuals such as Mr. Sokol, that were otherwise trusted individuals within the medical community, abandon that trust for a level of personal greed that cannot be understood and will not be tolerated.”
IRS-Criminal Investigation Special Agent in Charge Reginael McDaniel said, “Our system of health care is founded on the trust in our health care professionals and the outstanding services they provide. The system was not designed for a few rogue individuals who choose to place personal profit ahead of that trust.”
“This defendant’s criminal activity will eventually be felt by all of the American public. He not only took advantage of the health care system, but the honest people that do right by the system. Today’s sentence will give the defendant plenty of time to think about the consequences of his actions.” said Martin D. Phanco, U.S. Postal Inspector in Charge of the Atlanta Division.
SOKOL was sentenced to four years, 9 months in prison to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $6,599,456. SOKOL was convicted of these charges on October 21, 2010, after his plea of guilty.
According to United States Attorney Yates, the charges and other information presented in court: SOKOL was a licensed chiropractor who owned and operated “WellnessOne” chiropractic clinics in Marietta, Buckhead, Duluth, Vinings, and other locations throughout metro Atlanta.
WellnessOne offered massage, personal training, and chiropractic services to its patients, but fraudulently billed these services to insurance companies as physical therapy. SOKOL targeted MBNA and Bank of America employees because the Blue Cross Blue Shield policies covering those employees provided generous chiropractic and physical therapy insurance benefits. To attract these “patients” to WellnessOne clinics, SOKOL designed frequent promotions, giving bank employees who came in for a massage or chiropractic adjustment gift cards in the amount of $50, $25, or $10, and restaurant and free gasoline cards; raffle tickets offering the chance to win BMW and Hummer leases or $5,000; frozen turkeys and pies at Thanksgiving and Christmas; gift bags containing supplements, vitamins, lumbar and cervical pillows, and weight loss patches; and free catered lunches in the clinics.
SOKOL implemented other mass-marketing techniques to further his scheme, such as a billboard on I-75, a major interstate, that advertised his clinics, and direct mailings to the public indicating that patients could receive massages and have their insurance pay for it. SOKOL also routinely waived patients’ co-payments and deductibles, resulting in the patients being compensated—with gift cards and other items of value—while paying nothing for the massages and chiropractic adjustments they received at WellnessOne.
The evidence showed that from January 2005 through September 2007, SOKOL employed licensed medical doctors and physical therapists in order to bill a massage as physical therapy, even though these licensed providers never saw the majority of patients. Instead, massage therapists actually gave the massages. Several medical providers quit when they realized WellnessOne was billing insurers under their names for services they did not perform. In addition to using false provider names and billing codes, SOKOL directed that services be billed on different days and under different tax identification numbers to conceal the fraud from insurers.
Beginning in 2006, SOKOL permitted patients to visit a local gym in the Atlanta area and then fraudulently billed those gym visits to insurers as physical therapy. When that arrangement ended, SOKOL had small gyms built in the WellnessOne clinics and fraudulently billed personal training sessions to insurers as physical therapy.
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Sunday, June 26, 2011
Veronica Ann Lewis Green Ordered to Pay Restitution to Medicare, Blue Cross, and the Social Security Administration
BATON ROUGE, LA—United States Attorney Donald J. Cazayoux, Jr., announced that U.S. District Judge Frank J. Polozola sentenced Veronica Ann Lewis Green, 43, of Gonzales, Louisiana, to thirty months in prison, restitution of $1,128,308, and two years’ supervised release after imprisonment. Judge Polozola ordered GREEN to pay restitution to Medicare, Blue Cross, and the Social Security Administration.
GREEN pled guilty on February 23, 2011, to one count of health care fraud and one count of fraud on the Social Security Administration. From April 2006 through August 2009, GREEN submitted false and fraudulent claims to Medicare. The false claims led to Medicare and Blue Cross of Louisiana issuing payments to GREEN’s medical supply business. GREEN owned and operated AYS Medical Supplies, which was located in Gonzales, Louisiana. GREEN defrauded Medicare by submitting claims for durable medical equipment which was neither medically necessary nor actually provided to Medicare beneficiaries.
In the course of investigating the false claims to Medicare and Blue Cross, investigators also discovered that GREEN submitted false information to the Social Security Administration for the purpose of obtaining disability benefits for herself and her family.
Judge Polozola sentenced GREEN to repay $969,127 to Medicare and $654 to Blue Cross. GREEN was also ordered to repay $152,627 to the Social Security Administration.
The investigation of GREEN was conducted by the Medicare Strike Force, which is comprised of Special Agents of the United States Department of Health and Human Services, Office of Inspector General, the FBI, and the Louisiana Department of Justice, Medicaid Fraud Control Unit. The investigation was also assisted by AdvanceMed, the Medicare Program Integrity Contractor. The case was prosecuted by Assistant United States Attorney Rene Salomon.
The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.
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Saturday, June 25, 2011
Ekpedeme Obot Pleads Guilty in Connection with $1.3 Million Medicare Fraud Scheme
WASHINGTON—An owner of a Houston health care company pleaded guilty today to committing health care fraud and making false statements relating to health care matters, announced the Departments of Justice and Health and Human Services (HHS).
Ekpedeme Obot, 34, pleaded guilty before U.S. District Court Judge Lee Rosenthal in Houston to one count of making false statements relating to health care matters and one count of health care fraud.
According to court documents, Obot was an owner and operator of Praise DME. Praise maintained a Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics and other DME to Medicare beneficiaries. According to court documents, Praise submitted claims to Medicare for DME, including orthotic devices that were medically unnecessary and/or not provided. Many of the orthotic devices were components of an “arthritis kit,” and were purported to be for the treatment of arthritis-related conditions; in fact, however, they were not medically necessary or appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. From March 2007 through August 2008, Obot submitted claims of more than $1.3 million to Medicare and was paid approximately $945,637.
In addition, according to the plea agreement, Obot admitted that he made false statements to Medicare in his supplemental Medicare Enrollment Application when he failed to provide information about a prior felony conviction. Specifically, the Medicare Enrollment Application included a section entitled “Adverse Legal Actions/Convictions,” which required DME providers to list prior felony convictions. Obot was convicted on March 5, 2007, in Harris County, Texas, on a felony theft charge, but in his application, he represented only that he had been subject to a recoupment action by Texas Medicaid in November 2006 that was resolved by entering into a payment plan.
At sentencing, Obot faces a maximum penalty of 10 years in prison on the health care fraud charge and five years in prison on the false statements charge. Sentencing is scheduled for Oct. 12, 2011, at 9:00 a.m., CDT before Judge Rosenthal.
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Friday, June 24, 2011
Surya Nallani and her husband Srinivas Nallani Indicted for Health Care Fraud
An indictment charging Troy physician Surya Nallani, 43, and her husband, Srinivas Nallani, 46, with conspiracy to commit health care fraud and money laundering was unsealed today in federal court, United States Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Andrew G. Arena, FBI Special Agent in Charge, and Lamont Pugh, Special Agent in Charge, of the Department of Health and Human Services-Office of Inspector General (HHS-OIG).
The indictment charges that beginning in 2005 and continuing until February 2011, Surya Nallani, a physician doing business in Troy, Michigan, conspired with her husband, Srinivas Nallani, to commit health care fraud in connection with an approximately $9 million physicians home visit operation.
The indictment alleges that Dr. Nallani billed Medicare for excessive home visits which required that she physically be present during these home visits, when in fact she was out of the country. In addition, Dr. Nallani billed for home visits on particular days which would be physcially impossible to complete given the number of hours in a day and the geographical distance between each home. Srinivas Nallani, was the billing manager for Dr. Nallani’s company, Allied Geriatric Services, and participated in the submission of false and fraudulent claims to Medicare. Additionally, the Nallanis have been charged with laundering the proceeds of the health care fraud conspiracy.
If convicted on the charges that statutory maximum penalty is 10 years in prison and/or a $250,000 fine. The United States is seeking the forfeiture of approximately $825,000 seized from accounts controlled by the Nallanis as well as two vehicles owned by the Nallanis.
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Thursday, June 23, 2011
Kemmie Houston and Sharon Beal Plead Guilty to Medicare Fraud
WASHINGTON – Two owners of a Houston health care company pleaded guilty for their roles in a scheme to defraud Medicare of more than $800,000, announced the Departments of Justice and Health and Human Services (HHS).
Kemmie Houston, 43, pleaded guilty today and Sharon Beal, 47, pleaded guilty yesterday in U.S. District Court in Houston. Houston and Beal both pleaded guilty before U.S. District Judge David Hittner to one count of conspiracy to commit health care fraud. In their pleas, Beal and Houston admitted that they defrauded Medicare of $851,212.
According to court documents, Beal and Houston owned and operated STK Consultants. STK maintained a Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics, power wheelchairs, power wheelchair accessories and other DME to Medicare beneficiaries. According to court documents, STK submitted claims to Medicare for DME that was medically unnecessary and/or not provided. Many of the orthotic devices were components of what was referred to as an “arthritis kit,” and were purported to be for the treatment of arthritis-related conditions; in fact, however, they were not medically necessary or appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. In total, from August 2005 through August 2010, STK submitted approximately $851,212 in fraudulent claims to Medicare.
Beal is scheduled to be sentenced on Sept. 14, 2011, and Houston is scheduled to be sentenced on Sept. 15, 2011. Beal and Houston each face a maximum sentence of 10 years in prison.
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Wednesday, June 22, 2011
Dr. Alexander Orlov Sentenced for Health Care Fraud Violations
BEAUMONT, TX—A Lufkin physician has been sentenced to federal prison for health care fraud violations in the Eastern District of Texas announced U.S. Attorney John M. Bales today.
Dr. Alexander Orlov, D.O., 47, of Lufkin, pleaded guilty on Nov. 1, 2010, to conspiracy to defraud Medicare and Medicaid and was sentenced to 15 months in federal prison today by U.S. District Judge Ron Clark. Orlov was also ordered to pay $309,000 in restitution and a $30,000 fine.
According to information presented in court, from Nov. 2008 to Apr. 2010, Orlov, a physician and the owner of a Lufkin medical practice and urgent care clinic, and an employee, Haseeb Rehman, submitted claims for physicians’ services to Medicare and Medicaid for services provided by Rehman who was not a licensed medical professional. Orlov controlled and operated Lufkin Urgent Care, P.A. He employed Rehman to run Lufkin Urgent Care. Rehman treated patients, prescribed medication, performed minor surgical procedures, and operated within Lufkin Urgent Care as if he were a licensed medical professional. Claims were submitted to Medicare and Medicaid for Rehman’s services representing that the services were provided by a physician. As a result of these claims, Orlov unlawfully obtained more than $250,000 from Medicare and Medicaid. Orlov was indicted by a federal grand jury on June 3, 2010 and charged with conspiracy to defraud Medicare and Medicaid.
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Tuesday, June 21, 2011
Simone Ball the Owner of Houston Health Care Company Pleads Guilty to Defrauding Medicare
WASHINGTON – An owner of a Houston health care company pleaded guilty today in connection with a $654,227 Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Simone Ball, 24, pleaded guilty before U.S. District Judge Lee Rosenthal in Houston to one count of conspiracy to commit health care fraud. In her plea, Ball admitted that she defrauded Medicare of $654,227 .
According to court documents, Ball was an owner and operator of Preferred Plus Medical Supply. Preferred Plus maintained a valid Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics and other DME to Medicare beneficiaries. According to court documents, Preferred Plus submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or not provided. Many of the orthotic devices were components of “arthritis kits,” and purported to be for the treatment of arthritis-related conditions, although they were neither medically necessary nor appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. In total, from August through December 2008, Preferred Plus submitted approximately $654,227 in fraudulent claims to Medicare.
At sentencing, scheduled for Oct. 12, 2011, Ball faces a maximum sentence of 10 years in prison.
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Monday, June 20, 2011
Dr. Gautam Gupta who owns and operates the Nutrition Clinic, was charged with one count each of Mail Fraud, Health Care Fraud and Conspiracy
Criminal charges alleging that the owner of a chain of medically supervised weight-loss clinics defrauded both a private health insurance company and the Illinois Medicaid program were filed earlier this week, announced Robert D. Grant, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation (FBI). Mr. Grant was joined by Hiram Grau, Director of the Illinois State Police and Lamont Pugh III, Special Agent-in-Charge of the Department of Health and Human Services—Office of Inspector General (HHS-OIG) in announcing the charges.
Dr. GAUTAM GUPTA, who owns and operates the Nutrition Clinic, with locations in Arlington Heights, Chicago, Naperville, Rockford and South Beloit, was charged with one count each of Mail Fraud, Health Care Fraud and Conspiracy, all of which are felony offenses, in a criminal complaint filed in U.S. District Court in Springfield.
The complaint alleges that Dr. GUPTA, or members of his staff acting at his direction, submitted claims to both the Blue Cross/Blue Shield Insurance Company and the Illinois Medicaid program for unnecessary procedures or procedures which were never performed. The complaint indicates that, during the period of June 2001 through January of 2010, the Nutrition Clinic was paid nearly $25 million for claims submitted on behalf of clinic patients.
Attempts to locate and apprehend Dr. GUPTA have thus far been unsuccessful. As such, he is now the subject of a nationwide manhunt which is being coordinated by the Chicago FBI. Dr. GUPTA, whose last known address was 1660 North Mulford Road in Rockford, is described as a white/male of Indian descent, 57 years of age, 5’5” tall, 160 pounds, graying black hair which is sometimes worn in a ponytail, and brown eyes.
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Saturday, June 18, 2011
Departments of Justice, Health and Human Services Highlight Joint Efforts to Combat Health Care Fraud in Philadelphia
WASHINGTON – U.S. Attorney General Eric Holder and the Department of Health and Human Services (HHS) Secretary Kathleen Sebelius visited Philadelphia today where they participated in the sixth regional health care fraud prevention summit. The summits bring together a wide array of federal, state and local partners, beneficiaries, providers and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system.
The summits are part of a larger effort on behalf of the Obama Administration to root-out waste, fraud and abuse within the U.S. health care system.
“In communities across the country, and particularly here in Philadelphia, health care fraud schemes are being aggressively and permanently shut down. That’s, in large part, because of the great work being led by Health Care Fraud Prevention and Enforcement Action Team,” said Attorney General Eric Holder. “Not only have we secured record recoveries totaling billions of dollars, we have raised awareness about these crimes and improved the ability of consumers and victims to report suspected fraud schemes. Through this initiative, we have forged partnerships necessary to ensure the strength and integrity of our most essential health care programs.”
“Today, we continue to work with patients to protect their information, with providers to strengthen screening standards, and with private insurers to share strategies about how to prevent fraud,” said HHS Secretary Kathleen Sebelius. “The Affordable Care Act gives us new resources to eliminate waste and kick criminals out of the health care system. As long as we continue to aggressively put these tools to work preventing and prosecuting fraud, we can continue to protect and strengthen Medicare’s future.”
Joining Attorney General Holder and Secretary Sebelius at the University of the Sciences in Philadelphia were Assistant Attorney General Tony West of the Civil Division and U.S. Attorney Zane D. Memeger for the Eastern District of Pennsylvania. The summit featured educational panels aimed at identifying best practices for providers, law enforcement, and beneficiaries in preventing health care fraud. The summit also showcased the success of public-private partnerships in curbing fraudulent schemes.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania continues to show its strength as one of the leading offices in the nation for health care fraud recoveries, bringing in a record $2.7 billion for the Department of Justice in the past two calendar years. The office set a new record in 2009 when it announced the $1.415 billion joint civil and criminal resolution with pharmaceutical manufacturer Eli Lilly over the company’s off-label marketing of the drug Zyprexa. At the time, it was the largest monetary settlement against a single company.
Investments in fraud detection and enforcement have been shown to pay for themselves many times over, and the Administration’s tough stance against fraud is already yielding results. In FY 2010, more than $4 billion was returned to the Medicare Health Insurance Trust Fund, the U.S. Department of the Treasury and others as a result of enforcement activities targeting false claims and fraud perpetrated against government health care programs. This was an increase of $1.4 billion, or 56 percent, over FY 2009. The $4 billion recovered in FY 2010 includes recoveries from the $2.5 billion in settlements and judgments obtained in FY 2010 by the Department of Justice in False Claims Act matters alleging health care fraud. This is an unprecedented level of funds obtained in a single year and represents a 53 percent increase over FY 2009, in which $1.63 billion was obtained.
The summits are part of the overall joint health care fraud fighting effort undertaken jointly by the Departments of Justice and Health and Human Services through the Health Care Fraud Prevention and Enforcement Action Team (HEAT). As one part of HEAT’s efforts, Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles to a total of nine health care fraud hot spots including Houston; Detroit; Brooklyn, N.Y.; Baton Rouge, La.; Tampa, Fla.; Chicago; and Dallas. The Strike Force is a partnership between the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices, HHS’ Office of Inspector General, FBI, and other federal, state and local law enforcement partners.
On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The Philadelphia summit was the sixth in a series. Previous summits were held in Miami (July 16, 2010), Los Angeles (Aug. 26, 2010), New York (Nov. 5, 2010), Boston (Dec. 16, 2010) and Detroit (March 15, 2011).
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Friday, June 17, 2011
Joseph Vah Lavien Charged with Defrauding Medicaid
MINNEAPOLIS—Yesterday in federal court, the owner of a home health care company was charged with fraudulently obtaining more than $400,000 from Medicaid between 2008 and June of 2009. Joseph Vah Lavien, age 57, of Brooklyn Park, was charged via an Information with one count of health care fraud.
Lavien allegedly defrauded Medicaid, a health care benefit programs, by submitting reimbursement claims for personal care services that were not actually rendered. Since 2003, Lavien owned and operated Minneapolis-based Palm Healthcare Services, Inc. The business is required to submit Medicaid claims to the Minnesota Department of Human Services ("DHS") for in-home personal care. The Medicaid program, which is a federal program administered in Minnesota by DHS, provides medical care and services to low-income people who meet certain income and eligibility requirements. The fraudulent reimbursements included billing for services not provided to patients, billing for more services than authorized, billing for more services than could be performed in a particular day or month, billing for supervision services rendered by an eligible provider, and submitting false records in support of reimbursement claims. The total estimated loss for Medicaid during the time period specified in the charges is $412,227.17.
In addition, Lavien allegedly defrauded the MinnesotaCare insurance program, through which the State of Minnesota pays for insurance premiums of low-income residents. The total estimated loss for MinnesotaCare as a result of this fraud is $83,939.
If convicted, Lavien faces a potential maximum penalty of ten years in prison. All sentences will be determined by a federal district court judge. This case is the result of an investigation by the Minnesota Attorney General’s Office-Medicaid Fraud Control Unit, the Federal Bureau of Investigation, and the United States Department of Health and Human Services-Office of Inspector General ("HHS-OIG"). It is being prosecuted by Assistant U.S. Attorney Robert M. Lewis.
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Wednesday, June 15, 2011
Scott Burko Sentenced in White Plains Federal Court to Two Years in Prison for Illegally Dispensing Prescription Drugs
PREET BHARARA, the united States Attorney for the Southern District of New York, announced that SCOTT BURKO, 47, a pharmacist, of West Harrison, Westchester County, New York, was sentenced today in White Plains federal court to two years in prison for participating in a conspiracy to dispense prescription drugs without valid prescriptions and dispensing prescription drugs unlawfully and with intent to defraud and mislead. United States District Judge KENNETH M. KARAS imposed the sentence.
In imposing the sentence on BURKO, Judge KARAS, citing the defendant's "brazen and longstanding criminal conduct" and the fact that his conduct required "planning, guile, and attention to detail," underscored the need to impose a sentence that would deter others from engaging in similar conduct.
On November 30, 2010, BURKO pled guilty to three counts of an Indictment. The first count to which BURKO pled guilty charged that BURKO participated in a conspiracy from at least 2003 through March 31, 2006, to cause the dispensing without valid prescriptions of prescription drugs held for sale after shipment in interstate commerce. According to the Indictment, BURKO worked as a pharmacist for a company that operated pharmacies in Rockland County, Orange County, Dutchess County, and Westchester County. The second and third counts to which BURKO pled guilty charged that BURKO dispensed Prednisone on April 8, 2005, and March 31, 2006, pursuant to fraudulent prescriptions. As charged in the Indictment, on both occasions, BURKO dispensed Prednisone, a steroid, in 10 milligram tablets, pursuant to fraudulent prescriptions BURKO issued in the names of fictitious patients.
According to statements made by the Government during prior proceedings in this matter and in the Government's submission filed in advance of the sentencing proceeding:
On 163 occasions, BURKO falsified pharmacy records and filled and dispensed Prednisone prescriptions for fictitious individuals. The dispensing of Prednisone pursuant to the fraudulent prescriptions was part of a larger scheme by which BURKO and at least one co-conspirator stole drugs from the pharmacies at which BURKO worked. Burko falsified pharmacy records to make it appear that he had received oral prescriptions (via telephone calls from doctors) for Prednisone for fictitious patients.· BURKO then "filled" the false prescriptions and dispensed the medication to a co-conspirator, who came to the pharmacy to pick up the medication. When the co-conspirator left the pharmacy, he left with a bag containing the Prednisone, as well as numerous other medications.
In addition to his sentence of two years in prison, BURKO was also ordered to pay $400,000 in restitution. Judge KARAS also imposed a term of three years’ supervised release.
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Tuesday, June 14, 2011
Angel Gonzalez and Adrian Chalarca Plead Guilty in Tampa, Fla., to Medicare Fraud
WASHINGTON—Two Miami-area residents who were officers of a fraudulent physical therapy company in Lakeland, Fla., pleaded guilty today for their roles in a scheme to defraud Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Angel Gonzalez, 43, and Adrian Chalarca, 24, each pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Fla., to one count of conspiracy to commit health care fraud.
According to court documents, Gonzalez was the owner and vice president of Dynamic Therapy Inc. and Chalarca was the president and administrator of the company. Gonzalez, Chalarca and their co-conspirators purchased Dynamic from its prior owners and transformed it into a fraudulent enterprise. Under Gonzalez and Chalarca, Dynamic purported to provide physical therapy services to Medicare beneficiaries.
According to court documents, from fall 2009 to summer 2010, Gonzalez and Chalarca submitted and caused the submission of $757,654 in fraudulent claims by Dynamic to the Medicare program. Gonzalez and Chalarca admitted that they paid and caused the payment of kickbacks and bribes to Medicare beneficiaries in order to obtain their Medicare billing information and used it to submit claims to Medicare for physical therapy services that were never provided. According to court documents, Gonzalez and others also stole the identities of a physical therapist and Medicare beneficiaries in order to submit additional false claims to Medicare. Gonzalez and Chalarca admitted that they knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare, never received the services billed to Medicare.
Another vice president of Dynamic, Andres Cespedes, pleaded guilty in May 2011 for his participation in the fraud scheme.
At sentencing, Gonzalez and Chalarca each face a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not yet been scheduled.
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Monday, June 13, 2011
Dr. Rajiv Yakhmi Sentenced to One Year in Prison for Health Care Fraud and Income Tax Fraud
COLUMBUS—Dr. Rajiv Yakhmi, 46, of Powell, Ohio, was sentenced in U.S. District Court here to 12 months and one day in prison and ordered to pay $310,000 plus interest and penalties to the IRS and an additional $590,278.60 to the government and private health care insurers he defrauded.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Lamont Pugh, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General (HHS); Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office (IRS); and J. Mark Batts, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the guilty plea entered before U.S. District Judge Gregory L. Frost.
Yakhmi pleaded guilty on January 11, 2011 to one count of health care fraud and to one count of willfully filing a false income tax return with the IRS.
According to court documents, Yakhmi is a licensed medical doctor who had an office located at 2415 Deewood Drive, Columbus, Ohio. Between October 2005 and November 2007, Yakhmi contracted with DosHealth billing service to submit medical claims on his behalf to the Medicare and Medicaid programs as well as to private insurers. DosHealth relied on patient information provided by Yakhmi to submit medical claims to Medicare, Medicaid and private insurers.
Yakhmi knowingly submitted or caused to be submitted claims for patient office visits and medical services, including, but not limited to psychological tests, pulmonary stress tests and audio tests, knowing that such services were wrongfully coded, medically unnecessary or not provided to his patients.
In addition, on Wednesdays during part of 2006 and 2007, Yakhmi refused to accept insurance and accepted cash only from his patients for medical services and office visits which he knowingly failed to report as income on his 2006 and 2007 federal income tax returns.
The investigation discovered that in late 2006, Dr Yakhmi devised a scheme to evade federal income taxes by opening a checking account with Key Bank in the name of “Spyder Medical”. Dr. Yakhmi wrote checks from his business checking account with Huntington National Bank to “Spyder Medical” to make it appear as though he had purchased the equipment from “Spyder Medical” for his medical practice; thereby claiming a fraudulent expense of $108,000 on his 2006 Federal Income Tax return.
In November, 2007, Yakhmi terminated his contracts with Medicaid and Medicare as well as private insurance and began only accepting cash payments from his patients for all office visits and medical services. The investigation revealed that Yakhmi knowingly failed to report a significant amount of these cash payments as income to the IRS on his 2007 and 2008 federal tax income tax returns.
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Saturday, June 11, 2011
Novo Nordisk Inc., Pays $1.725 Million to Resolve Claims That its Sales Representatives Paid Pharmacists for Access to Confidential Patient Information
Novo Nordisk, Inc. has entered into a civil settlement agreement with the United States in which it has agreed to pay the United States and several states $1.725 million to resolve allegations that the company caused false or fraudulent claims to be submitted to the Medicaid program in connection with its marketing of the diabetes drugs Novolin, Novolin 70/30, Novolog, and Novolog 70/30.
The settlement was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
As alleged in the civil settlement agreement, Novo Nordisk sales representatives in four states and the District of Columbia made payments to Rite Aid pharmacists in exchange for those pharmacists recommending the Novolin and Novolog products. The pharmacists, together with Novo Nordisk sales representatives in those states, identified patients who were candidates to use Novolin or Novolog and communicated with physicians, patients, or other pharmacists to encourage them to use or recommend the use of those drugs. As part of these activities, the pharmacists accessed, or allowed Novo Nordisk representatives to access, confidential patient information, which was used for the purpose of conducting marketing events that were designed to switch patients from competitor diabetes drugs to Novolin or Novolog.
In addition to entering into the federal settlement and agreeing to enter into settlement agreements with the states, Novo Nordisk, which has not admitted to engaging in the conduct at issue, has also entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General.
The investigation that lead to the settlement began after a former Novo Nordisk sales representative filed a complaint against the company on behalf of the United States in the Eastern District of New York. Under the federal False Claims Act, a private individual who has uncovered fraud against the federal government may file a suit in federal court on behalf of the United States. If the United States is successful in resolving those claims, the individual who filed the complaint may receive a share of the recovery.
“We are committed to battling health care fraud, especially when money is exchanged in an attempt to impact treatment decisions,” stated United States Attorney Lynch. “The allegations in this case were particularly egregious because they involved the disclosure of confidential patient information.”
“When pharmaceutical companies pay kickbacks – as Novo Nordisk is alleged to have done – it is especially insidious because patients may not be receiving untainted medical advice,” said Tom O’Donnell, Special Agent-in-Charge of New York’s Office of the Inspector General for the Department of Health and Human Services. “When those in the health care industry insist on misusing private patient health information at taxpayer expense, they should not be surprised when they are held accountable for their actions.”
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Friday, June 10, 2011
U.S. Subsidiary of Belgian Pharmaceutical Manufacturer UCB S.A. Pleads Guilty to Off-Label Promotion; Company to Pay More Than $34 Million
WASHINGTON—The U.S. subsidiary of Belgian pharmaceutical manufacturer UCB S.A. pleaded guilty today to the off-label promotion of its epilepsy drug Keppra and will pay more than $34 million to resolve criminal and civil liability arising out of its illegal conduct, the Justice Department announced today.
Under the terms of the plea agreement before the U.S. Court for the District of Columbia, UCB Inc., which has its headquarters in Smyrna, Ga., pleaded guilty to a misdemeanor in connection with the company’s misbranding of Keppra, in violation of the Food, Drug and Cosmetic Act. Keppra was approved by the Food and Drug Administration (FDA) as an anti-epileptic drug, for the treatment of seizures in adults and children suffering from epilepsy. Keppra is not approved for the treatment of migraine, headache, psychiatric conditions or pain conditions. Once approved by the FDA, a manufacturer may not market or promote a drug for any use not specified in the FDA-approved product label. These uses are also known as unapproved or “off-label” uses.
The government alleged that UCB promoted the sale of Keppra for off-label use in the treatment of migraine by generating and disseminating posters representing that Keppra was safe and effective for treating migraine based on purportedly independent investigator-initiated studies. The posters did not disclose UCB’s sponsorship of these studies or that UCB’s own clinical trial had failed to demonstrate that Keppra was effective in treating migraine.
UCB will pay a $7.55 million criminal fine for the misbranding of Keppra and an asset forfeiture of $1.078 million.
In addition, UCB will pay $25.7 million to resolve civil allegations under the False Claims Act that the company illegally promoted Keppra and caused false claims to be submitted to government healthcare programs for a variety of off-label uses that were not medically accepted indications and therefore not covered by those programs, including headache, migraine, pain, bipolar, mood disorders and anxiety. The federal share of the civil settlement is $15,871,208, and the state Medicaid share of the civil settlement is $9,893,322.
“UCB put its pursuit of profits ahead of its obligations to patients,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “Today’s guilty plea and UCB’s $34 million payout should remind drug companies that try to cleverly design off-label marketing schemes that we will not allow them to compromise patient safety.”
“Patients have a right to know that the drugs they are prescribed have been approved by the FDA as safe and effective for a particular use,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Off-label promotion of pharmaceuticals undermines the FDA’s important role in protecting the public and is a drain on taxpayer dollars.”
“This settlement demonstrates the ongoing efforts to pursue violations of the False Claims Act and recover taxpayer dollars for Medicaid and other federal health care programs,” noted Dwight C. Holton, U.S. Attorney for the District of Oregon. “Our office will continue to work with whistleblowers and law enforcement to stop health care fraud.”
The civil settlement resolves two whistleblower lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act that are pending in Washington, D.C., and Oregon: United States ex rel. Root v. UCB, Civil Action No. 1:07-cv-1056, and United States ex rel. Maly v. UCB, Inc., Civil Action No. 1:08–cv-1161. As part of today’s resolution, the whistleblowers will receive payments totaling more than $2.8 million from the federal share of the civil recovery.
Also as part of the resolution accepted by the court, UCB has entered into an expansive corporate integrity agreement (CIA) with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.
“Patients have a right to be prescribed drugs based on sound medical judgment - not on drug company payoffs or off-label promotions,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Taxpayers shouldn't have to pay for unlawful conduct.”
“Today’s guilty plea and settlement is evidence of the government’s continued commitment to hold pharmaceutical companies accountable when they undermine the drug approval process by promoting drugs for uses not approved by the FDA as safe and effective,” said Acting Director Kathleen Martin-Weis of FDA’s Office of Criminal Investigations. “We will continue to join forces with the Department of Justice and our law enforcement counterparts to seek this kind of criminal resolution when pharmaceutical companies put profits ahead of the public health and safety.”
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Thursday, June 9, 2011
City of Dallas to Pay $2.47 Million to Resolve Allegations That It Caused Improper Medicare and Medicaid Ambulance Clai
DALLAS—The City of Dallas has agreed to pay the U.S. and Texas $2.47 million and enter into certain compliance obligations to resolve allegations that it violated the civil False Claims Act and Texas Medicaid Fraud Prevention Act, announced U.S. Attorney James T. Jacks of the Northern District of Texas. The U.S. and Texas contend Dallas caused “upcoded” claims to be submitted to Medicare and Medicaid for city-dispatched 911 ambulance transports between 2006 and 2010. Dallas fully cooperated with the investigation, and by settling did not admit any wrong-doing or liability.
Ambulance services generally are coded either as basic life support level or advanced life support (ALS). ALS transports are reimbursed at a higher rate by both Medicare and Medicaid. The U.S. and Texas contend Dallas directed its billing contractor to code every 911-dispatched transport at the ALS level, which indicates an ALS service was furnished and/or the patient’s condition necessitated an ALS intervention. The U.S. and Texas believe Dallas caused to be submitted for payment claims falsely representing to Medicare and Medicaid that such ALS services were appropriate and furnished by Dallas personnel when in fact no ALS-service was rendered and/or the patient did not require an ALS transport.
The U.S. and Texas initiated the investigation in response to an August 2009 whistleblower suit brought by Douglas Moore, a former employee of Dallas’ auditing department. Under the False Claims Act and Texas Medicaid Fraud Prevention Act, private individuals may bring actions alleging fraud on behalf of the U.S. and Texas and collect a share of any proceeds recovered by the suit. Mr. Moore can receive up to 30 percent of the recovery under the settlement.
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