Source- http://www.fbi.gov/cincinnati/press-releases/2012/home-health-aide-pleads-guilty-to-health-care-fraud
COLUMBUS—Demantria “Mindy” Hunt, 47, Dayton, a home health aide who worked for several home health service companies, pleaded guilty to turning in false time sheets that resulted in billing the Ohio Medicaid Program $221,234.22 between 2008 and 2011 for home health services that were never delivered.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Edward Hanko, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division (FBI); and Lamont Pugh, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General (HHS), announced the plea entered today before U.S. Magistrate Judge Elizabeth Preston Deavers.
According to a statement of facts presented during the hearing, Hunt worked as a home health care aide for various home care agencies. She admitted to fabricating her time sheets for at least 13 patients, indicating that she provided home care services to these individuals in their homes, when, in fact, she provided little, if any, services on all the days documented. Hunt provided some patients monetary incentives to allow their Medicaid numbers to continue to be billed, even though no services were rendered.
Hunt turned in fabricated timesheets to her employers, specifically: Capital Home Health Care, Central Ohio Elderly Care, Diversity Home Health Care, Continental Home Health Care, Damal Home Care Services, and Serenity Home Health Care, who, based upon the false information indicated on the forms, submitted claims to the Ohio Medicaid Program.
Hunt pleaded guilty to one count of making false statements in health care matters, a crime that is punishable by up to five years in prison, a fine of $250,000, and three years of supervised release. Magistrate Judge Preston Deavers will schedule a date for sentencing.
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Source- http://www.fbi.gov/cleveland/press-releases/2012/health-care-fraud-charges-filed-against-north-randall-company-and-owner
A man who lives in Orange, Ohio, and his home health care company were indicted on a six counts related to overbilling Medicaid and Medicare by more than $2.5 million and knowingly employing a worker who had previously been convicted of health care fraud, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Divyesh C. Patel, a.k.a. David Patel, age 38, and his home health care company, Alpine Nursing Care Inc., located at 4753 Northfield Road, Suite 5, North Randall, Ohio, were each charged with one count of conspiracy to commit health care fraud, four counts of health care fraud, and one count of making a false statement related to a health care benefit plan.
“This defendant enriched himself and his company by flouting rules designed to protect the public,” Dettelbach said. “The indictment details forged signatures and services that were never provided or performed by aides with criminal records, among other violations.”
The indictment alleges that Patel and Alpine employed Belita Mable Bush, a.k.a. Bea Bush, as the office manager and director of provider services from June 1, 2006 through October 18, 2009.
The indictment further charges that in this position, Patel and Alpine employed Bush to prepare and submit the billings to Medicaid and Medicare for reimbursement for services provided by Alpine as a home health care provider, even though Patel knew that Bush had been previously convicted of a health care-related felony that excluded Bush from being involved in any way with Alpine’s Medicaid and Medicare billings.
The indictment also alleges that in addition to the fact that Bush was excluded from handling Alpine’s medical billings, Patel and Alpine were aware that Bush falsified documents related to health care services allegedly provided to home health patients where the services were never provided or were provided by home health aide that had previous criminal convictions that excluded them from providing health services in people’s houses.
As a result of the conspiracy, Medicaid and Medicare suffered a loss of approximately $2,564,392, according to the indictment.
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Source- http://www.justice.gov/opa/pr/2012/August/12-crm-1056.html
WASHINGTON – A Detroit-area resident pleaded guilty today in federal court in the Eastern District of Michigan for his role in managing a $13.8 million psychotherapy fraud scheme, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Jawad Ahmad, 42, pleaded guilty today before U.S. District Judge Gerald E. Rosen in Detroit to one count of conspiracy to commit health care fraud. At his sentencing, scheduled for Nov. 28, 2012, Ahmad faces a maximum potential penalty of 10 years in prison and a $250,000 fine.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge of the FBI’s Detroit Field Office Robert D. Foley III; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
According to court documents, beginning in July 2008, two of Ahmad’s co-conspirators, Tausif Rahman and Muhammad Ahmad, acquired control over a home health care company known as Physicians Choice Home Health Care LLC (Physicians Choice). From in or around January 2009 and continuing through in or around March 2010, Jawad Ahmad managed the operations of Physicians Choice.
Court documents indicate that Jawad Ahmad managed numerous aspects of the fraud at Physicians Choice, including delivering the payment of kickbacks to beneficiary recruiters who obtained Medicare beneficiaries’ information needed to bill Medicare for home health services, including physical therapy and skilled nursing, that were never rendered. Jawad Ahmad also provided information to employees of Physicians Choice to check the billing eligibility of the Medicare beneficiaries before Physicians Choice began billing them.
In exchange for kickbacks, Medicare beneficiaries pre-signed forms and visit sheets that were later falsified to indicate they received home health services they had never received. Jawad Ahmad delivered the pre-signed beneficiary paperwork to various medical professionals, including nurses, physical therapists and physical therapy assistants to create and/or sign fictitious patient files to document purported home health services that were never rendered. From in or around January 2009 through in or around March 2010, Medicare paid more than $5 million for fraudulent home health care claims submitted by Physicians Choice.
According to court documents, from in or around May 2010 through in or around September 2011, Jawad Ahmad managed Phoenix Visiting Physicians PLLC, a company incorporated by co-conspirator Dr. Dwight Smith. Dr. Smith signed home health care referrals for beneficiaries he had not seen or treated. Phoenix employed individuals who held themselves out to be “doctors,” but who were not, in fact, licensed in the state of Michigan to perform any medical services. The unlicensed “doctors” met and purported to examine non-homebound Medicare beneficiaries for home health care services. Jawad Ahmad drove one unlicensed “doctor” to meet and purportedly examine beneficiaries who were not, in fact, homebound.
Between 2008 and 2009, Ahmad's co-conspirators acquired beneficial ownership and control over three additional home health care companies: First Care Home Health Care LLC, Quantum Home Care Inc., and Moonlite Home Care Inc. Each of these home health companies billed Medicare and operated in a manner the same as or similar to Physicians Choice. Each of these companies received fraudulent home health referrals from Dr. Smith through Phoenix Visiting Physicians. From in or around May 2010 through in or around September 2011, Medicare paid more than $5 million for fraudulent home health care claims submitted by Physicians Choice, First Care, Quantum and Moonlite based on Dr. Smith’s fraudulent referrals. The four home health companies at the center of the indictment received approximately $13.8 million from Medicare in the course of the conspiracy.
Eight other defendants have pleaded guilty in this case, including Tausif Rahman and Muhammad Ahmad, who each pleaded guilty to one count of conspiracy to commit health care fraud and one count of money laundering, as well as Dr. Dwight Smith who pleaded guilty to one count of conspiracy to commit health care fraud.
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Source- http://www.fbi.gov/detroit/press-releases/2012/detroit-area-resident-pleads-guilty-to-participating-in-3.1-million-medicare-fraud-scheme
WASHINGTON—A Detroit-area social worker pleaded guilty for his role in a $3.1 million Medicare fraud scheme, the Justice Department, FBI, and Department of Health and Human Services (HHS) announced today.
Gregory Lawrence, 54, of Detroit, pleaded guilty yesterday before U.S. District Court Judge Victoria A. Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.
On July 30, 2012, Lawrence’s co-conspirators Felicia Marsh, 54, and Jamie Moreau, 34, both of Detroit, each pleaded guilty before Judge Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud for their roles in the scheme.
According to plea documents, Lawrence, Marsh, and Moreau were employees at New Century Adult Day Program Services LLC, a purported psychotherapy clinic in Flint, Michigan. From November 2009 to April 2012, New Century used Medicare beneficiary information to bill Medicare for more than $3.1 million in psychotherapy services that were not medically necessary and/or not provided. Court documents reveal that New Century lured Medicare beneficiaries—many of whom were mentally or developmentally disabled—from adult foster care homes and off the street with the promise of seeing a doctor who would prescribe them prescription pain medication. When they arrived at New Century, beneficiaries were told that they must sign up for its psychotherapy program in order to see the doctor. New Century would use the signatures provided by these beneficiaries as a basis to bill Medicare for group and individual psychotherapy purportedly rendered to them. In fact, no psychotherapy was provided.
Court documents show that Lawrence, Marsh, and Moreau played key roles in this scheme. Lawrence was a licensed social worker, who helped direct New Century’s operations and created documents that gave the impression that he had provided psychotherapy, when, in fact, he had not. Lawrence’s provider identification number (PIN) was used by New Century to bill Medicare for group and individual psychotherapy services for approximately $1,247,059, of which Medicare paid approximately $395,060.
Plea documents show that, like Lawrence, Marsh used her training as a social worker to create documents for herself and others to give the impression that New Century had rendered psychotherapy that was not provided. New Century submitted approximately $488,331 in claims using Marsh’s PIN, and Medicare paid New Century approximately $153,333 on these claims.
Court documents show that Moreau collected signatures of Medicare beneficiaries that would be used by New Century to defraud Medicare. Moreau also prepared billing paperwork based upon these signatures. Moreau knew that these signatures were being used at New Century to bill Medicare for psychotherapy services that were not provided. From October 2011 through April 2012, Moreau was responsible for $615,751 of the amount New Century billed Medicare. Medicare paid New Century approximately $192,001 on these claims.
At sentencing, Lawrence, Marsh, and Moreau each face a maximum of 10 years in prison and a $250,000 fine. Lawrence’s sentencing hearing is scheduled for January 29, 2013. The sentencing hearings for Marsh and Moreau are scheduled for January 8, 2013.
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Source- http://www.fbi.gov/losangeles/press-releases/2012/pacific-health-corporation-and-three-of-its-southland-hospitals-agree-to-pay-16.5-million-in-cases-stemming-from-illegal-kickback-scheme
LOS ANGELES—A Los Angeles-based hospital chain has agreed to pay $16.5 million to resolve allegations that several of its subsidiary hospitals participated in an illegal kickback scheme in which so-called marketers were paid to recruit homeless persons from locations such as downtown Los Angeles’ “Skid Row” and bring them to Southland hospitals regardless of medical necessity, which allowed the hospitals to improperly submit bills to Medicare and Medi-Cal.
A global resolution of civil and criminal investigations conducted by the United States and the state of California was announced today when federal prosecutors filed a criminal case against Los Angeles Doctor’s Hospital Inc. (LADH), which has agreed to plead guilty to conspiring to defraud Medicare and Medi-Cal through the payment of illegal kickbacks to the marketers.
“To root out and deter those who seek to exploit publicly funded health care programs, we need to pursue all available remedies—civil, criminal, and administrative,” said United States Attorney André Birotte, Jr. “The guilty plea, civil settlement agreement, and corporate compliance agreement that we are announcing today—the result of efforts of civil and criminal attorneys in my office and officials at the Department of Health and Human Services—reflect this approach and should remind unscrupulous health care providers of our determination to bring to justice those who exploit federal and state public health programs for their personal gain.”
LADH is a subsidiary of Pacific Health Corporation (PHC), which has entered into a deferred prosecution agreement with the United States Justice Department. PHC is also being criminally charged today, but if the company abides by the deferred prosecution agreement, the charges will be dismissed in six years.
PHC; its parent company, Health Investment Corporation (HIC); and three subsidiary hospitals have also entered into a civil settlement agreement with the United States in which the companies agreed to pay $16.5 million to resolve allegations that they participated in the illegal kickback scheme and submitted false claims to Medicare and Medi-Cal. The three PHC hospitals whose conduct was the subject of the state and federal investigations and which are parties to the civil settlement are: Los Angeles Metropolitan Medical Center, Newport Specialty Hospital (formerly known as Tustin Hospital and Medical Center), and Anaheim General Hospital. The first payment related to this settlement was received yesterday.
In the plea agreement and deferred prosecution agreement filed this afternoon in United States District Court, LADH and PCH admitted that from 2003 to 2008, they, along with the three PCH hospitals, paid more than $2.3 million in kickbacks to marketers to recruit patients who were admitted to the hospitals for in-patient care, whether they needed it or not. As a result of this illegal conduct, Medicare and Medi-Cal made nearly $16 million in improper payments to the PHC hospitals.
Among the marketers paid by the PHC hospitals was Estill Mitts, who previously pleaded guilty in federal court to conspiring to recruit homeless people to receive unnecessary health services. According to Mitts’ plea agreement, from 2004 until October 2007, Mitts operated a facility on East Seventh Street in downtown Los Angeles commonly called the Assessment Center. Mitts hired so-called “stringers” to recruit homeless people to participate as patients in the scheme with promises of small payments. Mitts is scheduled to be sentenced by United States District Judge H. King on October 15.
In connection with the criminal plea agreement, the deferred prosecution agreement, and the civil settlement announced today, HIC, PHC, the three hospitals referenced above, and another PHC hospital—Bellflower Medical Center in Bellflower—have entered into a corporate integrity agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services that imposes strict oversight on the four PHC hospitals.
“Hospitals colluding with marketers to fatten profits through illegal referrals for costly and sometimes needless medical services are pocketing millions of taxpayer dollars,” said Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the Office of Inspector General of the U.S. Department of Health and Human Services. “Our agents are monitoring such schemes, and those entering into similar sham contracts should expect investigation and prosecution.”
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Source- http://www.fbi.gov/miami/press-releases/2012/two-home-health-care-nurses-convicted-of-conspiracy-to-commit-health-care-fraud-and-health-care-fraud
Wifredo 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; and Christopher Dennis, Special Agent in Charge, U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), announce that a federal jury in Miami found Odalys Fernandez, of Miami, Florida, and Kelvin Soto, of Hialeah, Florida, guilty of conspiracy to commit health care fraud and health care fraud charges following a one week trial before U.S. District Judge Ursula Ungaro.
The jury convicted Fernandez and Soto each of one count of conspiracy to commit health care fraud in violation of Title 18, United States Code, Section 1349; five counts of health care fraud for Fernandez; and four counts of health care fraud for Soto, in violation of Title 18, United States Code, Section 1347.
According to the evidence presented at trial, Soto and Fernandez were registered nurses (RN) employed by Ideal Home Health, a company that submitted approximately $40 million in false claims to Medicare. As part of their jobs as RNs, Soto and Fernandez purportedly provided skilled nursing services to homebound insulin dependent diabetics who were so ill that they were unable to inject themselves with insulin. Under Medicare regulations, Soto and Fernandez were required to keep records of each and every time they provided a skilled nursing service to a Medicare beneficiary. Between August 17, 2007 and March 19, 2009, the defendants completed hundreds of documents in which they claimed that they had injected Medicare beneficiaries with insulin two times a day, seven days per week. At trial, the evidence showed that at least three of the Medicare beneficiaries that the defendants claimed to be injecting with insulin were not even diabetic. Evidence was also presented showing that beneficiaries were paid $1,000 cash kickbacks in return for agreeing to pretend to need the skilled nursing services. In addition, there was evidence presented that defendant Soto claimed to be providing injections to two and three Medicare beneficiaries at the same time. Based upon the defendants’ false statements, hundreds of thousands of dollars in claims were submitted to Medicare for services that were not medically necessary or actually provided to Medicare beneficiaries.
Sentencing in this case has been set for November 9, 2012. The defendants are facing a statutory maximum of 10 years’ imprisonment as to each count.
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Source- http://www.fbi.gov/neworleans/press-releases/2012/new-orleans-resident-convicted-of-health-care-fraud-and-conspiracy-to-pay-and-receive-illegal-remunerations
BATON ROUGE, LA—United States Attorney Donald J. Cazayoux, Jr. announced today that a Federal Jury on Tuesday, August 21, 2012, convicted Sandra Parkman Thompson, 57, of New Orleans, Louisiana, of health care fraud and conspiracy to pay and receive illegal remunerations.
Thompson faces a maximum sentence of 135 years in prison, fines of $3,500,000, and forfeiture of all proceeds of the health care scheme to defraud.
The convictions are a result of Thompson’s participation in a scheme to defraud, which also included Young and Beatrice Anyanwu, the owners of the Baton Rouge-based company known as Lobdale Medical Services; and Dr. Anthony Stephen Jase, a physician practicing in New Orleans, Louisiana. As part of the scheme to defraud, Thompson and others procured the names and personal information of Medicare beneficiaries in and around the New Orleans area and delivered these names to Dr. Jase, who then signed false and fraudulent prescriptions for power wheelchairs and other durable medical equipment for which the Medicare beneficiaries had no medical need. Thompson subsequently delivered the fraudulent prescriptions to the Anyanwus, who submitted claims to Medicare through Lobdale Medical Services for the medically unnecessary equipment. The total billings to Medicare by Lobdale Medicare Services exceeded $1,000,000.
Thompson, along with the Anyanwus and Doretha Paul Augustus, another recruiter of Medicare beneficiaries, also participated in a conspiracy to pay and receive illegal remuneration for the durable medical equipment billed by Lobdale. The Anyanwus paid Thompson and Augustus a kickback for every claim for power wheelchairs and other durable medical equipment items that were submitted to, and paid by, Medicare. The kickback was based on a percentage of the reimbursement value thereby providing an incentive to recruit beneficiary claims for the most expensive models of durable medical equipment.
Dr. Anthony Stephen Jase pled guilty to the health care fraud scheme to defraud on October 31, 2012. Beatrice and Young Anyanwu pled guilty to the health care fraud scheme to defraud, as well as the illegal remuneration conspiracy, on August 14, 2012.
U.S. Attorney Donald J. Cazayoux, Jr. stated, “We will not tolerate thieves who commit Medicare fraud, as they steal from taxpayers and undermine a vitally important program for our elderly and disabled. As part of a well-coordinated, multi-agency and cross-jurisdictional approach, we will continue to focus on catching those who attempt to defraud the Medicare system and to prosecute them vigorously.”
“I think that hearing from the Medicare recipients themselves made a significant impact on this case,” said Special Agent in Charge William Root. “Hearing from one in particular who now needed a manual wheelchair but was unable to receive one from Medicare because the defendant sold her name to the highest bidder for a power wheelchair prescription disturbed us all.”
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Source- http://www.justice.gov/opa/pr/2012/August/12-crm-1048.html
WASHINGTON – Eight individuals and a Miami-based corporation were convicted by a federal jury for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced today.
Antonio Macli, the owner of Biscayne Milieu Health Center Inc., a mental health care corporation, his son Jorge Macli, Biscayne Milieu’s CEO, and Antonio Macli’s daughter Sandra Huarte, an executive at the company, were each found guilty in U.S. District Court for the Southern District of Florida of one count of conspiracy to commit health care fraud, and one or more substantive counts of health care fraud, conspiracy to commit a health care kickback scheme and conspiracy to commit money laundering and substantive counts of money laundering. Antonio Macli and Jorge Macli were also convicted of substantive kickback counts. Dr. Gary Kushner, the medical director at Biscayne Milieu, was found guilty of conspiracy to commit health care fraud and a substantive count of health care fraud. Rafael Alalu, a therapist, and Jacqueline Moran, who handled Medicare billing for Biscayne Milieu, were each found guilty of conspiracy to commit health care fraud and substantive counts of health care fraud. Anthony Roberts and Derek Alexander, two patient recruiters, were each found guilty of one count of conspiracy to commit a health care kickback scheme, and each was convicted of one health care kickback count.
The defendants were charged in a superseding indictment returned June 5, 2012. Twenty other individuals who worked at Biscayne Milieu have all previously pleaded guilty.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through Biscayne Milieu, a Florida corporation headquartered in Miami that purported to operate a partial hospitalization program (PHP) in that city. Biscayne Milieu purported to provide PHP services, a form of intensive treatment for severe mental illness, for Medicare beneficiaries suffering from mental illnesses. In fact, however, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for PHP services, which were never provided. Many of the beneficiaries admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia or Alzheimer’s disease and would not benefit from group therapy, or had no mental health diagnosis at all. Indeed, some beneficiaries were seeking fraudulent mental health treatment in order to be declared exempt from certain requirements for their applications for U.S. citizenship.
As part of a scheme orchestrated by Antonio Macli, Jorge Macli and Huarte, Biscayne Milieu used fraudulent documents created by Alalu and others and bogus certifications signed by psychiatrists, including Kushner, to bill Medicare for tens of millions of dollars in false and fictitious services. Kushner did not treat patients but rather created and certified false documents to make it appear that ineligible patients were receiving legitimate PHP treatment. In addition, the evidence at trial showed that Alexander and Roberts solicited and received illegal kickbacks in exchange for sending ineligible patients to Biscayne Milieu.
Throughout the course of the fraud conspiracy, beneficiaries who did not qualify for PHP services attended treatment programs that did not provide legitimate PHP services. Biscayne Milieu billed tens of millions of dollars in services to patients who did not need the services and to whom the appropriate services were not provided. According to the evidence, co-conspirators personally altered, and caused the alteration of, patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by Biscayne Milieu were qualified for PHP treatments and that the treatments provided were legitimate PHP treatments. Evidence further revealed that Kushner signed patient files without providing meaningful treatment, and Biscayne Milieu then billed Medicare for millions of dollars in PHP treatment for these patients under his name as the attending physician. Once Biscayne Milieu received reimbursement from Medicare for these fraudulent services, its owners and executives laundered the money through various accounts to launder the proceeds of their illegal scheme.
Kushner and Alalu were remanded into custody. Antonio Macli, Jorge Macli, Huarte, Alexander and Roberts were already in custody.
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Source- http://www.justice.gov/opa/pr/2012/August/12-crm-1032.html
WASHINGTON – The owner of multiple durable medical equipment (DME) companies that operated in Louisiana was sentenced today to serve 180 months in prison for his role in multiple Medicare fraud schemes involving fraudulent claims and illegal kickback payments for unnecessary DME, announced the Department of Justice, the Department of Health and Human Services (HHS), the FBI and the Louisiana State Attorney General’s Office.
Henry Lamont Jones, 37, of Prairieville, La., was sentenced by U.S. District Judge James J. Brady of the Middle District of Louisiana. In addition to his prison term, Jones was sentenced to serve three years of supervised release and ordered to pay $13,397,759 in restitution, jointly and severally with convicted co-defendants.
Jones, along with his ex-wife, Chikenna D. Jones, at various times operated McKenzie Healthcare Solutions Inc., and owned and operated Healthcare 1 LLC, Lifeline Healthcare Services Inc., Medical 1 Patient Services Inc. and Rose Medical Equipment Inc., Louisiana-based companies that fraudulently billed medical equipment to the Medicare program from 2004 to 2010. Jones had also worked as a patient recruiter for Unique Health Solution Inc. For his involvement with Unique, Jones, along with co-defendants Nnanta “Felix” Ngari, Sofjan M. Lamid and Ernest Payne, was convicted of conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay or receive health care kickbacks after a jury trial in August 2011. Henry Jones and Chikenna Jones were convicted of conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay or receive health care kickbacks after a jury trial in November 2011 for their role in the operation of McKenzie Healthcare Solutions Inc., and Jones pleaded guilty to Medicare fraud charges against him relating to the remaining companies in advance of a trial scheduled for February 2012.
In operating the various DME companies, Jones fraudulently billed the Medicare program for medical equipment that either was not medically necessary or not provided. Jones hired patient recruiters to obtain Medicare beneficiary information and prescriptions for medical equipment such as leg braces, arm braces, power wheel chairs and wheel chair accessories. These prescriptions were then used to submit fraudulent claims to the Medicare program.
According to court documents, during the period when Jones was operating Healthcare 1, Lifeline Healthcare Services, Medical 1 Patient Services, Rose Medical Equipment and McKenzie Healthcare Solutions, these companies submitted more than $22.5 million in fraudulent claims to the Medicare program. During the period of time when Jones was a patient recruiter for Unique Medical Solution, the company submitted more than $4.5 million in fraudulent claims to the Medicare program.
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Source- http://www.justice.gov/opa/pr/2012/August/12-crm-1029.html
WASHINGTON – The owner of a Miami-area assisted living facility was sentenced today to serve 30 months in prison for his role in a kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), the Department of Justice, the FBI and the Department of Health and Human Services announced today.
Bobby Ramnarine, 36, was sentenced by U.S. District Judge Donald M. Middlebrooks in the Southern District of Florida. In addition to his prison term, Ramnarine was sentenced to serve two years of supervised release and was ordered to pay $165,881 in restitution, jointly and severally with co-defendants. Ramnarine pleaded guilty on May 22, 2012, to one count of conspiracy to commit health care fraud.
Ramnarine was the owner of an assisted living facility called Elmina Inc., located in Lauderhill, Fla. According to court documents, Ramnarine agreed to send Elmina residents to ATC in exchange for illegal health care kickbacks. ATC purported to operate partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando, Fla. According to court documents, Ramnarine admitted that he knew ATC falsely billed Medicare for PHP treatment based on his fraudulent referrals. Ramnarine also admitted he referred his residents to ATC because he would receive a cash kickback and because his residents had Medicare and were willing to go to ATC. According to the plea agreement, Ramnarine’s participation in the fraud resulted in more than $445,025 in fraudulent billing to the Medicare program.
ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
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Source- http://www.justice.gov/usao/id/news/2012/aug/card08162012.html
BOISE – Christopher Card, 59, of Caldwell, Idaho, pled guilty in United States District Court today to a superseding information charging him with one count of executing a scheme to defraud health care benefit programs, U.S. Attorney Wendy J. Olson announced. Card is a licensed optometrist in Idaho and the former owner, manager and care provider at Total Vision, P.A., in Caldwell.
According to the plea agreement, on various dates between 1993 and August 31, 2010, Card executed a scheme to defraud Idaho Medicaid, Medicare, Blue Cross of Idaho, Regence Blue Shield of Idaho, and the Rail Road Retirement Board (RRB), by making false statements, and by submitting false, fraudulent, and fictitious claims for reimbursement to these health care benefit programs. The total loss to the health care benefit programs and the restitution agreed to by the parties is $1 million.
According to the plea agreement, Card fraudulently billed health care benefit programs, especially Medicaid and Medicare, for false diagnoses, including glaucoma, acquired color deficiency (color blindness), tension headaches, macular degeneration, treatment of eye injuries and removal of foreign objects from the eye. Card billed for testing that did not actually occur and for testing results that were falsified or altered. He admitted that in late October 2008, he altered his fraudulent diagnoses and billing practices when he learned that federal and state health care fraud investigators interviewed a former employee.
According to the plea agreement, 18 patients identified in the original indictment were diagnosed by Card with glaucoma or glaucoma-related conditions. All were subsequently examined by other doctors; only one was determined to actually have the glaucoma or glaucoma related diseases that Card had diagnosed. Card falsely diagnosed the 18th patient, and others, with acquired color deficiency. According to the plea agreement, the patients named in the original indictment were not the only patients for whom Card falsely billed health insurance companies.
The Medicaid program is a Idaho state-administered health insurance program that is approximately 70%, funded by the U.S. Department of Health and Human Services (HHS). The Idaho Medicaid program is a cooperative federal-state program that furnishes medical assistance to the indigent. The program helps pay for reasonable and necessary medical procedures and services, including optical services, to individuals deemed eligible under federal-state low-income programs. Medicare is 100% federally funded and is administered by the Centers for Medicare and Medicaid Services (CMS). Medicare pays for reasonable and necessary medical procedures and services, including vision services. Medicare covers, among others, individuals who are 65 years of age and older.
“Health care providers who submit false billings steal taxpayer dollars and unnecessarily strain our health insurance system,” said Olson. “Their greed drives up the cost of premiums and burdens others. In this case, the defendant's false diagnoses also caused unnecessary emotional stress for patients falsely diagnosed with glaucoma, an eye disease that can result in blindness. I commend the dedicated and thorough investigators who worked cooperatively to identify this fraud.”
“HHS-OIG is committed to protecting the integrity of the Medicare program and we will continue to work with the Department of Justice to seek those who exploit their patients for financial gain,” said Ivan Negroni, Special Agent-in-Charge of the San Francisco Region for the United States Department of Health and Human Services, Office of Inspector General. “We will continue to ensure that those who choose to defraud the Medicare program are held accountable.”
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Source- http://www.justice.gov/usao/can/news/2012/2012_08_07_lawsuit.joined.press.html
SAN FRANCISCO – The United States has joined a whistleblower action pending in the Northern District of California against the federally-qualified health center (FQHC), North East Medical Services (NEMS), alleging that the center under-reported income it received from a managed care organization in order to artificially inflate reimbursements it received from the California Medicaid program, the Justice Department announced today. North East serves the San Francisco Bay area. FQHCs are “safety net” community clinics certified under federal law and licensed under state law to provide medical care to poor and under-served populations. As such a health center, North East Medical Services is entitled to special payments from the California Medicaid program (Medi-Cal) that are significantly more generous than typical Medicaid payments. However, in order to receive these additional payments, NEMS must submit annual reports to Medi-Cal stating the total amount it actually received during the preceding year from any source for treating Medi-Cal enrollees. Medi-Cal then subtracts that amount from the amount that NEMS is entitled to receive as an FQHC and pays NEMS the difference. The government alleges that NEMS significantly under-reported payments it received from a managed care organization for treating Medi-Cal beneficiaries in order to artificially inflate the payments it received from Medi-Cal.
“Filing claims that improperly inflate reimbursement amounts means there are less funds available for people in need,” said Melinda Haag, U.S. Attorney for the Northern District of California. “My office views the actions this defendant allegedly committed as a serious breach of the responsibilities healthcare organizations owe to people in need of medical care and also to the taxpayers who fund these programs. We are committed to doing everything in our power to protect the integrity of the healthcare system.”
“As health care costs continue to rise, it is more important than ever that health care providers report accurate information to federal and state health care programs,” said Stuart Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice is committed to cracking down on improper accounting practices such as those alleged in this case, which undermine the integrity of these health care programs and increase the costs of health care for the rest of us.”
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Amarillo — Dr. Michael David Goodwin, 63, an orthodontist who practices in Amarillo, Texas, and Crown Point, Indiana, has been charged in a federal indictment with 11 counts of health care fraud, alleging that he defrauded the Texas Medicaid program of approximately $1.5 million, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the indictment that was returned by a federal grand jury today, approximately 90 to 95 percent of Goodwin’s orthodontics’ patients were Medicaid beneficiaries. The Texas Medicaid program provides orthodontic services for Medicaid beneficiaries who fit the following criteria: 1) children who are 12 years old and older with severe handicapping malocclusions; 2) children who are up to 20 years old with cleft palate; or 3) other special medically necessary circumstances, including crossbite therapy and head injury involving severe traumatic deviation.
The indictment alleges that from January 2008 through March 2011, Goodwin devised a scheme to defraud the Texas Medicaid program by billing the program more than $2 million for services he claimed he provided, when in fact, as he well knew, some of the services were not medically necessary, or dental assistants provided those services when no dentist or orthodontist was present to supervise, and even when present, did not directly supervise or provide any services. As a result of this scheme, Medicaid paid more than $1.5 million for claims filed by Goodwin.
As part of his scheme, according to the indictment, Goodwin practiced orthodontic dentistry approximately two weeks each month at Goodwin Orthodontics in Amarillo and approximately two weeks each month at his Indiana office. In order to maximize the number of Medicaid patients seen, employees regularly scheduled more than 100 patients per day and intentionally scheduled large numbers of Medicaid patients for days when Goodwin was scheduled to be out of town. To accommodate the large volume of patients, Goodwin directed dental assistants to perform impermissible acts, including comprehensive examinations, diagnoses and treatment planning for Medicaid patients when he knew that only licensed dentists were permitted to perform those acts. In many cases, dental assistants installed Medicaid patients’ braces before Goodwin had ever examined the patients, yet his instructed employees and billing staff to falsely state on Medicaid claims that he was the performing provider for all services impermissibly delegated to and performed by dental assistants.
He also allegedly submitted, or had his employees submit, forms to Medicaid that falsely and fraudulently represented that beneficiaries had been examined by Goodwin and had a medical necessity for braces, when in fact the treatment was for cosmetic purposes only and did not qualify for Medicaid reimbursement. He instructed his billing staff to falsely and fraudulently represent on Medicaid claims that there was medical necessity on all claims for all services billed for Medicaid beneficiaries whose treatment was merely for cosmetic purposes and was without medical necessity.
The indictment also alleges that Goodwin hired substitute general dentists, who were not enrolled Medicaid orthodontic providers, to create the appearance of direct supervision of dental assistants when he was away from the office. These substitutes did not provide services to Medicaid beneficiaries, did not directly supervise the dental assistants who provided the services, and were not always present in the office for orthodontic procedures.
Goodwin did not furnish services to Medicaid beneficiaries to the same extent as other patients. According to the indictment, he personally examined patients who paid cash for their orthodontic treatment at virtually every scheduled appointment, while he only examined Medicaid patients every third appointment, or less.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each health care fraud count carries a maximum statutory sentence of 10 years in prison and a $250,000 fine. Restitution could also be ordered.
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Source- http://www.justice.gov/usao/mow/news2012/mccarty.ple.html
KANSAS CITY, Mo. – David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced today that a psychologist practicing in the Lebanon, Mo., area pleaded guilty in federal court today to engaging in a $1 million scheme to defraud Medicare and Medicaid.
Rhett E. McCarty, 67, of Lake Ozark, Mo., pleaded guilty before U.S. District Judge Howard F. Sachs to health care fraud and to forgery.
McCarty is a licensed psychologist and private practitioner who provided psychotherapy services to recipients of both Medicare and Medicaid in their homes in the Lebanon area.
Between Sept. 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. 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, based on an estimate of the services he did provide, 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.
By pleading guilty today, McCarty must forfeit to the government $1 million, which represents the proceeds of the fraud scheme.
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Source- http://www.justice.gov/opa/pr/2012/August/12-crm-1002.html
WASHINGTON – The owner of a Miami health care agency pleaded guilty today for his participation in a $60 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Rodolfo Nieto Jr., 40, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to defraud the United States and to receive health care kickbacks.
According to the court documents, Nieto was the owner and operator of Ronat Home Health Care Inc. According to court documents, during the time of the conspiracy, Ronat was a Florida home health “staffing agency” that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. Ronat subsequently became a home health agency.
According to court documents, from approximately January 2006 to approximately November 2009, Nieto accepted kickbacks in return for recruiting Medicare beneficiaries to be placed at Nany Home Health Inc., a Miami home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. The owners and operators of Nany paid Nieto kickbacks in return for allowing Nany to bill the Medicare program on behalf of the patients Nieto had recruited through Ronat. Specifically, as part of the scheme, Nany billed Medicare for home health services purportedly provided by Ronat.
In a related case, on April 25, 2012, Roberto Gonzalez and Olga Gonzalez, president and vice president of Nany, and their son, Fabian Gonzalez, all of whom operated Nany, were sentenced to 120, 87 and 87 months in prison, respectively, following their Dec. 19, 2011, guilty pleas to one count each of conspiracy to commit health care fraud. From approximately January 2006 through November 2009, Roberto, Olga and Fabian Gonzalez and their co-conspirators submitted approximately $60 million in false and fraudulent claims to Medicare, and Medicare paid approximately $40 million on those claims.
At sentencing, scheduled for Oct. 23, 2012, Nieto faces a maximum penalty of five years in prison and a fine of $250,000 or twice the pecuniary gain or loss.
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Source- http://www.justice.gov/opa/pr/2012/August/12-crm-1001.html
WASHINGTON – A Miami-area patient broker was sentenced today to 18 months in prison for recruiting Medicare beneficiaries as part of a $200 million Medicare fraud scheme, the Department of Justice, FBI and Department of Health and Human Services announced.
Jean-Luc Veraguas, 51, of Plantation, Fla., was sentenced by U.S. District Judge Frederico A. Moreno in the Southern District of Florida. In addition to his prison term, Veraguas was ordered to pay $1.8 million in restitution, jointly and severally with other co-conspirators.
On May 30, 2012, Veraguas pleaded guilty to one count of conspiracy to commit health care fraud. Veraguas admitted to serving as a patient broker for American Therapeutic Corporation (ATC) and other health care agencies. ATC operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
According to court documents, Veraguas recruited patients to attend ATC’s PHP program, among others, in exchange for illegal kickbacks. Veraguas admitted that based on his recruiting efforts, he caused $3.8 million in fraudulent bills to Medicare. Veraguas admitted he knew many of the individuals he recruited did not need the treatment they purported to have received.
According to court filings, ATC’s owners and operators paid millions of dollars in kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC. According to court filings, co-conspirators fabricated documents in patient files to hide the fact that the patients did not, in the first instance, qualify for treatment and did not ultimately receive the treatment for which Medicare was billed.
ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
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Source- http://www.justice.gov/usao/nye/pr/2012/2012aug15.html
A federal jury in Central Islip today convicted the owner of a Long Island medical supply company of a $10.7 million Medicare fraud and wrongful disclosure of private patient information.
The conviction of Helene Michel of Old Brookville, New York, was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Janice K. Fedarcyk, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office, and Thomas O’Donnell, Special Agent-in-Charge of Health and Human Services (HHS), Office of the Inspector General (OIG), Office of Investigations, New York.
The evidence at trial established that over the course of four and a half years the defendant stole private patient information from various nursing homes on Long Island and then submitted thousands of fraudulent claims to Medicare. The claims sought payment for services and equipment that were never provided by the defendant’s company, Medical Solutions Management, Inc., of Hicksville, New York. Among the fraudulent claims proven at trial was the defendant’s demand for reimbursement for supplying boots and braces to an elderly patient who was in fact an above-the-knee double-amputee.
The defendant then used the proceeds of the scheme to purchase a $2.2 million home in Old Brookville, New York, as well as to fund a pension plan for herself and an investment brokerage account collectively worth $2 million.
The defendant, who used the alias “Dr. Elene Allonce,” among others, was charged in a three-count superseding indictment in March 2012 with conspiracy, health care fraud and wrongful disclosure of patient information in violation of the Health Insurance Portability and Accountability Act, commonly known as “HIPAA.” The case represents one of the first criminal prosecutions in the nation for wrongful disclosure of patient information under HIPAA.
“To this defendant, the elderly were not patients to be helped, but pawns to be exploited for personal gain. Invasion of patient privacy and fraud against the health care program that the elderly depend upon are intolerable,” said United States Attorney Lynch. “Let today’s verdict stand as a warning to all that we will tenaciously investigate violators, protect patient rights and vindicate the hard-earned support taxpayers provide the Medicare program.” Ms. Lynch expressed her appreciation to Health and Human Services, Office of the Inspector General, Office of Investigations, New York, for its assistance.
FBI Assistant Director-in-Charge Fedarcyk stated, “The defendant showed no regard for patients’ privacy rights when she stole their personal identity information to file false medical claims. She padded her own pockets at the expense of the Medicare kitty. The verdict today should serve as a warning to those who disregard privacy laws to defraud publicly funded programs meant to help our seniors.”
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Source- http://www.fbi.gov/denver/press-releases/2012/former-husband-and-wife-sentenced-for-fraudulent-health-care-billing-scheme
DENVER—Leonid and Yelena Stolyar, both age 51, and both of Denver, Colorado, were sentenced by U.S. District Court Judge Philip A. Brimmer to serve 35 months and 37 months, respectively, in federal prison for conspiracy to commit health care fraud and money laundering, federal and state authorities announced. Following their prison sentencing, Leonid and Yelena were ordered to spend three years on supervised release. Judge Brimmer also ordered the Stolyar’s to forfeit a secondary residence and pay restitution totaling over $480,000 to the Colorado Medicaid program. Leonid was sentenced on July 27, 2012, and was immediately taken into custody. Yelena was sentenced today and will surrender herself upon designation of a facility by the Bureau of Prisons.
Leonid and Yelena Stolyar were indicted by a federal grand jury in Denver on January 3, 2011. They plead guilty before Judge Brimmer on March 22 and 27, 2012, respectively.
According to the stipulated facts contained in the plea agreements, in 2000 and 2001, Yelena Stolyar (sometimes referred to herein as Yelena) was prosecuted for health care fraud by the United States Attorney’s office for the District of Colorado. Her fraud stemmed from false billing allegations while she operated a durable medical equipment company known as Medcenter Supply. Medcenter Supply was an assumed name for Y&L corporation, a business Yelena Stolyar and Leonid Stolyar (sometimes referred to herein as Leonid or Leon) incorporated in the state of Colorado. Yelena Stolyar was sentenced August 14, 2001, by the Honorable Judge Sparr to five years’ probation. Approximately one month prior to her sentencing, the business known as Medcenter Supply began doing business as Orthomed Supply (sometimes referred to herein as Orthomed). In fact, Medicaid began receiving bills under the Orthomed Supply name for items previously associated with Medcenter Supply in August 2001.
Two weeks after sentencing, on August 29, 2001, Leon Stolyar incorporated Orthomed Supply Inc. (“Orthomed” herein) with the Secretary of State of Colorado. Thereafter, the business previously known as Medcenter Supply did business as Orthomed. However, nothing changed, the business was run by Yelena and Leonid Stolyar, the same as before the sentencing. Yelena and Leonid Stolyar anticipated an exclusion order was forthcoming and merely changed the business name so as to remove Yelena as a principal of the business and billed under the new business entity, Orthomed; in actuality, Yelena continued to manage the business the same as before her conviction and exclusion from the Medicare and Medicaid programs.
Leonid and Yelena Stolyar submitted false and fraudulent claims for durable medical equipment, items including incontinence products, ankle supports, knee supports, shoulder supports, amongst other items, with the Medicare and Colorado Medicaid Programs in order to obtain money to which the defendants were not entitled during a period of time that Yelena Stolyar was excluded from participation in the Colorado Medicaid program, the Medicare program, and all federally funded health benefit programs.
In November 2005, the Stolyars were divorced and the divorce decree memorialized her one-half interest in Orthomed. The decree also called for alimony payments to Yelena relative to her interests in Orthomed. Coincidentally, one month later, in December 2005, the Department of Health and Human Services settled a dispute with Yelena Stolyar relative to her billing of federal programs while under her previous 10-year exclusion. She agreed to a lifetime exclusion. However, she continued to participate in Orthomed the same as before this second exclusion. Their fraudulent conduct continued until the execution of a federal search warrant in 2009.
Colorado Medicaid paid approximately $3.8 million to Orthomed and the Stolyars between December 2001 and May 2009. Meanwhile, the Medicare program paid over $500,000 between December 2001 and August 2009. Many of the cooperating beneficiaries indicate they received items falsely billed to Medicare or Medicaid or items never received from the Stolyars. In June 2009, a search warrant was executed at Orthomed, where many of the Orthomed beneficiary files seized indicated falsely that legitimate products and items were provided to the beneficiaries. Subsequent to search warrant, Yelena told a cooperating witness to falsely tell law enforcement that Yelena never worked at Orthomed.
“The FBI will continue to protect taxpayers by aggressively investigating those who attempt to defraud government-sponsored health care programs,” said FBI Denver Special Agent in Charge James Yacone. “We are fully committed to working with our federal and state partners to combat health care fraud and pursue the stiffest sentences possible.”
“Health care fraud harms everyone as it increases the costs of legitimate health care for everyone,” said Lilia Ruiz, Acting Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office. “IRS-Criminal Investigation together with our federal, state, and local partners will work aggressively to pursue health care fraud criminals and bring them to justice.”
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Source- http://www.justice.gov/opa/pr/2012/August/12-civ-996.html
The Department of Justice announced the guilty plea and sentencing of Easley, S.C.-based Altec Medical for engaging in a multi-million dollar prescription drug scheme. Altec Medical pleaded guilty in U.S. District Court in Miami to one count of conspiring to defraud the U.S. Food and Drug Administration (FDA) and to commit federal offenses in connection with a drug-diversion scheme that lasted from 2007 to 2009.
In the sentencing, U.S. District Judge Robert N. Scola, Jr. ordered Altec to pay a $2 million fine and to forfeit $1 million. The judge also ordered the company to be on probation for one year.
In a criminal information filed with the court, the government charged that Altec paid its supplier and co-conspirator William D. Rodriguez, approximately $55 million for prescription drugs that it knew had been diverted from lawful channels of drug wholesale distribution. “Drug Diversion” refers to various ways in which prescription drugs are removed from lawful channels of distribution and then reintroduced into the marketplace for sale to consumers. In drug diversion schemes, prescription drugs at issue are often stolen from warehouses or cargo trucks; torn from boxes of free samples, repackaged and resold; or bought from individual patients looking to make extra money.
“Drug diversion undermines the safety and effectiveness of our prescription drug system,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “When individuals divert drugs from lawful channels, we cannot be sure that the drugs are properly handled and stored. As a result, diverted drugs could be expired, become contaminated, or have their mechanisms of action altered. Diversion is a serious crime that puts consumers at risk; we will continue to prosecute those who engage in it aggressively.”
The Justice Department advises consumers who have concerns about a drug to check the lot numbers on the manufacturer’s web site to see if there are any warnings about it.
According to a plea agreement that was filed with the court, Altec became aware that Rodriguez had bought these drugs from individuals who had acquired them illegally and who were not properly licensed to sell prescription drugs on a wholesale basis. The government further charged that Altec and Rodriguez orchestrated the reentry of these drugs into the lawful channels of distribution. According to the government, Rodriguez first sent the diverted drugs to companies he controlled in South Carolina. His companies, in turn, resold the drugs to Altec, which, in turn, resold the drugs to various purchasers throughout the United States, including drug distributors with valid drug distribution licenses. This process caused reentry of the diverted drugs into the ordinary, lawful channels of distribution. Eventually, the diverted drugs were bought by retail pharmacies, which dispensed the drugs by filling prescriptions for individual consumers.
Finally, the government charged that Altec and Rodriguez attempted to conceal their scheme by falsifying a variety of business records. In particular, Altec and Rodriguez falsified documents known as “drug pedigrees.” Drug pedigrees are statements required by the FDA of all those who sell wholesale quantities of prescription drugs. The drug pedigrees are supposed to accurately identify all prior sales and transactions so that it is clear that the drugs have been acquired lawfully, and properly stored and held along the way. Despite knowing that the law required accurate pedigrees, Altec admitted that it created pedigrees that falsified prior transactions to make it appear as though the drugs had originally been acquired lawfully.
Use of diverted drugs can cause unpredictable adverse side effects and may fail to treat the condition for which a consumer is taking the drugs. According to the government, neither purchasers who bought from Altec nor consumers who later bought the drugs at retail pharmacies would have purchased the drugs had they known that the drugs had been diverted.
In June 2012, in U.S. District Court in Miami, Rodriguez pleaded guilty to conspiracy and money laundering in a separate case charging him with, among other things, his role in this drug diversion scheme. He has not yet been sentenced.
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