Source- http://www.justice.gov/usao/can/news/2013/2013_04_30_crihb.settles.press.html
SAN FRANCISCO - The California Rural Indian Health Board Inc. (“CRIHB”), a nontribal entity and grantee of the U.S. Department of Health and Human Services (“HHS”), Substance Abuse and Mental Health Services Administration (“SAMHSA”), agreed to pay the United States $532,000, and to be terminated from an existing SAMHSA grant, thereby relinquishing funds valued at over $4.6 million, announced United States Attorney Melinda Haag. In addition, CRIHB will be subject to certain administrative conditions imposed by SAMHSA, and will not be eligible to apply for any new SAMHSA funding opportunities for two federal fiscal years.
The settlement resolves a lawsuit filed against CRIHB in July 2012 by the U.S. Attorney’s Office under the federal False Claims Act, 31 U.S.C. §§ 3729-33. The United States alleged that CRIHB submitted false claims by, among other things, eliminating the substance abuse screening and assessment required of certain Access to Recovery (“ATR”) program applicants, and instructing ATR service providers to pay for prohibited expenses, such as the clients’ rent, mortgage, utilities, and auto repairs. The lawsuit further alleged that CRIHB instructed the ATR service providers to bypass voucher rules, all contrary to the terms of the ATR grant and HHS regulations.
“This settlement is a victory for all ATR clients who need substance and alcohol abuse treatment and recovery support. It sends a clear message that my office is committed to ensuring that federal grant funds are used for their intended purpose.” U.S. Attorney Haag said.
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Source- http://www.justice.gov/usao/gas/press_releases/2013/20130426_Moskovian.html
BRUNSWICK, GA: AVETIK MOSKOVIAN, 46, an Armenian National, plead guilty Tuesday before Chief United States District Court Judge Lisa Godbey Wood to his role in a conspiracy launder approximately $1.5 million in funds defrauded from Medicare through a phony medical business in Brunswick, Georgia.
MOSKOVIAN, who resided in Los Angeles until the time of his arrest and was here in the United States on a permanent residence card from Armenia, pleaded guilty to Money Laundering Conspiracy in violation of Title 18, United State Code, Section 1956(h), before Chief United States District Court Judge Lisa Godbey Wood.
According to the evidence presented at MOSKOVIAN’S guilty plea hearing:
From 2007 through 2008, various conspirators defrauded Medicare through a durable medical equipment company in Brunswick, Georgia, known as Brunswick Medical Supply. These conspirators submitted millions of dollars in phony claims for health care services that were never provided. The evidence showed that the conspirators stole the identities for doctors and patients from multiple different states, including Alaska, California, New York, and Ohio, and even submitted claims for people that were deceased at the time that he claimed to have provided them the medical equipment.
Once Medicare paid for these phony claims, MOSKOVIAN and other took numerous steps to launder the stolen money. MOSKOVIAN helped form at least four sham businesses in Los Angeles, opened multiple bank accounts in the names of these businesses, and used these bank accounts to launder the proceeds of the fraud at Brunswick Medical Supply. MOSKOVIAN engaged in multiple financial transactions within these accounts, including wire transfers and counter withdrawals of tens of thousands of dollars in cash, as part of his effort to help hide the money defrauded from Medicare.
MOSKOVIAN now faces a maximum statutory penalty of up to twenty (20) years in prison; a fine up to $500,000; and 5 years of supervised release. His sentencing will be scheduled after the United States Probation Office completes a presentence investigation.
United States Attorney Edward J. Tarver said, “Moskovian and others in this criminal organization thought that they could exploit Medicare to steal from this nation’s taxpayers and then avoid detection through this defendant’s money laundering operations. They were wrong. With this money laundering conviction, this Office and its law enforcement partners have taken another important step towards cleaning up the fraud in our nation’s health care programs.”
Derrick L. Jackson, Special Agent in Charge of the Atlanta Region for the Office of Inspector General of the Department of Health and Human Services, said “Avetik Moskovian engaged in a scheme to defraud Medicare by conducting numerous financial transactions with money that was generated through unlawful activity. The OIG strongly pursues those who abuse government healthcare programs for financial gain.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI remains very committed toward providing the much needed investigative resources in protecting such federally funded programs like Medicare from fraud and abuse. Mr. Moskovian, in diverting those public funds to his personal bank account, denied other individuals the health care that those funds were intended for.”
The prosecution of MOSKOVIAN was part of a multi-jurisdictional investigation involving more than $100 million worth of phony claims submitted to Medicare. More than 35 defendants were charged as part of this investigation in Brunswick, Georgia, New York, Los Angeles, Cleveland and Albuquerque. The investigation in the Southern District of Georgia was the result of a multi-agency team of federal, state and local agents, led by the FBI and HHS-OIG), working together to combat health care fraud.
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Source- http://www.justice.gov/opa/pr/2013/April/13-crm-475.html
A federal jury today convicted a Miami-area supervisor of a mental health care company, Health Care Solutions Network (HCSN), for helping to orchestrate a fraud scheme that crossed state lines and that resulted in the submission of more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
The announcement was made by Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigation’s Miami office.
After a five-day trial, a jury in the Southern District of Florida found Wondera Eason, 51, guilty of conspiracy to commit health care fraud. Sentencing is scheduled for July 8, 2013.
Eason was employed as the Director of Medical Records at HCSN’s Partial Hospitalization Program (PHP). A PHP is a form of intensive treatment for severe mental illness. In Florida, HCSN operated community mental health centers at two locations. After stealing millions from Medicare and Medicaid in Florida, HCSN’s owner, Armando Gonzalez, exported the scheme to North Carolina, opening a third HCSN location in Hendersonville.
Evidence at trial showed that at all three locations, Eason, a certified medical records technician, oversaw the alteration, fabrication, and forgery of thousands of documents, which purported to support the fraudulent claims HCSN submitted to Medicare and Florida Medicaid. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. Eason directed therapists to fabricate documents, and she also forged the signature of therapists and others on documents that she was in charge of maintaining. Eason interacted with Medicare and Medicaid auditors, providing them with false and fraudulent documents, while certifying the documents were accurate.
The “therapy” at HCSN oftentimes consisted of nothing more than patients watching Disney movies, playing bingo and having barbeques. Eason directed therapists to remove any references to these recreational activities in the medical records.
According to evidence at trial, Eason was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Eason also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease.
From 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and 12 defendants have pleaded guilty. On Monday, Feb. 25, 2013, Gonzalez was sentenced to serve 168 months in prison for his role in the scheme. Alleged co-conspirators Alina Feas and Lisset Palmero are scheduled for trial on June 3, 2013. Defendants are presumed innocent until proven guilty at trial.
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Source- http://www.justice.gov/opa/pr/2013/April/13-crm-471.html
A Southern California physician, a durable medical equipment (DME) supply company employee and a health care professional were found guilty late yesterday by a federal jury in Los Angeles for their roles in a $1.5 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Criminal Division; U.S. Attorney for the Central District of California André Birotte Jr.; Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Glenn R. Ferry, Special Agent in Charge of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).
Godwin Onyeabor, 49, of Ontario, Calif., Sri J. Wijegunaratne, 58, of Anaheim, Calif., and Heidi Morishita, 48, of Valencia, Calif., were each found guilty in U.S. District Court in the Central District of California of one count of conspiracy to pay and receive kickbacks. Wijegunaratne was also found guilty of conspiracy to commit health care fraud and six substantive counts of health care fraud. Onyeabor was also found guilty of conspiracy to commit health care fraud and 11 substantive counts of health care fraud.
The trial evidence showed that between January 2007 and February 2012, Onyeabor, an officer at Fendih Medical Supply Inc., a DME supply company located in San Bernadino, Calif., and others paid cash kickbacks to Wijegunaratne, a physician, and Morishita for fraudulent prescriptions for DME, including power wheelchairs. The evidence showed that Wijegunaratne wrote prescriptions for power wheelchairs and other DME that Medicare beneficiaries did not need and sometimes never used. After receiving prescriptions from Wijegunaratne and Morishita, Onyeabor and others used the prescriptions to fraudulently bill Medicare for the medically unnecessary DME.
At trial, several Medicare beneficiaries testified that they were lured to medical clinics with the promise of free items such as vitamins and juice, only to receive power wheelchairs that they did not need and did not want. The beneficiaries further testified that their attempts to reject delivery of the power wheelchairs from Onyeabor’s supply company were unsuccessful.
As a result of this fraud scheme, Onyeabor, Wijegunaratne and others submitted and caused the submission of approximately $1.5 million in false and fraudulent claims to Medicare, and received almost $1 million on those claims.
At sentencing, scheduled for Sept. 9, 2013, Onyeabor, Wijegunaratne and Morishita face a maximum penalty of 10 years in prison and a $250,000 fine for each count.
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Source- http://www.justice.gov/usao/ncw/pressreleases/2013/Charlotte-2013-04-25-curte.html
CHARLOTTE, N.C. – The former owner of Wilkesboro Clinical Laboratory (“WCL”) pleaded guilty today in U.S. District Court for his involvement in a health care fraud scheme in which he and his company billed Medicare for services which were not rendered, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Louis Francis Curte, 49, also admitted he filed false tax returns from 2007 to 2010.
In a separate civil settlement with the U.S. Attorney’s Office, Curte also agreed to pay $300,000 to resolve civil fraud allegations that he and his company violated the Physician Self-Referral Act or “Stark Law.”
U.S. Attorney Tompkins is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
Curte appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to four counts of health care fraud and one count of filing a false tax return. According to court documents and today’s plea hearing, Curte was the owner and operator of Wilkesboro Clinical Laboratory (“WCL”), which was enrolled with the Medicare program and provided microbiology and other laboratory services. Court records show that from at least 2007 to in or about 2009, Curte defrauded Medicare by submitting false and fraudulent claims for microbiology services which were never rendered.
Court documents indicate that Curte and WCL used another company (“Company #1”) for certain types of microbiology testing that could not be performed by WCL in-house. Court records show that WCL generally submitted specimens to Company #1 to test for the presence of infection-causing bacteria. If an infection was present in a specimen, Company #1 then typically performed one or two additional tests to identify the type of pathogen present (“identification test”) and the type of antibiotic to which the pathogen was susceptible (“susceptibility test”).
Pursuant to the scheme to defraud, Curte routinely billed Medicare for identification and susceptibility tests, when, in fact, no such tests were performed and even when the initial testing indicated that no pathogen was actually present in the specimen. According to the plea agreement, the intended loss to Medicare by the defendant was between $10,000 and $30,000.
At today’s hearing, Curte also pleaded guilty to filing false tax returns for the years 2007 through 2010. According to filed documents and court proceedings, Curte filed false tax returns which substantially understated his gross income, and therefore, the tax owed to the United States. Court records indicate that Curte maintained false books in an attempt to mask a prohibited business relationship with a physician, identified in court documents as Dr. T.M. According to the plea agreement, the amount of tax loss was more than $30,000 but less than $50,000.
At sentencing, Curte faces a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges and a maximum term of three years in prison and a $250,000 fine for the tax fraud charge. In his plea agreement, Curte agreed to pay full restitution to Medicare and to IRS for any losses. The final restitution amount will be determined by the Court at Curte’s sentencing hearing, which has not been scheduled yet. Curte has been released on bond pending sentencing.
Curte’s prohibited relationship with Dr. T. M. forms the basis for Curte’s civil settlement agreement. According to the civil settlement agreement, from January l, 2006 through April 30, 2009 Curte and WCL violated the Stark Law by knowingly having a prohibited financial relationship with Dr. T.M.
Dr. T.M. owned and operated a billing company, now defunct, which submitted all of WCL’s reimbursement claims to Medicare. Dr. T.M.’s billing company was paid on a “per claim” basis for the reimbursement claims submitted to Medicare on behalf of WCL. As an owner of the billing company, Dr. T.M. benefitted directly from WCL’s payments to his billing company. Investigators also found that Dr. T.M. referred blood and tissue specimens to WCL for pathology testing.
The Stark Law forbids a medical provider from billing Medicare and Medicaid for certain services referred by physicians who have a financial relationship with the medical provider. A prohibited financial relationship includes an agreement between the medical provider and a physician to compensate the physician based on the volume of the physician’s referrals or the revenue realized through those referrals.
Under the terms of the settlement agreement, Curte is required to reimburse the government for the amount he wrongfully received from Medicare in violation of the Stark Law and to pay penalties back to the program, for a total of $300,000.
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Source- http://www.justice.gov/opa/pr/2013/April/13-crm-467.html
An employee of Detroit medical service companies that fabricated patient visit notes and other documents as part of a $24 million home health care fraud scheme pleaded guilty today for her role in the conspiracy, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.
Dana Sharma, 30, of Detroit, pleaded guilty before U.S. District Judge Denise Hood in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.
According to court documents, Sharma worked at purported home health companies, including First Choice Home Health Care Services Inc. and Reliance Home Care LLC, where she and other conspirators agreed to submit false and fraudulent claims to Medicare for home health services. Court documents reveal that, among other things, Sharma organized and maintained company patient files, knowing that these files contained falsified patient visit notes that created the false impression that home health care had been provided to patients. Sharma admitted that she knew that these documents would be used by these companies to submit claims to Medicare for home health services that were not medically necessary and/or not provided.
Court documents allege that between January 2007 and May 2012, Sharma’s conduct caused home health companies to submit claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay these companies approximately $923,286.
At sentencing, scheduled for Aug. 1, 2013, Sharma faces a maximum penalty of 10 years in prison and a $250,000 fine.
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Source- http://www.justice.gov/usao/txe/News/2013/edtx-hcf-mahmood-042313.html
TYLER, Texas – A Dallas County, Texas, physician has been arrested and charged with health care fraud violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Tariq Mahmood, 61, of Cedar Hill, Texas, was indicted by a federal grand jury on April 11, 2013, and charged with conspiracy to commit health care fraud and seven counts of health care fraud. Mahmood went before U.S. Magistrate Judge John D. Love today for an initial appearance.
According to the indictment, Mahmood, a general practitioner, owned and operated several hospitals in the state of Texas, including Cozby Germany Hospital in Grand Saline, Renaissance Terrell Hospital in Terrell, Central Texas Hospital in Cameron, Community General Hospital in Dilley, and Shelby Regional Medical Center in Center. From April 2010 to April 2013, Mahmood and others are alleged to have carried out a scheme to defraud Medicare and Medicaid through the submission of false and fraudulent claims. Mahmood and others added, changed, deleted, and incorrectly sequenced diagnostic codes in a way that did not reflect the actual diagnoses and conditions of the patients. They submitted false and fraudulent claims to Medicare and Medicaid based on the added, changed, deleted, and incorrectly sequenced diagnostic codes. By means of fraudulent billing practices, the defendant and his co-conspirators are alleged to have unlawfully submitted false claims of more than $1.1 million and obtained more than $375,000.
If convicted, Mahmood faces up to 10 years in federal prison for each charge.
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Source- http://www.justice.gov/usao/dc/news/2013/apr/13-141.html
WASHINGTON – Tina Jackson-White, the owner and president of Family Home Medical Equipment and Supplies, LLC, pled guilty today to a federal charge of health care fraud stemming from a scheme in which the firm submitted and collected more than $200,000 in fraudulent Medicaid claims.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS - OIG) for the region including the District of Columbia, and Charles J. Willoughby, District of Columbia Inspector General.
Jackson-White, 51, of Bowie, Md., pled guilty in the U.S. District Court for the District of Columbia. The Honorable Amy Berman Jackson scheduled sentencing for July 9, 2013. Jackson-White faces a statutory maximum of 10 years in prison and financial penalties. Under federal sentencing guidelines, the parties have agreed that she faces a likely range of 24 to 30 months of incarceration and a fine of up to $50,000. As part of her plea agreement, Jackson-White has agreed to pay $212,893 in restitution to the District of Columbia Medicaid program.
According to a statement of offense, signed by the defendant as well as the government, Family Home Medical Equipment and Supplies provided durable medical equipment, or DME, such as adult incontinence supplies and other medical products to Medicaid beneficiaries in the District of Columbia and Maryland. Under Medicaid rules, the company would pay for the cost of the products supplied to beneficiaries and then submit claims for reimbursement.
Between January 2007 and December 2011, the company billed D.C. Medicaid for a total of $212,893 in fraudulent claims. The claims, knowingly submitted by the defendant, were for incontinence products, such as briefs, diapers and liners, which were not actually provided.
“Medicaid is designed to provide low-income families and people with disabilities with access to critical health care,” said U.S. Attorney Machen. “Over five years, this business owner defrauded the Medicaid program by submitting bills for more than $200,000 in supplies that were never delivered. This prosecution illustrates our commitment to fighting the fraud that undermines the integrity of federal health care programs and diverts resources intended to serve our neighbors in need.”
“Instead of providing medical supplies to citizens in the District of Columbia and Maryland, Ms. Jackson-White intentionally manipulated our Medicaid system and pocketed the money from claims she submitted,” said Assistant Director in Charge Parlave. “Along with our partners at HHS-OIF and DC-OIG, the FBI will continue to pursue all such fraudulent schemes which damage the ability of health care providers, employers and patients to participate in a system free of fraud and dishonesty.”
“As demands on the D.C. Medicaid program increase even as resources remain scarce, fraud is less tolerable than ever”, said HHS-OIG Special Agent in Charge DiGiulio. “Criminals such as Jackson-White will be brought to justice through aggressive investigation and prosecution.”
“This matter again represents how the District can work together with its federal colleagues in law enforcement to protect the interests of its citizenry and the public treasury,” said Inspector General Willoughby.
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Hugh Marion Willett, the owner of two Texas-based durable medical equipment companies, was sentenced today to 41 months in prison, followed by three years of supervised release, and ordered to pay $182,450 in restitution, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Willett, 69, of Fort Worth, Texas, was found guilty in January by U.S. District Judge Jane J. Boyle in the Northern District of Texas on all seven counts of a June 2012 second superseding indictment: one count of conspiracy to commit health care fraud and six counts of health care fraud stemming from a durable medical equipment (DME) fraud scheme. His wife, Jean Willett, previously pleaded guilty to the same charges and was sentenced in September 2012 to 50 months in prison.
The evidence at trial showed that between 2006 and 2010, the Willets co-owned and operated JS&H Orthopedic Supply LLC and Texas Orthotic and Prosthetic Systems Inc., which claimed to provide orthotics and other DME to beneficiaries of Medicare and private insurance benefit programs including Aetna, Blue Cross Blue Shield and CIGNA.
Evidence presented in court proved that both of these companies intentionally submitted claims to Medicare and other insurers for products that were materially different from and more expensive than what was actually provided, and that Hugh Marion Willett was a knowing and willful participant in the fraud.
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United States Attorney Anne M. Tompkins Western District of North Carolina
CHARLOTTE, N.C. – A Charlotte neurologist has agreed to pay $2 million plus interest to the United States to settle civil fraud allegations, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Hemanth P. Rao, MD, is the owner of and principal neurologist at The Neurological Institute in Charlotte, formerly known as Neurological Consultants of the Carolinas.
U.S. Attorney Tompkins is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
The settlement was reached following a multi-year investigation by HHS-OIG into Dr. Rao’s practices associated with the administration of intravenous immunoglobulin (IVIG) therapy. Government investigators found that from October 13, 2003 to May 26, 2006, Dr. Rao failed to meet the Medicare supervision regulations associated with IVIG therapy. IVIG is the delivery of healthy immunoglobulins directly into the bloodstream of patients suffering from immunodeficiency and autoimmune disorders. IVIG therapy involves the injection of a thick, viscous fluid into the veins of patients throughout a period of several hours. The Medicare program requires that the patient’s physician directly supervise the administration of this treatment in order to ensure the safety of the patient. Investigators found that Dr. Rao sought and obtained reimbursement for his IVIG therapy services from Medicare even though he was not present in the building with his patients when they were receiving IVIG treatment, as required by Medicare.
The Settlement Agreement also requires that Dr. Rao pay an additional $500,000 to Medicare upon the sale of his real estate holdings. Furthermore, Dr. Rao entered into a five-year Integrity Agreement with HHS-OIG to promote compliance with the statutes, regulations, program requirements, and written directives of Medicare, Medicaid, and all other federal health care programs.
In making today’s announcement U.S. Attorney Tompkins stated, “Dr. Rao’s actions not only compromised the integrity of the Medicare program, but exposed his patients to potential danger. I commend HHS-OIG for their thorough investigation and for their continued efforts to protect Medicare, an important health care program seniors rely upon to cover their health care needs.”
“Dr. Rao allowed his staff to practice a potentially hazardous procedure on Medicare patients, without his supervision, then blatantly charge taxpayers,” said Derrick Jackson of the HHS-OIG region including North Carolina. “Citizens of this State can continue to look toward U.S. Attorney Tompkins to vigorously pursue providers who shortcut Medicare regulations in exchange for profit.”
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Source- http://www.justice.gov/usao/iln/pr/chicago/2013/pr0418_02.html
CHICAGO — A Chicago physician associated with Sacred Heart Hospital on the city’s west side is facing federal charges for allegedly illegally prescribing hydrocodone to a hospital patient without having a valid license and registration to prescribe controlled substances. The defendant, Dr. KENNETH S. NAVE, allegedly illegally used the Drug Enforcement Administration registration number of another physician when he prescribed the hydrocodone last December.
Nave, 50, of Chicago, was arrested yesterday in Miami when he returned from a trip outside the country. He appeared today in Federal Court in Miami, was released, and ordered to appear at 3 p.m. tomorrow before U.S. Magistrate Judge Daniel G. Martin in U.S. District Court in Chicago. He was charged in a criminal complaint that was filed on Monday and unsealed upon his arrest.
Also today, the Illinois Department of Financial and Professional Regulation issued an order suspending Nave’s license to practice medicine.
On Tuesday, the owner and chief executive officer of Sacred Heart was arrested, along with the hospital’s chief financial officer and four physicians affiliated with the hospital on federal charges alleging a conspiracy to pay and receive kickbacks in exchange for referral of Medicare and Medicaid patients to the hospital. Federal agents also executed search and seizure warrants as part of an ongoing investigation of Medicare fraud allegations involving medically unnecessary emergency room admissions and in-patient tracheotomy procedures.
According to the complaint against Nave, who is the fifth physician to be charged, the investigation has revealed that between at least November 2012 and Feb. 25, 2013, he issued prescriptions to patients at Sacred Heart for controlled substances using the DEA registration issued to Physician I. On Dec. 7, 2012, Nave allegedly prescribed a particular patient 90 pills containing hydrocodone, a narcotic controlled substance, using Physician I’s registration number.
Nave’s Illinois license to practice medicine was suspended between 2002 and 2008. It was restored to probationary status on Dec. 20, 2012, but his state license to prescribe controlled substances was not restored until Feb. 26, 2013, according to the complaint affidavit. Separately, Nave was not registered with the DEA to prescribe controlled substances but an application for DEA registration that was submitted on March 6, 2013, is pending, the affidavit adds.
The affidavit cites records from the Centers for Medicare and Medicaid Services indicating that between Nov. 1, 2012, and Feb. 25, 2013, a person using Physician I’s name and DEA registration number issued approximately 101 prescriptions for controlled substances to approximately 33 patients at Sacred Heart Hospital.
The illegal prescription count carries a maximum penalty of four years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
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Source- http://www.justice.gov/opa/pr/2013/April/13-crm-443.html
A federal jury in Detroit today convicted the office manager of a home health agency for her participation in a $5.8 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Robert D. Foley III, Special Agent in Charge of the FBI Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Detroit Office.
Nabila Mahbub, 27, the office manager of All American Home Care Inc., was found guilty in U.S. District Court for the Eastern District of Michigan of one count of conspiracy to commit health care fraud.
Mahbub was charged in a superseding indictment returned March 27, 2012. Nineteen other individuals who worked at or were associated with All American were previously convicted for their roles in the fraudulent scheme; one was acquitted at trial, but was convicted at trial for a separate, but related, scheme.
According to evidence presented at trial, the defendant and her co-conspirators caused the submission of false and fraudulent claims to Medicare through All American, a home health care company located in Oak Park, Mich., that purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.
The evidence at trial showed that the defendant and her co-conspirators used patient recruiters, who paid Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of All American paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants then created fake medical records using blank, pre-signed forms obtained by the patient recruiters to make it appear as if physical therapy services were actually rendered, when, in fact, they were not.
According to evidence presented at trial, Mahbub doctored and directed the doctoring of fake patient files to facilitate the commencement and billing of home health services purportedly provided by physical therapists and physical therapist assistants working for All American. Mahbub also directed the physical therapists and physical therapist assistants who created fake therapy visit notes using blank, pre-signed forms, to make it appear that physical therapy services billed to Medicare were actually provided.
All American was paid over $5.8 million from Medicare between September 2008 and November 2009.
At sentencing, scheduled for July 25, 2013, Mahbub faces a maximum penalty of 10 years in prison.
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Source- http://www.justice.gov/usao/pae/News/2013/Apr/kuranplea_release.htm
PHILADELPHIA - Feda Kuran, 37, of Philadelphia, PA, pleaded guilty today to a health care fraud scheme that involved billing Medicare for ambulance services that were not medically necessary, that were not actually provided, or that were induced by illegal kickbacks. During this health care fraud scheme, the defendant also gave and received illegal kickbacks. As a result, the Medicare program paid more than $2,015,712 for the fraudulent bills. Kuran pleaded guilty to one count of Health Care Fraud and one count of violating the Anti-Kickback Statute. U.S. District Court Judge William H. Yohn, Jr. scheduled a sentencing hearing for July 24, 2013. Kuran faces a maximum possible sentence of 15 years in prison, three years of supervised release, a $250,000 fine, a $200 special assessment, and restitution to Medicare. In addition, the defendant has agreed to forfeiture and a money judgment against her for more than $2 million.
As documents filed in connection with the plea revealed, in July 2010, the defendant began operating Brotherly Love Ambulance, Inc. with a co-schemer. Kuran, or others acting at her direction, transported patients by ambulance when those patients could have been transported safely by other means and were, therefore, not eligible for ambulance service under Medicare and Medicaid requirements. Not only were those patients able to be safely transported by means other than ambulance, but also many of the patients were observed walking to and from ambulances. The defendant and others billed Medicare for ambulance services for patients who were transported by Brotherly Love employees in personal vehicles or who drove themselves or took public transportation to their destinations. In addition, the defendant and other employees paid kickbacks to some patients to induce them to allow Brotherly Love Ambulance, Inc. to transport them. Brotherly Love paid other patients so that the ambulance company could use those patients’ information to bill for transportation that Brotherly Love Ambulance never actually provided. The defendant also agreed that she received kickbacks from other ambulance companies to refer patients to the other ambulance companies.
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Source- http://www.justice.gov/opa/pr/2013/April/13-civ-438.html
Amgen Inc., a California-based biotechnology company, has agreed to pay the United States $24.9 million to settle allegations that it violated the False Claims Act, the Justice Department announced today. Amgen develops, manufactures, and sells pharmaceutical products, including products sold under the trade name Aranesp.
The settlement resolves allegations that Amgen paid kickbacks to long-term care pharmacy providers Omnicare Inc., PharMerica Corporation and Kindred Healthcare Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicare and Medicaid beneficiaries from a competitor drug to Aranesp. The government alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds. The government further alleged that, as part of the therapeutic interchange program, Amgen distributed materials to consultant pharmacists and nursing home staff encouraging the use of Aranesp for patients who did not have anemia associated with chronic renal failure.
“We will continue to pursue pharmaceutical companies that pay kickbacks to long-term care pharmacy providers to influence drug prescribing decisions,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Patients in skilled nursing facilities deserve care that is free of improper financial influences.”
“By this agreement we are making important strides in holding drug manufacturers accountable for fraudulent and abusive practices not only in South Carolina but nationwide,” said William Nettles, U.S. Attorney for the District of South Carolina. “I am proud of the tireless work of this office to investigate this case across the country.”
This civil settlement resolves a lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act suit was filed in the U.S. District Court for the District of South Carolina, and is captioned United States ex rel. Kurnik v. Amgen Inc., et al.
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Source- http://www.fbi.gov/losangeles/press-releases/2013/san-fernando-valley-doctor-who-pled-guilty-in-3-million-medicare-fraud-case-sentenced-to-more-than-three-years-in-federal-prison
LOS ANGELES—A medical doctor who owns a cosmetic medicine clinic in the Winnetka district of the San Fernando Valley has been sentenced to 42 months in federal prison for bilking Medicare out of more than $3 million by submitting bills for procedures he never performed.
Pezhman Ebrahimzadeh, who uses the name “Pez Abrahams,” 50, of Calabasas, received the three-and-a-half-year sentence yesterday from United States District Judge George H. Wu.
In addition to the prison term, Judge Wu ordered Ebrahimzadeh to pay $3,184,000 in restitution, most of which is to be paid to the Medicare program.
Ebrahimzadeh owns the Winnetka Medical Group, a cosmetic health care clinic that operates under the name Health & Beauty Clinic. At his clinic, Ebrahimzadeh provides cosmetic treatments that involve radiofrequency lasers and liposuction. As some of his patients were Medicare beneficiaries, Ebrahimzadeh obtained their beneficiary information, which was used to bill Medicare for procedures he did not perform.
Ebrahimzadeh also obtained beneficiary information for patients he never met or treated, and he used that information to submit other fraudulent bills to Medicare.
In relation to the bogus bills submitted to Medicare, Ebrahimzadeh typically claimed he had performed three expensive procedures: revascularization, ablation of a bone tumor, or the placement of a radiotherapy catheter in a breast. Ebrahimzadeh made these claims even though he lacked the equipment needed to perform revascularizations or the placement of radiotherapy catheters.
Ebrahimzadeh’s “conduct was so brazen that he billed Medicare for purportedly performing dozens of procedures on patients who were dead,” prosecutors wrote in a sentencing memorandum to the court. “For one such patient, defendant billed Medicare for seven separate high-paying procedures. [Ebrahimzadeh] also altered medical records in an attempt to conceal his fraudulent conduct. In addition to defrauding Medicare, defendant billed private insurance carriers for similar procedures, some of which he claimed he performed on himself.”
Between September 2008 and April 2012, Ebrahimzadeh submitted $7.5 million in bogus claims, and Medicare paid just over $3 million.
Ebrahimzadeh pleaded guilty in January to one count of health care fraud.
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Source- http://www.justice.gov/usao/iln/pr/chicago/2013/pr0416_01.html
CHICAGO – The owner and another senior executive of Sacred Heart Hospital and four physicians affiliated with the west side facility were arrested today for allegedly conspiring to pay and receive illegal kickbacks, including more than $225,000 in cash, along with other forms of payment, in exchange for the referral of patients insured by Medicare and Medicaid to the hospital.
Agents from the FBI and the U.S. Department of Health and Human Services Office of Inspector General today also began executing search and seizure warrants in connection with an ongoing investigation of alleged Medicare and Medicaid fraud schemes at the hospital involving emergency room evaluation, testing and observation services that were not medically necessary, as well as medically unnecessary sedation, intubation and tracheotomy procedures performed on patients. Approximately $2 million in Medicare reimbursement payments was seized today from various bank accounts.
Arrested were EDWARD J. NOVAK, 58, of Park Ridge, Sacred Heart’s owner and chief executive officer since the late 1990s; ROY M. PAYAWAL, 64, of Burr Ridge, executive vice president and chief financial officer since the early 2000s; and Drs. VENKATESWARA R. “V.R.” KUCHIPUDI, 66, of Oak Brook, PERCY CONRAD MAY, JR., 75, of Chicago, SUBIR MAITRA, 73, of Chicago, and SHANIN MOSHIRI, 57, of Chicago.
Sacred Heart Hospital is a 119-bed acute care facility located at 3240 West Franklin Blvd., in Chicago. Approximately 40 in-patients were in the hospital this morning, and representatives of the HHS Centers for Medicare and Medicaid Services (CMS) were on site and coordinating with the Illinois Department of Healthcare and Family Services to ensure continuity of patient care.
“These charges and the affidavit’s other allegations outline a kickback conspiracy to bribe doctors to refer patients to Sacred Heart where they would be treated in in an environment in which the quality of care and appropriate medical analysis were less important than maximizing the numbers of patients funneled into the hospital,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.
“The payment of kickbacks or bribes in exchange for the referral of Medicare or Medicaid patients, regardless of the form in which they are paid, is a crime,” said Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of HHS-OIG. “The Office of Inspector General will continue to work closely with our law enforcement partners to aggressively investigate alleged illegal patient referral schemes and hold accountable those who seek to exploit vulnerable patients and the Medicare and Medicaid programs.”
“Today’s arrests demonstrate our commitment to enforcing the laws intended to prevent abuses of the Medicare and Medicaid programs and to preserve the ability of those programs to provide appropriate medical services to the elderly and the needy,” said Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of investigation.
The defendants were charged in a complaint that was filed yesterday and unsealed today after the arrests. All six defendants were scheduled to appear beginning at 3 p.m. before U.S. Magistrate Judge Daniel Martin in Federal Court.
Kickback Conspiracy
A 90-page affidavit in support of the criminal complaint and search and seizure warrants states that former Sacred Heart Physician A began cooperating in the investigation in October 2011, and Administrator A and Administrator B began assisting in January 2013 and February 2012, respectively. Each of them made consensual recordings of meetings and telephone conversations with other executives, administrators, physicians and employees that are described in the affidavit.
According to the complaint – at Novak’s direction and with his approval and Payawal’s assistance – Sacred Heart implemented a scheme to pay kickbacks to physicians in return or referrals of Medicare and Medicaid patients. Novak and Payawal allegedly tried to conceal the scheme by masking payments as fictitious rental payments; paying the salaries of physicians’ employees; providing physicians ghost contracts for duties without any real responsibilities; creating alternative billing arrangements; and purporting to pay physicians to supervise and teach non-existent medical students.
In a conversation that Administrator A recorded on Feb. 28, 2013, Novak and Payawal allegedly identified Drs. Moshiri, Maitra and May as physicians receiving regular kickback payments who Administrator A should pay.
Between January 2010 and February 2013, May allegedly received $74,000 in the form of 37 checks, for $2,000 each, disguised as “rental payments”; Moshiri, a podiatrist, allegedly received $86,000 in 38 checks pursuant to a purported contract to teach podiatry students; and Maitra allegedly received $68,000 in 34 checks pursuant to a purported teaching contract – and the $228,000 total in alleged kickbacks were all in exchange for their referral of patients to Sacred Heart, the charges allege.
In a recorded conversation last month, Maitra allegedly explained to Administrator A that he used to make Novak “so much money” performing almost daily penile implant procedures on patients, but that he no longer performed as many of those procedures because Medicare had decreased its rates of reimbursement for the procedure. Maitra did not comment on whether the patient need for the procedure had somehow changed, according to the affidavit.
Regarding Dr. Kuchipudi, Administrator A told agents that he was one of Sacred Heart’s most prolific patient referral sources and, according to Physician A, was known within the hospital as the “king of nursing homes.” According to Administrator A, Sacred Heart paid Kuchipudi for Medicare patient referrals in two ways: first, by paying most of the salaries of a physician’s assistant and a registered nurse who were effectively employed by Kuchipudi, and second, by paying Physician B for treating Kuchipudi’s patients at Sacred Heart, despite the fact that Kuchipudi, and not the hospital, billed insurers for the services Physician B provided to those patients. These arrangements allegedly benefited Kuchipudi as a result of the hospital absorbing employee salary costs that Kuchipudi would normally have to pay himself.
Emergency Room Admissions
Although not charged, the affidavit supporting the search warrant states that the investigation extends to allegations of unnecessary emergency room admissions. Administrator A told agents that Novak ignored numerous complaints that physicians admit patients who do not require hospitalization, and that certain physicians have subjected patients to unnecessary medial testing and procedures in an attempt to justify the patients’ admissions and to increase billing.
Insiders have told agents that Sacred Heart’s executives established a system to admit nursing home patients, irrespective of any medical necessity, by directing referring physicians to use ambulance companies with which Sacred Heart has had “a relationship.” By designating such patients as “direct admission,” Sacred Heart physicians are able to transfer their patients by ambulance from nursing homes, regardless of the proximity to the hospital. Instead of directly admitting these nursing home patients, however, Sacred Heart processes them through its emergency room, billing Medicare for emergency care, which is usually not medically necessary, according to Administrator A. Physician A told investigators that, in his experience, half of the patients presented to Sacred Heart’s ER already had a relationship with one of the hospital’s attending physicians and that the majority of those patients were admitted to the hospital from the emergency room.
Tracheotomy Procedures
The investigation is also probing claims that Sacred Heart Physician D, a pulmonologist, allegedly performs a high number of unnecessary intubations and prolongs them by directing heavy sedation of his patients, often resulting in tracheotomies being performed by Sacred Heart surgeons that may not have been medically necessary. Administrator A told agents that during a lunch with Novak and Payawal in December 2012, they both explained that tracheotomy cases provide substantial insurance reimbursement income for the hospital. On March 1, 2013, Administrator A recorded Novak stating that tracheotomies are Sacred Heart’s “biggest money maker” and the hospital can make $160,000 for a tracheotomy if the patient stays 27 days. On March 7, 2013, the Intensive Care Unit case manager told Administrator A that she must often “stretch” a tracheotomy patient’s stay to 28 days to maximize Medicare reimbursements “to make Novak happy.”
According to the affidavit, Sacred Heart allegedly conceals $7,000 monthly payments for respiratory patient referrals by paying that amount to a healthcare management company that has an employee who works at one of the nursing homes where Kuchipudi sees patients. The consulting firm employee works with Kuchipudi, nursing homes, and Sacred Heart to facilitate the admission of respiratory patients to Sacred Heart, Administrator A told investigators.
On March 4, 2013, investigators from CMS and the State of Illinois arrived at Sacred Heart to conduct an investigation of the hospital’s intubations and tracheotomies, and quality assurance and performance improvement protocols. On March 6, Administrator A recorded Physician D acknowledging that Sacred Heart lacked policies for various aspects of intubations and tracheotomies and that he had given some practice guidelines and procedures obtained from other hospitals to the surveyors in response to their request for Sacred Heart’s policies. At the same time, the ICU nurse manager told Administrator A that she had reviewed eight tracheotomy patient files in connection with the CMS investigation. Physician D was the pulmonologist for all the patients and had performed all but one of the tracheotomies. The nurse manager said that there was no documentation in the patient files explaining the decision to intubate the patients or any efforts to wean them from the ventilators. The following day Administrator A reported the findings to Novak and others and regarding the lack of documentation, and Novak replied with an expletive, according to the affidavit.
On April 8, Physician D told Administrator A in a recorded conversation that Novak had asked him to provide two more tracheotomy cases for the hospital soon before the CMS surveyors might return.
Novak’s Business Interests
According to the affidavit, Novak has direct or indirect ownership interest in various related entities, including Superior Home Health, LLC, a home healthcare company; the Golden L.I.G.H.T. clinics, which are family practice / internal medicine clinics operated as divisions as Sacred Heart; the Chen Medical center; the Garfield Kidney Center, LLC, an outpatient dialysis center; and the Bentley Insurance Group, a medical malpractice insurance company. Novak also owns various real estate and corporate management holding companies, and prior to June 2012, he operated the Chicago R.E.A.C.H Foundation, a purported non-profit, senior citizen program financed by the State of Illinois.
In a series of recorded conversations over the last two months, Payawal told Administrator A that a substantial part of Sacred Heart’s revenue comes from Medicare and Medicaid reimbursements, and explained various ways in which revenue generated from the hospital is transferred to and among Novak’s other corporate interests.
Conspiracy to violate the federal anti-kickback statute carries a maximum penalty of five years in prison and a $250,000 fine and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Joel Hammerman, Terra Reynolds and Ryan Hedges.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
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Source- http://www.justice.gov/usao/ohn/news/2013/15aprilpatel.html
A man who lives in Orange, Ohio, admitted to overbilling Medicaid and Medicare by more than $2.5 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Divyesh “David” C. Patel, age 39, pleaded guilty to one count of conspiracy to commit health care fraud and four counts of health care fraud. Patel is expected to be sentenced later this year.
“This defendant enriched himself and his company by flouting rules designed to protect the public,” Dettelbach said.
“Mr. Patel defrauded the tax payers by scamming Medicaid and Medicare,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office. “Waste, fraud and abuse take critical resources out of our health care system and contribute to the rising cost of health care for all Americans.”
Patel was the owner and president of Alpine Nursing Care, Inc., located at 4753 Northfield Road, Suite 5, North Randall, Ohio, employed Belita Mable Bush, as the office manager and director of provider services from June 1, 2006 through October 18, 2009, according to court documents.
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, according to court documents.
In addition to the fact that Bush was excluded from handling Alpine’s medical billings, Patel was 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, according to court documents.
As a result of the conspiracy, Medicaid and Medicare suffered a loss of approximately $2,564,392, according to court documents.
Bush was convicted on related charges and is scheduled to be sentenced May 28.
The defendant's sentence will be determined by the court after review of factors unique to this case, including any prior criminal record, the defendants’ role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and, in most cases it will be less than the maximum.
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Source- http://www.justice.gov/usao/pae/News/2013/Apr/pennchoice_release.htm
PHILADELPHIA – An indictment was unsealed today charging Penn Choice Ambulance Inc., operating from Philadelphia, PA, Huntington Valley, PA and Camp Hill, PA, its owner, Anna Mudrova, and operators Yury Gerasyuk, Mikhail Vasserman, Irina Vasserman, Aleksandr Vasserman, Valeriy Davydchik, and Khusen Akhmedov, with conspiracy to commit health care fraud. The alleged scheme involved more than $3.6 million in fraudulent claims submitted to Medicare. The defendants were also charged with related crimes including making false statements in connection with health care matters, aggravated identity theft, paying kickbacks to patients, and money laundering, announced United States Attorney Zane David Memeger.
Valeriy Davydchik, 58, and Khusen Akhmedov, 22, Mikhail and Irina Vasserman, both 50, and Aleksandr Vasserman, 29, all of Philadelphia, were arrested this morning. Mudrova, 40, Gerasyuk, 41, also of Philadelphia, will make a court appearance tomorrow. According to the indictment, the defendants conspired to defraud Medicare by recruiting patients who were able to walk and could travel safely by means other than ambulance and who therefore were not eligible for ambulance transportation under Medicare requirements. It is alleged that the defendants, and others acting on their behalf, falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants knew that the patients could be transported safely by other means and that many of them walked to the ambulance for transport. It is further alleged that the defendants themselves, or through others, paid illegal kickbacks to the patients as part of scheme. The defendants allegedly billed Medicare for these ambulance services as if those services were medically necessary and, as a result of the allegedly fraudulent billing, the Medicare program sustained losses of more than $1.5 million for this medically unnecessary method of transportation.
If convicted, the defendants face substantial terms of imprisonment and fines. If convicted, Penn Choice Ambulance Inc. faces significant financial penalties, including substantial criminal fines, restitution and forfeiture obligations. All defendants could also be excluded from participating in federal health care programs.
Bank accounts and other assets were seized which are subject to criminal forfeiture proceedings.
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Source- http://www.justice.gov/usao/nj/Press/files/Katz,%20Jose%20Plea%20News%20Release.html
NEWARK, N.J. – A well-known cardiologist and the founder, CEO, and sole owner of a pair of large medical services companies in New Jersey and New York admitted today to conspiring in a multimillion-dollar health care fraud scheme that subjected thousands of patients to unnecessary tests and potentially life-threatening, unneeded treatment, as well as treatment by unlicensed or untrained personnel. The guilty plea was announced today by New Jersey U.S. Attorney Paul J. Fishman.
Jose Katz, 68, of Closter, N.J., pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Information charging him with one count of conspiracy to commit health care fraud and one count of Social Security fraud arising from a separate scheme to give his wife a “no show” job and make her eligible for Social Security benefits.
As part of his plea agreement with the government, Katz agreed that the loss amount sustained by Medicare, Medicaid and other insurers victimized by the fraudulent billings was $19 million. U.S. Department of Health and Human Services, Office of Inspector General and FBI records indicate the loss amount suffered by the victims is the largest recorded in New Jersey, New York and Connecticut for an individual practitioner convicted of health care fraud.
“After years of prominence in his field, Jose Katz will now be remembered for his record-setting fraud,” said U.S. Attorney Fishman. “Katz was so focused on illegal profits that he directed unlicensed and unqualified providers to treat his patients, ordered unnecessary tests and cavalierly ordered treatments that could have caused patient harm. Ripping off the government and insurance companies is bad enough; risking patient health in the bargain is inexcusable.”
“Health care fraud is not a victimless crime. It is a plague on American society and could put the health of people who need medical care at risk, said FBI Special Agent in Charge Aaron T. Ford. “The FBI, together with its law enforcement and regulatory agency partners, will vigorously investigate these crimes and hold those responsible accountable.”
“I am proud to be part of the federal team that brought Dr. Katz to justice after a complicated investigation,” said Tom O’Donnell, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Regional Office. Dr. Katz had very little regard for his patients and the Medicare program, as evidenced by his blatant behavior. Criminals can be assured that if they attempt to defraud Medicare and their patients, they will be brought to justice.”
According to documents filed in this case and statements made in court:
Katz was the founder, CEO, and sole equity-holder of Cardio-Med Services LLC (Cardio-Med), and Comprehensive Healthcare & Medical Services LLC (Comprehensive Healthcare). From 2004 through 2012, Cardio-Med had offices in Union City, Paterson, and West New York, N.J., and Comprehensive Healthcare had offices in Manhattan and Queens, New York. Both Cardio-Med and Comprehensive Healthcare provided cardiology, internal medicine and other medical services to individual patients. During that time period, Katz conspired to bill Medicare Part B, Medicaid, Empire BCBS, Aetna and others for unnecessary tests and unnecessary procedures based on false diagnoses, and for medical services rendered by unlicensed practitioners.
Between July 2006 and February, 2009, Katz spent more than $6 million for advertising on Spanish-language television and radio stations. The ads attracted hundreds of patients to Cardio-Med and Comprehensive Healthcare every day. Overall, Katz was able to bill Medicare and Medicaid more than $70 million for his services from 2005 through 2012.
Over the course of the conspiracy, Katz ordered and performed essentially the same battery of diagnostic tests for nearly all the patients he treated, regardless of their symptoms. Katz also instructed his non-physician employees to order and perform diagnostic tests for patients of other doctors working at his offices, even though he had not examined those patients and the other physicians had not ordered the unnecessary tests.
Most significantly, Katz admitted that he falsified patient charts with fictitious and boilerplate symptoms and falsely diagnosed a majority of his Medicare and Medicaid patients with coronary artery disease and debilitating and inoperable angina. He also admitted to making the diagnoses to justify prescribing and administering an unnecessary treatment for those patients called enhanced external counter pulsation, or EECP. Katz even prescribed EECP treatments for some patients with contraindications for the treatment, therefore subjecting those patients to a substantial risk of serious injury or death.
From 2005 through 2012, Medicare and Medicaid paid Katz more than $15.6 million just for his EECP treatments, most of which were fraudulent.
In addition, Katz ordered conspirator Mario Roncal, 62, of Woodland Park, N.J. – who had a medical degree from San Juan Bautista School of Medicine in San Juan, Puerto Rico, but did not have a license to practice medicine in any of the 50 states – to treat patients, knowing he was not licensed. At Katz’s direction, Roncal held himself out to fellow employees and to patients as “Dr. Roncal,” examined new patients as well as Katz’s follow-up patients, ordered diagnostic tests, diagnosed patients with medical conditions and diseases and recommended and prescribed courses of treatment and surgery – including falsely diagnosing patients with angina and prescribing EECP treatments for those patients.
To conceal this illegal and unlicensed practice of medicine, Roncal forged Katz’s signature on paperwork associated with Roncal’s unlawful medical services, including on patient charts. During the conspiracy, Katz used his own billing numbers to bill Medicare Part B and Medicaid for the illegal services Roncal provided as though they were provided by Katz.
Roncal was indicted on March 2, 2012, for conspiracy to commit health care fraud. He entered a guilty plea on Jan. 4, 2013 and awaits sentencing.
Katz also admitted to a Social Security fraud scheme in which, from 2005 through 2012, he kept his wife on Cardio-Med’s payroll though she performed little or no work. During the course of the scheme, Katz sent false W-2 forms for calendar years 2005 through 2011 to the U.S. Social Security Administration purportedly reflecting $1,251,604 in earnings for his wife, making her eligible for an estimated $263,000 in Social Security benefits to which she was not entitled.
The health care fraud conspiracy and fraud counts with which Katz is charged carry a maximum potential penalty of 10 and five years in prison, respectively. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense. At sentencing, currently scheduled before Judge Linares on July 23, 2013, Katz will also be ordered to pay restitution to victims of his offenses. Katz was granted $200,000 bail pending sentencing.
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