WASHINGTON – Two Miami-area residents and owners of a mental health care corporation, American Therapeutic Corporation (ATC), pleaded guilty today in U.S. District Court in Miami for orchestrating a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Lawrence S. Duran, 49, and Marianella Valera, 40, pleaded guilty at an arraignment hearing before Magistrate Judge Barry L. Garber to all counts charged in a superseding indictment, which was unsealed on Feb. 15, 2011. The superseding indictment charges Duran with 38 felony counts and Valera with 21 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements. The court must hold a hearing scheduled for a later date to accept and enter the guilty pleas.
“Lawrence Duran and Marianella Valera masterminded a complex Medicare fraud scheme,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “They reaped millions in illegal profits by operating a sham mental health care company that provided unnecessary and illegitimate treatments to patients, many of whom were recruited through bribes and kickbacks, and then they laundered the proceeds. In carrying out their elaborate scheme, Duran and Valera and their co-conspirators billed Medicare for more than $200 million – a staggering sum. Having now pleaded guilty to their crimes, they must face the consequences.”
“Community mental health centers are an essential part of the Nation’s health care system and serve vulnerable populations,” said Daniel R. Levinson, HHS Inspector General. “Today’s guilty pleas emphasize that OIG, along with our law enforcement partners, will not tolerate kickbacks and other crimes committed against the Medicare program.”
“These defendants billed Medicare for mental health services that were illegitimate or never provided,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “In this way, these defendants engaged in an eight-year scheme that defrauded Medicare out of more than $200 million in payments for purported community mental health services. We will continue to aggressively prosecute all types of Medicare fraud and all levels of fraudsters, up and down the organizational chain, to help preserve our scarce Medicare dollars for those who really need it, the sick and the elderly.”
“Health care fraud robs from the elderly and disabled,” said Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office. “Today’s pleas should be a warning to illegitimate providers who abuse their position of trust within the medical community. No matter what the scheme or how elaborately disguised, the FBI and our law enforcement partners will investigate and prosecute such fraud to the fullest extent of the law.”
In pleading guilty, Duran and Valera admitted that they masterminded and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera submitted false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that 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. Duran and Valera also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
According to the superseding indictment, Duran, Valera and others paid bribes and kickbacks to recruit Medicare beneficiaries to attend ATC and ASI. The superseding indictment charges that Duran, Valera and others billed Medicare for treatments purportedly provided to these recruited patients. According to court documents, the treatments were medically unnecessary or never provided at all. Duran and Valera supported the kickback scheme through an extensive money laundering scheme that aimed to conceal the illicit conversion of Medicare payments into cash. The defendants and their co-conspirators also engaged in sophisticated measures to conceal their fraudulent activities from Medicare and from law enforcement.
Specifically, according to court filings, Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. The defendants and their co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in this kickback scheme. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs so that ATC and ASI could bill Medicare for more than $200 million in medically unnecessary services.
The superseding indictment charges that Duran, Valera and others caused the alteration of patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC qualified for PHP treatments. According to court documents, Duran and Valera also instructed employees and doctors to alter diagnoses and medication types and levels to make it falsely appear that ATC patients qualified for PHP services. The superseding indictment also charges that Duran, Valera and co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
The defendants are also charged with engaging in a money laundering conspiracy to enrich themselves and to provide cash for the millions of dollars in kickbacks paid to recruit Medicare beneficiaries. According to court documents, they used another company they owned and operated, Medlink Professional Management Group Inc., to conceal the health care fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred millions of dollars to Medlink. The superseding indictment charges that they and others opened phony corporations to receive checks and wire transfers from both ATC and Medlink to convert that money into cash for their personal enrichment and for the payment of kickbacks. According to court documents, Duran, Valera and others cashed checks at different bank branches and different locations to conceal the true purpose of their activities and to evade reporting requirements.
Duran and Valera have been in federal custody since their arrests in October 2010, under orders of detention issued by Magistrate Judge Andrea Simonton and U.S. District Court Judge James Lawrence King. Sentencing is scheduled for July 13 at 9:30 a.m. Duran and Valera each face a maximum of 10 years in prison for each count of conspiracy to commit health care fraud and each count of health care fraud; five years in prison for each count of conspiracy to pay and receive health care kickbacks; 20 years in prison for each count of conspiracy to commit money laundering; 10 to 20 years in prison for each count of money laundering; and 10 years in prison for each count of structuring to avoid reporting requirements. The defendants’ assets were frozen at the time of their arrests through civil forfeiture proceedings.
Co-conspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7, 2011, for her role in the fraud scheme.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Saturday, April 16, 2011
Lawrence S. Duran and Marianella Valera Plead Guilty to Orchestrating $200 Million Medicare Fraud Scheme
Friday, April 15, 2011
Cassandra Faye Thomas Convicted of Health Care Fraud
JACKSON, MS—Cassandra Faye Thomas, of Jackson, Mississippi, was convicted by a jury on March 8, 2011, of two counts of health care fraud, four counts of wire fraud, two counts of making false statements related to health care, theft of government funds, and conspiracy to commit health care fraud, U.S. Attorney John M. Dowdy, Jr. announced. Thomas was placed on home confinement pending sentencing. She is currently the owner of Central Jackson Family Medical Clinic.
The evidence at trial showed that Thomas owned Central Mississippi Physical Medicine Group, Inc., which had offices in Flora and Yazoo City, Mississippi. Central Mississippi Physical Medicine Group claimed to provide physical therapy services to Medicare and Medicaid beneficiaries in their homes, free of charge to the beneficiary. Thomas submitted claims to Medicare and Medicaid, which represented that the therapy services had either been provided by a doctor, were provided under the doctors direct supervision, or were provided by a licensed physical therapist. The evidence at trial showed that none of the services that were billed to Medicare and Medicaid were provided or supervised by a doctor, or by a licensed physical therapist. Instead, the therapy services were provided by employees of Central Mississippi Physical Medicine Group, none of which were trained or licensed physical therapists. In fact, most of the employees of Central Mississippi Physical Medicine Group, had little or no medical training at all. From March, 2002, until September, 2004, Thomas billed Medicare and Medicaid for false claims of more than $12,000,000.00, and was paid more than $6,900,000.00.
Frank Wiley, who was previously convicted for his role in a similar company called Mississippi Central Rehab, testified during the trial.
“We will aggressively continue to pursue fraud in entitlement programs, especially Medicare and Medicaid. At a time when the federal government is faced with a serious financial crisis, fraud like this only adds to the strain. When people try to take advantage of these programs and commit almost $7 million in fraud, the taxpayers are the ones who bear the burden and it must be stopped,” said U.S. Attorney Dowdy.
Thomas will be sentenced on June 27, 2011 at 9:00 a.m. by U.S. District Judge Daniel P. Jordan, III, in Jackson. She faces up to 125 years in prison and $2,500,000 in fines, as well as the forfeiture of over $2,100,000.00 in cash, which was seized from Central Mississippi Physical Medicine Group bank accounts during the investigation. Thomas will also be forced to pay restitution.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Thursday, April 14, 2011
Former Haven Health Care Bookkeeper Serena Sylvia, Sentenced to 18 Months in Federal Priso
David B. Fein, United States Attorney for the District of Connecticut, announced that SERENA SYLVIA, 42, of Fargo Road, Waterford, was sentenced today by Chief United States District Judge Alvin W. Thompson in Hartford to 18 months of imprisonment, followed by two years of supervised release. On January 6, 2011, SYLVIA pleaded guilty to one count of health care fraud and one count of filing a false federal income tax return.
According to court documents and statements made in court, SYLVIA was employed as a regional accounts receivable manager for Haven Health Care Management, LLC. From 2005 to 2008, SYLVIA embezzled funds from nursing home resident trust fund accounts. The nursing homes affected by SYLVIA’s embezzlement include Haven Health Center of Jewett City, Haven Health Center of Norwich, Haven Health Center of Waterford, and Haven Health Center of Soundview in West Haven. SYLVIA took more than $53,000 from the trust fund accounts, and she did not pay income tax on the money she stole.
As part of her sentence, SYLVIA was ordered to pay back taxes and applicable penalties and interest to the government.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Wednesday, April 13, 2011
Owner and President of Allied Health Care Services, Inc. Charles K. Schwartz Pleads Guilty in $135 Million Medical Equipment Lease Scheme
NEWARK, NJ—The owner and president of Allied Health Care Services, Inc., an Orange, N.J., durable medical equipment corporation, admitted today to organizing and executing a $135 million phony lease scheme that caused losses of more than $80 million and victimized more than 50 financial institutions, U.S. Attorney Paul J. Fishman announced.
Charles K. Schwartz, 57, of Sparta, N.J., pleaded guilty before U.S. District Judge Susan D. Wigenton to one count of mail fraud. Schwartz was previously charged by complaint and arrested by special agents of the FBI on September 2, 2010. He has been in federal custody since that time.
U.S. Attorney Fishman stated: “Charles Schwartz turned phantom medical equipment into very real profits by tricking financial institutions out of tens of millions of dollars. Also victimized in this scheme were his employees, who watched his greed bankrupt the company that signed their paychecks. New Jersey is a hub for health care and financial industry, and we have no room for bad actors who criminally exploit our success.”
According to documents filed in this case and statements made in Newark federal court:
From at least 2002 through July 2010, Schwartz, through Allied Health Care Services, Inc. (“Allied”), convinced financial institutions to pay more than $135 million by telling them that the money would be used to lease valuable medical equipment. In reality, the purported medical equipment supplier did not provide Schwartz and Allied with any equipment during that time. Instead, the “supplier” created phony invoices which appeared to reflect legitimate transactions.
As part of the scheme, Schwartz approached various financial institutions and informed them that Allied needed to lease particular medical equipment. Using the phony invoices from the “supplier,” Schwartz convinced the financial institutions to enter into leasing arrangements. Pursuant to these arrangements, the financial institutions purchased the medical equipment—which they immediately leased to Schwartz and Allied—and sent payment for the medical equipment to the purported supplier. The “supplier” then sent the money received from the financial institutions (minus his 3-5 percent payment) to an entity created by Schwartz to facilitate the fraud.
In addition to spending millions of dollars on properties in New Jersey and New York, including a horse farm, Schwartz used the money in Ponzi-scheme fashion to repay earlier bank loans that were a part of the scheme. By August 2010, several financial institutions from which Schwartz had obtained loans filed lawsuits against Schwartz and Allied, claiming he owed them at least $20 million. Allied and Schwartz were forced into involuntary bankruptcy in August 2010 and September 2010, respectively. Losses from the scheme now total at least $80 million. Schwartz admitted that more than 50 victim financial institutions lost a total of between $50 and $100 million as a result of the scheme.
Schwartz and the medical equipment “supplier” undertook efforts throughout the scheme to deceive bank examiners who wanted to inspect the non-existent medical equipment, which had been purchased by the financial institutions. Schwartz admitted that in advance of expected inspections by financial institutions, he directed others to alter serial numbers or create fraudulent serial numbers on existing ventilators to match fraudulent invoices he had supplied to the various financial institutions. At times, when financial institutions sought to review documentation regarding Allied’s leasing of the ventilators to its customers, Schwartz falsely told the financial institutions that the information was protected by Health Insurance Portability and Accountability Act regulations. At one point during an August 2010 conversation between Schwartz and the “supplier,” Schwartz commented that the financial institutions had fallen “hook, line and sinker” for the false explanation given to bank examiners who asked why the purported supplier used his home address on certain invoices.
The mail fraud charge to which Schwartz pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 18, 2011.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Monday, April 11, 2011
Adelma Casas Sevilla Pleads Guilty in Connection with an Alleged $5.2 Million Medicare Fraud Scheme
WASHINGTON – A registered nurse employed by a Houston health care company pleaded guilty today in connection with an alleged $5.2 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Adelma Casas Sevilla, 54, pleaded guilty before U.S. District Court Judge Nancy Atlas in Houston to one count of conspiracy to commit health care fraud. According to court documents, Family Healthcare Group, a home health care company, purported to provide skilled nursing to Medicare beneficiaries. According to court documents, Family Group hired co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided. After the Medicare beneficiaries were recruited, Casas Sevilla, in her capacity as a registered nurse, fraudulently signed plans of care stating that the beneficiaries needed home health care when in fact she knew the beneficiaries were not home-bound and not in need of skilled nursing.
At sentencing, scheduled for July 21, 2011, Casas Sevilla faces a maximum sentence of 10 years in prison for the health care fraud conspiracy count.
Today’s guilty plea was announced by Assistant Attorney General of the Criminal Division Lanny A. Breuer; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and Texas Attorney General Greg Abbott.
This case is being prosecuted by Trial Attorneys Charles D. Reed and Laura Cordova, and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Sunday, April 10, 2011
Justice Department Requires Divestiture in Stericycle Inc.'s Acquisition of Healthcare Waste Solutions
WASHINGTON – The Department of Justice announced today that it will require Stericycle Inc. to divest an asset used in the treatment of infectious waste in order to proceed with its acquisition of Healthcare Waste Solutions Inc. (HWS). The department said the transaction, as originally proposed, would substantially lessen competition in the provision of infectious waste treatment services to hospitals and other health care facilities in the New York City metropolitan area, resulting in higher prices and reduced service.
The department’s Antitrust Division, along with the attorney general of the state of New York, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department and the New York attorney general filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“Without the divestiture required by the department, critical healthcare facilities in the New York City metropolitan area would have lost the benefits of competition for the provision of infectious waste treatment services and faced higher prices for those services,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
According to the complaint, the acquisition would remove a significant competitor in the treatment of infectious waste in an already highly concentrated market. The proposed acquisition would reduce from three to two the number of competitors with local transfer stations, leaving Stericycle and HWS with approximately 90 percent of the New York City metropolitan area’s infectious waste treatment market. This loss of competition likely would have resulted in higher prices and lesser quality of service for New York City area health care providers.
Under the proposed settlement, Stericycle and HWS must divest HWS’s transfer station located in the Bronx, N.Y., to a viable purchaser approved by the department. Transfer stations are facilities at which infectious waste collected by daily route trucks is transferred onto tractor trailers for efficient shipment of the waste to distant treatment facilities.
Stericycle is a Delaware corporation with its principal place of business in Lake Forest, Ill. Stericycle is a worldwide provider of infectious waste treatment services, and the largest provider in the United States, with operations in all 50 states. In 2009, Stericycle’s U.S. revenues totaled $913 million.
HWS is a Delaware corporation with its principal place of business in Cincinnati, Ohio. It is the second largest U.S. provider of infectious waste treatment services, with operations in 15 states. Its total revenues in 2009 were about $31 million.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Saturday, April 9, 2011
Jury Convicts Bassey Essien and his Daughter Rose Essien of Health Care Fraud
HOUSTON—The owners of a Houston area durable medical equipment company have been convicted by a jury of multiple counts of health care fraud arising from their roles in a scheme to defraud Medicaid through fraudulent billing for adult urinary incontinence supplies, United States Attorney José Angel Moreno and Texas Attorney General Greg Abbott announced today.
Bassey Essien, 60, and his daughter, Rose Essien, 31, of Houston, were found guilty on April 7, 2011, after an eight-day trial of multiple felony counts. Bassey Essien was convicted of all 19 counts alleged in the indictment against him—including conspiracy, health care fraud, and aggravated identity theft. Rose Essien was convicted of 15 of the 19 counts including 11 counts of health care fraud and five counts of aggravated identity theft. A third defendant, the Essien’s delivery driver, was acquitted on all counts.
Through the operation of Logic World Medical and Roben Medical, both durable medical equipment (DME) companies located in Houston, the Essiens unlawfully received Medicaid beneficiaries’ information, including names, addresses, and Medicaid numbers, which they then use to file false claims with the Medicaid program.
The evidence showed that the Essiens routinely billed Medicaid for adult urinary incontinence supplies they did not deliver to the Medicaid beneficiaries or for delivering supplies in amounts significantly less than the amounts billed to Medicaid. Additionally, the Essiens routinely billed Medicaid for adult urinary incontinence supplies provided to Medicaid beneficiaries who either did not need the supplies or whose physicians had not prescribed them. Adult incontinence supplies include adult diapers, underpads, wipes and pull-up briefs.
Through their DME company, the defendants continued to bill Medicaid for incontinence supplies even after their delivery staff and/or delivery contractors were told by the beneficiaries they did not need or want the supplies. They regularly billed Medicaid for the delivery of 300 diapers, the maximum allowed amount of incontinence supplies each month per beneficiary, and for extra-large size diaper briefs, which have the highest Medicaid reimbursement rate, without consideration to the actual size needed by the beneficiary. They even billed Medicaid for delivering a quantity of extra large adult size diapers far in excess of the amount they purchased from wholesale suppliers. The evidence showed the defendants only purchased six percent of the amount of extra large diapers they claimed to have delivered.
The scheme to defraud began in April 2004, under the company Logic World, with the last false claim having been filed in February 2010 under the name Roben Medical. The Essiens billed Medicaid for claims totaling approximately $2,341,293.64 and received payments for those claims totaling approximately $1,455,837.91.
Over government objection, the court has permitted Bassey and Rose Essien to remain on bond pending sentencing on July 8, 2011
Benjamin Essien, 34, Bassey Essien’s son, pleaded guilty to conspiracy to commit health care fraud, health care fraud, and aggravated theft in advance of trial.
All three defendants face a maximum of 10 years’ imprisonment and a $250,000 fine for the conspiracy conviction as well as each health care fraud conviction. Each count of aggravated identity theft carries a mandatory two-year consecutive term of imprisonment.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Friday, April 8, 2011
Margarita Acevedo Pleads Guilty for Her Role in Community Mental Health Care Fraud Scheme Involving More Than $100 Million in Fraudulent Medicare Claims
WASHINGTON – A Miami-area resident pleaded guilty today in U.S. District Court in Miami for her role in managing a community mental health care fraud scheme that resulted in the submission of more than $100 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Margarita Acevedo pleaded guilty before U.S. Magistrate Judge Barry L. Garber to one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive illegal health care kickbacks. In pleading guilty, Acevedo admitted that since 2005, she served as the marketing director for American Therapeutic Corporation (ATC), a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for mental illness.
Acevedo admitted that as marketing director, her job was to orchestrate the payment of kickbacks and bribes used to recruit Medicare beneficiaries to attend ATC and a related company, American Sleep Institute (ASI). Acevedo admitted that the Medicare beneficiaries recruited by ATC and ASI, were not eligible to receive the PHP and sleep study services that ATC and ASI billed to Medicare, and that the services were not medically necessary. During the period of her involvement in the fraud scheme, the defendant admitted that she and her co-conspirators caused between $100 million and $200 million in fraudulent claims to be submitted to Medicare for services purportedly provided at ATC and ASI.
According to court documents, Acevedo and others paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for providing ineligible patients to ATC and ASI. Acevedo and her co-conspirators knew that Medicare beneficiaries were recruited regardless of their medical needs and in some cases the beneficiaries received a portion of the kickbacks. Acevedo and her co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in this kickback scheme. Acevedo admitted that she and other co-conspirators paid and caused the payment of millions of dollars in kickbacks in exchange for Medicare beneficiaries to attend ATC and ASI programs for which they did not qualify so that ATC and ASI could bill Medicare for medically unnecessary services.
Acevedo also admitted that she and her co-conspirators engaged in elaborate and sophisticated measures to conceal their fraudulent activities from Medicare and from law enforcement.
Acevedo and her co-conspirators were charged in a superseding indictment unsealed on Feb. 15, 2011. The superseding indictment alleges that ATC and ASI submitted a total of more than $200 million in claims to Medicare.
Thursday, April 7, 2011
Dr. Ghulam Mustafa Pleads Guilty to Making False Health Care Statements
BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that Ghulam Mustafa, 48, of Albion, New York, pleaded guilty before Judge Richard J. Arcara, to a felony charge of making false statements in connection with a health care matter. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Mary Ellen Kresse, who is handling the case, stated that on multiple occasions between January 2005 and December 2007, Mustafa, a physician working with Hassan Medical Group in Albion, New York, submitted claims to health insurance companies seeking reimbursement for vaccines he administered to patients. The patients were insured by those companies but Mustafa received the vaccines for free through the Vaccines for Children Program—a federally funded program administered by New York State. The program is designed to provide free vaccines to underprivileged children. Mustafa falsely indicated that more patients were eligible for the free vaccines than actually were. As a result, the defendant received over $80,000 in reimbursements from private insurance companies to which he was not entitled.
“Our office will not tolerate any attempts to defraud our country’s health care sector,” said U.S. Attorney Hochul. “In this case, the defendant targeted not only private health insurance companies but also a federal program designed to provide health care assistance to those who need it most.”
The guilty plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard Kollmar, and Health and Human Services, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Thomas O’Donnell.
Tuesday, April 5, 2011
Rex Healthcare Hospital to Pay U.S. $1.9 Million to Resolve Allegations Related to Kyphoplasty and Other Procedures
WASHINGTON – Rex Healthcare, a 655-bed hospital in Raleigh, N.C., has agreed to pay the United States $1.9 million, plus interest, to settle allegations that it submitted false claims to Medicare, the Justice Department announced today. The government alleges that the hospital routinely submitted claims to Medicare for a variety of minimally-invasive procedures during the period 2004 through 2007, which the hospital classified as inpatient admissions in order to increase its reimbursement from Medicare, despite the absence of medical necessity justifying the more expensive inpatient admissions.
The allegations arise from a lawsuit that was brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. The lawsuit was filed in 2008 in federal district court in Buffalo, N.Y., by former Kyphon employees Craig Patrick and Charles Bates. They will receive a total of approximately $80,000 as their share of the settlement proceeds for those claims related to kyphoplasty claims. The settlement also involves claims related to a variety of other minimally-invasive procedures that the hospital classified as inpatient admissions in order to increase its reimbursement when less costly outpatient visits would have been appropriate.
“We pursue cases like this because when hospitals submit false claims in order to increase their Medicare reimbursement, as we allege here, it artificially drives up the cost of health care, leaving taxpayers to foot the inflated bill," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
“This settlement shows the continuing commitment by the U.S. Attorney’s Office for the Western District of New York to investigate and recover any improper billings for kyphoplasty procedures and to partner with our colleagues in other U.S. Attorney Offices when necessary to remedy similar billing abuses related to non-kyphoplasty procedures,” said William J. Hochul Jr., U.S. Attorney for the Western District of New York.
“This resolution demonstrates the department’s ability to coordinate efficiently among districts and with our partners at the U.S. Department of Health and Human Services to achieve a comprehensive and fair result,” said George E.B. Holding, U.S. Attorney for the Eastern District of North Carolina. “We are committed to ensuring that Medicare funds are expended appropriately in all cases.”
“Submitting inflated claims - as Rex Healthcare is alleged to have done - drains critically-needed dollars from government health care programs,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “OIG is committed to working closely with our law enforcement partners to pursue and hold accountable entities that defraud Medicare and ultimately U.S. taxpayers.”
Assistant Attorney General West noted that the settlements with these hospitals were the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of New York, the U.S. Attorney’s Office for the Eastern District of North Carolina and the Department of Health and Human Services’ Office of Inspector General.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Monday, April 4, 2011
U.S. Files Complaint Against Texas-Based Healthpoint Ltd. Under the False Claims Act
WASHINGTON – The United States has filed a complaint against Healthpoint Ltd., alleging civil False Claims Act violations arising from the company’s sale of an unapproved prescription drug that was ineligible for payment under Medicaid and Medicare, the Justice Department announced today. In the complaint, filed in the District of Massachusetts, the government alleges that the Ft. Worth, Texas-based subsidiary of DFB Pharmaceuticals Inc., submitted false statements concerning the regulatory status of Xenaderm to the United States, thereby causing false or fraudulent prescription claims for the unapproved drug to be submitted to Medicaid and Medicare.
Xenaderm, a skin ointment primarily used to treat bed and pressure sores, otherwise known as “decubitus ulcers,” was launched by Healthpoint in 2002 without any approval by the Food and Drug Administration (FDA). Xenaderm contains trypsin as an active ingredient, which is intended to function in the unapproved drug as a debriding agent, i.e., for the removal of dead tissue around a wound. In the 1970s, however, the FDA determined on at least two separate occasions that trypsin was ineffective as a debriding agent and rescinded the market approval for products containing trypsin as a debriding agent. As a result of these determinations, Xenaderm, which came onto the market much later, was ineligible for reimbursement under Medicaid and Medicare.
The government’s complaint alleges that Healthpoint knew Xenaderm was unapproved, and knew of or recklessly disregarded the FDA notices concerning trypsin’s lack of effectiveness as a debriding agent. According to the complaint, Healthpoint nonetheless falsely represented to the United States that the drug was eligible for Medicaid and Medicare reimbursement. As a result of Healthpoint’s false statements, the United States alleges that Healthpoint caused Medicaid and Medicare to pay tens of millions of dollars for an unapproved drug that was ineligible for reimbursement.
“The complaint filed today underscores our commitment to pursuing manufacturers that provide false information to obtain taxpayer dollars for unapproved and ineffective drugs,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.
“This action reflects our continued efforts to ensure that drug manufacturers do not evade the drug approval process or cause the government to pay for less than effective drugs,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Saturday, April 2, 2011
Dannette M. Hawthorne The Owner of the Two Columbus Clinics Pleaded Guilty to Illegally Distributing Thousands of Pain Pills
COLUMBUS—The owner and two employees of two pain management clinics in Columbus have pleaded guilty in U.S. District Court to distributing prescriptions for the equivalent of more than 11,000 dosages of pain medicine without a legitimate medical need for the prescriptions and fraudulently billing a government insurance program for the drugs.
Dannette M. Hawthorne, 48, of Columbus, the owner of the two Columbus clinics, Trinity Medical Center, LLC, and Perspective Medical Solutions, Inc. pleaded guilty today to one count each of conspiracy to distribute Schedule II controlled substances, conspiracy to commit health care fraud, submission of fraudulent claims, and aggravated identity theft.
Charlene Breedlove-Jones, 53, of Columbus and the office manager for both clinics, pleaded guilty Monday, March 28 to one count each of conspiracy to distribute Schedule II controlled substances, health care false statements, obtaining controlled substances by fraud, attempted distribution of a controlled substance and aggravated identity theft.
In 2010, Hawthorne and Breedlove-Jones illegally distributed 170 grams of oxycodone, or the equivalent of more than 11,000 dosages of 15-milligram pills.
The U.S. Attorney’s Office asked the court to order that Hawthorne and Breedlove-Jones remain in custody until sentencing.
Deneshia M. Wakefield, 37, of Columbus, who was employed at both clinics, pleaded guilty on March 25 to one count each of health care false statements and obtaining a controlled substance by fraud.
According to statements read during their plea hearings, Hawthorne owned the clinics operating on Karl Court in Columbus. The clinics accepted cash payments only and charged approximately $365 for each new patient and $265 for returning patients. In June 2010 Hawthorne and Jones had a physician employed by the clinic sign numerous prescriptions for oxycodone in the hotel room where he was staying, knowing that he had not seen any of the patients for whom the prescriptions were intended.
Between August, 2010 and December, 2010, Trinity and Perspective employed no licensed physicians. Hawthorne and Breedlove-Jones conspired to forge hundreds of physician signatures on prescriptions for pain medications and other controlled substances. Hawthorne and Breedlove-Jones used the names of physicians who had previously worked at Trinity and Perspective without the physicians’ knowledge. Breedlove-Jones and Hawthorne distributed the prescriptions to patients of the clinics, many of whom had addictions to pain medications. Patients subsequently had the prescriptions filled at various pharmacies throughout Ohio and neighboring states.
Hawthorne also had prescriptions for pain medications filled in the names of co-workers who were receiving Medicaid benefits and illegally billed the Medicaid program more than $29,000 for filling the prescriptions.
“Illegal diversion of prescription drugs and Medicaid fraud are two crimes we vigorously prosecute,” Stewart said. “We are committed to working with the Ohio Attorney General’s office and other state, local and federal agencies to attack the prescription diversion problem.”
“I commend our team of federal, state, and local law enforcement officers and prosecutors who helped convict these three drug dealers,” Ohio Attorney General DeWine said. “The Ohio Attorney General’s Office will continue to partner with the U.S. Attorney’s Office and local law enforcement to protect Ohio families from the predators who try to poison them through prescription drug abuse.”
substances is punishable and attempted distribution of a controlled substance are each punishable by up to 20 years' imprisonment and a fine of up to $1 million. Conspiracy to commit health care fraud is punishable by up to 10 years' imprisonment and a fine of $250,000. Submitting fraudulent claims is punishable by up to five years in prison. Obtaining a controlled substance by fraud is punishable by up to four years in prison. Aggravated identity theft carries a mandatory two-year sentence which must be served consecutive to the sentences imposed for any of the other crimes.
Judge Frost will determine the sentences and schedule a sentencing hearing following the completion of a pre-sentence investigation by the court.
Stewart commended the cooperative investigation by the federal, state and local law enforcement agencies who are investigating the case, and Assistant U.S. Attorney Kenneth Affeldt, and Special Assistant U.S. Attorney Shawn Napier with Ohio Attorney General Mike DeWine’s Office, who are prosecuting the case.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Friday, April 1, 2011
Carolyn Ann Vasquez Pleads Guilty to Participating in a Medicare Fraud Scheme Using Fraudulent Medical Clinics and Stolen Doctor Identities to Defraud Medicare of More Than $6.2 Million
WASHINGTON—A Los Angeles woman has pleaded guilty to using fraudulent medical clinics and the stolen identities of physicians to defraud Medicare of more than $6.2 million, the Departments of Justice and Health and Human Services (HHS) announced.
Carolyn Ann Vasquez, 46, pleaded guilty yesterday before U.S. District Judge Terry J. Hatter Jr. in the Central District of California. Vasquez admitted that from 2007 to 2008, she conspired with others to use a series of fraudulent Los Angeles-area medical clinics to defraud Medicare. Vasquez admitted that her co-conspirators used the identities and Medicare provider numbers of physicians who both worked and did not work at the clinics to submit false claims to Medicare for reimbursement for services the physicians did not perform and for power wheelchairs, medical equipment and diagnostic tests that the physicians did not order or prescribe. According to court documents, physician assistants recruited to work at the clinics by Vasquez and working at her direction performed these services and prescribed and ordered the wheelchairs, medical equipment, and diagnostic tests.
According to court documents, Vasquez told the physicians she recruited that they would be the medical directors of the clinics, but that if they did not want to work full time, the clinics would hire physician assistants. Vasquez assisted the physicians in obtaining Medicare provider numbers and entering into management agreements that gave Vasquez's co-conspirators authority to operate and manage the clinics in exchange for 75 percent of the reimbursement payments the physicians received from Medicare.
According to court documents, Vasquez's involvement in the recruitment of the physicians gave her access to their personal and Medicare information, which Vasquez stole to further the fraud scheme at the medical clinics. Vasquez admitted that in approximately 2007, a physician contacted her about a job at one of the fraudulent medical clinics, but the physician decided not to accept the job. Nevertheless, Vasquez's co-conspirators printed prescription pads with the physician's name and Medicare provider number on them. Vasquez admitted that she instructed a physician assistant working at one of the fraudulent medical clinics to use the prescription pads to write fraudulent prescriptions and medical documentation for diagnostic tests, power wheelchairs and other medical equipment in the physician's name even through Vasquez knew that the physician did not work at the clinic. Vasquez admitted that as a result of her conduct, Medicare was defrauded of approximately $6,268,899.
At sentencing, scheduled for July 11, 2011, Vasquez faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in court documents in this case, Vasquez pleaded guilty in 1993 to participating in a health care fraud scheme. According to court documents, Vasquez and others used telemarketing or "boiler room" schemes to defraud government-funded health care benefit programs of approximately $41 million.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Thursday, March 31, 2011
Marlon Oslvaldo Palma Sentenced to Nearly Five Years in Prison in $1.8 Million Medicare Fraud Scheme
LOS ANGELES—The owner of a South Los Angeles medical supply company that fraudulently collected nearly $2 million from Medicare for unneeded electric wheelchairs and other durable medical equipment has been sentenced to 57 months in federal prison.
Marlon Oslvaldo Palma, 40, of South Los Angeles, was sentenced late yesterday by United States District Judge Christina A. Synder.
Palma, the co-owner of Santos Medical Supply, pleaded guilty in March 2010 to conspiracy to commit health care fraud. Palma admitted to bilking the Medicare program by submitting claims for $5,000 power wheelchairs and other medical equipment that were unnecessary and, in many instances, never provided to patients. As part of the scheme, Palma bought Medicare patient information and bogus prescriptions from a medical clinic and patient recruiters and then used that information to bill Medicare. Santos Medical Supply submitted nearly $3 million worth of fraudulent claims to Medicare, which paid out $1,822,016.
Palma was arrested in September 2008 after an investigation by the Medicare Fraud Strike Force, a multi-agency team comprised of the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General (HHS-OIG); the Fraud Section in the Criminal Division at the United States Department of Justice in Washington; and the United State’s Attorney’s Office in Los Angeles.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Wednesday, March 30, 2011
Carolyn Ann Vasquez Pleads Guilty to Participating in a Medicare Fraud Scheme Using Fraudulent Medical Clinics and Stolen Doctor Identities to Defraud Medicare of More Than $6.2 Million
WASHINGTON—A Los Angeles woman has pleaded guilty to using fraudulent medical clinics and the stolen identities of physicians to defraud Medicare of more than $6.2 million, the Departments of Justice and Health and Human Services (HHS) announced.
Carolyn Ann Vasquez, 46, pleaded guilty yesterday before U.S. District Judge Terry J. Hatter Jr. in the Central District of California. Vasquez admitted that from 2007 to 2008, she conspired with others to use a series of fraudulent Los Angeles-area medical clinics to defraud Medicare. Vasquez admitted that her co-conspirators used the identities and Medicare provider numbers of physicians who both worked and did not work at the clinics to submit false claims to Medicare for reimbursement for services the physicians did not perform and for power wheelchairs, medical equipment and diagnostic tests that the physicians did not order or prescribe. According to court documents, physician assistants recruited to work at the clinics by Vasquez and working at her direction performed these services and prescribed and ordered the wheelchairs, medical equipment, and diagnostic tests.
According to court documents, Vasquez told the physicians she recruited that they would be the medical directors of the clinics, but that if they did not want to work full time, the clinics would hire physician assistants. Vasquez assisted the physicians in obtaining Medicare provider numbers and entering into management agreements that gave Vasquez's co-conspirators authority to operate and manage the clinics in exchange for 75 percent of the reimbursement payments the physicians received from Medicare.
According to court documents, Vasquez's involvement in the recruitment of the physicians gave her access to their personal and Medicare information, which Vasquez stole to further the fraud scheme at the medical clinics. Vasquez admitted that in approximately 2007, a physician contacted her about a job at one of the fraudulent medical clinics, but the physician decided not to accept the job. Nevertheless, Vasquez's co-conspirators printed prescription pads with the physician's name and Medicare provider number on them. Vasquez admitted that she instructed a physician assistant working at one of the fraudulent medical clinics to use the prescription pads to write fraudulent prescriptions and medical documentation for diagnostic tests, power wheelchairs and other medical equipment in the physician's name even through Vasquez knew that the physician did not work at the clinic. Vasquez admitted that as a result of her conduct, Medicare was defrauded of approximately $6,268,899.
At sentencing, scheduled for July 11, 2011, Vasquez faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in court documents in this case, Vasquez pleaded guilty in 1993 to participating in a health care fraud scheme. According to court documents, Vasquez and others used telemarketing or "boiler room" schemes to defraud government-funded health care benefit programs of approximately $41 million.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Monday, March 28, 2011
Fred Dweck Sentenced to 24 Months in Prison for Role in $37 Million Medicare Fraud Scheme Involving Miami-Area Home Health Agencies
WASHINGTON – A Miami-area doctor, Fred Dweck, was sentenced to 24 months in prison today for his role in a wide-ranging Medicare fraud scheme involving several Miami-area home health agencies, the Departments of Justice and Health and Human Services (HHS) announced today.
U.S. District Judge Adalberto Jordan also sentenced Dweck to three years of supervised release following his prison term and ordered him to pay $22 million in restitution jointly and severally with his co-defendants and co-conspirators in a related case. The restitution is to be paid to the victim in this case, the Centers for Medicare and Medicaid Services (CMS).
According to court documents, Dr. Dweck was the physician at Courtesy Medical Group, a Miami medical clinic that purported to provide health care services to Miami-area residents. The clinic was at various times owned by two of Dweck’s co-defendants, Auturo Fonseca and Yudel Cayro. At his plea hearing, Dweck admitted that while employed at the clinic, he wrote hundreds of prescriptions and signed hundreds of plans of care and medical certifications for Medicare beneficiaries to receive purported home health services. These services included twice or three-times daily skilled nursing visits to provide diabetic insulin injections. Dweck admitted that, in fact, these Medicare beneficiaries were able to care for themselves and did not actually need or qualify for the expensive home health services. Dweck also admitted to having prescribed unnecessary physical therapy services for many of the same Medicare beneficiaries.
According to court documents, the owners of Courtesy Medical Group would solicit and accept bribes and kickbacks from patient recruiters and the owners of Miami-area home health agencies in return for providing the bogus prescriptions signed by Dweck. Those prescriptions would then be used by dozens of Miami-area home health agencies to fraudulently bill the Medicare program for millions of dollars in unnecessary services.
Dweck admitted that in total, from about August 2006 through December 2009, he referred approximately 858 patients through Courtesy Medical Group and other Miami-area clinics for these unnecessary home health and therapy services, resulting in more than $37 million being fraudulently billed to the Medicare program. Of that amount, more than $22 million was actually paid out by the Medicare program to various Miami-area home health agencies. According to court documents, more than $16 million of those fraudulent billings stemmed from prescriptions issued by Dweck through Courtesy Medical Group, of which close to $10 million was actually paid out by Medicare.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Sunday, March 27, 2011
Melanie Newman and her Husband Michael Anthony Goodloe Jr, Sentenced for Conspiracy to Commit Health Care Fraud
MELANIE NEWMAN, age 25, and her husband, MICHAEL ANTHONY GOODLOE, JR., age 28, both of Carrollton, Texas, were sentenced today in federal court by U. S. District Judge Mary Ann Vial Lemmon for their roles in a health care fraud conspiracy, announced U. S. Attorney Jim Letten. Specifically, NEWMAN was sentenced to twenty-four (24) months in prison and GOODLOE was sentenced to eighteen (18) months in prison to be followed by six (6) months of home confinement. Both defendants were ordered to serve three (3) years’ supervised release following imprisonment during which time they will be under federal supervision and risk additional imprisonment should they violate the terms of the supervision. In addition, NEWMAN was ordered to pay restitution in the amount of $152,915.04 and GOODLOE in the amount of $103,325 to the Medical Center of Louisiana Foundation. 10/21
According to court documents, both defendants pled guilty on October 21, 2010. NEWMAN admitted that, as a bookkeeper employed at the Medical Center of Louisiana Foundation, she created and forged Foundation checks to pay for personal items and expenses, such as her wedding to GOODLOE, payment of student loans and to purchase automobiles. NEWMAN further admitted that she also gave forged checks to GOODLOE who had no legitimate business with the Foundation. During the conspiracy, NEWMAN and GOODLOE took approximately $220,603.65, some of which was retrieved by the Foundation.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Saturday, March 26, 2011
Dr. Selwyn Carrington Charged with Conspiring to Distribute Controlled Substances
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Pam Bondi, Florida Attorney General, Medicaid Fraud Control Unit (MFCU), West Palm Beach Bureau; William J. Maddalena, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Office of Investigations; John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service (DCIS); and the Greater Palm Beach Health Care Fraud Task Force, announced the arrest of Dr. Selwyn Carrington, a 57-year-old physician living in Miami, Florida.
The criminal complaint charges the defendant, Dr. Carrington with conspiring to dispense and distribute and to cause the dispensing and distribution of controlled substances through medical clinics in Hallandale and West Palm Beach, Florida, in violation of Title 21, United States Code, Sections 846 and 841(a)(1). If convicted, Dr. Carrington faces a maximum statutory sentence of 20 years. Selwyn Carrington is a licensed physician in the State of Florida. Carrington’s primary practice is at 1613 North Hiatus Road, Pembroke Pines, Florida.
According to the complaint and corresponding affidavit, Dr. Carrington served as the medical director of Primary Care Primary Care Practitioners, a family medical practice owned by two advanced registered nurse practitioners (ARNPs). Primary care practitioners operates clinics in Hallandale and West Palm Beach, Florida.
According to court documents, the investigation revealed that Dr. Carrington did not treat or evaluate any clients at the clinics and he was not at the clinics during their normal business hours. The investigation revealed that, in exchange for $5,000 per month, Dr. Carrington went to the clinics approximately once per week to sign progress notes for patients that had been previously seen by the ARNPs and to pre-sign blank prescriptions so that the ARNPs and other employees, who have no medical licenses, could illegally prescribe controlled substances to their clients. According to the charging documents, Percocet, Oxycodone, and Xanax were all illegally prescribed in this manner.
An analysis of the payments made by Florida Medicaid for the time period from March 2005 through January 2011 indicated that over 300,000 pills containing controlled substances were dispensed to Primary Care Practitioner’s clients due to the prescriptions pre-signed by Dr. Carrington. The Florida Medicaid Program paid for these pills. The 300,000 pill total includes 150,000 pills containing Schedule II control substances. Schedule II controlled substances, such as Oxycodone, have a high level of abuse or misuse and so their use is severely restricted in the United States.
************************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
