The owners and operators of several Miami home health care agencies and a patient recruiter pleaded guilty today in connection with a health care fraud scheme involving defunct home health care company Trust Care Health Services Inc. (Trust Care).
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; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; 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 Investigations Miami office; and Acting Special Agent in Charge Michael J. DePalma of the Internal Revenue Service—Criminal Investigation’s (IRS-CI) Miami Field Office made the announcement.
Roberto Marrero, 60; Sandra Fernandez Viera, 49; and Enrique Rodriguez, 59, all of Miami, pleaded guilty before U.S. Magistrate Judge Edwin G. Torres in the Southern District of Florida to conspiracy to commit health care fraud and conspiracy to receive and pay health care kickbacks.
Marrero and Fernandez Viera were owners and operators of Trust Care, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Rodriguez worked as a patient recruiter on behalf of Trust Care and Marrero and Fernandez Viera.
According to court documents, Marrero and Fernandez Viera operated Trust Care for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.
Marrero largely controlled Trust Care and, in light of that role, oversaw the schemes operating out of the company. Fernandez Viera’s primary role, among others, involved managing and supervising personnel at Trust Care. Both Marrero and Fernandez Viera were responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims submitted to the Medicare program.
Marrero, Fernandez Viera and their co-conspirators paid kickbacks and bribes to patient recruiters, including Rodriguez, in return for the recruiters providing patients to Trust Care for home health and therapy services that were medically unnecessary and/or not provided. Marrero, Fernandez Viera and their co-conspirators at Trust Care also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation. Marrero, Fernandez Viera and their co-conspirators used these prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Marrero and Fernandez Viera knew was in violation of federal criminal laws.
Rodriguez offered and paid kickbacks and bribes to Medicare beneficiaries in return for those beneficiaries allowing Trust Care to bill Medicare for services that were medically unnecessary and/or not provided. Rodriguez solicited and received kickbacks and bribes from the owners and operators of Trust Care, including Marrero and Fernandez Viera, in return for his patient recruiting. Rodriguez knew that in many instances the patients he recruited for Trust Care did not qualify for the services billed to Medicare.
From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services. Medicare paid Trust Care more than $15 million for these fraudulent claims.
Marrero, Fernandez Viera and Rodriguez also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies in addition to Trust Care with estimated total losses of approximately $50 million, including Global Nursing Home Health Inc., Lovable Home Health Services Corp., New Concepts In Health Inc., Ubieta Health System Inc., R&M Health Care Inc., Vital Care Home Health Services Inc., Centrum Home Health Care Inc. and A&B Health Services Inc.
At sentencing, scheduled for Nov. 12, 2013, the defendants face a maximum penalty of 10 years in prison for conspiracy to commit health care fraud and five years in prison for conspiracy to receive and pay health care kickbacks.
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Source- http://www.justice.gov/usao/txs/1News/Releases/2013%20September/130905%20-%20Nowlin.html
HOUSTON – Yolanda Nowlin, 42, has been convicted of conspiracy to commit health care fraud, four counts of health care fraud, conspiracy to commit kickback fraud and aiding and abetting Social Security fraud, United States Attorney Kenneth Magidson announced today. The verdicts were returned late yesterday afternoon following seven days of trial and less than three hours of deliberations.
Nowlin, of Bryan, ran two durable medical equipment companies - Yellabone Medic Care Express Equipment Supply Company and Yellabone Medical Equipment Inc. Nowlin was arrested in December 2012 along with co-defendant Carla Parnell, 50, also from Bryan. Parnell pleaded guilty earlier this year to Social Security fraud and testified against Nowlin at the jury trial.
The evidence at trial showed that between July 2003 and December 2009, Nowlin engaged in a scheme to defraud Medicare and Medicaid. Nowlin submitted claims to Medicare and Medicaid for durable medical equipment (DME) and incontinence supplies that were not delivered, not wanted and not needed by Medicare or Medicaid beneficiaries and were often the result of illegal kickbacks. During the alleged conspiracy, Nowlin submitted approximately $3,391,771.90 in claims to Medicare and Medicaid and received $1,108,316.82 for those claims. Approximately $750,000 was identified as fraudulently paid.
The evidence at trial also showed that Nowlin paid kickbacks to a large number of recruiters over the course of the scheme in return for the referral of beneficiaries to Yellabone.
Nowlin was additionally convicted of aiding and abetting the theft of government money from the Social Security administration. Nowlin and Parnell concealed Parnell’s employment with Yellabone in order to continue Parnell’s receiving Social Security disability benefits to which she was not entitled.
Nowlin faces up to 10 years for aiding and abetting Social Security fraud, up to 10 years for each count of health care fraud, up to 10 years for conspiracy to commit health care fraud and a maximum of five years for conspiracy to commit kickback fraud. She could also face the possibility of up to a $250,000 fine.
Nowlin’s sentencing hearing is set for Dec. 13, 2013, while Parnell is scheduled to be sentenced Dec. 20, 2013. Both women were permitted to remain on bond pending their respective hearings.
The United States is additionally seeking forfeiture of approximately $750,000 to be paid as restitution to Medicare and Medicaid.
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Two patient recruiters of a Miami health care company pleaded guilty late yesterday for their participation in a $48 million home health Medicare fraud scheme.
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; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Elizabeth Monteagudo, 33, and Cristobal Gonzalez, 39, both of Miami, pleaded guilty on Sept. 3, 2013, before U.S. District Judge Joan A. Lenard to one count each of conspiracy to receive health care kickbacks. Monteagudo also pleaded guilty to receipt of kickbacks in connection with a federal health care program. Both charges carry a maximum penalty of five years in prison, and sentencing for both defendants is scheduled for Dec. 2, 2013.
According to court documents, Monteagudo and Gonzalez were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Gonzalez also worked for Good Quality Home Health Care, Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.
According to court documents, from approximately January 2009 through approximately June 2011, Monteagudo and Gonzalez would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
Monteagudo also admitted to her involvement with $7 million in fraudulent billings for Starlite Home Health Agency Inc., which she owned and operated.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively. Their sentencings followed their December 2012 guilty pleas each to one count of conspiracy to commit health care fraud charged in an October 2012 indictment, which charged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided. Medicare actually paid approximately $33 million for these fraudulent claims.
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PHILADELPHIA - Aleksandr N. Zagorodny, 40, of Southampton, PA, was sentenced today to 78 months in prison for a healthcare fraud scheme involving MedEx Ambulance, Inc., located in Feasterville, PA. Zagorodny was the President and a founder of MedEx Ambulance. His 36 year-old brother, Sergey Zagorodny, from Philadelphia, PA, the former Vice-president and co-owner of the company, was sentenced to 60 months in prison for his involvement in the health care fraud scheme. MedEx Ambulance was ordered to be dissolved after it has been excluded from participation in Medicare and its assets are transferred to the government to satisfy restitution and forfeiture obligations. Each defendant had pleaded guilty to all counts in a 41-count indictment including health care fraud, false statements in connection with health care matters, wire fraud, and conspiracy to commit health care fraud and wire fraud.
Defendant MedEx Ambulance and its owners transported patients who were able to walk and could travel safely by means other than ambulance and who were not eligible for ambulance transportation under Medicare requirements. Falsified reports made it appear that the patients needed to be transported by ambulance when the defendants and their employees knew otherwise. The defendants billed for the ambulance services as if those services were medically necessary. The Medicare program was bilked out of more than $3.4 million through this fraud.
U.S. District Court Judge Berle M. Schiller also ordered restitution to Medicare in the amount of $3,418,358.81, a special assessment of $4,100 for each individual defendant and $16,400 for the corporation, and a 3-year term of supervised release for the individuals and 5 years of probation for the corporation. The Court ordered the forfeiture of four ambulances that had been purchased for over $200,000, as well as forfeiture of bank accounts worth over $40,000, and entered a money judgment against the defendants for $3,418,358.81. In connection with the sentencing, the company agreed to sell its base of operations and to provide the proceeds of that sale to the government in partial satisfaction of the defendants’ restitution obligations. The defendants and their wives also pledged to sell their family homes, as well as additional property, and to provide the proceeds of the sale of those assets to partially satisfy the defendants’ restitution obligations.
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Source- http://www.justice.gov/usao/txs/1News/Releases/2013%20September/130904%20-%20Ramirez%20and%20Velasquez.html
CORPUS CHRISTI, Texas - Sylvia Salinas Ramirez, of Driscoll, and Debra Jean Velasquez, of Robstown, have been convicted of wire fraud and conspiring to do so as part of a scheme to defraud the Texas Medicaid program through fraudulent home health billings, United States Attorney Kenneth Magidson announced today along with Texas Attorney General Greg Abbott.
Ramirez, 52, and Velasquez, 41, were charged in a 14-count federal indictment returned Wednesday, May 8, 2013. Today, they appeared before U.S. District Judge Nelva Gonzales Ramos and entered pleas of guilty to conspiring to submit false and fraudulent bills to the Texas Medicaid Program by wire transmissions as well as wire fraud for using interstate wire transmissions to bill.
The two women admitted that from or about Aug. 1, 2009, through on or about June 15, 2010, they were employed by the Corpus Christi office of MRNG Inc. doing business as Caring Touch Home Health. During that time, they conspired to submit false and fraudulent bills through wire transmissions to the Texas Medicaid program and the Medicaid funded managed care organizations known as Evercare of Texas LLC and Superior Health Plan Inc. for home health services that had not been provided. Ramirez and Velasquez admitted they created false and fraudulent time sheets for former Caring Touch employees for home health services that had not been provided and then fraudulently billed Medicaid, Evercare and Superior in the name of Caring Touch for those non-existent services. They sent approximately 562 of those false and fraudulent bills by wire.
Ramirez and Velasquez also admitted that in order to personally profit from their fraudulent billings, they created phony payroll records from the fraudulent time sheet which they then sent to Caring Tough’s payroll staff. Ramirez and Velasquez then obtained the payroll checks generated from the false and fraudulent time records, forged the signatures of the former Caring Touch employees, then cashed the checks and divided the money among themselves. Caring Touch and the former employees whose names were used on the false time sheets and checks were not accused of any wrongdoing.
Ramirez and Velasquez admitted that as a result of their false and fraudulent claims, Texas Medicaid, Evercare and Superior paid the approximate aggregate sum of $155,127.72. As part of their pleas, the women have agreed to pay restitution in that amount.
Conspiracy to commit wire fraud and wire fraud each carry a maximum punishment of 20 years in federal prison without parole as well as a possible $250,000 fine. Judge Ramos has set sentencing Dec. 3, 2013. Ramirez and Velasquez were permitted to remain on bond pending that hearing.
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Source- http://www.justice.gov/opa/pr/2013/August/13-crm-981.html
A former office manager at the defunct health care provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 68 months in prison for her role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
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; Special Agent in Charge Michael B. Steinbach 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 Investigations Miami office made the announcement.
Lisset Palmero, 45, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to her prison term, Palmero was sentenced to three years of supervised release and ordered to pay restitution in the amount of $17.4 million.
During the course of the conspiracy, Palmero was employed as a receptionist and office manager at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services. A PHP is a form of intensive treatment for severe mental illness.
HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. According to court documents, Palmero was aware that HCSN-FL 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. Palmero also knew that many of the ALF referral patients were ineligible for PHP services because they suffered from mental retardation, dementia or Alzheimer's disease.
Court documents reveal that Palmero was aware that HCSN-FL personnel were fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment. Palmero was also aware that medical records were fabricated for “ghost patients” who were never admitted to the HCSN-FL PHP. During her employment at HCSN-FL, Palmero actively concealed the fabrication of medical records by preparing, and causing others to prepare, documentation that was later utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Florida Medicaid.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported HCSN-FL mental health services.
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Source- http://www.justice.gov/usao/ncm/news/2013/08_28_13.html
Ordered to serve prison time and pay restitution
GREENSBORO, N.C. – United States Attorney Ripley Rand of the Middle District of North Carolina announced today that two Alamance County residents have been sentenced to prison for defrauding the Medicaid program.
EVELYN FULLER, 61, and MICHAEL McLEAN, 57, were sentenced by United States District Judge Catherine Eagles in federal court in Greensboro, North Carolina, on Tuesday, August 27, 2013. FULLER was sentenced to 26 months imprisonment. Her co-defendant, McLEAN, was sentenced to 36 months imprisonment. FULLER and McLEAN were also ordered to pay restitution to the Medicaid program in the amount of $399,811.44. Both FULLER and McLEAN will serve three years of supervised release after serving their prison sentences.
FULLER and McLEAN plead guilty on February 27, 2013, to health care fraud charges in connection with a scheme to defraud the North Carolina State Medicaid program in connection with community support services. Both worked for a company called Harvest House Community Development Corporation, through which they submitted false claims to the Medicaid program for community support services which were not actually rendered. Community support services are rehabilitative services for eligible children and adults in which the clinical and diagnostic needs of the clients are arranged, coordinated, and monitored.
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Source- http://www.justice.gov/usao/hi/news/1308wgh.html
HONOLULU - Wahiawa General Hospital ("WGH") of Honolulu, Hawaii, shall pay $451,428.00 to settle two lawsuits alleging that WGH improperly billed the Medicare program, the State of Hawaii Medicaid program, and TRICARE, the federal health benefits program for military dependents. The settlement grew out of civil "whistleblower" lawsuits brought under the federal and State of Hawaii False Claims Acts in federal and state court by a doctor who had worked at the Physicians Center at Mililani (“PCM”), an out-patient clinic operated by WGH. The doctor alleged that WGH had submitted bills to Medicare and Medicaid programs for services provided by resident doctors without the level of supervision required by federal law. The federal and state governments initiated an investigation based upon the doctor’s allegations.
According to the settlement agreement signed on August 29, 2013, the federal and state governments alleged that WGH wrongfully submitted claims to the Medicare, Medicaid, and TRICARE programs for services provided to federal beneficiaries at WGH and PMC, during the time period from April 1, 2008, through March 31, 2011, by resident doctors participating in the Family Practice Residency Program (“FPRP”) sponsored by the John A. Burns School of Medicine, without satisfactory documentation of the required supervision by the FPRP’s teaching faculty or where the coding of services performed could not be confirmed by the doctors’ entries in the patients’ medical records. While WGH agreed to the settlement, it did not admit liability. Under the terms of the settlement agreement, WGH shall pay the federal government a settlement payment of $451,428.00. WGH also agreed to pay $75,000.00 in attorney’s fees and costs to the attorneys who represented the doctor.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, noted that under the federal False Claims Act, the United States can seek up to triple damages, plus penalties, for false and fraudulent claims for payment that are submitted to government programs. To encourage assistance from the public, the False Claims Act allows private persons bring civil lawsuits on behalf of the government and to receive a share of any damages recovered through the lawsuit if the person substantially contributes to the successful prosecution of the action. In this case, the doctor who initiated the lawsuits will receive $84,642.75 of the $451,428.00 settlement payment. Nakakuni praised the doctor for his courage in coming forward and reporting the alleged wrongdoing, and expressed appreciation for the efforts of his attorneys, Margery Bronster, Esq., and Sunny Lee, Esq., both of Honolulu.
Wade McFaul, Assistant Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General region including Hawaii, stated: "We will work tirelessly to protect the taxpayers and these vitally important federal health care programs. Working with law enforcement partners, our investigators, auditors and attorneys uncovered evidence that WGH allegedly submitted bills to Medicare for services performed by resident doctors without properly documenting the required supervision."
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New York-based Imagimed LLC, the company’s former owners, William B. Wolf III and Dr. Timothy J. Greenan, and the company’s former chief radiologist, Dr. Steven Winter, will pay $3.57 million to resolve allegations that they submitted to federal healthcare programs false claims for magnetic resonance imaging (MRI) services, the Justice Department announced today. Imagimed owns and operates fifteen MRI facilities, located primarily in New York state, under the name “Open MRI.”
Allegedly, from July 1, 2001, through April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims to Medicare, Medicaid and TRICARE for MRI scans performed with a contrast dye without the direct supervision of a qualified physician. Since a potential adverse side effect of contrast dye is anaphylactic shock, federal regulations require that a physician supervise the administration of contrast dye when it is used for an MRI. Also, allegedly, from July 1, 2005, to April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims for services referred to Imagimed by physicians with whom Imagimed had improper financial relationships. In exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute.
“The Department of Justice is committed to guarding against abuse of federal healthcare programs,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “We will help protect patients’ health by ensuring doctors who submit claims to federal healthcare programs follow proper safety precautions at all times.”
U.S. Attorney for the Northern District of New York, Richard S. Hartunian said: “This case is an example of our commitment to using all of the remedies available, including civil actions under the False Claims Act, to ensure patient safety and combat health care fraud. Stripping away the profit motive for circumventing physician supervision requirements has both a remedial and a deterrent effect. The settlement announced today advances our critical interest in both the integrity of our health care system and the safe delivery of medical services.”
The allegations resolved by the settlement were brought in a lawsuit filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. The whistleblower in this case, Dr. Patrick Lynch, was a local radiologist and will receive $565,500.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.
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Source- http://www.justice.gov/usao/txn/PressRelease/2013/AUG2013/aug27Tuan_Truong_plea.html
Defendant Worked as a Pediatric Dental Provider at Kool Smiles and Personally Benefitted From Scheme
ABILENE, Texas — A dentist who practiced pediatric dentistry at Kool Smiles in Abilene, Texas, has admitted that he made false and fraudulent statements and entries on patient records, which caused Medicaid to be billed for, and pay, at least $120,000 for services falsely claimed to have been performed, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Dr. Tuan Truong, aka “Terry Truong,” of Abilene, pleaded guilty this afternoon, before U.S. District Judge Jorge A. Solis, to an information charging one count of making a false statement in connection with a health care matter. Truong, who will remain on bond, faces a maximum statutory penalty of five years in federal prison, a $250,000 fine and restitution. A sentencing date was not set.
According to documents filed in the case, in summer 2008, Truong began working for Kool Smiles, which paid him a base salary and offered opportunities for bonuses based on additional procedures he performed in excess of daily targets set by Kool Smiles management. Dentists were required to use professional judgment in the treatment and management of patient care.
Beginning on June 30, 2008, and continuing to July 10, 2009, Truong made false entries on Kool Smiles patient records, purporting to have performed dental services for Medicaid beneficiaries that he well knew he had not performed. As a result of the false and fraudulent statements and entries Truong made, Kool Smiles billed Medicaid for procedures that were not performed. In fact, during this time period, Truong made false entries in the Kool Smiles electronic database that caused Kool Smiles to bill and receive payment from Medicaid (and Medicaid affiliates) of more than $120,000, but less than $200,000 for services he claimed to have performed, but did not.
In addition, according to the factual resume filed, Truong personally benefitted from this scheme by receiving bonuses of $32,749 to which he would not have been otherwise entitled.
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Source- http://www.justice.gov/usao/co/news/2013/aug/8-26-13.html
DENVER – Joel E. Miller, age 55, of Craig, Colorado, was arrested without incident today on charges of health care fraud, money laundering and distributing/dispensing controlled substances, federal and state authorities announced. Miller was indicted by federal grand jury in Denver on August 21, 2013, which remained under seal until his arrest and first court appearance. Miller was arrested without incident in Steamboat Springs, Colorado. He made his initial appearance this afternoon before a U.S. Magistrate Judge in Grand Junction, where he was advised of his rights and the charges pending against him.
According to the indictment, Miller was a licensed physician in the state of Colorado and obtained Doctor of Osteopathic Medicine (D.O.) degree in 1990. He was licensed to practice medicine in Colorado in 1994. In 2003 he practiced medicine in Moffat County, Colorado and in 2008, Miller opened a solo private medical practice located in Craig, Colorado. The legal name of his business was DODXRX, doing business as High Country Medical.
In September 2009, the State of Colorado Board of Medical Examiners (“Board”) entered a Stipulation and Final Agency Order in which the Board issued a Letter of Admonition against Miller based upon findings he mis-prescribed neuropsychiatric medications to certain patients. The Board ordered Miller, among other things, to attend a continuing medical education course “in the area of prescribing” and provide proof of completion of such a course. In March of 2011, Miller sent a letter to the Board acknowledging completion of the ordered course.
Approximately between May 2008 and September 2012, Miller executed and attempted to execute a scheme to defraud health care benefit programs, namely Medicaid, Medicare, and commercial health care plans. Particularly, Miller prescribed controlled substances to patients without determining a sufficient medical necessity for the prescription of controlled substances; prescribed controlled substances to patients in a manner which was inconsistent with the usual course of professional practice and for other than legitimate medical purpose; and prescribed pharmaceuticals to patients for whom the prescription was not intended, and directed the persons to whom he prescribed the pharmaceuticals to give the prescription to third parties.
Furthermore, Miller prescribed controlled substances in quantities and dosages that would cause patients to abuse, misuse, and become addicted to the controlled substances. He also pre-signed prescriptions and allowed office employees to distribute controlled substance prescriptions to patients in his absence and without a doctor’s examination of the patient. According to the indictment, in August of 2010, Miller dispensed and distributed to a patient hydrocodone (Schedule III controlled substance), alprazolam and clonazepam, (both Schedule IV controlled substances) which resulted in the death of the patient. The indictment also alleges that in May 2012, Miller dispensed and distributed to a patient hydrocodone (Schedule III controlled substance), and diazepam (a Schedule IV controlled substance) which also resulted in death.
“Defrauding our health care system, causing the cost of care to increase is one thing,” said U.S. Attorney John Walsh. “It is quite another when a doctor over prescribes prescription medication that, as alleged in this case, causes patients to be addicted, and in two cases here, die.”
"Dr. Joel E. Miller's over prescribing and distribution of licit drugs is no different than the drug traffickers that DEA targets," said Drug Enforcement Administration Denver Special Agent in Charge Barbra Roach. "Dr. Miller destroyed the life of at least two patients, has hurt many other patients and disguised his drug dealing by conducting those activities in his professional office and while wearing a doctor's coat. DEA will continue to target "drug dealers" no matter their social or professional status."
"Crimes like this are motivated purely by greed and the patients are the real victims in this case," said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. "Prescription drug abuse is a serious problem and we are committed to investigate along with our law enforcement partners those individuals who are responsible for the illegal distribution of prescription medicine."
“Many people in Moffat County were directly negatively affected by the actions of Dr. Miller,” said Moffat County Sheriff Tim Jantz. “Some in our community were caused great harm and pain, which will never go away for those families. Hopefully this arrest and indictment will bring some closure to those affected by his actions.”
Miller was charged with thirty four counts as follows; one count of health care fraud with death resulting, which carries a penalty of life in prison, and up to a $250,000 fine; eight counts of health care fraud, which carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000 per count; ten counts of money laundering, which carries a penalty of not more than 20 years in federal prison, and a fine of up to $500,000 or twice the value of the property involved, per count; two counts of dispensing of controlled substances resulting in death, which carries a penalty of not less than 20 years, and up to life in federal prison, and up to a $1,000,000 fine; seven counts of dispensing of controlled substances, which carries a penalty of not more than 20 years in federal prison, and up to a $1,000,000 fine; dispensing of controlled substances, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine; one count of dispensing a controlled substance, which carries a penalty of not more than 10 years in federal prison, and up to a $500,000 fine; and one count of furnishing false and fraudulent material information, which carries a penalty of not more than 4 years in federal prison, and up to a $250,000 fine. The indictment also includes an asset forfeiture allegation.
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Source- http://www.justice.gov/opa/pr/2013/August/13-crm-957.html
A former owner of a Los Angeles-area medical equipment supply company pleaded guilty today to a $2.6 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Akinola Afolabi, 54, of Long Beach, Calif., pleaded guilty before U.S. District Judge Philip S. Gutierrez in the Central District of California to one count of health care fraud.
According to court documents, Afolabi was the owner and president of Emmanuel Medical Supply, a durable medical equipment (DME) supply company located in Long Beach. Afolabi admitted that from approximately June 2006 through September 2009, he engaged in a scheme to commit health care fraud through the operation of Emmanuel by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and by submitting false and fraudulent claims to Medicare. Afolabi admitted that he obtained Medicare beneficiary information through various means, including “marketers,” whom he paid to refer Medicare beneficiaries to Emmanuel for the purpose of using that information to submit, and cause the submission of, false and fraudulent claims to Medicare on behalf of Emmanuel. Afolabi admitted knowing that the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary.
From approximately June 7, 2006, through Sept. 28, 2009, Afolabi, through Emmanuel, submitted approximately $2,668,384 in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Emmanuel approximately $1,490,532 on those claims.
At sentencing, scheduled for Nov. 25, 2013, Afolabi faces a maximum penalty of 10 years in prison and a $250,000 fine.
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Source- http://www.justice.gov/opa/pr/2013/July/13-crm-841.html
A greater Detroit-area physical therapist assistant – who was also an owner of a home health agency and a patient recruiter – pleaded guilty today for his role in a $22 million home health care fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; 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 Chicago Regional Office of the U.S. Department of Health and Human Services’s Office of Inspector General (HHS-OIG) made the announcement.
Syed Shah, 51, of West Bloomfield, Mich., pleaded guilty before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Nov. 19, 2013, Shah faces a maximum penalty of 10 years in prison.
According to information contained in plea documents, Shah, a licensed physical therapist assistant, admitted that beginning in or around October 2008 and continuing through approximately September 2012, he conspired with others to commit health care fraud by billing Medicare for home health care services that were not actually rendered and/or not medically necessary. Shah admitted that he began working in approximately October 2008 for Prestige Home Health Services, Inc., a home health agency located in Troy, Mich., owned by alleged co-conspirators. His co-conspirators at Prestige paid him kickbacks in exchange for his obtaining the information of Medicare beneficiaries, which the co-conspirators then used to bill Medicare for services that were not provided and/or were not medically necessary. Shah and his co-conspirators then created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided and/or were not medically necessary. Shah admitted that his role in creating the fictitious therapy files was to sign documents and progress notes indicating he had provided physical therapy services to particular Medicare beneficiaries, when in fact he had not. Shah admitted to knowing that the documents he falsified were used to support false claims billed to Medicare by his co-conspirators at Prestige.
In his plea, Shah also acknowledged that in approximately August 2009, he became an owner of Royal Home Health Care, Inc., a home health agency located in Troy, Mich., along with other co-conspirators. He and his co-conspirators at Royal billed Medicare for home health visits that never occurred and were not medically necessary. Shah and his co-conspirators paid kickbacks to Shah and other patient recruiters in exchange for Medicare beneficiary information, which was then used to bill Medicare for services that were not provided and/or were not medically necessary. Shah admitted that he and his co-conspirators created fictitious therapy files, reflecting services that had not been provided and/or were not medically necessary. He knew the documents he falsified would be used to support false claims by Royal to Medicare for home health services.
Shah submitted or caused the submission of claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay approximately $5,925,843. According to the indictment, two additional home health agencies were involved in the alleged conspiracy. In total, the four home health agencies at the center of the indictment received more than $22 million from the Medicare program.
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Source- http://www.justice.gov/opa/pr/2013/July/13-crm-844.html
A former health care clinic director and licensed clinical psychologist at defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 135 months in prison for her central role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
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; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the Miami office of the U.S. Department of Health and Human Services’s Office of Inspector General (HHS-OIG) made the announcement.
Alina Feas, 53, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to her prison term, Feas was sentenced to three years of supervised release and ordered to pay $24.1 million in restitution.
On May 7, 2013, Feas pleaded guilty to one count of conspiracy to commit health care fraud and one substantive health care fraud count. During the course of the conspiracy, Feas was employed as a therapist and clinical director of HCSN’s Partial Hospitalization Program (PHP). A PHP is a form of intensive treatment for severe mental illness.
HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. In her capacity as clinical director, Feas oversaw the entire clinical program and supervised therapists and other HCSN-FL personnel. She also conducted group therapy sessions when therapists were absent, and she was aware that HCSN-FL 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. Feas 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.
Feas submitted claims to Medicare for individual therapy she purportedly provided to HCSN-FL patients using her personal Medicare provider number, knowing that HCSN-FL was simultaneously billing the same patients for PHP services. She continued to bill Medicare under her personal provider number while an HCSN community health center in North Carolina (HCSN-NC) simultaneously submitted false and fraudulent PHP claims.
Feas was also aware that HCSN-FL personnel were fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment and were used to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Florida Medicaid. During her employment at HCSN-FL, Feas signed fabricated PHP therapy notes and other medical records used to support false claims to government-sponsored health care programs.
At HCSN-NC, Feas was aware that her co-conspirators were fabricating medical records to support the fraudulent claims she was causing to be submitted to Medicare on behalf of HCSN-NC. She knew that a majority of the fabricated notes were created at the HCSN-FL facility for patients admitted into the PHP at HCSN-NC. In some instances, Feas signed therapy notes and other medical records even though she never provided services in HCSN-NC’s PHP.
From 2004 through 2011, HCSN billed Medicare and the Medicaid program more than $63 million for purported mental health services.
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Source- http://www.justice.gov/opa/pr/2013/July/13-crm-840.html
The daughter of a church pastor and owner of a California-based durable medical equipment (DME) supply company was found guilty by a jury of Medicare fraud charges for her role in a Medicare fraud scheme that resulted in over $11 million in fraudulent billings to Medicare.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services’s Office of Inspector General (HHS-OIG); Assistant Director in Charge Bill Lewis of the FBI’s Los Angeles Field Office; and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.
Obiageli Agbu, 26, of Carson, Calif., was found guilty on July 19, 2013, of one count of conspiracy to commit health care fraud and eight counts of health care fraud following a two-week trial.
The evidence introduced at trial showed that Agbu owned Ibon Inc., a fraudulent DME supply company that she operated from a nondescript office building in Carson. Agbu’s father and co-defendant, Charles Agbu, a church pastor who pleaded guilty to Medicare fraud and money laundering charges in December 2012, ran a fraudulent DME supply company called Bonfee Inc. from the same office building that housed Ibon. The trial evidence showed that from Ibon and Bonfee, Agbu, her father and others working with them submitted more than $11 million in fraudulent claims from Ibon and Bonfee to Medicare for expensive, high-end power wheelchairs, hospital beds, braces and other DME that customers either did not need or receive.
According to evidence at trial, Agbu and her father purchased the power wheelchairs wholesale for approximately $900 per wheelchair, but they billed the wheelchairs to Medicare at $4,000 to $5,000 per power wheelchair. These power wheelchairs were a type of medical equipment of last resort reserved for people with severe mobility limitations and could cause harm if the wheelchairs were supplied to people who did not have a legitimate medical need for them.
Agbu and her father paid kickbacks to street-level patient recruiters or “marketers” who would find senior citizens with Medicare and Medi-Cal benefits and cajole the seniors into agreeing to accept power wheelchairs and other DME that the seniors did not need. The seniors were directed to doctors who received cash kickbacks of $200 to $1,000 to write fraudulent prescriptions and other Medicare-specific documents conspirators used at Bonfee and Ibon to submit fraudulent claims to Medicare.
As a result of this scheme, between July 2005 and February 2011, Agbu, her father and those working with them submitted approximately $11,094,918 million in fraudulent claims to Medicare and received approximately $5,788,725 on those claims.
At sentencing, scheduled for Oct. 17, 2013, Agbu faces a maximum penalty of 10 years in prison for each count of conviction. Agbu’s father is scheduled for sentencing on Aug. 15, 2013. Agbu’s other co-defendants – Dr. Juan Van Putten, Dr. Emmanuel Ayodele, Alejandro Maciel and Candalaira Estrada – have each pleaded guilty to Medicare fraud charges and are scheduled for sentencing in September and October 2013.
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Source- http://www.justice.gov/usao/nv/news/2013/20130723_little.html
RENO, Nev. – Two women were sentenced today for their guilty pleas to federal health care fraud charges after they defrauded the Nevada Medicaid program of approximately $1 million, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Cassandra Little, 49, of Reno, was sentenced to 33 months in prison, three years of supervised release, and ordered to pay $81,400 in restitution. Little pleaded guilty in March to 28 counts of health care fraud and 10 counts of money laundering.
Susan Hill, 66, of Las Vegas, was sentenced to 18 months in prison, three years of supervised release, and ordered to pay $81,400 in restitution. Hill pleaded guilty in March to one count of health care fraud and one count of money laundering.
Senior U.S. District Judge Howard D. McKibben in Reno sentenced both women, and allowed them to self-report to federal prison by Oct. 15, 2013.
“As this case demonstrates, health care fraud is a serious criminal offense with serious consequences that can land you in federal prison,” said U.S. Attorney Bogden. “The U.S. Department of Justice is committed to investigating and prosecuting persons who commit this type of crime.”
“Our attorneys and investigators work closely with our partners to find Medicaid violators and prosecute them to the fullest extent of the law for cheating the system,” said Nevada Attorney General Catherine Cortez Masto. “We hope today's prison sentence and combined restitution of approximately $81,000 sends a strong message to others who may consider stealing from taxpayers. We will not tolerate those that take advantage of the system."
According to the court records, from about January 2007 to January 2011, Hill and Little defrauded the Nevada Medicaid program of approximately $1 million by fraudulently billing for expensive therapy-related services such as psychosocial rehabilitation and basic skills training which were never provided. To execute their scheme, Hill and Little formed a company, the Hill/Little LLC, and entered into a contract with Nevada Medicaid to provide health care services to children who were eligible for Medicaid. Hill was the president of the LLC. Little, a PhD and licensed social worker, was to provide the clinical services to the children. Hill and Little then created a program to obtain aid for the parents of the children who were eligible to receive the Medicaid funding; however, the program was not authorized or allowed under their Medicaid contract with the state. Hill recruited parents and guardians to provide services to their own children following minimal training provided by Hill/Little LLC. The services were nothing more than what parents normally do without reimbursement. Hill/Little LLC then billed Medicaid approximately $8,000 per month for each child, using a billing code which was only authorized for services that could have been provided by Little, the licensed social worker. Hill/Little kept $5,000 per month for each child and paid each parent/guardian approximately $3,000. The parents/guardians reported that their children received little or no services from Hill or Little, and none of the services billed by Hill/Little from January 2007 to January 2011 were ever properly provided or authorized under Medicaid rules. Using this scheme, Hill and Little unlawfully received approximately $1 million from Medicaid for services they did not provide.
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Source- http://www.justice.gov/usao/nys/pressreleases/July13/DharayanetalArrestPR.php
Preet Bharara, the United States Attorney for the Southern District of New York, Thomas O’Donnell, the Special Agent-in-Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and Steven G. Hughes, the Special Agent-in-Charge of the New York Office of the U.S. Secret Service today announced charges against eight individuals for their alleged involvement in a lucrative scheme in which information technology vendors paid over $2.3 million in bribes and kickbacks to secure business from executives of a Manhattan-based medical cost management company (the “New York Company”). The defendants charged with paying the bribes and kickbacks are SARVESH DHARAYAN, SANJAY GUPTA, VENKATA ATLURI, RANGARAJAN KUMAR, VADAN KUMAR KOPALLE, and DARREN SIRIANI. The defendants charged with receiving the bribes and kickbacks are ANIL SINGH and KEITH BUSH. DHARAYAN, GUPTA, KOPPALLE, and SIRIANI were arrested this morning at their homes in New Jersey, and were presented in Manhattan federal court this afternoon before U.S. Magistrate Judge James L. Cott. SINGH, who was previously arrested in April 2013, pled guilty to honest services fraud and other charges before U.S. District Judge Denise L. Cote on July 11, 2013. BUSH, who was also arrested previously on July 12, 2013, is next scheduled to appear in court for a pretrial conference on August 15, 2013. ATLURI and KUMAR are not yet in custody.
Manhattan U.S. Attorney Preet Bharara said: “For the eight defendants charged in this multi-million dollar scheme, bribes and kickbacks were allegedly the cost they imposed for doing business with this medical-cost management company. As today’s charges detail, the defendants achieved their years-long fraud through fake companies, sham invoices and made-up consulting services. Today’s actions underscore our commitment to work with our law enforcement partners to bring to justice individuals who break the law out of greed.”
HHS-OIG Special Agent-in-Charge Thomas O’Donnell said: “This scheme was motivated by greed and it deprived its victim, a company in the health care field, of the honest labor of its employees. We will continue to aggressively investigate those who pay kickbacks and bribes to gain an advantage in the public and private health care sectors.”
USSS Special Agent-in-Charge Steven G. Hughes said: “The Secret Service continues to enjoy its partnership with the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General. We find partnerships such as this to be an effective way to share resources and stop criminals from continuing to engage in fraudulent schemes.”
According to the allegations contained in the Complaint, the Informations filed against BUSH and SINGH, and other statements made in Manhattan federal court:
SINGH was employed as a Senior Vice President and the Chief Information Officer at the New York Company, which provided nation-wide medical cost management solutions including, among other things, medical reimbursement services, and BUSH was employed as the company’s Director of Database Administration. SINGH and BUSH had considerable influence over the selection of vendors, specifically vendors of database administrators (“DBAs”), hired by the New York Company.
From 2008 to September 2012, various individuals collectively paid over $2.3 million in money and other benefits to SINGH and BUSH in exchange for SINGH’s and BUSH’s agreement to steer millions of dollars of the New York Company’s DBA business to them. Specifically, as alleged:
DHARAYAN, the owner of a New Jersey information technology company (“Vendor 1”) and GUPTA, an employee of Vendor 1, paid approximately $1,722,620 in kickbacks and bribes to BUSH and SINGH in exchange for receiving DBA business from the New York Company. From 2010 to 2012, the New York Company paid Vendor 1 approximately $6,625,479.20 for placing DBAs with the New York Company.
ATLURI, the owner of another New Jersey information technology company (“Vendor 2”), paid approximately $190,436.75 in kickbacks and bribes to BUSH and SINGH in exchange for receiving DBA business from the New York Company. From 2008 to 2012, the New York Company paid Vendor 2 approximately $11,495,804.88 for placing DBAs with the New York Company.
KUMAR paid approximately $247,634 in kickbacks and bribes to BUSH and SINGH in exchange for their agreement to steer DBA business to another New Jersey information technology company (“Vendor 3”). From 2009 to 2012, the New York Company paid Vendor 3 approximately $2,593,210.38 for placing DBAs with the New York Company.
KOPALLE, who was in charge of delivery and operations at a Texas information technology company (“Vendor 4”), paid approximately $142,967.50 in kickbacks and bribes to BUSH and SINGH in exchange for receiving DBA business from the New York Company. From 2009 to 2010, the New York Company paid Vendor 4 approximately $1,035,660 for placing DBAs with the New York Company.
SIRIANI, the owner and operator of another New Jersey information technology company (“Vendor 5”) paid approximately $23,000 to $29,000 in cash kickbacks and bribes to BUSH and SINGH in exchange for receiving business from the New York Company. SIRIANI also paid for hotel rooms in Las Vegas and Costa Rica, deep sea fishing, massages, sports tickets, and other things, all in exchange for receiving business from the New York Company. From 2008 to 2012, the New York Company paid Vendor 5 approximately $1,177,600.91 for various services and products.
According to the Complaint, DHARAYAN, GUPTA, ATLURI, KUMAR, and KOPALLE paid the kickbacks and bribes through conduit companies established by BUSH and SINGH for the very purpose of disguising the true nature and origin of the illegal payments. To further conceal the bribery and kickback scheme, BUSH and SINGH sent false invoices to the conduit companies for consulting services that never occurred. Many of the kickbacks and bribes were paid pursuant to these false invoices.
* * *
DHARAYAN, 42, of Edison, New Jersey, GUPTA, 38 of East Windsor, New Jersey, ATLURI, 41, of Monmouth Junction, New Jersey, KUMAR, 47, of Monroe, New Jersey, KOPALLE, 43, of Edison, New Jersey, and SIRIANI, 45, of Matawan, New Jersey, were each charged with one count of conspiracy to commit honest services fraud, which carries a maximum term of 20 years in prison, one count of conspiracy to violate the Travel Act, which carries a maximum term of five years in prison, one count of honest services fraud, which carries a maximum term of 20 years in prison, and one count of violating the Travel Act, which carries a maximum term of five years in prison. DHARAYAN, GUPTA, ATLURI, KUMAR, and KOPALLE were also charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison.
SINGH, 40, a resident of East Brunswick, New Jersey pled guilty to one count each of conspiracy to commit honest services fraud, conspiracy to violate the Travel Act, honest services fraud, violating the Travel Act, and conspiracy to commit money laundering. He faces a maximum penalty of 70 years in prison on all counts. BUSH, 41, a resident of Rahway, New Jersey, is charged with one count each of conspiracy to commit honest services fraud, conspiracy to violate the Travel Act, honest services fraud, violating the Travel Act, and conspiracy to commit money laundering. He also faces a maximum penalty of 70 years in prison if convicted on all counts.
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Source- http://www.justice.gov/usao/nj/Press/files/Aponte,%20Dennis%20et%20al.%20Plea%20News%20Release%20.html
NEWARK, N.J. – Three New Jersey doctors admitted today they accepted tens of thousands of dollars in bribes from Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS) as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Dennis Aponte, 46, of Cedar Grove, N.J.; Claudio Dicovsky, 51, of Fort Lee, N.J.; and Franklin Dana Fortunato, 63, of Montville, N.J., each pleaded guilty to violating the Federal Travel Act. Fortunato also pleaded guilty to filing a false tax return, admitting that from 2004 to 2008, he failed to disclose and report as income more than $640,000 in bribe money and patient co-pays and failed to pay more than $160,000 in taxes he owed as a result of that unreported income. The defendants entered their guilty pleas today before U.S. District Judge Stanley R. Chesler in Newark federal court.
“Decisions about medical care should not be influenced by doctors and providers who are more interested in lining their pockets than in providing quality healthcare,” U.S. Attorney Fishman said. “The doctors who pleaded guilty today admitted making decisions about the care they provided based on being paid in return for their referrals. We will continue to seek out and punish those doctors and other medical professionals who put profit before patient care.”
Newark FBI Special Agent in Charge Aaron T. Ford said: “Patients have every right to insist that their physician is making medical referrals based on what is best for the patient. However, these three physicians decided to accept bribes in exchange for referrals. These types of kickback arrangements cripple the healthcare industry and severely impact patient care. The FBI remains committed to investing its resources to combat these types of schemes.”
“Today’s pleas should send a loud and clear message that kickbacks and unnecessary billing have no place in our Federal healthcare system,” Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Region covering New Jersey, said. “We will aggressively investigate those suspected of defrauding taxpayers and the Medicare program.”
According to documents filed in this and other cases and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and New Jersey physician Frank Santangelo, 43, of Boonton, N.J. The charges against BLS and Santangelo are pending.
Dicovsky
Dicovsky admitted he agreed with David Nicoll to accept bribes from BLS in exchange for his referral of blood specimens. To disguise those bribes, Dicovsky and BLS entered into a sham lease agreement and a sham service agreement in which the monthly bribe payments of more than $5,000 were characterized as “lease” and “service” payments. While the lease agreement purported to be for 1,000 square feet of space, little or no space was allocated to BLS in Dicovsky’s medical office in Paterson, N.J. Between November 2006 and August 2009, Dicovsky received more than $224,000 in bribe payments from BLS, and BLS made more than $800,000 through testing on blood specimens referred by Dicovsky.
Fortunato
On May 2, 2013, two former sales representatives of BLS, Peter Breihof, 42, of Nutley, N.J., and William Dailey, 41, of Wall, N.J., pleaded guilty to an information charging them with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act. They admitted using phony lease and service agreements to bribe physicians to send their patients’ blood samples to BLS. Breihof and Dailey also admitted that they paid various physicians a fee per test on behalf of BLS in order to induce those physicians to order more of the blood tests than they otherwise would have.
Fortunato admitted entering into bribe arrangements with BLS through Breihof, with David Nicoll’s knowledge and approval, for the referral of blood specimens of patients of Fortunato’s Montclair, N.J., practice. Fortunato received more than $100,000 in bribe payments – often more than $5,000 per month – from BLS disguised through sham lease and sham service agreements between 2006 and 2009, and BLS made more than $430,000 through testing on blood specimens referred by Fortunato.
Aponte
Aponte admitted that he and David Nicoll agreed that BLS would pay Aponte bribes to refer to BLS blood specimens from the patients of his West New York, N.J., medical practice. From October 2012 to March 2013, Nordman, acting at David Nicoll’s direction, paid Aponte approximately $3,000 per month in cash in return for blood specimens referred to BLS. The lab made more than $175,000 through testing on blood specimens referred by Aponte.
The count to which Aponte, Dicovsky and Fortunato each pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Fortunato also faces a maximum potential penalty of five years in prison and a $250,000 fine on the filing a false tax return charge. Sentencing for all three defendants is scheduled for Oct. 22, 2013.
Aponte has agreed to forfeit $235,000, Dicovsky has agreed to forfeit more than $220,000, and Fortunato has agreed to forfeit more than $635,000. The investigation has so far recovered more than $2 million through forfeiture.
On June 10, 2013, David Nicoll, Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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