Michigan Doctor and Owner of Medical Billing Company Sentenced to 15 Years in Prison for $26 Million Health Care Fraud Scheme

Tuesday, November 7, 2017

A Detroit-area doctor was sentenced to 180 months in prison today for his role in a $26 million health care fraud scheme that involved billing Medicare for nerve block injections that were never provided and efforts to circumvent Medicare’s investigation of the fraudulent scheme.  A co-conspirator who owned a medical billing company was previously sentenced to 10 years in prison.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office and Special Agent in Charge Manny Muriel of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

Johnny Trotter M.D., 42, of Bloomfield Hills, Michigan, was sentenced today by U.S. District Judge George C. Steeh of the Eastern District of Michigan.  The owner of the medical billing company, Elaine Lovett, 61, of Detroit, was sentenced by Judge Steeh on Sept. 26.  Judge Steeh also ordered each defendant to pay $9,199,946 in restitution and scheduled a hearing tomorrow on forfeiture.  Trotter and Lovett were convicted in April 2017 after a four-week jury trial of one count of conspiracy to commit health care fraud and wire fraud, and three counts of health care fraud.  Trotter was remanded to custody pending a detention hearing tomorrow.

According to the evidence presented at trial, from May 2008 until May 2014, Trotter and Lovett knowingly submitted fraudulent bills for services that they knew had not been provided, mainly nerve block injections.  Additionally, after Medicare imposed a requirement in 2009 that required Trotter’s claims to undergo a medical review prior to payment, Trotter and Lovett conspired to circumvent Medicare’s fraud investigation of Trotter by creating sham medical practices, the evidence showed.  To continue to receive payment for services that were not provided, Trotter and Lovett concealed their involvement with these practices from Medicare, and instead recruited their family members and employees to serve as straw owners of the companies, the evidence further showed.

The FBI, HHS-OIG and IRS-CI investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Fraud Section Assistant Chiefs Malisa Dubal and Allan Medina, as well as Trial Attorneys Tom Tynan and Jacob Foster, prosecuted the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

Owner of Florida Pharmacy Pleads Guilty in $100 Million Compounding Pharmacy Fraud Scheme; Real Properties, Cars and a 50-Foot Boat Will Be Forfeited

Monday, November 6, 2017

Seven Others Previously Pleaded Guilty

The president and owner of a Florida pharmacy that was at the center of a massive compounding pharmacy fraud scheme, which impacted private insurance companies, Medicare and TRICARE, pleaded guilty today for his role in the scheme.  Seven other individuals have previously pleaded guilty in connection to the scheme.  Various real properties, cars and a 50-foot boat will be forfeited as part of the guilty pleas.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney W. Stephen Muldrow of the Middle District of Florida, Special Agent in Charge Eric W. Sporre of the FBI’s Tampa Field Office, Special Agent in Charge Robert F. Lasky of the FBI’s Miami Field Office, Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Resident Agent in Charge Brooke Harris of the U.S. Defense Criminal Investigative Service’s (DCIS) Tampa Regional Office made the announcement.

Nicholas A. Borgesano Jr., 45, of New Port Richey, Florida, the president and owner of A to Z Pharmacy of New Port Richey, pleaded guilty in the Middle District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to engage in monetary transactions involving criminally derived property.  His sentencing will be scheduled before U.S. District Judge James S. Moody Jr of the Middle District of Florida.

According to admissions made as part of his plea agreement, Borgesano owned and operated numerous pharmacies and shell companies that he and his co-conspirators used to execute a fraud scheme involving prescription compounded medications.  The scheme generated over $100 million in fraud proceeds, he admitted.  Borgesano acquired and controlled A to Z Pharmacy in New Port Richey, Havana Pharmacy, Medplus/New Life Pharmacy and Metropolitan Pharmacy, all of Miami; and Jaimy Pharmacy and Prestige Pharmacy, both of Hialeah, Florida.  He admitted using these pharmacies to cause the submission of false and fraudulent reimbursement claims for prescription compounded medications, chiefly pain creams and scar creams, to private insurance companies, Medicare and TRICARE.  Borgesano admitted that he and his co-conspirators manipulated billing codes in the reimbursement claims and submitted reimbursement claims for pharmaceutical ingredients they did not have.  Borgesano and his co-conspirators also paid kickbacks and bribes in exchange for prescriptions and patient identifying information used to further the scheme, including to a physician in exchange for the physician signing prescriptions for patients he never saw.  Borgesano admitted using A to Z Pharmacy as the hub of his operation on behalf of all his pharmacies.  He disbursed proceeds of the fraud scheme through a variety of methods, including by check and wire transfer to co-conspirators’ shell companies and through the purchase of assets, he admitted.

In addition to Borgesano, the following defendants have previously pleaded guilty to conspiracy to commit health care fraud for their roles in the scheme:

  • Bradley Sirkin, 55, of Boca Raton, Florida;
  • Scott P. Piccininni, 49, of Fort Lauderdale, Florida;
  • Edwin Patrick Young, 49, of New Port Richey, Florida;
  • Wayne M. Kreisberg, 40, of Parkland, Florida;
  • Matthew N. Sterner, 48, of New Port Richey, Florida;
  • Peter B. Williams, 57, of New Port Richey, Florida; and
  • Joseph Degregorio, 71, of New Port Richey, Florida

The cars that will be forfeited include a 1936 Ford Deluxe, a 1964 Chevrolet Corvette convertible, a 1967 Chevrolet Camaro, a 1970 Chevrolet Monte Carlo and a 2008 Lamborghini convertible.  The boat that will be forfeited is a 2009 50’7” Cigarette racing boat.   The cars and boat had previously been seized.  The combined equity in the real properties, cars and boat that will be forfeited is over $7.6 million.  The real properties, cars and boat had been purchased with proceeds from the fraud scheme.

This case was investigated by the FBI with support from HHS-OIG and DCIS and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida.  The case is being prosecuted by Senior Trial Attorney Christopher J. Hunter and Trial Attorney Timothy P. Loper of the Fraud Section.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

Former CEO of Arthrocare Corporation Sentenced to 20 Years in Prison for Role in $750 Million Securities Fraud Scheme

Friday, November 3, 2017

The former chief executive officer of ArthroCare Corporation, a publicly traded medical device company based in Austin, Texas, was sentenced today to 240 months in prison for his role in orchestrating a fraud scheme that resulted in shareholder losses of over $750 million.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field office made the announcement.

Michael Baker, 58, of Austin, Texas, was sentenced by U.S. District Judge Sam Sparks of the Western District of Texas, who also ordered Baker five years of supervised release following his prison sentence and to pay a fine in the amount of $1 million and to forfeit $13.7 million.  At the sentencing hearing, the Court found that investors lost more than $750 million as a result of the fraud scheme.  On Aug. 18, after a two-week re-trial, Baker was convicted of one count of conspiracy to commit wire fraud and securities fraud, seven counts of wire fraud, two counts of securities fraud and two counts of making false statements.

Evidence at trial showed that, beginning in 2005 and continuing until 2009, Baker, along with his co-conspirators, masterminded and executed a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors.  Baker, along with his co-conspirators, determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders.  Baker and others then caused ArthroCare to “park” millions of dollars’ worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter.  ArthroCare reported these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.

The trial evidence further showed that ArthroCare’s distributors agreed to accept shipment of millions of dollars of products in exchange for special conditions, including substantial, upfront cash commissions, extended payment terms and the ability to return products, allowing ArthroCare to falsely inflate revenue by tens of millions of dollars.  In the case of ArthroCare’s largest distributor, DiscoCare, Baker caused ArthroCare to acquire DiscoCare specifically to conceal from the investing public the nature and financial significance of ArthroCare’s relationship with DiscoCare.  In addition to falsely inflating ArthroCare’s revenue, Baker lied when he was deposed by the U.S. Securities and Exchange Commission in November 2009 about ArthroCare’s relationship with DiscoCare, the evidence showed.

Baker’s earlier conviction was overturned by the U.S. Court of Appeals for the Fifth Circuit, resulting in the retrial.  The sentence imposed on Baker today of 20 years imprisonment is identical to the sentence he received after his first trial.

Co-conspirators David Applegate and John Raffle, both former senior vice presidents of ArthroCare, pleaded guilty to multiple felonies in 2013 in connection with their participation in the scheme.  Co-conspirator Michael Gluk, former chief financial officer of ArthroCare, pleaded guilty to conspiracy to commit wire and securities fraud on June 14, in connection with his participation in the scheme.

On Aug. 29, 2014, Raffle was sentenced to 80 months in prison.  On Aug. 29, 2014, Applegate was sentenced to 60 months in prison.  Gluk’s sentencing is scheduled for Jan. 5, 2018.

This case was investigated by the FBI’s San Antonio Field Office.  The case is being prosecuted by Securities and Financial Fraud Unit Chief Benjamin D. Singer, Assistant Chief Henry P. Van Dyck and Trial Attorney Caitlin Cottingham of the Criminal Division’s Fraud Section.

Owner of Two New York Medical Clinics Sentenced to 84 Months for Her Role in $55 Million Health Care Fraud Scheme

Friday, September 15, 2017

The owner of two Brooklyn, New York, medical clinics was sentenced today to 84 months in prison for her role in a $55 million health care fraud scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS OIG) Office of Investigations, Special Agent in Charge James D. Robnett of the IRS Criminal Investigation’s (IRS-CI) New York Field Office and Inspector General Dennis Rosen of the New York State Office of the Medicaid Inspector General (OMIG) made the announcement.

Valentina Kovalienko, 47, of Brooklyn, and the owner of Prime Care on the Bay LLC and Bensonhurst Mega Medical Care P.C., was sentenced by U.S. District Judge Roslynn R. Mauskopf of the Eastern District of New York, who also ordered Kovalienko to forfeit $29,336,497. Kovalienko pleaded guilty in October 2015 to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.

As part of her guilty plea, Kovalienko acknowledged that her co-conspirators paid cash kickbacks to patients to induce them to attend her two clinics.  Kovalienko also admitted that she submitted false and fraudulent claims to Medicare and Medicaid for services that were induced by prohibited kickback payments to patients or that were unlawfully rendered by unlicensed staff.  Kovalienko also wrote checks from the clinics’ bank accounts to third-party companies, which purported to provide services to the clinics, but which in fact were not providing services, and the payments were instead used to generate the cash needed to pay the illegal kickbacks to patients, she admitted.

Twenty other individuals have pleaded guilty in connection with this case, including the former medical directors of Prime Care on the Bay LLC and Bensonhurst Mega Medical Care P.C., six physical and occupational therapists, three ambulette drivers, the owner of several of the sham companies used to launder the money and a former patient who received illegal kickbacks.

HHS-OIG, IRS-CI and OMIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Acting Assistant Chief A. Brendan Stewart of the Fraud Section and Assistant U.S. Attorney F. Turner Buford of the Eastern District of New York, formerly a Fraud Section trial attorney, are prosecuting the case.

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

United States Files Complaints to Forfeit More Than $11 Million From Companies That Allegedly Laundered Funds To Benefit Sanctioned North Korean Entities

Tuesday, August 22, 2017

WASHINGTON – The United States filed two complaints today seeking imposition of a civil money laundering penalty and to civilly forfeit more than $11 million from companies that allegedly acted as financial facilitators for North Korea, announced U.S. Attorney Channing D. Phillips, Michael DeLeon, Special Agent in Charge of the FBI’s Phoenix Field Office, and Michael J. Anderson, Special Agent in Charge of the FBI’s Chicago Field Office.

The actions, filed in the U.S. District Court for the District of Columbia, represent two of the largest seizures of North Korean funds by the Department of Justice. One complaint seeks $6,999,925 associated with Velmur Management Pte Ltd., a Singapore-based company. The other seeks $4,083,935 from Dandong Chengtai Trading Co. Ltd., also known as Dandong Zhicheng Metallic Material Co., Ltd., a company in Dandong, China.

The lawsuits follow a similar complaint, filed in June 2017, seeking more than $1.9 million from Mingzheng International Trading Limited, a company based in Shenyang, China.

The complaints allege that the companies have participated in schemes to launder U.S. dollars on behalf of sanctioned North Korean entities. According to the complaints, the companies participated in financial transactions in violation of the International Emergency Economic Powers Act (IEEPA), the North Korean Sanctions and Policy Enhancement Act of 2016, and federal conspiracy and money laundering statutes. Today’s complaints are the first filed actions based on the 2016 North Korean Sanctions and Policy Enhancement Act.

“These complaints show our determination to stop North Korean sanctioned banks and their foreign financial facilitators from aiding North Korea in illegally accessing the United States financial system to obtain goods and services in the global market place,” said U.S. Attorney Phillips. “According to the complaints, these front companies are supporting sanctioned North Korean entities, including North Korean military and North Korean weapons programs. Working with our law enforcement partners, we will vigorously enforce vital sanctions laws.”

“The complaints allege that these companies are assisting North Korea in evading sanctions, which is in direct conflict with our national security interests,” said Special Agent in Charge DeLeon, of the FBI’s Phoenix Field Division. “We will continue to use the necessary resources to expose these types of actions and investigate those who utilize the U.S. banking systems for illegal activities.”

**

U.S. v. Velmur Management Pte., Ltd. (Velmur) and Transatlantic Partners Pte. Ltd. (Transatlantic)

This complaint alleges that Velmur and Transatlantic Partners Pte. Ltd. (Transatlantic) laundered United States dollars on behalf of sanctioned North Korean banks that were seeking to procure petroleum products from JSC Independent Petroleum Company (IPC), a designated entity. The complaint also seeks a civil monetary penalty against Velmur and Transatlantic for prior sanctions and money laundering violations related to this scheme.

According to the complaint, designated North Korean banks use front companies, including Transatlantic, to make U.S. dollar payments to Velmur. The complaint relates to funds that were transferred through four different companies and remitted to Velmur to wire funds to JSC Independent Petroleum Company (IPC), a Russian petroleum products supplier. On June 1, 2017, the Department of the Treasury’s Office of Foreign Asset Controls (OFAC) designated IPC. The designation noted that IPC had a contract to provide oil to North Korea and reportedly shipped over $1 million worth of petroleum products to North Korea.

The United Nations Panel of Experts reported in 2017 on the methods used by North Korean banks to evade sanctions and continue to access the international banking system. Specifically, despite strengthened financial sanctions, North Korean networks are adapting by using greater ingenuity in accessing formal banking channels. This includes maintaining correspondent bank accounts and representative offices abroad which are staffed by foreign nationals making use of front companies. These broad interwoven networks allow the North Korean banks to conduct illicit procurement and banking activity.

An FBI investigation revealed that Velmur’s and Transatlantic’s activities mirror this money laundering paradigm. Specifically, companies identified in the complaint and Transatlantic act as front companies for designated North Korean banks.

The government is seeking to forfeit $6,999,925 that was wired to Velmur in May 2017. The U.S. dollar payments, which cleared through the U.S., are alleged to violate U.S. law, because the entities were surreptitiously making them on behalf of the designated North Korean Banks, whose designation precluded such U.S. dollar transactions. The government also is seeking imposition of a monetary penalty commensurate with the millions of dollars allegedly laundered by Velmur and Transatlantic.

**

U.S. v. Dandong Chengtai Trading Co., Ltd. (Dandong Chengtai), also known as Dandong Zhicheng Metallic Material Co., Ltd.

This complaint alleges that Dandong Chengtai and associated front companies controlled by Chi Yupeng, a Chinese national, comprise one of the largest financial facilitators for North Korea. According to the complaint, Dandong Chengtai conspired to evade U.S. economic sanctions by facilitating prohibited U.S. dollar transactions through the United States on behalf of the North Korean Workers’ Party, a sanctioned entity.

The complaint further alleges that the North Korean government relies on exports of coal as its primary means of obtaining access to foreign currency, and that the North Korean military controls the amount of coal produced and its subsequent export. The North Korean government uses proceeds of coal sales to fund its weapons of mass destruction program and missile programs. Coal generates more than $1 billion in revenue per year for North Korea. The investigation revealed that Dandong Chengtai is one of the largest importers of North Korean coal in China, and has continued to engage in illicit U.S. dollar transactions related to its coal sales to benefit North Korea.

The complaint alleges that Dandong Chengtai facilitated wire transfers denominated in U.S. dollars for purchases of goods that are well outside the scope of a mineral trading company. Financial records reveal that purchases of bulk commodities such as sugar, rubber, petroleum products, and soybean oil, among others, were in fact destined for North Korea.

As reported in findings by the Treasury Department and the United Nations Panel of Experts, North Korean financial facilitators frequently establish and maintain offshore U.S. dollar accounts for the purposes of remitting wire transfers denominated in U.S. dollars on behalf of sanctioned North Korean entities. These broad interwoven networks allow sanctioned North Korean entities to conduct illicit procurement and banking activity.

The government is seeking to forfeit $4,083,935 that Dandong Chengtai wired on June 21, 2017 to Maison Trading, using their Chinese bank accounts. The investigation revealed that Maison Trading is a front company operated by a Dandong Chengtai employee. These U.S. dollar payments, which cleared through the United States, are alleged to violate U.S. law, because the recent North Korean sanctions law specifically barred U.S. dollar transactions involving North Korean coal and the proceeds of these transactions were for the benefit of the North Korea Worker’s Party, whose designation precluded such U.S. dollar transactions.

This case relates to a previously unsealed opinion from Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia, which found that probable cause existed to seize funds belonging to Dandong Chengtai.

**

The claims made in the complaints are only allegations and do not constitute a determination of liability.

The FBI’s Phoenix Field Office is investigating the case involving Velmur Management Pte Ltd. and Transatlantic Partners Pte., Ltd. The FBI’s Chicago Field Office is investigating the case involving Dandong Chengtai Trading Co. Ltd. Both investigations are being supported by the FBI Counterproliferation Center.

Assistant U.S Attorneys Arvind K. Lal, Zia M. Faruqui, Christopher B. Brown, Deborah Curtis, Ari Redbord, and Brian P. Hudak, all of the U.S. Attorney’s Office for the District of Columbia, are prosecuting both cases. Paralegal Specialist Toni Anne Donato and Legal Assistant Jessica McCormick are providing assistance.

dandong_chengtai_trading_-_complaint_-_august_2017.pdf

velmur_management_-_complaint_-_august_2017_4.pdf

Compounding Pharmacy Sales Representative Pleads Guilty to Prescription Fraud Conspiracy

Thursday, August 17, 2017

TUSCALOOSA – A sales representative for a Haleyville, Ala.-based compounding pharmacy pleaded guilty today in federal court to participating in a conspiracy to generate prescriptions and defraud health care insurers and prescription drug administrators out of tens of millions of dollars in 2015.

U.S. Attorney Jay E. Town, FBI Special Agent in Charge Johnnie Sharp, U.S. Postal Inspector in Charge Adrian Gonzalez, U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge John F. Khin, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge James E. Dorsey announced the plea.

BRIDGET McCUNE, 41, of Destin, Fla., pleaded guilty before U.S. District Court Judge L. Scott Coogler to conspiracy to commit health care fraud, wire fraud and mail fraud and to conspiring to solicit and receive kickbacks in return for referring prescriptions under Medicare and TRICARE, a U.S. Department of Defense health care program. McCune also pleaded guilty to four counts of health care fraud, and to two counts of money laundering for spending proceeds of the crimes. She remains out on bond pending sentencing, which is not yet scheduled.

McCune worked for Northside Pharmacy, an Alabama company doing business as Global Compounding Pharmacy. Global’s compounding and shipping facility was in Haleyville. The pharmacy did its prescription processing, billing and customer service at its “call center” in Clearwater, Fla.

Global hired sales representatives, including McCune, who were located in various states and were responsible for generating prescriptions from physicians and other prescribers. To bill insurance providers, including Blue Cross Blue Shield of Alabama, Medicare and TRICARE, for these prescriptions, Global contracted to enter the pharmacy networks of their third-party administrators, known as “pharmacy benefit managers” or “PBMs. These PBMs included Prime Therapeutics, Express Scripts Incorporated and CVS/Caremark.

McCune’s plea agreement with the government describes a conspiracy at Global that centered on generating and billing PBMs for fraudulent, often high-reimbursement prescriptions. To generate prescriptions, Global hired sales representatives who were married or related to doctors and other prescribers. Global also encouraged sales representatives to volunteer at doctors’ offices where they would review patient files and push Global’s products to patients. Global executives also frequently instructed employees to obtain high-reimbursing prescriptions that Global would fill and bill for reimbursement. The plea agreement describes a Global executive instructing sales representatives to obtain certain prescriptions and, shortly after, McCune obtained those prescriptions for herself and her dependents.

When billing, Global engaged in various fraudulent practices, including splitting drug quantities to evade PBM billing safeguards and automatically refilling and billing for prescriptions regardless of patient need, according to court documents. Global routinely waived co-pays to encourage patients to accept unnecessary medications and refills.

As part McCune’s plea, she agrees to forfeit $401,628 to the government as proceeds of illegal activity.

Global paid McCune a base salary plus a monthly commission for prescriptions that she obtained, according to court documents.

McCune began as a sales representative for Global’s Florida region in September 2014, working from Destin. Global promoted her to national field trainer in January 2015, but she also continued to function as a sales representative until she left the company in July 2016. McCune had a “close familial relationship” with a Florida physician, according to her plea agreement, and the “overwhelming majority of prescriptions she obtained” were issued under her family member’s signature.

At the same time that the U.S. Attorney’s Office for the Northern District of Alabama charged McCune, it separately charged another Global sales representative, KELLEY NORRIS, also known as KELLEY NORRIS-HARTLEY, 41, of Tuscaloosa. Norris faces the charge of conspiracy to commit health care fraud, wire fraud and mail fraud, as well as charges of health care fraud for submitting fraudulent prescription reimbursement claims to Blue Cross Blue Shield of Alabama. Norris also entered a plea agreement with the government.

The charges against McCune and Norris followed charges brought by the U.S. Attorney’s Office in May against Global sales representative Robin Gary Lowry, 49, of Columbus, Miss. Lowry was charged with conspiracy to defraud BCBS of Alabama and Prime Therapeutics. She also faced three counts of health care fraud for submitting fraudulent claims for payment to BCBS of Alabama.

Lowry pleaded guilty to the charges in June. She is scheduled for sentencing Nov. 7.

FBI, U.S. Postal Inspection Service, U.S. Department of Health and Human Services Office of Inspector General, U.S. Defense Criminal Investigative Service and Internal Revenue Service, Criminal Investigation investigated the cases, which Assistant U.S. Attorneys Chinelo Dike-Minor and Nicole Grosnoff are prosecuting.

Former Medical Doctor And Business Partner Indicted For $7.1 Million Medicare Health Care Fraud Scheme

Monday, August 14, 2017

LAS VEGAS, Nev. – Two Californians, a former medical doctor and his business partner, who were indicted on July 5, 2017 for a $7.1 million Medicare health care fraud scheme that occurred at three Las Vegas hospices, made their initial appearances in federal court today, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.

Camilo Q. Primero, 74, of San Dimas, Calif., and Aurora S. Beltran, 61, of Glendora, Calif., are each charged with one count of conspiracy to commit health care fraud; one count of health care fraud; one count of fraudulent concealment involving a federal health care program; three counts of false statements relating to a health benefit program; and thirteen counts of money laundering. The defendants face a criminal forfeiture money judgment in the amount of at least $7,083,130.

According to the indictment, from about Jan. 1, 2012 to about July 5, 2017, Primero, a former medical doctor and owner of Angel Eye Hospice, Vision Home Health Care, and Advent Hospice, all in Las Vegas, Nevada, and Beltran, Primero’s business partner, allegedly operated a scheme to fraudulently obtain $7.1 million from the federal Medicare program. They allegedly filed false enrollment documents with Medicare to enable Primero to operate hospice and home care agencies through nominees. Furthermore, they allegedly submitted hospice care claims for people who were not terminally ill and did not require hospice care.

The case is being investigated by the FBI and the U.S. Department of Health and Human Services-OIG, with assistance from IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Patrick Burns.

For prevention tips and information about Medicare fraud, visit www.medicare.gov.

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty in a court of law.

Former Deputy Director of USAID Contractor Sentenced for Theft of Grant Funds

Tuesday, August 1, 2017

South African Doctor Took Over $200,000 Meant to Promote Safer Childbirth

WASHINGTON – Eugene Sickle, the former deputy executive director of a South African research institute, was sentenced today to seven months of incarceration and ordered to pay $206,250 in restitution for a scheme in which he stole grant funds originating with the U.S. Agency for International Development (USAID).

The sentencing, in the U.S. District Court for the District of Columbia, was announced by Channing D. Phillips, U.S. Attorney for the District of Columbia, and Jonathan Schofield, Special Agent in Charge for the USAID Office of Inspector General, Office of Investigations.

Sickle, 47, a chemist and a citizen of South Africa, pled guilty in May 2017 to a charge of theft concerning programs receiving federal funds. The plea, which was contingent upon the Court’s approval, called for an agreed-upon sentence of six months to 12 months and a day of incarceration. The Honorable Ketanji Brown Jackson accepted the plea today and sentenced Sickle accordingly. In addition to the restitution order, the judge issued a forfeiture money judgment of $206,250. Following his release, Sickle will be subject to deportation proceedings.

Based in Washington, D.C., USAID is a U.S. government agency that provides international development assistance and humanitarian aid worldwide. It implements and administers foreign assistance programs and funds, including those supporting global health, from dedicated offices (“missions”) around the world. USAID’s South Africa mission is one such office that works with local organizations in that country. USAID’s Office of Inspector General bases investigators in 11 countries outside the United States, including South Africa, and provides oversight of USAID programs and operations around the world.

According to a statement of offense, signed by the defendant as well as the government, Sickle was deputy executive director of the Wits Reproductive Health and HIV Institute, a South African research institute focusing on sexual and reproductive health as well as vaccine-preventable diseases. Its primary source of funding is USAID, and Sickle administered grant funds for projects. One such project involved a mobile electronic device software application, in connection with the South African National Department of Health, which would help facilitate safer childbirth deliveries in South Africa.

On Oct. 2, 2015, according to the statement of offense, Sickle and the institute’s chief executive officer signed a contract with a company called Alzar Consulting Services Ltd. to develop the childbirth app. Likewise, an individual named “Dr. Carla Das Neves” Alzar’s purported director, signed the contract. Pursuant to this contract, the institute made two payments to Alzar totaling $206,250. However, the childbirth app has never been developed.

Subsequent investigation revealed that Sickle created Alzar in the British Virgin Islands. Unbeknownst to anyone at the research institute, he was the sole owner of the company. Sickle also created e-mail accounts for Alzar and fake Alzar employees, including “Carla Das Neves.” He created a fake LinkedIn page for “Carla Das Neves,” which had a beach scene for a picture, and falsely claimed that “Carla Das Neves” was a trained expert in aid/relief work.

Sickle shepherded the research institute’s contract with Alzar through the approval and compliance process. He signed the contract both as himself and also as “Carla Das Neves.”

According to the statement of offense, Sickle did not perform any of the work required under the contract, nor did anyone else. None of the USAID money was used for its intended purpose to facilitate safer childbirth in South Africa. Instead, Sickle diverted the money to himself personally, and an associate.

Sickle resigned from his position last year. Agents with the USAID Inspector General’s Office arrested him in Washington, D.C., in February 2017. He has been in custody ever since.

This case was investigated by the U.S. Agency for International Development Office of Inspector General. It was prosecuted by Assistant U.S. Attorneys John P. Marston and Denise Simmonds and Special Assistant U.S. Attorney Vesna Harasic-Yaksic of the U.S. Attorney’s Office for the District of Columbia.

Hudson County, New Jersey, Man Sentenced To 63 Months In Prison For Masterminding Fake ID Website And Participating In ‘SIRF’ Scheme

Thursday, July 27, 2017

NEWARK, N.J. – A Jersey City, New Jersey, man was sentenced today to 63 months in prison for his role in two separate conspiracies: one to create and operate a website that sold high-quality, custom-made fake identification documents, some of which were later used to commit financial crimes, and a second to fraudulently obtain tax refund checks, Acting U.S. Attorney William E. Fitzpatrick announced.

Ricardo Rosario, 34, previously pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with conspiracy to commit fraud in connection with authentication features and conspiracy to submit false claims to the U.S. Government. Judge Linares imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court:

From October 2012 through August 2014, Rosario, with the assistance of Abraham Corcino, 34, of Jersey City, and Alexis Scott Carthens, 38, of Newark, sold fake driver’s licenses over the Internet, running a website that was available at “fakeidstore.com” and “fakedlstore.com.” A number of the fake driver’s licenses sold by Rosario and other conspirators were used in connection with “cash out” schemes, where stolen credit card information, usually obtained through hacking or ATM skimming operations, was encoded on to counterfeit credit cards and used to steal cash from victims’ accounts.

Rosario created and ran the website. Corcino and Carthens assisted him by creating and mailing the fake driver’s licenses purchased through the website. Corcino also maintained an Instagram account to promote the website. The website sold fake New Jersey, Florida, Illinois, Pennsylvania, Rhode Island, and Wisconsin driver’s licenses, and the website boasted that the licenses had “scannable barcodes” and “real” holographic overlays. The price for each fake driver’s license was approximately $150, but the website offered bulk pricing for orders of 10 or more.

The website allowed its users to pay by bitcoin, a cryptographic-based digital currency, or MoneyPak, a type of prepaid payment card that could be purchased at retail stores. The “FAQ” section of the website indicated that orders would be received approximately one to two days after payment was received and described the website’s policy with respect to returns: “No Refunds. No snitching.”

In the Stolen Identity Refund Fraud (SIRF) conspiracy, Rosario assisted Carthens, who obtained stolen personally identifiable information (PII) primarily in the form of lab testing request forms that he purchased from another individual. Rosario provided Carthens with email accounts and drop addresses used in furtherance of the scheme. The email accounts were used to register accounts for online tax filing services and prepaid card accounts used to apply for and receive the tax refunds. The drop addresses were used to physically receive the refunds in the form of prepaid debit cards.

In addition to the prison term, Judge Linares sentenced Rosario to three years of supervised release and ordered forfeiture of $232,660 and restitution of $121,922.

Corcino was sentenced on April 17, 2017, to three years of probation. Carthens pleaded guilty to his role in the scheme on April 25, 2016, and is scheduled to be sentenced Sept. 28, 2017.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, and special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Zach Intrater of the Economic Crimes Unit and Barbara Ward, Acting Chief of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.

Defense counsel: Brian Neary Esq., Hackensack, New Jersey

Short Hills, New Jersey, Investment Manager Sentenced To 33 Months In Prison For $675,000 Ponzi Scheme

Thursday, July 27, 2017

NEWARK, N.J. – An investment manager with an office in Short Hills, New Jersey, was sentenced today to 33 months in prison for that he fraudulently inducing investments, concealing investment losses, and diverting more than $675,000 in investor money for his own use, Acting U.S. Attorney William E. Fitzpatrick announced.

Mark Moskowitz, 48, of Short Hills, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of wire fraud. Judge Hayden imposed the sentence today in Newark federal court.

In a separate legal proceeding, the N.J. Bureau of Securities ordered Moskowitz and his trading company, Edge Trading LLC, to pay a $1 million civil penalty for selling unregistered fraudulent securities and misusing investors’ funds for personal expenses.

According to documents filed in this case and statements made in court:

Moskowitz controlled an investment fund under the names Edge Trading Partners L.P. and Edge Trading LLC (Edge Trading). In addition to touting his investment skill and experience, Moskowitz concealed losses from investors and falsely told them that Edge Trading was growing year after year. Based on these misrepresentations, investors continued to entrust additional funds to Moskowitz and left previous investments under his control.

Edge Trading was an investment fund that Moskowitz created and operated, starting in or around 2012. Moskowitz told investors that Edge Trading was invested in U.S. and foreign equities, futures contracts, and option contracts and that the fund’s investments continued to show positive returns. In reality, Moskowitz redirected investor money to his personal use, which he concealed from the investors.

In addition to the prison term, Judge Hayden sentenced Moskowitz to three years of supervised release and ordered restitution and forfeiture of $694,577.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s sentencing. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Office, under the direction of Attorney General Christopher S. Porrino and Acting Bureau Chief Amy Kopleton, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: David Holman Esq., Assistant Federal Public Defenders, Newark