Former Social Security Administrative Law Judge Sentenced to Four Years in Prison for Role in $550 Million Social Security Fraud Scheme

Friday, August 25, 2017

A former social security administrative law judge (ALJ) was sentenced today to four years in prison for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments from the Social Security Administration (SSA) for thousands of claimants.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division, Special Agent in Charge Amy S. Hess of the FBI’s Louisville Field Division, Special Agent in Charge Tracey D. Montaño of the IRS Criminal Investigation (IRS-CI) Nashville Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.

David Black Daugherty, 81, of Myrtle Beach, S.C., was sentenced by U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky, who also ordered Daugherty to pay restitution of over $93 million to the SSA and HHS. Daugherty pleaded guilty in May 2017 to two counts of receiving illegal gratuities.

According to admissions made as part of his guilty plea, beginning in 2004, Daugherty, as an ALJ assigned to the SSA’s Huntington, W. Va., hearing office, sought out pending disability cases in which Kentucky attorney Eric Christopher Conn represented claimants and reassigned those cases to himself. Daugherty then contacted Conn and identified the cases he intended to decide the following month and further solicited Conn to provide medical documentation supporting either physical or mental disability determinations. Without exception, Daugherty awarded disability benefits to individuals represented by Conn – in some instances, without first holding a hearing. As a result of Daugherty’s awarding disability benefits to claimants represented by Conn, Conn paid Daugherty an average of approximately $8,000 per month in cash, until approximately April 2011. All told, Daugherty received more than $609,000 in cash from Conn for deciding approximately 3,149 cases.

As a result of the scheme, Conn, Daugherty, and their co-conspirators obligated the SSA to pay more than $550 million in lifetime benefits to claimants based upon cases Daugherty approved for which he received payment from Conn.

Daugherty was indicted last year, along with Conn and Alfred Bradley Adkins, a clinical psychologist. The defendants were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme.

Conn pleaded guilty on March 24, to a two-count information charging him with theft of government money and paying illegal gratuities, and was sentenced in absentia on July 14 to 12 years in prison. Conn absconded from court ordered-electronic monitoring on June 2, and is considered a fugitive. He remains under indictment. On June 12, Adkins was convicted after a jury trial of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements. Adkins is scheduled to be sentenced on September 22.

The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorney Trey Alford of the Western District of Missouri and Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.

Connecticut Substance Abuse Treatment Provider Pays $627K to Settle False Claims Act Allegations

Thursday, September 7, 2017

United States Attorney Deirdre M. Daly and Connecticut Attorney General George Jepsen today announced that a Connecticut substance abuse treatment provider and its former CEO will pay $627,000 to resolve allegations that they violated the federal and state False Claims Acts.

THE HARTFORD DISPENSARY and THE HARTFORD DISPENSARY ENDOWMENT CORPORATION (collectively, “Hartford Dispensary”) is a healthcare organization that provides behavioral health and substance use disorder treatment services. It operates various outpatient treatment programs through its nine clinics located in Connecticut. PAUL McLAUGHLIN is the former President and Chief Executive Officer of Hartford Dispensary.

To be certified as an opioid treatment provider (OTP), the OTP must formally designate a medical director, who assumes responsibility for administering all medical services performed by the OTP. The medical director is also responsible for ensuring that the OTP is in compliance with all applicable federal, state, and local laws and regulations.

The government alleges that Hartford Dispensary and McLaughlin made repeated false representations and false certifications to federal and state authorities that Hartford Dispensary had a medical director, as defined by relevant regulations, who was performing the duties and responsibilities required by federal and state law. The government further alleges that these false representations and certifications were material to false or fraudulent claims submitted to the Medicaid program.

To resolve the government’s allegations under the federal and state False Claims Acts, Hartford Dispensary and McLaughlin have agreed to pay $627,000, which covers conduct occurring from January 1, 2009 through November 20, 2015.

A complaint against Hartford Dispensary was filed in the U.S. District Court in Connecticut under the qui tam, or whistleblower, provisions of the both the federal and state False Claims Acts. The relators (whistleblowers), Russell Buchner and Charles Hatheway, former employees of Hartford Dispensary, will receive a share of the proceeds of the settlement in the amount of $112,860. The whistleblower provisions of both the federal and state False Claims Acts provide that the whistleblower is entitled to receive a percentage of the proceeds of any judgment or settlement recovered by the government.

“Health care providers must be completely honest when certifying information to the government, and the failure to do so will have serious consequences,” stated U.S. Attorney Daly. “The U.S. Attorney’s office is committed to vigorously pursuing health care providers who make false representations to federal health care programs.”

“Medicaid providers are required to comply with the applicable rules of the program and to certify honestly their compliance,” said Attorney General Jepsen. “I’m grateful to our state and federal partners for their continued cooperation and coordination as we work to protect our taxpayer-funded healthcare programs.”

This matter was investigated by the Office of Inspector General for the U.S. Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot and Auditor Kevin Saunders, and by Assistant Attorneys General Michael Cole and Gregory O’Connell of the Connecticut Office of the Attorney General.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.

South Carolina Family Practice Chain, Its Co-Owner, and Its Laboratory Director Agree to Pay the United States $2 Million to Settle Alleged False Claims Act Violations for Illegal Medicare Referrals and Billing for Unnecessary Medical Services

Monday, September 11, 2017

Family Medicine Centers of South Carolina LLC (FMC), has agreed to pay the United States $1.56 million, and FMC’s principal owner and former chief executive officer, Dr. Stephen F. Serbin, and its former Laboratory Director, Victoria Serbin, have agreed to pay $443,000 to resolve a False Claims Act lawsuit alleging that they submitted and caused the submission of false claims to the Medicare and TRICARE programs. FMC is a physician-owned chain of family medicine clinics located in and around Columbia, South Carolina, whose practices include Springwood Lake Family Practice, Woodhill Family Practice, Midtown Family Medicine, Saluda Pointe Family Medicine, Lake Murray Family Medicine, and the now closed Rice Creek Family Medicine.

The settlements announced today resolve allegations that FMC, as directed by Dr. Serbin, submitted claims to the Medicare Program that violated the physician self-referral prohibition, commonly known as the Stark Law, which is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Stark Law forbids a clinic from billing Medicare for certain services ordered by physicians who have a financial relationship with the entity. In this case, the government alleged that the Stark Law was violated by FMC’s incentive compensation plan that paid FMC’s physicians a percentage of the value of laboratory and other diagnostic tests that they personally ordered through FMC, which FMC then billed to Medicare. Dr. Serbin, FMC’s co-owner and chief executive, allegedly initiated this program and reminded FMC’s physicians that they needed to order tests and other services through FMC in order to increase FMC’s profits and to ensure that their take-home pay remained in the upper level nationwide for family practice doctors.

“Financial arrangements that compensate physicians for referrals can sometimes encourage physicians to make decisions based on financial gain rather than patient needs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs and drive up the cost of healthcare for taxpayers.”

The settlements also resolve allegations that FMC, Dr. Serbin, and Victoria Serbin submitted and caused the submission of false claims to Medicare and TRICARE for medically unnecessary laboratory services by creating custom laboratory panels comprised of diagnostic tests not appropriate for routine measurement, performing these tests without an order from the treating physician, implementing standing orders to assure these custom panels were performed with defined frequency and not in reaction to clinical need, and programming FMC’s billing software to systematically change certain billing codes for laboratory tests to ensure payment by Medicare.

“Healthcare decisions should be made by physicians based on medical science and not with regard to maximizing the doctor’s own income,” said U.S. Attorney Beth Drake for the District of South Carolina. “Our goal in bringing this case was not only to recover money for improper healthcare claims, but also to deter similar conduct and promote health care affordability.”

The allegations settled today arose from a lawsuit filed by a physician formerly employed by FMC, Dr. Catherine A. Schaefer, under the whistleblower provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Dr. Schaefer will receive $340,510.

As part of the settlement announced today, FMC and the Serbins have also agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which ensures the Serbins will have no management role in FMC for five years and obligates FMC to undertake other substantial internal compliance reforms, including hiring an independent review organization to conduct annual claims reviews.

“Patients and taxpayers should expect that doctors’ best medical judgement is not clouded by what amount to thinly-veiled bribes,” said Special Agent in Charge Derrick L. Jackson for HHS-OIG. “We will work tirelessly with our law enforcement partners to preserve government health funds by bringing violators to justice.”

“We applaud the Department of Justice and the U.S. Attorney for the District of South Carolina for holding this provider accountable for its actions,” said Deputy Director Guy Kiyokawa of the Defense Health Agency. “The provider’s actions targeted American service members, veterans and their families, diverting valuable resources through unnecessary tests. The Defense Health Agency continues to work closely with the Justice Department and other state and federal agencies to investigate all those who participated in these nefarious, fraudulent practices.”

This case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of South Carolina, HHS-OIG and the Defense Health Agency.

The litigation and settlement of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The claims resolved by this settlement are allegations only, and there has been no determination of liability. The case is captioned United States ex rel. Schaefer v. Family Medicine Centers of South Carolina, LLC, Stephen F. Serbin, M.D. and Victoria Serbin, No. 3:14-cv-342-MBS (D.S.C.).

CEO Indicted For Wire Fraud And Aggravated Identity Theft

Thursday, August 10, 2017

Greenbelt, Maryland – A federal grand jury has indicted Zheng Geng, a/k/a “Jason Geng”, age 59, of Vienna, Virginia, on charges related to a scheme to defraud the United States. The indictment was returned on August 9, 2017, and unsealed today upon the arrest of Geng. Geng is the Chief Executive Officer of Xigen LLC (Xigen), which has offices in Maryland and Virginia.

The indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Inspector General Paul Martin of the National Aeronautics and Space Administration Office of Inspector General; Inspector General Allison Lerner of the National Science Foundation Office of Inspector General; Special Agent in Charge Nick DiGiulio of the Health and Human Services Office of Inspector General; Special Agent in Charge Gordon Thompson of the U.S. Postal Service Office of Inspector General; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.

According to the six-count indictment, Geng devised a scheme between 2005 to 2016 to defraud the United States by submitting false and fraudulent grant applications under the Small Business Innovation Research (SBIR) Program. The SBIR program aims to stimulate United States technological innovation. A further aim is to foster and encourage participation in technical innovation by socially and economically disadvantaged small businesses that in some instances are at least 51-percent owned and controlled by women. Geng prepared materially fraudulent proposals for awards, subsequent reports, and related communications under the programs.

To support the applications, Geng submitted endorsements for his grant applications using the identities of people without their permission, or misrepresenting their positions within Xigen. In addition, he submitted endorsements that misrepresented active affiliations with various universities including, Harvard University Medical School and Johns Hopkins University School of Medicine, and budgeted funds for subcontractors without their knowledge and without providing them with budgeted funds. With this false information, the United States government approved SBIR program awards and grants through the Department of Health and Human Service’s National Institutes of Health and the National Aeronautics and Space Administration. The awards totaled over $1.8 million.

According to court documents, Geng used the rewarded funds for his own personal use and the use of his family members and associates.

“The NASA Office of Inspector General will continue to aggressively investigate those who undermine and defraud NASA programs and operations,” said Inspector General Martin. “The NASA OIG appreciates the efforts of the entire investigative and prosecution team during this multi-year investigation, and we look forward to continued cooperation with our law enforcement partners in this and related matters.”

Allison Lerner, Inspector General for the National Science Foundation said, “The SBIR program is a valuable tool for advancing promising new technologies. My office will continue to vigorously pursue attempts to defraud scarce research dollars intended to promote economic growth through innovative SBIR investments.”

“The United States Department of Health and Human services provides research grant funds to qualified small businesses; we cannot tolerate the theft of taxpayer funds meant for honest research projects” said Nick DiGiulio, Special Agent in Charge for the Inspector General’s Office of the US Department of Health and Human Services.

Geng faces a maximum sentence of 20 years in prison and a $250,000 fine for wire fraud and a 2-year mandatory minimum consecutive sentence for each of the aggravated identity theft charges.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Acting United States Attorney Stephen M. Schenning commended the NASA Office of Inspector General, the National Science Foundation Office of Inspector General, the HHS Office of Inspector General, U.S. Postal Service Office of Inspector General and the FBI for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Phil Selden and Jennifer Sykes, who are prosecuting the case and Assistant U.S. Attorney David Salem who also helped investigate this case.

Contact ELIZABETH MORSE at (410) 209-4885

www.justice.gov/usao/md       

Houston Home Health Agency Owner Sentenced to 480 Months in Prison for Conspiring to Defraud Medicare and Medicaid of More Than $17 Million

Friday, August 18, 2017

WASHINGTON – The owner and operator of five Houston-area home health agencies was sentenced on Thursday to 480 months in prison for conspiring to defraud Medicare and the State of Texas’ Medicaid-funded Home and Community-Based Service (HCBS) and Primary Home Care (PHC) Programs of more than $17 million and launder the money that he stole from Medicare and Medicaid.  The HCBS and PHC Programs provided qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services” (PAS).  This case marks the largest PAS fraud case charged in Texas history.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office, Special Agent in Charge D. Richard Goss of IRS Criminal Investigation’s (CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

Godwin Oriakhi, 61, of Houston, was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas.  In March 2017, Oriakhi pleaded guilty to two counts of conspiracy to commit health care fraud and one count of conspiracy to launder monetary instruments.

According to admissions made as part of Oriakhi’s plea, he, his co-defendant daughter and other members of his family owned and operated Aabraham Blessings LLC, Baptist Home Care Providers Inc., Community Wide Home Health Inc., Four Seasons Home Healthcare Inc. and Kis Med Concepts Inc., all of which were home health agencies in the Houston area.  Oriakhi admitted that he, along with his daughter and other co-conspirators, obtained patients for his home health agencies by paying illegal kickback payments to patient recruiters and his office employees for hundreds of patient referrals.  In his plea, Oriakhi also admitted that he, along with his daughter and co-conspirators, paid Medicare and Medicaid patients by cash, check, Western Union and Moneygram for receiving services from his family’s home health agencies in exchange for the ability to use the patients’ Medicare and Medicaid numbers to bill the programs for home healthcare and PAS services.  Oriakhi admitted that he, his daughter and their co-conspirators also directly paid some of these patients for recruiting and referring other Medicare and Medicaid patients to his agencies.  Additionally, Oriakhi admitted that he, his daughter and other co-conspirators paid physicians illegal kickbacks payments, which Oriakhi and his co-conspirators called “copayments,” for referring and certifying Medicare and Medicaid patients for home health and PAS services.

Oriakhi further admitted that each time he submitted a claim predicated on an illegal kickback payment he knew he was submitting a fraudulent claim to Medicare or Medicaid based on his false representations that the claim and the underlying transaction complied with the federal Anti-Kickback Statute and other state and federal laws.  Oriakhi further admitted that he knew that Medicare and Medicaid would not otherwise pay for the fraudulent claims, according to his plea.  In addition to the home health care and PAS services fraud scheme, Oriakhi admitted that he and his co-conspirators used the money fraudulently obtained from Medicare and Medicaid to make illegal kickback payments to patient recruiters, employees, physicians and patients to promote the Medicare home health and Medicaid PAS fraud conspiracies, and ensure their successful continuation.

In total, Oriakhi that he and his co-conspirators submitted approximately $17,819,456 in fraudulent home healthcare and PAS claims to Medicare and Medicaid and received approximately $16,198,600 on those claims.

To date, three others have pleaded guilty based on their roles in the fraudulent scheme at Oriakhi’s home healthcare agencies.  Oriakhi’s daughter, Idia Oriakhi, and Charles Esechie, a registered nurse who was Baptist’s primary admissions nurse, each pleaded guilty to one count of conspiring with Oriakhi and others to commit health care fraud.  Jermaine Doleman, a patient recruiter, pleaded guilty to conspiring with Oriakhi and others to commit health care fraud and launder money.  Doleman was also charged in two other healthcare fraud cases.  Esechie was also sentenced on August 17, to 60 months in prison.  Idia Oriakhi and Jermaine Doleman are awaiting sentencing.

The case was investigated by the IRS-CI, FBI, HHS-OIG and MFCU under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.  The case is being prosecuted by Senior Trial Attorney Jonathan T. Baum and Trial Attorneys Aleza S. Remis and William S.W. Chang of the Fraud Section of the Justice Department’s Criminal Division.

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.

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

Owner of Home Health Agency Sentenced to 75 Years in Prison for Involvement in $13 Million Medicare Fraud Conspiracy

Friday, August 11, 2017

The owner and director of nursing of a Houston home health agency was sentenced today to 75 years in prison for her role in a $13 million Medicare fraud scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Region and Special Agent in Charge D. Richard Goss of the Houston Field Office of IRS-Criminal Investigation Division (IRS-CI) made the announcement.

Marie Neba, 53, of Sugarland, Texas, was sentenced by U.S. District Judge Melinda Harmon of the Southern District of Texas.  In November 2016, Neba was convicted after a two-week jury trial of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to pay and receive health care kickbacks, one count of payment and receipt of health care kickbacks, one count of conspiracy to launder monetary instruments and one count of making health care false statements.

According to the evidence presented at trial, from February 2006 through June 2015, Neba and others conspired to defraud Medicare by submitting over $10 million in false and fraudulent claims for home health services to Medicare through Fiango Home Healthcare Inc., owned by Neba and her husband, Ebong Tilong, 53, also of Sugarland, Texas.  The trial evidence showed that using the money that Medicare paid for such fraudulent claims, Neba paid illegal kickbacks to patient recruiters for referring Medicare beneficiaries to Fiango for home health services.  Neba also paid illegal kickbacks to Medicare beneficiaries for allowing Fiango to bill Medicare using beneficiaries’ Medicare information for home health services that were not medically necessary or not provided, the evidence showed.  Neba falsified medical records to make it appear as though the Medicare beneficiaries qualified for and received home health services.  Neba also attempted to suborn perjury from a co-defendant in the federal courthouse, the evidence showed.

According to the evidence presented at trial, from February 2006 to June 2015, Neba received more than $13 million from Medicare for home health services that were not medically necessary or not provided to Medicare beneficiaries.

To date, four others have pleaded guilty based on their roles in the fraudulent scheme at Fiango.  Nirmal Mazumdar, M.D., the former medical director of Fiango, pleaded guilty to a scheme to commit health care fraud for his role at Fiango.  Daisy Carter and Connie Ray Island, two patient recruiters for Fiango, pleaded guilty to conspiracy to commit health care fraud for their roles at Fiango.  On August 11, Island was sentenced to 33 months in prison.  Mazumdar and Carter are awaiting sentencing.  After the first week of trial, Tilong pleaded guilty to one count of conspiracy to commit healthcare fraud, three counts of healthcare fraud, one count of conspiracy to pay and receive healthcare kickbacks, three counts of payment and receipt of healthcare kickbacks, and one count of conspiracy to launder monetary instruments.  Tilong is scheduled to be sentenced on October 13.

The case was investigated by the IRS-CI, FBI and HHS-OIG under the supervision of the Fraud Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Southern District of Texas.  The case is being prosecuted by Trial Attorney William S.W. Chang and Senior Trial Attorney Jonathan T. Baum 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.

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

Registered Nurse Who Owned Two Houston Home Health Companies Convicted in $20 Million Medicare Fraud Scheme

Thursday, August 10, 2017

A federal jury today convicted a registered nurse who was the owner of two home health companies in Houston for her role in a $20 million Medicare fraud scheme involving fraudulent claims for home health services.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Region made the announcement.

After a four-day trial, Evelyn Mokwuah, 52, of Pearland, Texas, was convicted of one count of conspiracy to commit health care fraud and four counts of health care fraud for her conduct at Beechwood Home Health (Beechwood) and Criseven Health Management Corporation (Criseven).  Sentencing has been scheduled for October 6, before U.S. District Judge Gray H. Miller of the Southern District of Texas, who presided over the trial.

According to evidence presented at trial, from 2008 to 2016, Mokwuah and others engaged in a scheme to defraud Medicare of approximately $20 million in fraudulent claims for home health services at Beechwood and Criseven that were not provided or not medically necessary.  According to the trial evidence, Mokwuah billed for patients who were not homebound or did not qualify for home health services; Mokwuah and others falsified patient records to show patients were homebound when they were not; Mokwuah paid patient recruiters to recruit Medicare beneficiaries to Beechwood and Criseven; and Mokwuah paid doctors to sign off on falsified plans of care for the recruited beneficiaries so that Beechwood and Criseven could bill Medicare for those services.

Co-defendant Amara Oparanozie, 47, of Richmond, Texas, pleaded guilty on May 24, to conspiring with Mokwuah and others to commit health care fraud and is awaiting sentencing.

The case was investigated by the FBI and HHS-OIG, 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 Southern District of Texas.  The case is being prosecuted by Trial Attorneys Scott Armstrong and Kevin Lowell of the Criminal Division’s Fraud Section.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the department 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.

Woman Pleads Guilty to Medicaid Fraud and Identity Theft Charges

Wednesday, August 9, 2017

A Richmond woman pleaded guilty today healthcare fraud and aggravated identity theft.

According to court documents, Chermeca Harris, 36, was a Medicaid beneficiary and would misrepresent her health condition to health care providers, such as hospitals and ambulance services, in order to obtain health care benefits. Specifically, Harris would falsely represent that she was suffering from sickle cell anemia and was having a sickle cell crisis in order to obtain pain killing drugs, such as dilaudid, which she wanted to receive intravenously through the neck. In fact, doctors tested Harris in January 2016, and determined she did not have sickle cell anemia. The hospitals involved were Virginia Commonwealth University Medical Center, Chippenham, Bon Secours St. Mary’s, Memorial Regional, John Randolph Medical Center, and Henrico Doctor’s. According to court documents, it was a further part of the scheme that Harris also falsely represented her identity. On some occasions she used the name of M.M., and on other occasions she used the name of R.J.; both Medicaid recipients. She also falsely stated to investigating federal agents that her name was M.M. and that she had sickle cell anemia.

Harris was charged as part of the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.

Harris pleaded guilty to healthcare fraud on the Medicaid program and aggravated identity theft. She faces a mandatory minimum of two years in prison and a maximum penalty of 12 years in prison, when sentenced on October 26. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; and Nick DiGiulio, Special Agent in Charge, Philadelphia Regional Office of Inspector General of Department of Health and Human Services, made the announcement after the plea was accepted by Magistrate Judge David J. Novak. Assistant U.S. Attorney David T. Maguire is prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-cr-77.

Marshall County physician indicted on health care fraud charges

Wednesday, July 26, 2017

WHEELING, WEST VIRGINIA – A physician with a pain management clinic in McMechen, West Virginia, was indicted by a federal grand jury sitting in Wheeling on June 6, 2017 on health care fraud, mail fraud, and wire fraud charges, Acting United States Attorney Betsy Steinfeld Jividen announced.

Dr. Roland F. Chalifoux, Jr., age 57, of St. Clairsville, Ohio, was indicted on eleven counts of “Health Care Fraud for Travel Dates,” seven counts of “Mail Fraud,” four counts of “Wire Fraud,” and four counts of “Health Care Fraud.” The crimes are alleged to have occurred from 2008 to June 2017 in Marshall County and elsewhere in the Northern District of West Virginia.

Assistant U.S. Attorney Robert H. McWilliams is prosecuting the case on behalf of the government. The U.S. Department of Health and Human Services, The Drug Enforcement Administration, the Federal Bureau of Investigation, the United States Postal Inspection Service, and the West Virginia Insurance Fraud Investigation Unit are investigating.

An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.

District Court Enters Permanent Injunction Against Tennessee Company and Its CEO to Stop Distribution of Unapproved and Misbranded Drugs

Thursday, July 27, 2017

The U.S. District Court for the Eastern District of Tennessee entered a consent decree of permanent injunction against Crown Laboratories Inc. and the firm’s Chief Executive Officer, Jeffrey Bedard, to stop the distribution of unapproved and misbranded drugs, the Department of Justice announced today. The products at issue include urea creams and lotions intended to treat a variety of skin ailments.

The Department filed a complaint in the Eastern District of Tennessee on March 1, at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that the defendants violated the federal Food, Drug and Cosmetic Act by, among other things, introducing unapproved and misbranded drugs into interstate commerce. Specifically, the complaint alleges that defendants sold a series of dermatological creams, despite the absence of FDA approval or a sufficient showing that these products were safe and effective.

“The public has a right to assume that drugs in the marketplace are safe, effective, have obtained proper approvals, and are labeled with the information necessary to allow for proper use,” said Acting Assistant Attorney General Chad Readler of the Justice Department’s Civil Division. “Where drug manufacturers violate these fundamental requirements, the Department of Justice will continue to work aggressively with the FDA to ensure that the pharmaceutical industry follows the rules. Doing so is necessary to protect American consumers.”

As detailed in the complaint, Crown manufactures a variety of prescription and OTC drugs including prescription urea cream and lotion. The products referenced in the complaint include Rea Lo (Urea 40 percent) Cream, Rea Lo (Urea 40 percent) Lotion, Rea Lo 39 (Urea 39 percent) Cream, Dermasorb XM Complete Kit (Urea 39 persent cream and moisturizer), and Sodium Sulfacetamide 10 percent and Sulfur 5 percent (Sodium Sulfacetamide).

As noted in the complaint, the various urea based products were sold as products intended to treat a series of dermatological conditions, such as dry, rough skin, xerosis, ichthyosis, skin cracks and fissures, dermatitis, eczema, psoriasis, keratosis, and calluses. Sodium Sulfacetamide is intended to treat acne vulgaris, acne rosacea, and seborrheic dermatitis. As products designed to provide dermatological treatment, these drugs required FDA approval for their intended uses – approval that was lacking for all of these products. Distributing unapproved drugs in interstate commerce is a violation of the federal Food, Drug, and Cosmetic Act.

In conjunction with the filing of the complaint, the defendants agreed to settle the case and to be bound by a permanent injunction. The injunction requires Crown to stop the manufacturing, selling and introducing into interstate commerce any Rea Lo (Urea 40 percent) Cream, Rea Lo (Urea 40 percent) Lotion, Rea Lo 39 (Urea 39 percent) Cream, Dermasorb XM Complete Kit, Sodium Sulfacetamide, or any drug labeled similarly to such drugs and containing the same active ingredient(s), unless and until an application has been filed with the FDA and approved by the agency.

In addition, within 20 days after the district court’s order, the defendants are required, among other things, to give FDA written notice that they are prepared to destroy all Rea Lo (Urea 40 percent) Cream, Rea Lo (Urea 40 percent) Lotion, Rea Lo 39 (Urea 39 percent) Cream, Dermasorb XM Complete Kit, Sodium Sulfacetamide, and any unapproved drug labeled similarly to such drugs and containing the same active ingredient(s).

The government is represented by Trial Attorney Mary M. Englehart of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Susan Williams of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.