Tag Archives: Andrew H. Warren

Owners of Orlando Health Care Clinic Charged with $3 Million Medicare Fraud Scheme

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Charges have been unsealed against husband and wife owners of an Orlando health care clinic for their roles in a fraud scheme that resulted in the submission of more than $3 million in allegedly fraudulent claims to Medicare.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida and Special Agent in Charge Derrick Jackson of the U.S. Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement after the defendants were taken into custody last night and this morning.

A federal grand jury in the Middle District of Florida returned an indictment on Nov. 19, 2014, against Juan Carlos Delgado, 58, and Nereyda Infante, 48, both of Orlando, Florida, charging them with one count of conspiracy to commit health care fraud, five counts of health care fraud, and one count of conspiracy to commit money laundering.  According to the indictment, Delgado and Infante owned and operated Prestige Medical Services and Rehab Center, a health care clinic that purportedly provided medical services to Medicare Part B and Medicare Part C beneficiaries, and three other similarly named clinics that also purportedly provided medical services to Medicare Part C beneficiaries.

Between February 2012 and September 2014, the defendants allegedly submitted claims to Medicare that falsely represented that medical services were provided, medically necessary, and prescribed by a physician, when they were not.  The health care fraud counts specifically allege fraudulent claims involving Pentostatin prescriptions, an expensive chemotherapeutic medication, that were not medically necessary, not prescribed by a physician, and not provided.  The indictment also alleges that the defendants transferred proceeds obtained as the result of fraudulent claims and diverted them for their personal use.  According to the indictment, the defendants obtained more than $1.8 million in proceeds from the alleged fraud.

The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case is being investigated by the 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 Middle District of Florida.  The case is being prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 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 Team (HEAT), go to: www.stopmedicarefraud.gov.

Principal in $28.3 Million Medicare Fraud Scheme Sentenced to 11 Years in Prison

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A Florida owner and operator of multiple physical therapy rehabilitation facilities was sentenced in federal court in Tampa today to serve 11 years in prison for his role in organizing a $28.3 million Medicare fraud scheme involving physical and occupational therapy services.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office made the announcement.

Luis Duluc, 54, of Tampa, pleaded guilty on Feb. 3, 2014, to conspiracy to commit health care fraud as well as making a false statement relating to health care matters.  In addition to the prison term, U.S. District Judge Susan C. Bucklew of the Middle District of Florida ordered Duluc to pay $14,424,856 in restitution.

According to Duluc’s admissions in connection with his guilty plea, he and his co-conspirators used various physical therapy clinics and other businesses throughout Florida to submit approximately $28,347,065 in fraudulent reimbursement claims to Medicare between 2005 and 2009.  Medicare paid approximately $14,424,865 on those claims.

Duluc was chairman and president of a Delaware holding company known as Ulysses Acquisitions Inc., which was used to purchase comprehensive outpatient rehabilitation facilities and outpatient physical therapy providers, including West Coast Rehab Inc. in Fort Myers, Florida; Rehab Dynamics Inc. in Venice, Florida; Polk Rehabilitation Inc. in Lake Wales, Florida; and Renew Therapy Center of Port St. Lucie LLC in Port St. Lucie, Florida.  This gave Duluc and his co-conspirators control of those clinics’ Medicare provider numbers, which allowed them to bill Medicare for services.

Duluc admitted that he and his co-conspirators paid kickbacks to obtain, and stole, the personal identifying information of Medicare beneficiaries, and that he and his co-conspirators also obtained unique identifying information of physicians.  They then used this information to create and submit false claims to Medicare through the clinics owned by Ulysses Acquisitions.  These claims sought reimbursement for therapy services that were not legitimately prescribed and not actually provided.  Duluc admitted that he and his co-conspirators created and used false and forged patient records in an effort to conceal the fact that services had not actually been provided.

Duluc also admitted that he developed and marketed the “80/20 deal.”  In these deals, Duluc and his co-conspirators submitted false reimbursement claims to Medicare on behalf of Miami-based therapy clinics, such as Hallandale Rehabilitation Inc., Tropical Physical Therapy Corporation, American Wellness Centers Inc. and West Regional Center Inc.  Duluc and co-conspirators retained approximately 20 percent of the money Medicare paid on these claims and paid the other 80 percent to the co-conspirator clinic owners.

When Duluc and his co-conspirators were done using the clinics they acquired through Ulysses Acquisitions, they engaged in sham sales to nominee or straw owners, all of whom were recent immigrants to the United States with no background or experience in the health care industry.  Duluc admitted that he did this in an effort to disassociate from the fraudulent operations of the rehabilitation facilities.

This case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Middle District of Florida.  This case is being prosecuted by Senior Trial Attorney Christopher J. Hunter and Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Simon A. Gaugush of the Middle District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 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 Team (HEAT), go to: www.stopmedicarefraud.gov.

Miami-Area Hospital Chief Operating Officer Pleads Guilty in $67 Million Mental Health Care Fraud Scheme

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The former chief operating officer of a Miami-area hospital pleaded guilty today for his role in a mental health care fraud scheme that resulted in the submission of more than $67 million in fraudulent claims to Medicare by a state-licensed psychiatric hospital located in Hollywood, Florida, that purported to offer both inpatient and outpatient mental health services.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.

Christopher Gabel, 61, of Davie, Florida, the former Chief Operating Officer (COO) of Hollywood Pavilion LLC (HP), pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay and receive health care kickbacks.  Gabel was charged in an indictment returned on May 8, 2014.

According to Gabel’s admissions in connection with his guilty plea, between April 2003 and September 2012, HP submitted false and fraudulent claims to Medicare for treatment that was not medically necessary or not provided to patients.  As COO during that time, Gabel supervised HP’s staff at both its inpatient and outpatient facilities, where Medicare beneficiaries were admitted to HP regardless of whether they qualified for mental health treatment, and were often admitted before seeing a doctor.

Gabel admitted that HP obtained Medicare beneficiaries from across the country by paying bribes and kickbacks to various patient brokers.  Gabel instructed the patient brokers to falsify invoices and marketing reports in an effort to hide, and cover up the true nature of the bribes and kickbacks they were receiving from HP.  From 2003 through August 2012, HP billed Medicare approximately $67 million for services that were not properly rendered, for patients that did not qualify for the services being billed, and for claims for patients who were procured through bribes and kickbacks.  Medicare reimbursed HP nearly $40 million for those claims.

Karen Kallen-Zury, Daisy Miller, Michele Petrie and Christian Coloma were convicted at trial in June 2013 for their roles in this scheme.  Kallen-Zury, HP’s former chief executive officer, was sentenced to 25 years in prison.  Miller, the clinical director of HP’s inpatient facility, was sentenced to 15 years in prison; and Petrie, the head of HP’s intensive outpatient program, was sentenced to six years in prison.  Coloma, the director of physical therapy for an entity associated with HP, was sentenced to 12 years in prison.  Kallen-Zury, Miller and Petrie were ordered to pay nearly $40 million in restitution, and Coloma was ordered to pay more than $20 million in restitution.

The case is being 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 Florida.  The case is being prosecuted by Trial Attorneys Nicholas E. Surmacz, Andrew H. Warren and L. Rush Atkinson of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 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.

Straw Owner of Clinic Sentenced in Medicare Fraud Scheme

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A Florida man who had been the straw owner of a physical therapy rehabilitation facility has been sentenced to serve 30 months in prison for his role in a $28.3 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Middle District of Florida A. Lee Bentley III, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Acting Special Agent in Charge Brian P. Martens of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Roberto Fernandez Gonzalez, 63, formerly of southwest Florida, was sentenced by U.S. District Judge Susan C. Bucklew in the Middle District of Florida and was ordered to forfeit $446,738 and pay the same amount in restitution.   Fernandez pleaded guilty on June 24, 2013, to conspiracy to commit health care fraud.
According to court documents, Fernandez and his co-conspirators used various physical therapy clinics and other business entities throughout Florida – including Rehab Dynamics Inc. in Venice, Fla. – to submit approximately $28.3 million in fraudulent reimbursement claims to Medicare from 2005 through 2009.   Medicare paid approximately $14.4 million on those claims.
Fernandez’s co-conspirators obtained and controlled Rehab Dynamics.   They engaged in a sham sale of Rehab Dynamics to Fernandez, a Cuban immigrant with no background in the health care industry.   Fernandez did not have the money to buy Rehab Dynamics.   Instead, the co-conspirators paid Fernandez approximately $20,000 to serve as the straw owner of Rehab Dynamics from January 2008 through March 2008.   During that time, Rehab Dynamics submitted approximately $1.6 million in fraudulent claims to Medicare seeking reimbursement for rehabilitation therapy services that were not provided.   Medicare paid approximately $446,738 on those false claims.
This case is being 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 Middle District of Florida.   This case is being prosecuted by Trial Attorneys Christopher J. Hunter and Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant United States Attorney Simon A. Gaugush of the U.S. Attorney’s Office for the Middle District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Leader of $28.3 Million Medicare Fraud Scheme Pleads Guilty

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A Florida man who had been the owner and operator of multiple physical therapy rehabilitation facilities pleaded guilty today for his role in organizing and leading a $28.3 million Medicare fraud scheme involving physical and occupational therapy services.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Health and Human Services Office of Inspector General (HHS-OIG) region including all of Florida made the announcement.
Luis Duluc, 53, formerly of southwest Florida, pleaded guilty in the U.S. District Court for the Middle District of Florida to conspiracy to commit health care fraud and making a false statement relating to health care matters.   His sentencing date will be set by the court.   He faces a maximum penalty of 15 years in prison.
According to documents filed in the case, Duluc and his co-conspirators used various physical therapy clinics and other business entities throughout Florida and elsewhere to submit approximately $28,347,065 in fraudulent reimbursement claims to Medicare from 2005 through 2009.   Medicare paid approximately $14,424,865 on those claims.
Duluc was chairman and president of a Delaware holding company known as Ulysses Acquisitions Inc.   Duluc and his co-conspirators used Ulysses Acquisitions to purchase comprehensive outpatient rehabilitation facilities (CORFs) and outpatient physical therapy providers (OPTs) including West Coast Rehab Inc. in Fort Myers, Fla.; Rehab Dynamics Inc. in Venice, Fla.; Polk Rehabilitation Inc. in Lake Wales, Fla.; and Renew Therapy Center of Port St. Lucie LLC in Port St. Lucie, Fla., in order to gain control of these clinics’ Medicare provider numbers.
Working with co-conspirators in Miami and elsewhere, Duluc obtained identifying information of Medicare beneficiaries by paying kickbacks and stealing beneficiaries’ identifying information.   Duluc and his co-conspirators also obtained unique identifying information of physicians.   They then used this information to create and submit false claims to Medicare through the clinics Ulysses Acquisitions purchased.   These claims sought reimbursement for therapy services that were not legitimately prescribed and not actually provided.   The conspirators created and used false and forged patient records in an effort to conceal the fact that services had not actually been provided.
Part of the conspiracy included what came to be known as the 80/20 deal, which Duluc developed and marketed.   The 80/20 deal involved extensive kickback arrangements with co-conspirators who owned other therapy clinics that were used to further the overall fraud scheme.   For example, Duluc and co-conspirators used the clinics they controlled to submit false reimbursement claims to Medicare on behalf of Miami-based therapy clinics such as Hallandale Rehabilitation Inc., Tropical Physical Therapy Corporation, American Wellness Centers Inc., and West Regional Center Inc.   Duluc and co-conspirators would retain approximately 20 percent of the money Medicare paid on these claims and pay the other 80 per cent of the fraud proceeds to the co-conspirator clinic owners.
When Duluc and his co-conspirators were done using the clinics they acquired through Ulysses Acquisitions, they engaged in sham sales of the clinics to nominee or straw owners, all of whom were recent immigrants to the United States who had no background or experience in the health care industry.   Duluc did this in an effort to try to disassociate himself from the fraudulent operations of the rehabilitation facilities.
This case is being 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 Middle District of Florida.   This case is being prosecuted by Trial Attorneys Christopher J. Hunter and Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant United States Attorney Simon A. Gaugush of the U.S. Attorney’s Office for the Middle District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Disbarred Attorney Pleads Guilty for Role in $28.3 Million Medicare Fraud Scheme

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A North Carolina woman has pleaded guilty for her involvement in a $28.3 million Medicare fraud scheme involving physical and occupational therapy services.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Special Agent in Charge Christopher Dennis of the U.S. Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Margarita M. Grishkoff, 59, of Charlotte, N.C., and formerly of southwest Florida, pleaded guilty today in the U.S. District Court for the Middle District of Florida to conspiracy to commit health care fraud.   Her sentencing date will be set by the court.    She faces a maximum penalty of 10 years in prison.
According to documents filed in the case, Grishkoff and her co-conspirators used various physical therapy clinics and other business entities throughout Florida and elsewhere to submit approximately $28.3 million in fraudulent reimbursement claims to Medicare from 2005 through 2009.    Medicare paid approximately $14.4 million on those claims.
Grishkoff, a former attorney who was disbarred in 1997, was vice president, director and registered agent in Florida for a Delaware holding company known as Ulysses Acquisitions Inc.    Grishkoff and co-conspirators used Ulysses Acquisitions to purchase comprehensive outpatient rehabilitation facilities and outpatient physical therapy providers, including West Coast Rehab Inc. in Fort Myers, Fla.; Rehab Dynamics Inc. in Venice, Fla.; Polk Rehabilitation Inc. in Lake Wales, Fla.; and Renew Therapy Center of Port St. Lucie LLC in Port St. Lucie, Fla., to gain control of these clinics’ Medicare provider numbers.
Working with co-conspirators in Miami and elsewhere, Grishkoff and her co-conspirators obtained identifying information of Medicare beneficiaries through paying kickbacks.    They also obtained unique identifying information of physicians.   Grishkoff and her co-conspirators then used this information to create and submit false claims to Medicare through the clinics Ulysses Acquisitions purchased.    These claims sought reimbursement for therapy services that were not legitimately prescribed and not actually provided.
Grishkoff and co-conspirators also paid kickbacks to co-conspirators who owned other therapy clinics that were used to further the fraud scheme.    For example, Grishkoff and co-conspirators used the clinics they controlled to submit false reimbursement claims to Medicare on behalf of Miami-based therapy clinics such as Hallandale Rehabilitation Inc., Tropical Physical Therapy Corporation, American Wellness Centers Inc., and West Regional Center Inc.    Grishkoff and co-conspirators would retain approximately 20 percent of the money Medicare paid on these claims and pay the other 80 percent of the fraud proceeds to the co-conspirator clinic owners.
When Grishkoff and her co-conspirators were done using the clinics they acquired through Ulysses Acquisitions, they engaged in sham sales of the clinics to nominee or straw owners, all of whom were recent immigrants to the United States with no background or experience in the health care industry.    Grishkoff and others did this in an effort to try to disassociate themselves from the fraudulent operations of their clinics.
This case is being 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 Middle District of Florida.    This case is being prosecuted by Trial Attorneys Christopher J. Hunter and Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant United States Attorney Simon A. Gaugush of the U.S. Attorney’s Office for the Middle District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.    In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Alcoa World Alumina Agrees to Plead Guilty to Foreign Bribery and Pay $223 Million in Fines and Forfeiture

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Alcoa World Alumina LLC, a majority-owned and controlled global alumina sales company of Alcoa Inc., has agreed to plead guilty later today and pay $223 million in criminal fines and forfeiture to resolve charges that it paid millions of dollars in bribes through an international middleman in London to officials of the Kingdom of Bahrain, in violation of the Foreign Corrupt Practices Act (FCPA).
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney David J. Hickton of the Western District of Pennsylvania, Chief Richard Weber of IRS—Criminal Investigation (IRS-CI), and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
“Alcoa World Alumina today admits to its involvement in a corrupt international underworld in which a middleman, secretly held offshore bank accounts, and shell companies were used to funnel bribes to government officials in order to secure business,” said Acting Assistant Attorney General Raman.    “The law does not permit companies to avoid responsibility for foreign corruption by outsourcing bribery to their agents, and, as today’s prosecution demonstrates, neither will the Department of Justice.”
“Today’s case shows that multinational corporations cannot get away with using middlemen to structure sham business arrangements that funnel kickbacks to government officials,” said U.S. Attorney Hickton.
Alcoa World Alumina has agreed to plead guilty in the Western District of Pennsylvania to one count of violating the anti-bribery provisions of the FCPA in connection with a 2004 corrupt transaction, to pay a criminal fine of $209 million, and to administratively forfeit $14 million.   As part of the plea agreement, Alcoa Inc. (Alcoa) has agreed to maintain and implement an enhanced global anti-corruption compliance program.
In a parallel action, Alcoa settled with the U.S. Securities and Exchange Commission (SEC)  and will pay an additional $161 million in disgorgement, bringing the total amount of U.S. criminal and regulatory penalties to be paid by Alcoa and Alcoa World Alumina to $384 million.
“This case is the result of unraveling complex financial transactions used by Alcoa World Alumina LLC’s agent to facilitate kickbacks to foreign government officials,” said Chief Richard Weber of IRS-CI.   “IRS-CI will not be deterred by the use of sophisticated international financial transactions as we continue our ongoing efforts to pursue corporations and executives who use hidden offshore assets and shell companies to circumvent the law.”
“Corrupt kickback payments to foreign government officials to obtain business diminish public confidence in global commerce,” said Assistant Director in Charge Parlave.  “There is no place for bribery in any business model or corporate culture.   Today’s plea demonstrates the FBI and our law enforcement partners are committed to curbing corruption and will pursue all those who try to advance their businesses through bribery.”
Today’s court filings allege that Alcoa of Australia, another Alcoa-controlled entity, originally secured a long-term alumina supply agreement with Aluminium Bahrain B.S.C. (Alba), an aluminium smelter controlled by the government of Bahrain.   At the request of certain members of Bahrain’s Royal Family who controlled the tender process, Alcoa of Australia inserted a London-based middleman with close ties to certain Royal Family members as a sham sales agent and agreed to pay him a corrupt commission intended to conceal bribe payments, according to court papers.   Over time, Alcoa of Australia expanded the relationship with the middleman, identified as Consultant A in today’s court filings, to begin invoicing increasingly larger volumes of alumina sales through his shell companies, which permitted Consultant A to make larger bribe payments to certain government officials, according to today’s filings.
As admitted in the charging documents, in 2004, Alcoa World Alumina corruptly secured a long-term alumina supply agreement with Alba by agreeing to purportedly sell over 1.5 million metric tons of alumina to Alba through offshore shell companies owned by Consultant A.   The sham distributorship permitted Consultant A to mark up the price of alumina by approximately $188 million from 2005 to 2009, the duration of the corrupt supply agreement.   Court filings allege that Consultant A used the mark-up to pay tens of millions in corrupt kickbacks to Bahraini government officials, including senior members of Bahrain’s Royal Family.   To conceal the illicit payments, Consultant A and the government officials used various offshore bank accounts, including accounts held under aliases, at several major financial institutions around the world, including in Guernsey, Luxembourg, Liechtenstein and Switzerland.
In addition to the monetary penalty, Alcoa and Alcoa World Alumina agreed to cooperate with the department in its continuing investigation of individuals and institutions involved in these matters.
The plea agreement and related court filings acknowledge Alcoa’s current financial condition as a factor relevant to the size of the criminal fine, as well as Alcoa’s and Alcoa World Alumina’s extensive cooperation with the department, including conducting an extensive internal investigation, making proffers to the government, voluntarily making current and former employees available for interviews, and providing relevant documents to the department.   Court filings also acknowledge subsequent anti-corruption remedial efforts undertaken by Alcoa.
The department acknowledges and expresses its appreciation for the cooperation and assistance of the Office of the Attorney General of Switzerland, the Guernsey Financial Intelligence Service and Guernsey Police, the Australian Federal Police, the U.K.’s Serious Fraud Office, and other law enforcement authorities in the department’s investigation of this matter.   The department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.
The investigation is being conducted by Special Agents and analysts with the IRS-Criminal Investigation’s Washington Field Office and the FBI’s Washington Field Office.   The case is being prosecuted by Deputy Chief Adam G. Safwat and Trial Attorneys Andrew Gentin, Allan J. Medina and Andrew H. Warren of the Criminal Division’s Fraud Section, with the assistance of the U.S. Attorney’s Office for the Western District of Pennsylvania.   The Criminal Division’s Office of International Affairs also provided significant assistance during this investigation.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .

Patient Broker of South Florida Psychiatric Hospital Sentenced for Role in $67 Million Health Care Fraud Scheme

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A patient broker of a South Florida psychiatric hospital was sentenced today to serve 24 months in prison followed by three years of supervised release for her participation in a $67 million 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 U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Miami Office made the announcement.
Gloria Himmons, 54, of Union Springs, Ala., was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida.  In March 2013, Himmons pleaded guilty to one count of conspiracy to receive health care kickbacks and one count of receiving a health care kickback.  In addition to her prison term, Himmons was ordered to pay $14 million in restitution, joint and severally with her co-defendants.
According to court documents, Himmons was a patient broker at Hollywood Pavilion LLC (HP), a state-licensed psychiatric hospital in South Florida that purported to offer both inpatient and outpatient mental health services.  Himmons would provide Medicare beneficiaries to HP in exchange for bribes and kickbacks, and she knew that the patients she provided to HP were not appropriate for inpatient psychiatric hospitalization or for outpatient mental health treatment.  The patients she provided to HP included those who were not severely mentally ill, as well as substance abusers looking for rehabilitation programs.  The patients did not have legitimate referrals from hospitals or doctors who had been treating acute-phase, severe mental illness.
From at least 2005 through September 2012, in exchange for bribes and kickbacks, Himmons knowingly and willfully provided to HP Medicare beneficiaries who did not need inpatient or outpatient psychiatric treatment.  As a result of Himmons’s participation in this scheme, HP was improperly paid more than $7 million by Medicare.  From at least 2003 through at least August 2012, HP billed Medicare approximately $67 million for services that were not properly rendered, for patients that did not qualify for the services being billed, and for claims for patients who were procured through bribes and kickbacks.  Medicare reimbursed HP on approximately $40 million of those claims.
On Sept. 10, 2013, co-defendants Karen Kallen-Zury, Daisy Miller and Christian Coloma were sentenced on their June 2013 jury convictions.  Kallen-Zury, the chief executive officer of HP, and Miller and Coloma were convicted on all counts at trial and sentenced to 300 months, 180 months and 144 months, respectively.  Kallen-Zury and Miller were ordered to pay, jointly and severally with their co-defendants, nearly $40 million in restitution.  Coloma was ordered to pay, jointly and severally, more than $20 million in restitution.
This 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 Miami.  This case is being prosecuted by Assistant Chief Robert A. Zink and Trial Attorneys Andrew H. Warren and Anne McNamara of the Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Executives from Miami-Area Mental Health Care Hospital Convicted for Participating in $70 Million Medicare Fraud Scheme

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WASHINGTON – A federal jury today convicted four individuals for their participation in a Medicare fraud scheme involving nearly $70 million in fraudulent billings by Hollywood Pavilion (HP), a mental health care hospital.

Today’s verdict was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; 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.

Karen Kallen-Zury, 59, of Lighthouse Point, Fla., and Daisy Miller, 44, of Hollywood, Fla., were each found guilty of one count of conspiracy to commit wire fraud and health care fraud, five substantive counts of wire fraud and two substantive counts of health care fraud.  Michele Petrie, 64, of Ft. Lauderdale, Fla., was found guilty of one count of conspiracy to commit wire fraud and health care fraud and three substantive counts of wire fraud.  Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of Miami Beach, Fla., were also convicted of one count of conspiracy to pay bribes in connection with Medicare, with Kallen-Zury and Coloma also each being convicted on five substantive counts of paying bribes.

“The defendants convicted today participated in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries,” said Acting Assistant Attorney General Raman.  “By paying bribes to a network of patient recruiters and falsifying documents, the defendants created the illusion of providing intensive psychiatric care to qualifying patients, when in reality they provided no care of substance.  Today’s verdict illustrates the success of the inter-agency Medicare Fraud Strike Force, which is dedicated to stamping out Medicare fraud.”

The defendants were charged in an indictment returned on Oct. 2, 2012.  Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through HP, a state-licensed psychiatric hospital located in Hollywood that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care.  The defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment.  The defendants then submitted claims to Medicare for those patients who were procured through bribes and kickbacks.

Karen Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered.

Evidence at trial established that Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients.

Trial evidence also demonstrated that Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and he supervised the creation of false documents to conceal the bribery scheme.

From at least 2003 through at least August 2012, HP billed Medicare nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients who were procured through bribes and kickbacks.

The criminal case is being prosecuted by Trial Attorneys Robert A. Zink, Andrew H. Warren and Anne McNamara of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Attorney Convicted in Multimillion-Dollar Stock Fraud

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Attorney Mitchell J. Stein, 53, of Hidden Hills, Calif., was convicted by a jury in the Southern District of Florida for his role in operating a five-year, multimillion-dollar market manipulation and fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

Stein was charged in a December 2011 indictment and on May 20, 2013, he was convicted on all counts: conspiracy to commit mail and wire fraud and three counts each of mail fraud and wire fraud, each of which carries a maximum penalty of 20 years in prison; three counts of securities fraud, which each carry a maximum penalty of 25 years; three counts of money laundering, which each carry a maximum penalty of 10 years; and one count of conspiracy to obstruct justice, which carries a maximum penalty of five years in prison. Stein is being detained until sentencing, which is scheduled for Aug. 16, 2013.

According to evidence presented at trial, Stein’s wife held a controlling interest in Signalife Inc., a publicly-traded company currently known as Heart Tronics that purportedly sold electronic heart monitoring devices.  Stein engaged in a scheme to artificially inflate the price of Signalife stock by creating the false impression of sales activity for Signalife.  Specifically, the evidence at trial showed that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers, then caused Signalife to issue press releases and file documents with the U.S. Securities and Exchange Commission (SEC) trumpeting these fictitious sales.  Evidence at trial also proved that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.

Evidence at trial further proved that Stein disguised his selling of stock during the conspiracy by placing shares in purportedly blind trusts, and that he had a co-conspirator sell shares of Signalife stock after Stein caused false information to be disseminated to the public.  Stein also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein.  From one co-conspirator alone, Stein received illicit gains of over $1.8 million.     In addition, evidence at trial proved that Stein conspired to obstruct the SEC’s investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the scheme described above.

This case was investigated by the U.S. Postal Inspection Service and the Office of the Special Inspector General for the Troubled Asset Relief Program.

This matter was referred to the Department by the SEC, which conducted a parallel investigation and in December 2011 announced the filing of a civil enforcement action against Stein and others.  The Department thanks the SEC for its substantial assistance in this matter.  The Department also acknowledges the substantial assistance of FINRA’s Criminal Prosecution Assistance Group.     This case is being prosecuted by Assistant Chief Albert B. Stieglitz, Jr. and Trial Attorneys Kevin B. Muhlendorf and Andrew H. Warren of the Criminal Division’s Fraud Section.