Monthly Archives: July 2013

Florida Health Care Medical Director and Six Therapists Arrested for Alleged Roles in $63 Million Fraud Scheme

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The former medical director at defunct health provider Health Care Solutions Network (HCSN) and six therapists were arrested today, accused of conspiring to fraudulently bill Medicare and Florida Medicaid more than $63 million.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office, made the announcement after the indictment was unsealed following the arrests.

The former HCSN medical director, Roger Rousseau, 71, of Miami, was indicted on July 11, 2013, and charged with conspiracy to commit health care fraud and two counts of health care fraud. In addition, six therapists from Miami – Doris Crabtree, 61; Angela Salafia, 65; Liliana Marks, 46; Ruben Busquets, 49; Alina Fonts, 47; and Blanca Ruiz, 59 – were also charged in the same indictment with conspiracy to commit health care fraud. Fonts was also charged with two counts of health care fraud, and Crabtree, Salafia, Marks and Busquets were each charged with two counts of making false statements related to health care matters. The indictment also seeks forfeiture of proceeds from the alleged healthcare fraud offenses.

According to the indictment, HCSN purported to provide intensive mental health treatment to Medicare and Medicaid beneficiaries in Miami and Hendersonville, N.C., from approximately 2004 through 2011 for purported mental health services that were not medically necessary and often never provided.  The indictment also alleges that in Miami, HCSN paid kickbacks to assisted living facility owners and operators who, in exchange, referred beneficiaries to HCSN.  In total, HCSN is alleged to have fraudulently billed Medicare and Medicaid approximately $63.7 million, from which HCSN allegedly received payments totaling approximately $28 million.

Rousseau served as the medical director for HCSN in Florida, and the indictment alleges that he routinely signed what he knew to be fabricated and altered medical records without ever reviewing the materials, and, in most instances, without ever meeting with the patient.  The indictment also alleges that Crabtree, Salafia, Marks, Busquets, Fonts and Ruiz fabricated HCSN medical records to support false and fraudulent claims for partial hospitalization program services that were not medically necessary and were not provided.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being 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. The case is being prosecuted by Fraud Section Trial Attorney Allan J. Medina.   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.

Diamond Electric Mfg. Co. Ltd. and an Autoliv Inc. Executive Agree to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. Cars;

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Osaka, Japan-based Diamond Electric Mfg. Co. Ltd. has agreed to plead guilty and to pay a $19 million criminal fine for its role in a conspiracy to fix prices of ignition coils installed in cars sold in the United States and elsewhere, the Department of Justice announced today. This is the first case in the department’s antitrust investigation involving parts sold directly to an automobile company headquartered in the United States – Ford Motor Co. The department also announced that an Autoliv Inc. executive has agreed to plead guilty for his role in a conspiracy to fix the prices of certain seatbelts sold to Toyota Motor Corp. for installation in cars manufactured and sold in the United States and elsewhere.

Diamond Electric has agreed to cooperate with the department’s ongoing investigation. Takayoshi Matsunaga, a current employee of Autoliv and former vice president of the Toyota Global Business Unit at Autoliv Japan, agreed to serve one year and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. The plea agreements for both Diamond Electric and Matsunaga are subject to court approval.

According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Diamond Electric engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of ignition coils it sold to Ford Motor Co., Toyota Motor Corp., Fuji Heavy Industries Ltd. and certain of their subsidiaries, in the United States and elsewhere, on a model-by-model basis. According to the charge, Diamond Electric and its co-conspirators carried out the conspiracy from at least as early as July 2003 until at least February 2010.

“Today’s prosecutions brings the total to 10 companies and 15 executives held accountable for fixing prices on parts used to manufacture cars in the United States,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program.  “The Antitrust Division and its law enforcement partners will protect American businesses and consumers from harmful price-fixing cartels and bring those responsible to justice.”

Diamond Electric manufactures and sells ignition coils.  Ignition coils are part of the fuel ignition system. They are responsible for quickly releasing electricity to the spark plugs for ignition.

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Matsunaga, a Japanese national, engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of certain seatbelts sold to Toyota in the United States and elsewhere. According to the charge, Matsunaga’s involvement in the conspiracy lasted from on or about May 2008 until at least February 2011.

“Those who engage in price fixing, bid rigging and other fraudulent schemes harm the automotive industry by driving up costs for vehicle makers and buyers,” said Robert D. Foley III, Special Agent in Charge, FBI Detroit Division.  “The FBI is committed to pursuing and prosecuting these individuals for their crimes.”

According to the charge, Matsunaga and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids submitted to Toyota. Matsunaga is the 15th individual to agree to plead guilty in the department’s ongoing antitrust investigation into price fixing and bid rigging in the auto parts industry.

Stockholm-based Autoliv Inc. is a manufacturer of automotive occupant safety systems, including certain seatbelts.  In June 2012, Autoliv agreed to plead guilty and to pay a $14.5 million criminal fine for its role in a conspiracy to fix the prices of certain seatbelts, airbags and steering wheels installed in U.S. cars.

Including Diamond Electric and Matsunaga, 10 companies and 15 executives have pleaded guilty or agreed to plead guilty in the division’s ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of $828 million in criminal fines. DENSO, Nippon Seiki Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd, Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH have already pleaded guilty.  Additionally, 12 individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. Two additional executives have agreed to serve time in prison and are currently awaiting sentencing.

Diamond Electric and Matsunaga are charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations and 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.

Allen Grunes Quoted in Washington Post: “AT&T Bid for Leap Wireless Seen Winning U.S. Regulatory Approval”

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Allen Grunes was asked for his views on the proposed merger of AT&T and Leap Wireless International.  (Grunes and Maurice Stucke were the authors of an influential antitrust analysis of the attempted AT&T/T-Mobile merger in 2011.)  Please click on the linked article below:

AT&T Bid for Leap Wireless Seen Winning U.S. Regulatory Approval

 

 

Competition Policy International: US: New antitrust firm GeyerGorey snags DOJ lawyers after office closures

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Competition Policy International: US: New antitrust firm GeyerGorey snags DOJ lawyers after office closures

Contrack International Inc. Agrees to Pay $3.5 Million to Resolve False Claims Act Allegations

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Contrack International Inc., a global design and construction company headquartered in McLean, Va., has agreed to pay $3.5 million to settle allegations that it submitted false claims in connection with U. S. Agency for International Development (USAID) contracts, the Justice Department announced today.

“Misrepresentations during contract negotiations undermine the integrity of the government procurement process,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division.  “The Justice Department will take action where contractors misrepresent their qualifications for government contracts and programs.”

The settlement concerns USAID-funded contracts for the construction of water and wastewater infrastructure projects in the Arab Republic of Egypt in the 1990s.  The bidders for these contracts were required to receive prequalification and, in some cases, establish that they were U. S. companies.  However, the contracts were ultimately performed by a joint venture partnership among Contrack; Washington Group International, Inc., a subsidiary of URS Corporation; and Misr Sons Development S.A.E. (Hassan Allam Sons), an Egyptian company.  The government filed suit under the False Claims Act and the Foreign Assistance Act alleging that the joint venture partners evaded the prequalification requirement by concealing the identity of the joint venture partners, which prevented USAID from accurately evaluating their qualifications.  As a result, the government alleged that Contrack and its partners received USAID-funded contracts for which they were ineligible. “Proper public contracting, government efficiency and government accountability rely on complete information from contractors,” said Wendy J. Olson, U.S. Attorney for the District of Idaho.  “Along with our partners at USAID and the Department of Justice’s Commercial Litigation Branch, we will aggressively seek to recover improperly awarded taxpayer dollars.”

This settlement – which resolves only Contrack’s liability – was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Idaho; and the USAID Office of Inspector General.  The government is continuing to pursue its claims against the other two defendants in the suit.

The case is United States v. Washington Group International Inc. f/k/a/ Morrison Knudsen, Corporation; Contrack International, Inc.; and Misr Sons Development S.A.E. a/k/a Hassan Allam Sons, No. 04-555 (N.D. Idaho).  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

Las Vegas Agent Convicted in Mortgage Fraud Scheme

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A Las Vegas mortgage agent has been convicted for his role in a “cash back at closing” mortgage fraud scheme that netted $1.43 million in fraudulent mortgage loans, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada, and Acting Special Agent in Charge William C. Woerner of the FBI’s Las Vegas Field Office.
After a three-day trial before U.S. District Judge Larry Hicks in the District of Nevada, a federal jury convicted Jawad “Joe” Quassani, 42, on July 10, 2013, of one count of conspiracy to commit wire fraud and mail fraud, two counts of wire fraud, and two counts of mail fraud.
According to court documents and evidence presented at trial, Quassani participated in a scheme in which the prices of two homes were falsely inflated, mortgage loans were obtained through the submission of loan applications containing false and fraudulent information about the buyer’s income and intent to occupy the homes as primary residences, a portion of the loan proceeds was diverted at the close of escrow to the defendant’s co-conspirators, and commissions on the fraudulent loans were paid to Quassani and his co-conspirator.  Evidence at trial established that Quassani, a licensed mortgage agent at Rapid Funding Group, conceived the scheme together with two of his co-conspirators, prepared one of the loan applications and arranged for the preparation of the other, and shared in the commissions generated by transactions that had no purpose other than to generate profits for the co-conspirators.
Co-conspirators Anita Mathur and Shirjil “Sean” Qureshi previously pleaded guilty in related cases in Las Vegas to one count of conspiracy to commit bank fraud, wire fraud and mail fraud.  Both are awaiting sentencing.
This case was investigated by the FBI.  Trial Attorneys Stephen J. Spiegelhalter and Gary A. Winters of the Criminal Division’s Fraud Section are prosecuting the case.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants.

Justice Department Issues Statement on U.S. District Court Ruling That Apple Violated Antitrust Laws

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Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division made the following statement today after the U.S. District Court for the Southern District of New York found that Apple Inc. violated Section 1 of the Sherman Act by conspiring to raise e-book prices and end e-book retailers’ freedom to compete on price:

 “This result is a victory for millions of consumers who choose to read books electronically.  After carefully weighing the evidence, the court agreed with the Justice Department and 33 state attorneys general that executives at the highest levels of Apple orchestrated a conspiracy with five major publishers – Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster – to raise e-book prices.  Through today’s court decision and previous settlements with five major publishers, consumers are again benefitting from retail price competition and paying less for their e-books.

“As the department’s litigation team established at trial, Apple executives hoped to ensure that its e-book business would be free from retail price competition, causing consumers throughout the country to pay higher prices for many e-books.  The evidence showed that the prices of the conspiring publishers’ e-books increased by an average of 18 percent as a result of the collusive effort led by Apple.

“Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so. This decision by the court is a critical step in undoing the harm caused by Apple’s illegal actions.

“I am proud of the outstanding work done by the trial team.  The Antitrust Division will continue to vigorously protect competition and enforce the antitrust laws in this important business, and in other industries that affect the everyday lives of consumers.”

Background

On April 11, 2012, the department filed a civil antitrust lawsuit in the U.S. District Court for the Southern District of New York against Apple, Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc., for conspiring to end e-book retailers’ freedom to compete on price by taking control of pricing from e-book retailers and substantially increasing the prices that consumers paid for e-books.

At the same time that it filed the lawsuit, the department reached settlements with three of the publishers – Hachette, HarperCollins and Simon & Schuster. Those settlements were approved by the court in September 2012.  The department settled with Penguin on Dec. 18, 2012, and with Macmillan on Feb. 8, 2013.  The Penguin settlement was approved by the court in May 2013.  Final approval of the Macmillan settlement is pending before the court.  Under the settlements, each publisher was required to terminate agreements that prevented e-book retailers from lowering the prices at which they sell e-books to consumers and to allow for retail price competition in renegotiated e-book distribution agreements.

The department’s trial against Apple, which was overseen by Judge Denise Cote, began on June 3, 2013. The trial lasted for three weeks, with closing arguments taking place on June 20, 2013.  The court has not yet scheduled a hearing to address the parties’ proposed remedies.

Former U.S. Army Reserve Captain Pleads Guilty in Nevada to Bribery Scheme

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A former U.S. Army Reserve captain pleaded guilty today to accepting more than $90,000 in bribes from contractors while he was deployed to Iraq, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.

Edward William Knotts III, 51, of Gibbon, Neb., pleaded guilty before U.S. District Judge James Mahan in the District of Nevada to a criminal information charging him with one count of bribery. He faces a maximum penalty of 15 years in prison when he is sentenced on Oct. 8, 2013.

According to court documents, from December 2005 until December 2007, Knotts was stationed at Camp Buehring, Kuwait, as a contracting officer’s representative for contracts between the U.S. Army and local contractors to provide services to support the operations at Camp Buehring and another U.S. camp in Kuwait.

In November 2006, Knotts entered into an agreement with a Kuwait-based corporation to receive a monthly fee from the corporation in return for providing confidential bidding information about U.S. Army contracts.  Between November 2006 and November 2007, the corporation paid him approximately $31,500 in cash.  In June 2007, a representative of the corporation paid Knotts $40,000 at a hotel room in Las Vegas in return for his promise to provide confidential bid information and in anticipation of the corporation hiring him.  Knotts received another similar cash payment of $20,000 in August 2008 in a different Las Vegas hotel.

This case was investigated by the Special Inspector General for Iraq Reconstruction, Defense Criminal Investigative Service and U.S. Army Criminal Investigation Command. The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw and Trial Attorney Brian Young of the Criminal Division’s Fraud Section.

Main Justice: Policy Politics and the Law: Former DOJ Attorneys Aim For New Model With GeyerGorey LLP Law Firm

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7/10/2013 Main Justice: “Former DOJ Attorneys Aim For New Model With GeyerGorey LLP Law Firm

 

Iraqi Company Business Manager Pleads Guilty in Texas to Illegal Gratuities Scheme

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A business manager for an Iraqi company pleaded guilty today to giving thousands of dollars in illegal gratuities to a U.S. pay agent from contractors while the business manager was in Iraq, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

 Mario G. Khalil, 50, of Houston, pleaded guilty before U.S. District Judge David Hittner in the Southern District of Texas to a criminal information charging him with one count of giving a gratuity to a public official.  At sentencing, scheduled for Oct. 3, 2013, he faces a maximum sentence of two years in prison.

According to court documents, from 2007 through 2009, Khalil worked at Camp Liberty in Iraq as a business manager for an Iraqi contracting company, holding various contracts with the U. S. Army, Air Force and Department of Defense to provide logistical services and supplies.

Khalil told Richard Gilliland – a U.S. Army staff sergeant serving as a pay agent for civil investment projects in Iraq from October 2007 through November 2008 – that Khalil’s company was interested in obtaining contracts and acquiring used and non-working generators from the Defense Reutilization and Marketing Office (DRMO) and was seeking Gilliland’s assistance as an Army official.  Khalil gave and offered Gilliland approximately $10,000 in cash and a laptop computer in return for his influence in obtaining generators and future contracts.

Gilliland pleaded guilty in February 2013 to an information stemming from the same scheme and is awaiting an August 2013 sentencing.

The case was investigated by the Special Inspector General for Iraq Reconstruction.  The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw and Trial Attorney Mark Grider of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James Buchanan of the Southern District of Texas.