Author Archives: Brad Geyer

Four Florida Residents Sentenced to Federal Prison for Roles in $6 Million Miami Home Health Care Fraud Scheme

Posted on by
Four South Florida residents were sentenced today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services.  Two of the defendants were also sentenced in connection with their conduct in similar schemes at other Miami home health care agencies.

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. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.  Chief U.S. District Judge K. Michael Moore of the Southern District of Florida imposed the sentences.

Dennis Hernandez, 32, of Miami, was sentenced to serve 120 months in prison and ordered to pay $1,438,186 in restitution.  Jose Alvarez, 48, of Miami, was sentenced to serve 120 months in prison and ordered to pay $2,972,570 in restitution.  Joel San Pedro, 45, of Miami, was sentenced to serve 97 months in prison and ordered to pay $4,938,432 in restitution.  Alina Hernandez, 38, of West Palm Beach, was sentenced to serve 24 months in prison and ordered to pay $204,526.05 in restitution.

Dennis Hernandez, Alvarez, San Pedro and Alina Hernandez each pleaded guilty to one count of conspiracy to commit health care fraud in November 2014.

In connection with their guilty pleas, each of the defendants admitted that Professional Home Health was actually operated for the purpose of billing the Medicare program for expensive physical therapy and home health services that were not medically necessary or not provided.  Dennis Hernandez, San Pedro and Alvarez admitted to being managers, supervisors, owners and operators at Professional Home Health.  In those capacities, they coordinated and oversaw the submission of fraudulent claims at Professional Home Health, and falsified patient documentation to make it appear that Medicare beneficiaries qualified for and received home health services that were, in fact, not medically necessary or not provided.  Dennis Hernandez and Alvarez also admitted to partaking in similar schemes at additional Miami-area home health agencies.

Additionally, all four defendants admitted to acting as patient recruiters for Professional Home Health.  In this role, they solicited and received kickbacks and bribes from other co-conspirators at Professional Home Health in exchange for recruiting beneficiaries who neither needed, nor, in some cases, received services.

From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for fraudulent home health claims.

Earlier this year, two other individuals pleaded guilty and were sentenced in connection with the same scheme.  Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison.  Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison.  Both were also ordered to pay $6,257,142 in restitution.  A sentencing hearing for Ernesto Fernandez and Juan Valdes, co-defendants in the case, is scheduled for Feb. 3, 2015.

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 Florida.  This case is being prosecuted by Trial Attorney Anne P. McNamara 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 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure Auctions

Posted on by
Two Georgia real estate investors pleaded guilty today for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta.  According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia.  Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012.  Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.  “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Gwinnett County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office.  “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

SANDEN CORP. AGREES TO PLEAD GUILTY TO PRICE FIXING ON AUTOMOBILE PARTS INSTALLED IN U.S. CARS

Posted on by

Company Agrees to Pay $3.2 Million Criminal Fine

WASHINGTON — Sanden Corp., an automotive parts manufacturer based in Gunma, Japan, has agreed to plead guilty and to pay a $3.2 million criminal fine for its role in a conspiracy to suppress and eliminate competition for the purchase of compressors used in air conditioning systems sold to Nissan North America Inc. for installation in vehicles manufactured and sold in the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Sanden conspired to fix the prices of compressors sold to Nissan.  In addition to the criminal fine, Sanden has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Today’s charge is the latest in the Antitrust Division’s ongoing investigation of automobile parts suppliers,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”

The department said that Sanden and its co-conspirator held meetings and conversations to discuss and agree upon the bids and price quotations submitted to Nissan for the purchase of compressors used in automotive air conditioning systems.  Sanden’s involvement in the conspiracy lasted from as early as August 2008 until at least April 2009.

Including Sanden, 33 companies and 50 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the automotive parts industry.  All of the charged companies have pleaded guilty or have agreed to plead guilty and to pay a combined total of more than $2.4 billion in fines.

Sanden is charged with fixing prices in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations.  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.

Today’s charge is 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 the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s New York Office and the FBI’s New York Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s New York Field Office at 212-384-1000.

3C’s: Antitrust Division Announces FY 2014 Criminal Fine Total

Posted on by

Antitrust Division Announces FY 2014 Criminal Fine Total

by Leave a Comment

The Antitrust Division just issued a press release announcing that it collected $1.861 billion in criminal fines for its fiscal year that ended Sept. 30, 2014.  The highlights are that four companies paid fines in excess of $100 million (the Sherman Act maximum), led by the $425 million fine against Bridgestone Corp.   The full press release is below:

***************************************************

FOR IMMEDIATE RELEASE AT
THURSDAY, JANUARY 22, 2015 (202) 514-2007
WWW.JUSTICE.GOV TTY (866) 544-5309

ANTITRUST DIVISION ANNOUNCES FISCAL YEAR TOTAL
IN CRIMINAL FINES COLLECTED

The Department of Justice collected $1.861 billion in criminal fines and penalties resulting from Antitrust Division prosecutions in the fiscal year that ended on Sept. 30, 2014.

* * * * *Click Here for the Rest of the Story* * * * * 

3C’s: India Update 2015, Volume 1.

Posted on by

India Update 2015, Volume 1.

by Leave a Comment

Today’s post is the first in 2015 from my friend in India, Avinash Amarath.

****************************

I wish all readers of Cartel Capers a very happy and prosperous new year. There are two items to report for the first India post of the New Year.

Film Distributor Trade Association fined for price fixing and collective boycott

In its last reported decisions of 2014, the Competition Commission of India (CCI), in two separate cases, fined the Film Distributors Association of Kerala (a state in India) 5% of its turnover (in each case) for indulging in price fixing and collective boycott respectively. The business chain for films in India broadly comprises producers, distributors and exhibitors (i.e. cinema halls and multiplexes).

* * * * *Click Here for the rest of the Story* * * * *

Owner (Requeira) of Miami Health Company Sentenced

Posted on by
The owner and operator of a Miami home health care agency was sentenced today to 106 months in prison for his participation in a $30 million Medicare fraud scheme.

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. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Ramon Regueira, 66, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 13, 2014.  In addition to the prison sentence, U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida ordered Regueira to pay $21 million in restitution, both jointly and severally with his co-conspirator.

According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  Regueira admitted that he and his co-conspirators operated Nation’s Best for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or not provided.

Specifically, Regueira admitted that he and his co-conspirators paid kickbacks and bribes to patient recruiters who provided patients to Nation’s Best, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services.  Regueira and his co-conspirators then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care services.

From January 2007 through January 2011, Nation’s Best submitted approximately $30 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 million for these fraudulent claims.

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.  This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer and Trial Attorney Kelly Graves 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 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

3C’s: EU Competition Policy Brief–The Damages Directive

Posted on by

EU Competition Policy Brief–The Damages Directive

by Leave a Comment

Last week Cartel Capers featured a post from James Musgrove and Joshua Chad, What Fresh Hell Is This: The Canadian Cartel Class Action System.  I wanted to follow up that post with an update on collective redress in Europe. On November 26, 2104 the European Parliament adopted certain rules governing actions for damages under national law for infringement of the competition law provisions of the Member States and of the European Union. The “Damages Directive” was published on December 5, 2014 and EU countries need to implement it by December 27, 2016. The aim of the Directive is more efficient enforcement of the EU competition rules by making it easier for victims of antitrust violations to claim compensation. While larger companies already often obtain redress for price-fixing overcharges in Europe, the Directive aims to make recovery a realistic options for smaller companies and consumers.

For more information see the EU Competition Policy Brief—The Damages Directive, January 2015.

Thanks for reading.

3C’s: What Fresh Hell is This? The Canadian Cartel Class Action System

Posted on by

What Fresh Hell is This? The Canadian Cartel Class Action System

by Leave a Comment

In Canadian Cartel News Volume 6, James Musgrove and Joshua Chad of McMillan LLP discuss the Canadian class action system.

***********************************************

The answer to Miss Parker’s question, for those in the midst of a cartel investigation, is, almost certainly, a follow-on class action claim. In this volume of Cartel Capers we aim to give a rough and ready overview of the class action system for cartel cases in Canada. A book could be written on this subject – some have been – so these are merely the highest of lights.

The first point to note is that what used to be called follow-on class actions (that is, follow-on after a criminal conviction) is now a misnomer. Like in the US, these are now parallel or even precursor class actions. The merest hint of a cartel investigation results in the filing of class action applications.

* * * * *Click Here for the Rest of the Story** * * *

Executive of Japanese Automotive Parts Manufacturer Indicted for Role in Conspiracy to Fix Prices

Posted on by
A Detroit federal grand jury returned a one-count indictment against an executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.

The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Hiromu Usuda, an executive at Takata Corp., with conspiring to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles manufactured and sold in the United States and elsewhere.  Usuda served as Group and Department Manager in the Customer Relations Division at Takata, from January 2005 until at least February 2011.

“Antitrust violators who refuse to accept responsibility for their crimes leave us no choice but to indict,” said Brent Synder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “We will continue to prosecute those that commit these crimes.”

The indictment alleges, among other things, that from at least Jan. 1, 2005, through at least February 2011, Usuda and others attended meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices of seatbelts sold to the automobile manufacturers.  It alleges that Usuda participated directly in the conspiratorial conduct and that he directed, authorized and consented to his subordinates’ participation.

Takata is a Tokyo-based manufacturer of automotive parts, including seatbelts.  Takata supplies automotive parts to automobile manufacturers in the United States, in part, through its U.S. subsidiary, TK Holdings Inc., located in Auburn Hills, Michigan.  Takata pleaded guilty on Dec. 5, 2013, for its involvement in the conspiracy, and was sentenced to pay a criminal fine of $71.3 million.  Four other executives from Takata have pleaded guilty, have been sentenced to serve time in a U.S. prison and to pay criminal fines for their roles in the conspiracy.

Including Usuda, 50 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 32 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.4 billion in fines.

Usuda is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 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.

Today’s indictment is 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 four of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.

3C’s: Banks Found Not to Have Colluded

Posted on by

Banks Found Not to Have Colluded

by 1 Comment

I have really enjoyed publishing this blog.  One of the downsides is the embarrassment of an occasional typo, a problem with margins or other technical issues, or like yesterday, when I forgot to include a headline.  But, the  headline above is not a typo.  Banks have been found not to have colluded.

In India, the Competition Commission of India (CCI) dismissed allegations that banks had colluded had to control and determine prices in the gold loan business (here).  It is welcome to see the reasoning of the CCI:  “It may be observed that parallel behaviour needs to be substantiated with the additional evidence or the plus factors to bring it into the ambit of prohibited anti-competitive agreements.”

* * * * * Click Here for the Rest of the Story * * * * *