Category Archives: Criminal Division FRD

Detroit-Area Operator of Adult Day Care Center, Two Home Health Care Company Owners Convicted in $29 Million Medicare Fraud Conspiracy

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A federal jury in Detroit late yesterday convicted the operator of an adult day care center and two individuals who owned and operated a network of home health care companies for their participation in a $29 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Detroit Office and Special Agent in Charge Jarod Koopman of the Internal Revenue Service – Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

According to evidence presented at trial, Felicar Williams, 51, of Dearborn, Michigan, operated Haven Adult Day Care Center LLC (Haven), which purported to provide adult day care services for patients suffering from mental health disorders such as schizophrenia and dementia.  At Williams’s direction, Haven billed Medicare for sophisticated mental health services purportedly provided by other, unlicensed staff members.

Evidence at trial also established that Abdul Malik Al-Jumail, 54, and his daughter, Jamella Al-Jumail, 25, both of Brownstown, Michigan, owned and operated a series of fraudulent home health care companies, including ABC Home Care Inc., Associates in Home Care Inc., Accessible Home Care Inc., Swift Home Care LLC, and Be Well Home Care LLC.  The companies billed Medicare for home health services that were not needed or not provided.  At the instruction of both Abdul Malik Al-Jumail and Jamella Al-Jumail, employees of the home health companies fabricated patient medical records to make it appear that the services were needed and provided.

According to evidence presented at trial, Abdul Malik Al-Jumail paid kickbacks to Williams to obtain billing information about patients at Haven.  He then used the information to bill Medicare for home health care services that were never provided.

In addition, the evidence at trial showed that, on May 2, 2012, the day her father was arrested, Jamella Al-Jumail instructed an employee to retrieve falsified patient medical records from the company.  Later that day, Jamella Al-Jumail and others helped burn the false records.

Haven and the various home health care companies billed Medicare for more than $29 million in the course of the conspiracy.

The defendants were charged in a superseding indictment on May 1, 2014.  After the 12-week jury trial, Williams was found guilty of conspiracy to commit health care fraud and conspiracy to pay and receive health care kickbacks in relation to the sale of Medicare billing information to Abdul Malik Al-Jumail.

Abdul Malik Al-Jumail and Jamella Al-Jumail were each found guilty of conspiracy to commit health care fraud.  Abdul Malik Al-Jumail was also found guilty of conspiracy to pay and receive health care kickbacks.  Jamella Al-Jumail was also found guilty of destroying documents in connection with a federal investigation.

Carey Vigor, 61, a psychiatrist from Algonac, Michigan, was also charged in the indictment and was acquitted by the jury.

Sentencing has not yet been scheduled.  Two other individuals charged in the indictment, Mohammed Sadiq and Philandis Thomas, are scheduled for trial in October 2014.  One individual remains a fugitive.

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 HHS-OIG, FBI and IRS-CI 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 Eastern District of Michigan.  The case is being prosecuted by Trial Attorneys Patrick Hurford, Chris Cestaro and Brooke Harper 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 and 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.

Five Army National Guard Officials and One Civilian Charged with Bribery

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Four retired and one active-duty Army National Guard officials and one civilian have been charged for their alleged participation in bribery schemes related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts.  Two of the retired Army National Guard officials and the civilian pleaded guilty for their roles in the schemes.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.

“As captured by its motto, the Army National Guard is ‘always ready, always there’ for the American people,” said Assistant Attorney General Caldwell.  “Unfortunately, today’s charges expose National Guard officials who were ‘always ready’ to pocket bribes and ‘always there’ to take kickbacks.  In return, the charged officials allegedly subverted the open bidding process and illegally steered millions of taxpayer dollars to the bribe-payers through marketing and advertising contracts.  Corruption should know no place in American government, but least of all in the military that so honorably serves our country.  The Criminal Division is committed to rooting out corruption wherever we find it, including in the military, so that we can ensure that no one is putting the public’s trust up for sale.”

“These criminal charges and guilty pleas reflect our continued commitment to rooting out public corruption wherever it occurs,” said U.S. Attorney Boente.  “The public contracting process should be one of integrity and fairness, and these cases should send a strong message that public corruption will be vigorously prosecuted in the military as well as other areas of government.”

“This investigation has sadly reminded us that even some members of our military are willing to trade on the trust their country placed in them to line their pockets with the profits of corrupt activities,” said U.S. Attorney Lynch.  “We and our law enforcement partners will constantly guard against and root out such corruption wherever we find it.”

Charles Sines, 56, of Stafford, Virginia, a retired colonel from the United States Army National Guard; Wesley Russell, 48, of Albany, Indiana, a retired lieutenant colonel from the Indiana Army National Guard; and Jason Rappoccio, 39, of Hampton, South Carolina, an active-duty sergeant first class from the Army National Guard are charged with conspiracy to solicit bribes and the solicitation of bribes.  Russell and Rappoccio allegedly asked for and received bribes, and Sines allegedly provided bribes.

Robert Porter, 50 of Columbia, Maryland, a retired colonel from the Army National Guard, and Timothy Bebus, 44, of Forest Lake, Minnesota, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC, each pleaded guilty in the Eastern District of Virginia in September 2014 to conspiracy to commit bribery and bribery of a public official.  Julianne Hubbell, 45, of Brooklyn Park, Minnesota, a civilian who partnered with her brother, Bebus, as the vice president of operations of Mil-Team, also pleaded guilty in September 2014 to conspiracy to commit bribery.  Sentencing hearings for Bebus and Hubbell are scheduled for Jan. 23, 2015, and for Porter on Jan. 30, 2015.

“The alleged steering of large government contracts is offensive to active duty, reserve and retired members of the National Guard Bureau who took an oath to support and defend the Constitution,” said FBI Assistant Director in Charge McCabe.  “It is also offensive to average American citizens who trust their government and its contractors to use taxpayer money wisely.  We urge anyone who has knowledge of corruption and abuse in federal government contracting to contact the FBI.”

“The Department of Defense places special trust and confidence in its service members, particularly those in positions to influence the expenditure of taxpayer dollars,” said DCIS Special Agent in Charge Craig.  “Guardsmen hold a unique position in our society, representing both their state and military service.  The alleged behavior uncovered in this investigation was a disservice to both, but in no way typical of those honorable women and men that serve in our Army and Air National Guard.  Identifying and investigating fraud and public corruption remains the highest of priorities for the Defense Criminal Investigative Service.  Alongside our law enforcement partners, we will continue to aggressively pursue allegations of fraud impacting Department of Defense resources.”

“We have highly-trained, Army CID special agents who are extremely talented and very capable of rooting out this type of corruption within our ranks,” said Army-CID Director Robey.   “People must realize, both in and out of uniform, that fraud will not be tolerated within the Army and Department of Defense, and greed cannot and will not trump duty and honor.”

As set forth in the indictments and other publicly-filed documents, the National Guard Bureau is a joint activity of the U.S. Department of Defense (DOD), state Army National Guard units and the Departments of the Army and Air Force.  The National Guard Bureau, located in Arlington, Virginia, oversees the distribution of federal funding provided to the Army National Guard and its state units.

The DOD provides millions of dollars of federal funds to the Army National Guard for, among other things, advertising, marketing and sponsorships in order to recruit new members.  The National Guard Bureau uses these funds to promote the Army National Guard by entering into advertising, marketing and sponsorship contracts.  For example, through advertising, marketing and sponsorship contracts, the National Guard was an official sponsor of Dew Tour, Warrior Dash, and American Motorcycle Association Supercross’s events, where recruiters handed out promotional items and recruited new members.  The National Guard also had a contract to sponsor Michael Jordan’s AMA Superbike team.

The National Guard Bureau can avoid a competitive bid process by awarding these federally-funded marketing contracts to Small Business Administration (SBA) certified 8(a) companies, which are minority-owned businesses.  The National Guard Bureau also provides a portion of the federal funds to the state units to allocate.

The indictments allege that Sines and Rappoccio evaded the competitive bid process by using 8(a) companies to award contracts in exchange for bribes.

According to allegations in the indictment against him, Sines founded a company, Financial Solutions, after retiring from the Army National Guard as a colonel.  Sines allegedly paid Porter, a then-active-duty colonel in the Army National Guard, a percentage of all contracts that Porter steered to Financial Solutions through 8(a) companies.  As the director of the National Guard Bureau’s Guard Strength Directorate, Porter had substantial influence over the awarding of National Guard Bureau contracts, and allegedly steered approximately $4.5 million worth of contracts to Sines and Financial Solutions.

The indictment against Russell alleges that, while on active duty as a lieutenant colonel in the Indiana Army National Guard, Russell demanded 15 percent of all profits that a private marketing company would receive from state Army National Guard units.  In return for his 15 percent cut of the profits, Russell allegedly promoted and encouraged state Army National Guard units to purchase the marketing company’s products.

The indictment against Rappoccio, an active-duty sergeant first class in the Army National Guard, alleges that Bebus and Hubbell paid Rappoccio a $30,000 bribe for steering a contract worth approximately $3.7 million to an 8(a) company chosen by Bebus.  In pleading guilty, Bebus and Hubbell admitted to paying this bribe.  In an effort to conceal the bribe payment, Bebus, Hubbell and others allegedly arranged for the payment of $6,000 in cash to Rappoccio, and the remaining $24,000 was allegedly routed from a business account controlled by Hubbell to an account controlled by Bebus and Hubbell’s brother-in-law, and then provided to Rappoccio in the form of a cashier’s check to Rappoccio’s wife.

An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit.  The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.

Allegations of bribery or corruption within the National Guard Bureau’s retention and recruitment contracting can be reported to the FBI’s Washington Field Office at (202) 278-2000 or the FBI’s Northern Virginia Public Corruption Hotline at (703) 686-6225.

Six Defendants Charged for $6 Million Miami Home Health Care Fraud Scheme

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Six South Florida residents have been indicted for their alleged participation in a $6.2 million Medicare fraud scheme involving defunct home health care company Professional Medical Home Health LLC (Professional Home Health).

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 Acting 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.

On Sept. 25, 2014, a federal grand jury in Miami returned a 14-count indictment charging Ernesto Fernandez, 48, Dennis Hernandez, 32, Jose Alvarez, 47, and Joel San Pedro, 44, all of Miami; Alina Hernandez, 38, of West Palm Beach; and Juan Valdes, 37, of Palm Springs, for their roles in defrauding Medicare and soliciting and receiving health care kickbacks.

According to allegations in the indictment, the defendants recruited patients for Professional Home Health, a Miami home health care agency.  As part of the scheme, the defendants solicited and received kickbacks from the owners and operators of Professional Home Health in exchange for providing beneficiaries for home health services that were not medically necessary or not provided.  The defendants and their co-conspirators also allegedly falsified patient documentation to support the fraudulent billing.  From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for these fraudulent home health care claims.

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

Two other individuals have already pleaded guilty for their roles in the scheme.  Annarella Garcia, an owner of Professional Home Health, pleaded guilty to one count of conspiracy to commit health care fraud, and on Aug. 26, 2014, she was sentenced to serve 70 months in prison and ordered to pay $6,257,142 in restitution.  Annilet Dominguez, an administrator of Professional Home Health, pleaded guilty to one count of conspiracy to commit health care fraud and three counts of false statements related to health care matters.  On Sept. 29, 2014, she was sentenced to serve 68 months in prison and ordered to pay $6,257,149 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 Florida.  This case is being prosecuted by Trial Attorneys Anne P. McNamara and A. Brendan Stewart 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 and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Administrator Sentenced to 68 Months in Prison for Role in $6 Million Miami Home Health Care Fraud Scheme

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An administrator of a Miami home health care company, Professional Medical Home Health LLC, was sentenced to serve 68 months in prison and ordered to pay $6,257,142 million in restitution today for her participation in a $6 million health care 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 Acting 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.  U.S. District Judge Federico A. Moreno of the Southern District of Florida imposed the sentence.

According to court documents, Annilet Dominguez, 28, of Hialeah, Florida, was an administrator at Professional Home Health.  Dominguez and her co-conspirators paid kickbacks to patient recruiters in return for providing patients to Professional Home Health.  Dominguez and her co-conspirators falsified patient documentation to make it appear that beneficiaries qualified for and received home health care services, when, in fact, many of the beneficiaries did not actually qualify for or receive such services.  Dominguez and her co-conspirators then caused the submission of false claims to Medicare for services that were not medically necessary or not provided.

From December 2008 through February 2014, Medicare paid Professional Home Health approximately $6.25 million for fraudulent claims for home health care services.

On June 25, 2014, Dominguez pleaded guilty to one count of conspiracy to commit health care fraud and three counts of making false statements related to health care matters.  On Aug. 26, 2014, co-defendant Annarella Garcia was sentenced to serve 70 months in prison and ordered to pay $6,257,142 million in restitution.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Trial Attorneys Anne P. McNamara and A. Brendan Stewart 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.

Army Sergeant Pleads Guilty for Scheme to Defraud the Military

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An Army sergeant pleaded guilty today to bribery and conspiracy to defraud the government for his role in a scheme to steal more than one million gallons of fuel from the U.S. military for resale on the black market in Afghanistan.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina, Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service (DCIS) Southeast Field Office, Special Agent in Charge John A. Strong of the FBI’s Charlotte Division, Director Frank Robey of the U.S. Army Criminal Investigation Command (CID) Major Procurement Fraud Unit (MPFU) and Special Inspector General for Afghanistan Reconstruction John F. Sopko made the announcement.

Christopher Ciampa, 32, of Lillington, North Carolina, entered his guilty plea before U.S. District Court Judge Terrence W. Boyle of the Eastern District of North Carolina.  The sentencing hearing was scheduled for the week of December 15, 2014.

“Sergeant Ciampa took bribes to help steal millions of dollars’ worth of fuel meant to support U.S. military operations in Afghanistan,” said Assistant Attorney General Caldwell.  “His greed put his fellow soldiers at greater risk, and his actions stand in stark contrast to the integrity and sacrifice demonstrated every day by the men and women of our Armed Forces.”

“The DCIS, with our investigative partners, continues to aggressively pursue those who deprive the Department of Defense of much needed resources, such as fuel, critical to accomplishing its global missions,” said DCIS Special Agent in Charge Khin.  “Corruption and theft in a combat environment, especially on such a large scale, degrade the effectiveness of the U.S. armed forces, and increases the danger to our warfighters by diverting those resources to our enemies

“Sergeant Christopher Ciampa betrayed his unit and nation for personal profit by entering into illegal relationships in order to personally profit from the sale and transport of fuel valued at millions of dollars,” said FBI Special Agent in Charge Strong.  “These actions, especially in a wartime environment, damage the reputation of all soldiers and impede the success of coalition war efforts.  Those who put the reputation and lives of their fellow servicemen and women at risk will be aggressively pursued by the FBI and our military partners dedicated to upholding justice.”

“Our highly-trained special agents are experts in fraud investigations and untangling webs of lies and deceit,” said CID MPFU Director Robey.  “Whether an individual is in or out of uniform, it makes no difference, we will do everything in our investigative power to see those who defraud the Army brought to justice.”

“The crimes alleged in this case are serious and describe actions that undermine our mission in Afghanistan,” said Special Inspector General Sopko.  “SIGAR will continue to work tirelessly to protect the American taxpayers’ hard earned money and bring the full weight of the justice system to bear on anyone who seeks to rob the U.S. government.”

According to his plea agreement, Ciampa was deployed to Afghanistan with the 3rd Special Forces Group Service Detachment and was assigned to Camp Brown at Kandahar Air Field between February 2011 and January 2012.  During the deployment, one of Ciampa’s chief responsibilities was management of the Transportation Movement Requests (TMRs) for fuel and other items in support of military units in Afghanistan paid for by the U.S. government.

Over the course of the conspiracy, Ciampa and others created and submitted false TMRs for the purchase of thousands of gallons of fuel that were neither necessary nor used by military units.  Instead, Ciampa and his co-conspirators stole the fuel and resold it on the black market in neighboring towns.  Between February 2011 and December 2011, they created false TMRs for 114 large fuel tanker trucks, which could each carry approximately 10,000 gallons of fuel.  All of the TMRs were awarded to a single Afghan trucking company, despite significantly higher rates charged by this company.

As a result of the criminal conduct, the United States suffered a total loss of $10,812,000.  The loss resulted from stolen fuel and payments on the fraudulent TMRs in the following amounts: $9,120,000 in lost fuel and $1,692,000 in fraudulent TMRs for the 114 large tanker trucks.

Ciampa admitted that he and his co-conspirators sent some of the illicit proceeds back to the United States via wire transfer and carried some of the cash in their luggage, and Ciampa hid $180,000 of stolen funds inside stereo equipment that he shipped back to North Carolina with his unit’s gear.  He used his share of the proceeds from the scheme to purchase a truck and other personal items.

The case was investigated by DCIS, FBI, CID MPFU and the Special Inspector General for Afghanistan Reconstruction (SIGAR).  The case is being prosecuted by Trial Attorney Wade Weems on detail to the Criminal Division’s Fraud Section from SIGAR and Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina.

Owner of Home Health Care Company Sentenced to Nearly Six Years in Prison for Role in $6 Million Medicare Fraud Scheme

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A co-owner of Professional Medical Home Health LLC was sentenced today to serve 70 months in prison and ordered to pay $6.2 million in restitution for her participation in a health care fraud scheme involving the now defunct home health care company .
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 Acting Special Agent in Charge Reginald France of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.    U.S. District Judge Federico A. Moreno of the Southern District of Florida imposed the sentence.
According to court documents, Annarella Garcia, 44, of Hialeah, Florida, was a co-owner of Professional Medical Home Health, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.    Between December 2008 and February 2014, Garcia and others engaged in a scheme to bill the Medicare Program for expensive physical therapy and home health care services that were not medically necessary or were not provided.    During that time, Professional Medical Home Health was paid approximately $6.25 million by Medicare for the fraudulent claims.
Specifically, Garcia and her co-conspirators paid kickbacks and bribes to patient recruiters in return for their providing patients to Professional Medical Home Health for home health and therapy services that were not medically necessary or were not provided.    In furtherance of the scheme, Garcia and her co-conspirators falsified patient documentation to make it appear that beneficiaries qualified for and received home health care services, when, in fact, many of the beneficiaries did not actually qualify for such services and did not receive such services.
Garcia pleaded guilty to conspiracy to commit health care fraud on June 25, 2014.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.    This case is being prosecuted by Trial Attorneys A. Brendan Stewart and 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 1,900 defendants who have collectively billed the Medicare program for more than $6 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.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .

 

Louisiana Psychiatrist Sentenced to Serve More Than Seven Years in Prison for His Role in $258 Million Medicare Fraud Scheme

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A Louisiana psychiatrist was sentenced in federal court in Baton Rouge, Louisiana, today to serve 86 months in prison for his role in a $258.5 million Medicare fraud scheme involving partial hospitalization psychiatric services.    He was further ordered to pay $43.5 million in restitution and to forfeit all proceeds from the fraudulent scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney J. Walter Green of the Middle District of Louisiana, Special Agent in Charge Mike Fields of the Dallas Region of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division and Louisiana State Attorney General James D. “Buddy” Caldwell made the announcement.    Chief U.S. District Court Judge Brian A. Jackson of the Middle District of Louisiana imposed the sentence.
According to documents filed in the case, Zahid Imran, M.D., 56, of Baton Rouge, served as the medical director of Shifa Community Mental Health Center of Baton Rouge, and co-owned Serenity Center of Baton Rouge and Shifa Community Mental Health Center of Texas.    As part of the scheme, Imran admitted mentally ill patients to the facilities, some of whom were inappropriate for partial hospitalization, and then re-certified the patients’ appropriateness for the program in an effort to continue to bill Medicare for services.   To support the fraudulent Medicare billing, Imran and others falsified patient treatment records to reflect services on dates when no such services were provided.    Imran pleaded guilty on May 13, 2014, to conspiracy to commit health care fraud.
Law enforcement’s 2011 investigation into the three community mental health centers has resulted in 17 convictions of individuals employed by the facilities, including therapists, marketers, administrators, owners and the medical director.    The companies billed Medicare for partial hospitalization program services for the mentally ill that were unnecessary or never provided over a period of approximately seven years.    The companies, collectively, submitted more than $258 million in claims to Medicare during this period.   Medicare paid approximately $43.5 million on those claims.
The case is being investigated by HHS-OIG, the FBI and the Medicaid Fraud Control Unit of the Louisiana Attorney General’s Office, 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 Louisiana.    The case is being prosecuted by Trial Attorneys Abigail Taylor and Dustin M. Davis of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shubhra Shivpuri of the Middle District of Louisiana.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 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.

Former Rabobank LIBOR Submitter Pleads Guilty for Scheme to Manipulate Yen Libor

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A former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) Japanese Yen London InterBank Offered Rate (LIBOR) submitter pleaded guilty today for his role in a conspiracy to commit wire and bank fraud by manipulating Rabobank’s Yen LIBOR submissions to benefit trading positions.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Acting Assistant Director in Charge Timothy A. Gallagher of the FBI’s Washington Field Office made the announcement.
Paul Robson, a citizen of the United Kingdom, appeared before United States District Judge Jed S. Rakoff in the Southern District of New York and pleaded guilty to count one of a 15-count indictment returned by a federal grand jury in the Southern District on April 28, 2014.    Sentencing is scheduled for June 9, 2017.
“ Paul Robson is the second employee at Rabobank, one of the world’s largest banks, to plead guilty to participating in a global fraud scheme,” said Assistant Attorney General Caldwell.  “The scope of the fraud was massive, but the scheme was simple.  By illegally influencing the LIBOR rates, Robson and his coconspirators rigged the markets to ensure that their trades made money.  Robson’s conviction demonstrates the Department of Justice’s continued resolve to hold individuals and institutions accountable for their involvement in fraud in the financial markets.”
“Today’s guilty plea demonstrates our continuing resolve to prosecute those who fraudulently manipulated the LIBOR rate for their own personal benefit and, in doing so, undermined free and fair markets,” said Deputy Assistant Attorney General Snyder.
“Fraudulently manipulating the LIBOR has far reaching effects on international financial markets and such criminal activity will not be tolerated,” said Acting Assistant Director in Charge Gallagher.    “The Washington Field Office has committed significant time and resources including the expertise of Special Agents, forensic accountants and analysts to investigate this case along with our Department of Justice colleagues.    While the crimes committed are complex, their expertise demonstrates our ability to bring justice to those that choose to commit these crimes.”
Robson, along with former Rabobank Yen LIBOR derivatives traders Paul Thompson, of Australia, and Tetsuya Motomura, of Japan, was charged with conspiracy to commit wire and bank fraud as well as substantive counts of wire fraud.    The indictment also alleges that the conspiracy involved numerous additional, unnamed individuals and entities.    Among those individuals and entities are:

Takayuki Yagami (described in the indictment as Trader-R), a Japanese national and former Rabobank trader who pleaded guilty on June 10, 2014, in the Southern District of New York to one count of conspiracy to commit wire and bank fraud for his involvement in the conspiracy alleged in the indictment; and

Lloyds Banking Group plc (LBG), a U.K.-based bank that, as part of a deferred prosecution agreement filed in the United States District Court for the District of Connecticut on July 28, 2014, admitted wrongdoing in connection with the alleged conspiracy’s overt acts, and agreed to pay an $86 million penalty.

According to court documents, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks.    LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products.    The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion.
At the time relevant to the charges, LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London.    LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.    The published LIBOR “fix” for Yen LIBOR at a specific maturity is the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.
Rabobank entered into a deferred prosecution agreement with the Department of Justice on Oct. 29, 2013, and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.
According to court documents, Robson worked as a senior trader at Rabobank’s Money Markets and Short Term Forwards desk in London and also served as Rabobank’s primary submitter of Yen LIBOR to the BBA; Thompson was Rabobank’s head of Money Market and Derivatives Trading Northeast Asia and worked in Singapore; Motomura was a senior trader at Rabobank’s Tokyo desk who supervised money market and derivative traders; and Yagami worked as a senior trader at Rabobank’s Money Market/FX Forwards desks in Tokyo and elsewhere in Asia.
Robson’s main role in the conspiracy was to submit Yen LIBOR rates at the requests of traders, including Thompson, Motomura and Yagami, who entered into derivatives contracts containing Yen LIBOR as a price component .    T he profit and loss that flowed from those contracts was directly affected by the relevant Yen LIBOR on certain dates.    If the relevant Yen LIBOR moved in the direction favorable to the defendants’ positions, Rabobank and the defendants benefitted at the expense of the counterparties.    When LIBOR moved in the opposite direction, the defendants and Rabobank stood to lose money to their counterparties.
As alleged in court filings, from about May 2006 to at least January 2011, the four defendants, a Yen LIBOR submitter at LBG, and others agreed to make false and fraudulent Yen LIBOR submissions for the benefit of selected trading positions.    According to the allegations, sometimes Robson submitted rates at a specific level requested by a co-defendant or other traders, and at other times Robson made a higher or lower Yen LIBOR submission consistent with the direction requested by a co-defendant or other traders.
For example, according to court filings, on Sept. 21, 2007, Yagami asked Robson by email, “where do you think today’s libors are?    If you can I would like 1mth higher today.” Robson responded, “bookies reckon .85,” to which Yagami replied, “I have some fixings in 1mth so would appreciate if you can put it higher mate.” Robson answered, “no prob mate let me know your level.” After Yagami asked for “0.90% for 1mth,” Robson confirmed, “sure no prob[ ] I’ll probably get a few phone calls but no worries mate… there’s bigger crooks in the market than us guys!”
Robson admitted that he accommodated the requests of his co-defendants and other traders.    For example, on Sept. 21, 2007, after Robson allegedly received a request from Yagami for a high one-month Yen LIBOR, Rabobank submitted a one-month Yen LIBOR rate of 0.90, which was seven basis points higher than the previous day and five basis points above where Robson said that “bookies” predicted it, and which moved Rabobank’s submission from the middle to the highest of the panel.
According to court documents, the defendants were also aware that they were making false or fraudulent Yen LIBOR submissions.    For example, on May 10, 2006, Robson admitted in an email to Yagami that “it must be pretty embarrasing to set such a low libor.   I was very embarrased to set my 6 mth – but wanted to help thomo [Thompson].   Tomorrow it will be more like 33 from me.” At times, Robson referred to the submissions that he submitted on behalf of his co-defendants as “ridiculously high” and “obscenely high,” and acknowledged that his submissions would be so out of line with the other Yen LIBOR panel banks that he might receive a phone call about them from the BBA or Thomson Reuters.
On numerous occasions, Robson also passed along such requests to the LBG submitter, who altered LBG’s Yen LIBOR submission accordingly if doing so did not adversely affect selected trading positions at LBG.    Likewise, the LBG setter sent requests to Robson and he generally altered Rabobank’s Yen LIBOR to satisfy the requests.    For example, on July 28, 2006, Robson wrote to the LBG submitter: “morning skipper…..will be setting an obscenely high 1m again today…poss 38 just fyi.” The LBG submitter responded: “(K)…oh dear..my poor customers….hehehe!! manual input libors again today then!!!!” Both banks’ submissions on July 28 moved up one basis point, from 0.37 to 0.38.    As the LBG submitter explained, according to court documents filed in connection with Rabobank’s deferred prosecution agreement, to other LBG submitters, “We usually try and help each other out…but only if it suits.”
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The investigation is being conducted by special agents, forensic accountants, and intelligence analysts in the FBI’s Washington Field Office.    The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section, and Trial Attorney Michael T. Koenig of the Antitrust Division.    The Criminal Division’s Office of International Affairs has provided assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad.    The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the LIBOR investigation.    The Securities and Exchange Commission also has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.      The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank.    Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.   For more information about the task force visit: www.stopfraud.com.

 

Director of Nursing Pleads Guilty in Miami for Role in $7 Million Health Care Fraud Scheme

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A former director of nursing pleaded guilty today in connection with a health care fraud scheme involving Anna Nursing Services Corp. (Anna Nursing), a defunct home health care company in Miami.
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 Acting Special Agent in Charge Ryan Lynch of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.
Armando Buchillon, 42, of Hialeah, Florida, pleaded guilty before U.S. District Judge Joan A. Lenard in the Southern District of Florida to one count of conspiracy to commit health care fraud.    Sentencing is scheduled for Oct. 6, 2014, before Judge Lenard.
According to court documents, Buchillon was a director of nursing at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.    The owners and operators of Anna Nursing agreed to and actually did operate Anna Nursing 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 and/or were not provided.
As part of the fraudulent scheme, Buchillon and his co-conspirators regularly falsified patient documentation in order to make it appear that beneficiaries qualified for and received home health care services, when, in fact, many of the beneficiaries did not actually qualify for or receive such services.    In addition, Buchillon paid kickbacks and bribes to patient recruiters, in return for the recruiters providing patients to Anna Nursing for home health care and therapy services that were medically unnecessary and/or were not provided.    Buchillon also worked as a patient recruiter for Anna Nursing and was paid kickbacks and bribes by the owner of Anna Nursing.    Buchillon and his co-conspirators caused the submission of false and fraudulent claims to Medicare on behalf of these beneficiaries.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were medically unnecessary and/or were not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.    This case is being prosecuted by Trial Attorneys A. Brendan Stewart and 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 1,900 defendants who have collectively billed the Medicare program for more than $6 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.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .

 

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Lloyds Banking Group Admits Wrongdoing In LIBOR Investigation,  Agrees To Pay $86 Million Criminal Penalty

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WASHINGTON — Lloyds Banking Group plc has entered into an agreement with the Department of Justice to pay an $86 million penalty for manipulation of submissions for the London InterBank Offered Rate (LIBOR), a leading global benchmark interest rate.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Antitrust Division, and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

A criminal information will be filed today in U.S. District Court for the District of Connecticut that charges Lloyds as part of a deferred prosecution agreement (DPA).  The information charges Lloyds with wire fraud for its role in manipulating LIBOR.  In addition to the $86 million penalty, the DPA requires the bank to admit and accept responsibility for its misconduct as described in an extensive statement of facts.  Lloyds has agreed to continue cooperating with the Justice Department in its ongoing investigation of the manipulation of benchmark interest rates by other financial institutions and individuals.

“For more than three years, traders at Lloyds manipulated the bank’s LIBOR submissions for three currencies to benefit the trading positions of themselves and their friends, to the detriment of the parties on the other side of the trades,” said Assistant Attorney General Caldwell.  “Because investors and consumers rely on LIBOR’s integrity, rate-rigging fundamentally undermines confidence in financial markets.  Lloyds is the fifth major financial institution that has admitted LIBOR manipulation and paid a criminal penalty, and nine individuals have been criminally charged by the Justice Department.  Our active investigation continues, as we work to restore trust in the markets.”

“Lloyds manipulated benchmark rates, allowing its traders to increase their profits unfairly and fraudulently,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “Lloyds’s conduct undermined financial markets domestically and abroad, and today’s charges send a clear message that we will continue to bring those responsible to justice.”

“Manipulating financial trading markets to create an unfair advantage is against the law,” said Assistant Director in Charge Parlave. “Today’s agreement further underscores the FBI’s ability to investigate complex international financial crimes and bring the perpetrators to justice. The Washington Field Office has committed significant time and resources including the expertise of Special Agents, forensic accountants and analysts to investigate this case along with our Department of Justice colleagues. Their efforts send a clear message to anyone contemplating financial crimes: think twice or you will face the consequences.”

Together with approximately $283 million in criminal and regulatory penalties imposed by other agencies in actions arising out of the same conduct – $105 million by the Commodity Futures Trading Commission (CFTC), and approximately $178 million by the U.K. Financial Conduct Authority (FCA) – the Justice Department’s $86 million criminal penalty brings the total amount to be paid by Lloyds to almost $370 million.

According to signed documents, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world and reflecting the rates those banks believe they would be charged if borrowing from other banks.  LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products.  The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion.

At the time relevant to the conduct in the criminal information, LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London.  LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.  The LIBOR for a given currency at a specific maturity was the result of a calculation based upon submissions from a panel of banks for that currency (the Contributor Panel) selected by the BBA.  From at least 2006 through the present, Lloyds (through its subsidiaries) has been a member of the Contributor Panel for a number of currencies, including United States Dollar LIBOR, Pound Sterling LIBOR, and Yen LIBOR.

According to the statement of facts accompanying the agreement, between at least as early as 2006 and at least as late as July 2009, Lloyds’s LIBOR submitters for Dollar LIBOR, Yen LIBOR, and Pound Sterling LIBOR submitted LIBOR contributions intended to benefit their own trading positions or the trading positions of others, rather than rates that complied with the definition of LIBOR.  When Lloyds LIBOR submitters contributed LIBOR submissions to benefit trading positions, the manipulation of the submissions affected the fixed rates on occasion.

According to signed documents, on May 19, 2009, a money markets trader who was a former Dollar LIBOR submitter at a subsidiary of Lloyds wrote to the then-current Dollar LIBOR submitter: “have 5 yard [billion] 3 month liability rolls today so would be advantageous to have lower 3month libor setting if doesn’t conflict with any of your fix’s.”  Later that day, the Dollar LIBOR submitter told the money markets trader in a phone call: “obviously we got the Libors down for you.”

In another example, on March 6, 2009, a money markets trader who was a former Pound Sterling LIBOR submitter for a subsidiary of Lloyds told the then-current Pound Sterling LIBOR submitter: “Um, I’m paying on 12 yards [billions] of 1s today, . . . so if there is any way of making 1s relatively low it would just be helpful for us all.”  That day, the Pound Sterling LIBOR submitter contributed a rate that was ten basis points lower than the previous day’s submission.

Also according to the statement of facts, a Yen LIBOR submitter and a former submitter at Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) who traded money-markets and derivatives products had an agreement to submit Yen LIBOR contributions that benefitted their respective trading positions, rather than submissions that complied with the definition of LIBOR.

For example, on July 28, 2006, the Rabobank submitter wrote to the Yen LIBOR submitter: “morning skipper…..will be setting an obscenely high 1m again today…poss 38 just fyi.”  The Yen LIBOR submitter responded: “(K)…oh dear..my poor customers….hehehe!! manual input libors again today then!!!!”  Both banks’ submissions on July 28 moved up one basis point, from 0.37 to 0.38.

This ongoing investigation is being conducted by special agents, forensic accountants, and intelligence analysts of the FBI’s Washington Field Office. The prosecution of Lloyds is being handled by Trial Attorney Patrick Pericak of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antitrust Division. Assistant U.S. Attorneys Chris Mattei and Michael McGarry of the U.S. Attorney’s Office for the District of Connecticut, along with the Criminal Division’s Office of International Affairs, have provided valuable assistance in this matter.

The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the department and, along with the FCA, has played a major role in the investigation. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance. In particular, the Securities and Exchange Commission has played a significant role in the LIBOR investigation, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.