Category Archives: Criminal Division FRD

Detroit-Area Home Health Agency Owner Sentenced to 72 Months in Prison for His Role in $13.8 Million Medicare Fraud Scheme

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The owner of a home health agency involved in a $13.8 million Medicare fraud scheme was sentenced today to serve 72 months in prison.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Paul M. Abbate of the FBI Detroit Field Office and Special Agent in Charge Lamont Pugh III of the Detroit Office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations made the announcement.
Zahir Yousafzai, 44, was sentenced by U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan.  In addition to his prison term, Yousafzai was sentenced to three years of supervised release and was ordered to pay $4,131,135 in restitution, jointly and severally with his co-defendants.
According to court records, in 2009, Yousafzai and his co-conspirators acquired beneficial ownership and control over two home health companies, First Care Home Health Care LLC and Moonlite Home Care Inc.  Yousafzai also assisted in the operation of two additional home health care agencies, Physicians Choice Home Health Care LLC and Quantum Home Care Inc., owned by co-conspirators.
Also according to court records, Yousafzai, a physical therapist assistant, paid and directed the payment of various medical professionals, including doctors, nurses, physical therapists and physical therapist assistants, to create fictitious patient files to document purported home health services that were never provided.
In addition, according to court records, Yousafzai paid and directed the payment of kickbacks to recruiters who obtained beneficiaries’ Medicare information that he used to submit claims for home health care that was never provided.  The beneficiaries sometimes pre-signed forms that were later falsified to indicate they received home health services, when they did not.  In other instances, the beneficiaries’ signatures were forged.    Yousafzai signed patient files falsely stating that physical therapy services were provided.
Additionally, according to court records, Yousafzai incorporated a shell company known as A-1 Nursing and Rehab Inc., through which he laundered the proceeds of the health care fraud.
Between July 2008 and September 2011, Medicare paid approximately $13.8 million in fraudulent home health claims submitted by the four home health agencies associated with Yousafzai.  Of this amount, Medicare paid more than $4 million to First Care and Moonlite, the companies that Yousafzai owned in whole or in part.
This case was investigated by the FBI and HHS-OIG and was brought by the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.  The case was prosecuted by Assistant Chief Catherine K. Dick and Trial Attorney Matthew C. Thuesen 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 almost 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is 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 .

 

Owner and Recruiter for Louisiana and Texas Mental Health Clinics Convicted as Part of $258 Million Health Care Fraud Scheme in Baton Rouge, Louisiana

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An owner and operator of community mental health centers in Baton Rouge, Louisiana, as well as a patient recruiter for a related facility in Houston, Texas, were convicted on Wednesday, May 21, 2014, for their roles in a $258 million Medicare fraud scheme involving three facilities that filed fraudulent claims for psychiatric services that were unnecessary or never actually provided.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Walt Green for the Middle District of Louisiana, Special Agent in Charge Michael J. Anderson for the FBI’s New Orleans Field Office, Special Agent in Charge Mike Fields for the Dallas Region of the Department of Health and Human Services (HHS) Office of Inspector General and Louisiana State Attorney General James Buddy Caldwell made the announcement.
“These convictions resulted from a massive fraud involving thousands of false billings for mental health services that were either not needed or not given,” said Acting Assistant Attorney General O’Neil.  “It was a sophisticated scheme involving kickbacks, falsified medical records and false billings.  We will use all tools at our disposal – from data to traditional law enforcement techniques – to root out these schemes and bring the appropriate people to justice.”
“These significant convictions are the latest example of our ongoing commitment to rooting out health care fraud throughout our community,” said U.S. Attorney Green.    “We will use all of the tools and resources at our disposal to prosecute those who submit false information and false claims to Medicare – especially where, as in this case, those claims cost the United States tens of millions of dollars and were filed using the names and identities of Medicare beneficiaries who are particularly vulnerable.    I appreciate the tremendous assistance we received in this case, and in our other anti-health care fraud efforts, from the Department’s Criminal Division and our federal and state law enforcement partners.”
“The success of this broad sweeping, complex healthcare fraud investigation could not have been possible without the tremendous collaboration between all agencies involved,” said Special Agent in Charge Anderson.    “It clearly demonstrates how law enforcement can make such a significant community impact as a result of such strong partnerships.”
“Whenever Medicare providers are motivated by greed, our most vulnerable citizens, the elderly, are put at risk,” said Special Agent in Charge Fields.  “Our HHS-OIG agents will continue to work closely with our law enforcement partners to investigate providers who will stop at nothing to loot the Medicare Trust Fund.”
Roslyn F. Dogan, 53, of Baton Rouge, Louisiana, and James R. Hunter, 49, of Houston, Texas, were found guilty after a six-day jury trial before Chief U.S. District Judge Brian A. Jackson of the Middle District of Louisiana.    Dogan was convicted of conspiracy to commit health care fraud and two counts of health care fraud.    Hunter was convicted of conspiracy to commit health care fraud and conspiracy to pay and receive health care kickbacks.
The investigation into these three community mental health centers – Shifa Community Mental Health Center of Baton Rouge (Shifa Baton Rouge), Serenity Center of Baton Rouge (Serenity Center), and Shifa Community Mental Health Center of Texas (Shifa Texas) – has resulted in the convictions of 17 individuals employed by the facilities, including therapists, marketers, administrators, owners and the medical director.    The investigation is ongoing.
According to court documents, the companies billed Medicare more than $258 million over a period of seven years for partial hospitalization program services for the mentally ill that were unnecessary or never provided.
Further according to court documents, Dogan was part owner of Serenity Center as well as the marketer for Serenity Center and Shifa Baton Rouge.  As part of the scheme, Dogan would arrange for Medicare-eligible patients to be sent to Shifa Baton Rouge and Serenity Center and admitted to those facilities, regardless of whether the patients needed partial hospitalization program services.  In order to increase billings to Medicare, Dogan, along with others in management, instructed administrators and therapists to falsify patient treatment records for services that had not been provided.  Dogan also concealed the fraud at Shifa Baton Rouge and Serenity Center by directing that patient billing statements be intercepted from patients’ mail in order to prevent the patients from seeing the services that had been billed in their names, and by stealing incriminating documents seized pursuant to a search warrant from federal custody.
According to court documents, Hunter, a resident of Houston, was paid $1,500 per week in cash to direct patients to attend the partial hospitalization program at Shifa Texas.  Hunter, in turn, paid each patient $75 per week to attend the program.  In an effort to get patients admitted to Shifa Texas, Hunter instructed patients as to the types of symptoms and diagnoses to describe to physicians in order to be admitted to the program.
The individuals who have pleaded guilty in this case include:

  •          Dr. Zahid Imran  – Imran, a Baton Rouge area psychiatrist, served as Shifa’s medical director and co-owner of Serenity Center and Shifa Texas.  As part of the scheme, Imran would admit mentally ill patients to the facilities, some of whom were inappropriate for partial hospitalization.  Imran would then re-certify these patients’ appropriateness for the program, in an effort to continue to bill Medicare for services.  In order to support their fraudulent Medicare billing, Imran and others would falsify patient treatment records to reflect services on dates where no such services were provided.

 

  •          Hoor Naz Jafri – Jafri was an owner of all three facilities in Baton Rouge and Houston and a marketer for Shifa Baton Rouge and Serenity Center.  Jafri was also part owner of two affiliated residential facilities; patients who lived at these apartments were required to attend the programs at Shifa Baton Rouge and Serenity Center, regardless of whether these patients actually needed or desired the services.  As a marketer for Shifa Baton Rouge and Serenity Center, Jafri caused patients to be admitted to the facilities who were inappropriate for the services.  As management at all three facilities, Jafri directed administrators and therapists at these facilities to falsify records for treatment that patients did not in fact receive.

 

  •          Sedra Signater and Arthur Smith – Signater and Smith were the administrators of Shifa and Serenity Center, respectively.  At the direction of management, Signater and Smith fabricated and instructed other therapists at the facilities to fabricate patient treatment records to indicate therapy had been provided to patients, when in fact, no such therapy had been provided.  These fabricated records formed the basis of the fraudulent billings to Medicare.

 

  •          Erica Williams and Kyeiana Murray – Williams and Murray were office managers of Shifa Texas and Shifa Baton Rouge, respectively.  Williams also served as the admissions coordinator of Shifa Texas.  As the office managers at these facilities, Murray and Williams facilitated and coordinated the collection of the falsified patient treatment records and submitted these records for billing to Medicare.  Williams also directed therapists at Shifa Texas to falsify patient treatment records and coordinated the payment of kickbacks to patient recruiter James Hunter in Houston.

 

  •          Robert Booker, Teryl Vincent, Todd Ulmer, June Durio, Nancy Reed, Jason Myer, Anna Ngang and Patrick Wallace – Booker, Vincent, Ulmer, Durio, Reed and Myer, therapists at Shifa Baton Rouge and Serenity Center, and Anna Ngang and Patrick Wallace, therapists at Shifa Texas, were directed by Signater, Smith, and Williams to falsify patient treatment records for group therapy sessions they had not conducted.

The case was investigated by HHS-OIG, the FBI, and the Medicaid Fraud Control Unit of the Louisiana State 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.  This case is being prosecuted by Trial Attorneys Abigail Taylor and Dustin 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 almost $6 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with 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 .

U.S. Navy Petty Officer Based in Japan Pleads Guilty in International Bribery Scandal

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U.S. Navy Petty Officer First Class Daniel Layug pleaded guilty in the Southern District of California today to accepting more than $10,000 in cash, consumer electronics and travel expenses from a foreign defense contractor in exchange for classified and internal Navy information.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Laura Duffy of the Southern District of California, Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General for Investigations James B. Burch of the U.S. Department of Defense Office of the Inspector General made the announcement.

Layug, 27, entered his plea before U.S. Magistrate Judge Karen S. Crawford to one count of conspiracy to commit bribery.  He is the sixth defendant charged – and the third to plead guilty – in the alleged bribery scheme involving Singapore-based defense contractor Glenn Defense Marine Asia (GDMA), which provided port services to U.S. Navy ships in the Asia Pacific region.

“Today, U.S. Navy Petty Officer First Class Dan Layug admitted that he swapped classified U.S. Navy information for cash, luxury travel perks and electronic gadgets from a defense contractor,” said Acting Assistant Attorney General O’Neil.  “In taking these under-the-table bribes, Layug put his own financial interests above those of the Navy and the country he vowed to serve.  The Criminal Division, with our law enforcement partners, is committed to holding responsible those who were part of this massive fraud and bribery scheme that cost the U.S. Navy more than $20 million.”

“Every service member is entrusted with the enormous responsibility of protecting this country at all costs,” said U.S. Attorney Duffy.  “Because of greed, Daniel Layug fell woefully short of that high calling, and this guilty plea holds him accountable for a painful betrayal.”

“The guilty plea of U.S. Navy Petty Officer First Class Dan Layug is part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to bring to justice individuals who seek to enrich themselves at the expense of U.S. taxpayers,” said Deputy Inspector General Burch.  “While the conduct of the vast majority of service members is beyond reproach, Defense Criminal Investigative Service will vigorously pursue individuals who betray the trust bestowed upon them.”

“Petty Officer Layug sold sensitive Navy information for monetary gain,” said NCIS Director Traver.  “In doing so, he compromised the integrity of his position and the safety of his shipmates. NCIS will continue to work with DCIS and the U.S. Attorney’s Office in investigating and prosecuting these crimes to the fullest extent possible.”

According to allegations in court documents, GDMA owner and CEO Leonard Glenn Francis and his cousin, GDMA executive Alex Wisidigama, enlisted the clandestine assistance of Navy personnel – including Layug, Commander Michael Vannak Khem Misiewicz, Commander Jose Luis Sanchez, and Naval Criminal Investigative Service Special Agent John Beliveau – to provide classified ship schedules and other sensitive U.S. Navy information in exchange for cash, travel expenses, and consumer electronics.   GDMA allegedly overcharged the Navy under its contracts and submitted bogus invoices for more than $20 million in port services.

Court records state that Layug worked secretly on behalf of GDMA, using his position as a logistics specialist at a U.S. Navy facility in Yokosuka, Japan, to gain access to classified U.S. Navy ship schedules and then provided this information to GDMA’s vice president of global operations.  Layug admitted he also provided pricing information from one of GDMA’s competitors.

In return, according to the plea agreement, GDMA gave Layug envelopes of cash on a regular basis.  Layug admitted that he accepted a $1,000 monthly allowance from GDMA.   On May 21, 2012, GDMA’s vice president of global operations instructed a GDMA accountant that “at the end of each month, we will be providing an allowance to Mr. Dan Layug. Total of US $1,000. You may pay him the equivalent in Yen.  He will come by the office at the end of each month to see you.”    Layug also admitted that he received luxury hotel stays for himself and others in Malaysia, Singapore, Indonesia, Hong Kong and Thailand.

Further according to the plea agreement, Layug asked GDMA for consumer electronics.  In an email on March 9, 2012, Layug asked the vice president of global operations, “What are the chances of getting the new iPad 3? Please let me know.”  In the plea agreement, Layug admitted that GDMA then provided him with an iPad 3.

In another email exchange on May 28, 2013, Layug asked the vice president of global operations for a “bucket list” of items including a high end camera, an iPhone5 cellular phone, a Samsung S4 cellular phone, and an iPad Mini.  Shortly after sending his “bucket list” to the vice president of global operations, Layug stated in an email that “the camera is awesome bro! Thanks a lot! Been a while since I had a new gadget!”

Francis was previously charged with conspiring to bribe U.S. Navy officials.  Wisidagama pleaded guilty on March 18, 2014, to defrauding the U.S. Navy.

Two other senior Navy officials – Commander Michael Vannak Khem Misiewicz, 46, and Commander Jose Luis Sanchez, 41 – have been charged separately with bribery conspiracies involving GDMA.  On Dec. 17, 2013, NCIS Supervisory Special Agent John Bertrand Beliveau II, 44, pleaded guilty to conspiracy and bribery charges for regularly tipping off Francis to the status of the government’s investigation into GDMA.

The ongoing investigation is being conducted by NCIS, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.

The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Trial Attorneys Brian Young and Wade Weems of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert Huie of the Southern District of California.

Former Wellcare Chief Executive Sentenced for Health Care Fraud

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Former WellCare Chief Executive Officer Todd S. Farha, 45, of Tampa, Florida, was sentenced today in the Middle District of Florida to serve 36 months in prison for defrauding the Florida Medicaid program.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and United States Attorney A. Lee Bentley III of the Middle District of Florida made the announcement after Farha was sentenced by U.S. District Judge James S. Moody Jr.
Farha was convicted by a federal jury in the Middle District of Florida on June 10, 2013, of two counts of health care fraud.
According to court records and evidence at trial, Farha and others orchestrated a scheme to defraud the Florida Medicaid program from the summer of 2003 through the fall of 2007 by making fraudulent statements relating to expenditures for behavioral health care services.
WellCare operates health maintenance organizations (HMOs) in several states providing services through government-sponsored health care benefit programs like Medicaid.  Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration (AHCA), the Florida agency that administers the Medicaid program, to provide Florida Medicaid program recipients with an array of services, including behavioral health services.
In 2002, Florida enacted a statute that required Florida Medicaid HMOs to expend 80 percent of the Medicaid premium paid for certain behavioral health services upon the provision of those services. In the event that the HMO expended less than 80 percent of the premium, the difference was required to be returned to AHCA. As part of the scheme, Farha and others fraudulently submitted inflated expenditure information in the company’s annual reports to AHCA to reduce the WellCare HMOs’ contractual repayment obligations for behavioral health care services.
On May 5, 2009 the government filed related charges in an information and a deferred prosecution agreement (DPA) against WellCare. Pursuant to that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States and cooperate with the government’s criminal investigation.  The company complied with all of the requirements of the DPA.    As a result, the information was later dismissed by the court following a government motion.    In a related civil qui tam case, Wellcare agreed to pay $137.5 million in civil fines and penalties.
This case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, the FBI, and the Florida Attorney General’s Medicaid Fraud Control Unit.  The case was prosecuted by Senior Trial Attorney John Michelich of the Criminal Division’s Fraud Section and Assistant United States Attorneys Jay Trezevant and Cherie Krigsman and Special Assistant United States Attorney John Bowers of the Middle District of Florida

Six Miami-Area Residents Plead Guilty to Mortgage Fraud Scheme Involving Four Condominium Developments

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Six Miami-area residents, including three former loan officers, pleaded guilty in the Southern District of Florida this week to participating in a fraudulent scheme designed to enrich real estate developers by selling condominium units to straw buyers.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Special Agent in Charge Phyllis Robinson of the Department of Housing and Urban Development’s Office of the Inspector General (HUD-OIG) in Miami and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency (FHFA) made the announcement.

Today, Leidy Masvidal, 42, of Miami, pleaded guilty before U.S. District Court Judge Marcia G. Cooke to conspiring to commit bank fraud.   Sentencing is scheduled for Sept. 24, 2014.   Alfredo Jesus Chacon, 48, of Orange Park, Florida, and Francisco Martos, 63, and Dorian Wong Magarino, 49, both of Miami, also pleaded guilty today to conspiring to commit wire fraud and mail fraud before U.S. District Court Judge Ursula Ungaro.   Sentencing is scheduled for Aug. 1, 2014.

On May 14, 2014, Tania Masvidal, 49, and Douglas Ponce, 40, both of Miami, each pleaded guilty before Judge Cooke to conspiring to commit bank fraud.  Sentencing is scheduled for July 30, 2014.

According to the defendants’ plea agreements and other court documents, the defendants participated in a scheme to pay straw buyers to submit false loan applications to lending institutions to purchase condominiums owned by co-conspirators.   Leidy Masvidal and Tania Masvidal used a mortgage brokerage they owned, EZY Mortgage Inc., to arrange financing for the purchases.   Because the straw buyers were not credit-worthy, the Masvidals secured loans in their names by submitting to lending institutions loan applications and other fraudulent documents containing false statements about the buyers’ income, employment and assets, and falsely stating that the buyers intended to reside in the properties.   Additionally, the Masvidals enabled their co-conspirators to secretly fund the buyers’ obligations to pay money at closing (known as “cash to close” obligations) by establishing shell corporations, which the co-conspirators used to funnel cash from conspirators to the escrow account used at closing, as well as paying the straw buyers.   The co-conspirators compensated the Masvidals for their role in the scheme by sending kickback payments taken from the loan proceeds to the Masvidals’ shell corporations for every straw buyer identified.

According to admissions in court records, Martos was a former loan officer at a mortgage company known as State Lending who helped secure financing for straw buyers in exchange for kickbacks by procuring false employment documents and by including false information in buyers’ loan applications. Chacon and Ponce recruited straw buyers to purchase properties owned by co-conspirators in exchange for kickbacks paid from the sales proceeds.   Chacon also allowed a company that he controlled to be used as a false employer for the straw buyers.  Magarino accepted payments to act as one of Chacon’s straw buyers and recruited other straw buyers into the scheme.   For the properties in which Margarino acted as the straw buyer, he represented to the lender that he personally met his cash-to-close obligations when in fact he knowingly paid these costs with funds supplied by conspirators.

Many of the straw buyers defaulted on their loans after the conspirators stopped making their mortgage payments on their behalf, causing millions of dollars in losses to lenders.

On March 31, 2014, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo were indicted in the Southern District of Florida for their alleged participation in this scheme.   They have pleaded not guilty and trial is currently set for Sept. 8, 2014.   The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by HUD-OIG and FHFA-OIG.  The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.

Marubeni Corporation Sentenced for FCPA Violations

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Marubeni Corporation, a Japanese trading company involved in the handling of products and provision of services in a broad range of sectors around the world, including power generation, was sentenced today for its participation in a scheme to pay bribes to high-ranking government officials in Indonesia to secure a lucrative power project.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Acting U.S. Attorney Michael J. Gustafson of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

Marubeni was sentenced by U.S. District Judge Janet B. Arterton in the District of Connecticut.  Marubeni pleaded guilty on March 19, 2014, to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and seven counts of violating the FCPA.   The company signed a plea agreement in which it admitted its criminal conduct, agreed to maintain and implement an enhanced global anti-corruption compliance program and to cooperate with the department’s ongoing investigation, and agreed to pay an $88 million fine, which the court accepted in imposing the sentence.   The plea agreement cites Marubeni’s refusal to cooperate with the department’s investigation when given the opportunity to do so, its lack of an effective compliance and ethics program at the time of the offense, and its failure to timely remediate as several of the factors considered by the department in determining the resolution.

According to the court filings, Marubeni and its employees, together with others, paid bribes to officials in Indonesia – including a high-ranking member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia – in exchange for assistance in securing a $118 million contract, known as the Tarahan project, for the company and its consortium partner to provide power-related services for the citizens of Indonesia.   To conceal the bribes, Marubeni and its consortium partner retained two consultants purportedly to provide legitimate consulting services on behalf of the power company and its subsidiaries in connection with the Tarahan project.   The primary purpose for hiring the consultants, however, was to use the consultants to pay bribes to Indonesian officials.

Also according to court filings, the first consultant retained by Marubeni and its co-conspirators received hundreds of thousands of dollars in his U.S. bank account to be used to bribe the member of Parliament.  The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official.   E-mails between the co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.

As admitted in court documents, in the fall of 2003, Marubeni and its co-conspirators determined that the first consultant was not effectively bribing key officials at PLN.   As a result, Marubeni and its consortium partner decided to reduce the first consultant’s commission from three percent of the total contract value to one percent, and pay the remaining two percent to a second consultant who could more effectively bribe officials at PLN.   In an e-mail between two employees of Marubeni’s consortium partner, they discussed a meeting between Marubeni, an executive from the consortium partner, and the first consultant, stating that the consultant “committed to convince [the member of Parliament] that ‘one’ [percent] is enough.”   Marubeni and its co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials.

Frederic Pierucci, a current executive at Marubeni’s consortium partner, pleaded guilty on July 29, 2013, to one count of conspiring to violate the FCPA and one count of violating the FCPA.  David Rothschild, a former vice president of regional sales at the consortium partner, pleaded guilty on Nov. 2, 2012 to one count of conspiracy to violate the FCPA.   Lawrence Hoskins, a former senior vice president for the Asia region for the consortium partner, and William Pomponi, a former vice president of regional sales at the consortium partner, were charged in a second superseding indictment on July 30, 2013.

This case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Connecticut, Resident Agency of the FBI.   Significant assistance was provided by the Criminal Division’s Office of International Affairs.   In addition, the department greatly appreciates the significant cooperation provided by its law enforcement counterparts in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission), the Office of the Attorney General in Switzerland and the Serious Fraud Office in the United Kingdom.

The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.

Remarks about Massive Medicare Fraud Strike Force Takedown

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Remarks by Acting Assistant Attorney General David A. O’Neil for the Medicare Fraud Strike Force Takedown

WASHINGTON ~ Tuesday, May 13, 2014
In today’s nationwide takedown, scores of defendants were arrested across the country for engaging in health care fraud – to the tune of hundreds of millions of dollars in fraudulent bills to Medicare.   Among the defendants charged today were doctors, home health care providers, doctor’s assistants, pharmacy owners and medical supply company executives.   The crimes charged represent the face of health care fraud today – doctors billing for services that were never rendered, supply companies providing motorized wheelchairs that were never needed, recruiters paying kickbacks to get Medicare billing numbers of patients.   The fraud was rampant, it was brazen, and it permeated every part of the Medicare system.

But law enforcement is striking back.   In Brooklyn, Tampa, Detroit, Houston, Los Angeles, and right here in Miami, 90 defendants were charged today with having submitted over $260 million in fraudulent claims to Medicare.   Using cutting-edge, data-driven investigative techniques to find fraud, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars.   Overall, since its inception, the Department of Justice’s Medicare Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud.

Today’s defendants played a variety of key roles in the schemes alleged in this takedown.   But most strikingly, at the center of this takedown are the 27 medical professionals, including 16 physicians, who we allege breached the public trust and their professional duties of care, selling out their medical licenses for the lure of easy money.

For example, in Houston, we are announcing charges against five doctors employed by a health care clinic who were paid to provide $1.4 million worth of referrals for home health treatments that were not necessary and often not even provided.

In Los Angeles, we have charged a physician with false billings for medically unnecessary home health and medical equipment orders that cost Medicare over $23 million — including hundreds of expensive power wheelchairs for people who did not need or want them.

In some of these schemes, we saw doctors going to extravagant lengths to conceal their fraud.  In Detroit, we charged a doctor who allegedly conspired with his billing company to conceal his false billings through a complex web of sham partnerships with other health care companies.

In other schemes, we seized extravagant fruits of the crimes, including bank accounts, jewelry, and luxury vehicles tied to the scheme.

The foundation for the success of the Medicare Fraud Strike Force is data.   Cold, hard data.  Medicare recently made physician billing data public for the first time, which has prompted reporters and researchers to take a close look at who is billing Medicare for what.   Our agents and prosecutors have used those numbers and other real-time data for years.   We take that data, provided to us by CMS, and we use sophisticated analytic tools to identify billing patterns that stand out compared to other health care providers in their communities.   The result?   We have identified billions of dollars in Medicare fraud, spread across the country.   This real-time data helps us pinpoint new schemes as they arise so we can stay one step ahead of the fraudsters.

But it is not just data.   We are also using traditional law enforcement techniques used in other types of investigations, like those used in corruption or organized crime cases, to develop evidence.   Undercover officers, Title III wiretaps, hidden cameras, GPS trackers. And I also want to highlight the role that Medicare beneficiaries can play in rooting out fraud.   In many of the schemes charged today, powerful evidence of fraud came from Medicare beneficiaries finding out what was billed to Medicare using their numbers and coming forward to tell law enforcement what they were seeing.

We are investigating and prosecuting all levels of these schemes – from the recruiters to the medical professionals to the owners of these clinics.   We will bring to justice those who steal from Medicare.   With an overall conviction rate of 95%, the Medicare Fraud Strike Force has sent that message to over 1,400 Medicare fraudsters who have been convicted since the Strike Force began operations in 2007.   In fact, just yesterday, a jury convicted a Dallas doctor who took cash in exchange for falsely certifying that Medicare beneficiaries qualified for home health services.

Make no mistake, together with our partners in the U.S. Attorneys’ Offices, the FBI, and the Department of Health and Human Services, the Criminal Division of the Department of Justice will continue to aggressively investigate health care fraud using every tool available to us.   We are committed to the fight against Medicare fraud.   We will bring to justice those who loot our nation’s health care funds, and we will recover what has been stolen.

Thank you.

Massive Medicare Fraud Strike Force Takedown

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Medicare Fraud Strike Force Charges 90 Individuals for Approximately $260 Million in False Billing

27 Medical Professionals, Including 16 Doctors, Charged with Health Care Fraud
Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in six cities has resulted in charges against 90 individuals, including 27 doctors, nurses and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings.

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, FBI Assistant Director Joseph Campbell, U.S. Department of Health and Human Services (HHS) Inspector General Daniel R. Levinson and Deputy Administrator and Director of the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Shantanu Agrawal.

This coordinated takedown is the seventh national Medicare fraud takedown in Strike Force history.   The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion.  In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.   Almost 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other federal, state and local law enforcement agencies participated in the takedown.

“Medicare is a sacred compact with our nation’s seniors, and to protect it, we must remain aggressive in combating fraud,” said Attorney General Holder.   “This nationwide Medicare Strike Force takedown represents another important step forward in our ongoing fight to safeguard taxpayer resources and to ensure the integrity of essential health care programs.  Department of Justice will not tolerate these activities.  And we will continue working alongside the Department of Health and Human Services – as well as federal, state, and local partners – to use every appropriate tool and available resource to find, stop, and punish those who seek to take advantage of their fellow citizens.”

“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius.  “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars.  Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price.  We will protect a sacred trust and an earned guarantee.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering.   The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided.  In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit approximately $260 million in fraudulent billings.

“Today, across the nation, scores of defendants were arrested for engaging in hundreds of millions of dollars in health care fraud,” said Acting Assistant Attorney General O’Neil.  “Among the defendants charged were 27 medical professionals, including 16 doctors.   The crimes charged represent the face of health care fraud today – doctors billing for services that were never rendered, supply companies providing motorized wheelchairs that were never needed, recruiters paying kickbacks to get Medicare billing numbers of patients.  The fraud was rampant, it was brazen, and it permeated every part of the Medicare system.  But law enforcement continues to strike back.  Using cutting-edge, data-driven investigative techniques, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars.  Overall, since its inception, the Department of Justice’s Medicare Fraud Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud.  We are committed to using every tool at our disposal to prevent, deter, and prosecute health care fraud.”

“We all feel the effects of health care fraud,” said FBI Assistant Director Campbell.  “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need.  The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels.  But we need the public’s help.  Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers.  We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”

“ Today’s arrests demonstrate the effectiveness of our Strike Forces in combating Medicare and Medicaid fraud,” said HHS Inspector General Levinson.  “Through seamless teamwork, our agents and law enforcement partners bring lawbreakers to justice, protect beneficiaries and recover stolen taxpayer funds.”

“ Fraud can inflict real harm on Medicare beneficiaries and CMS is committed to working with our law enforcement partners to get criminals behind bars and out of the Medicare program as swiftly as possible,” said CMS Program Integrity Deputy Administrator Agrawal.  “Today’s actions represent further consequences for bad actors, many of whom CMS had already stopped paying, or even kicked out of the program. Fundamentally, this is about protecting the well-being of our beneficiaries and the investment of taxpayer dollars.”

In Miami, a total of 50 defendants were charged today and yesterday for their alleged participation in various fraud schemes involving approximately $65.5 million in false billings for home health care and mental health services, and pharmacy fraud.   In one case, two defendants were charged in connection with a $23 million pharmacy kickback and laundering scheme.   Court documents allege that the defendants solicited kickbacks from a pharmacy owner for Medicare beneficiary information, which was used to bill for drugs that were never dispensed.   The kickbacks were concealed as bi-weekly payments under a sham services contract and were laundered through shell entities owned by the defendants.

Eleven individuals were charged by the Houston Medicare Strike Force.   Five Houston-area physicians were charged with conspiring to bill Medicare for medically unnecessary home health services.   According to court documents, the defendant doctors were paid by two co-conspirators to sign off on home health care services that were not necessary and often never provided.

Eight defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $32 million.   In one case, a doctor was charged for causing almost $24 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including over 1,000 expensive power wheelchairs, and home health services that were not medically necessary and frequently not provided.

In Detroit, seven defendants were charged for their roles in fraud schemes involving approximately $30 million in false claims for medically unnecessary services, including home health services, psychotherapy and infusion therapy.   In one case, four individuals, including a doctor, were charged in a sophisticated $28 million fraud scheme, where the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided.  Court documents allege that when the physician’s billings raised red flags, he was put on payment review by Medicare.   He was allegedly able to continue his scheme and evade detection by continuing to bill using the billing information of other Medicare providers, sometimes without their knowledge.

In Tampa, Florida, seven individuals were charged in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions of dollars in physician services and tests that never occurred .  In one case, five individuals were charged for their alleged roles in a $12 million health care fraud and money laundering scheme that involved billing Medicare using names of beneficiaries from Miami-Dade County for services purportedly provided in Tampa area clinics, 280 miles away.  The defendants then allegedly laundered the proceeds through a number of transactions involving several shell entities.

In Brooklyn, New York, the Strike Force announced an indictment against Syed Imran Ahmed, M.D., in connection with his alleged $85 million scheme involving billings for surgeries that never occurred; Dr. Ahmed had been arrested last month and charged by complaint.   Dr. Ahmed has charged with health care fraud and making false statements.   In addition, the Brooklyn Strike Force charged six other individuals, including a physician and two billers who allegedly concocted a $14.4 million scheme in which they recruited elderly Medicare beneficiaries and billed Medicare for medically unnecessary vitamin infusions, diagnostic tests and physical and occupational therapy supposedly provided to these patients.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

A complaint or indictment is merely an accusation, and defendants are presumed innocent unless and until proven guilty.

Former Chief Executive Officer of Oil Services Company Indicted in New Jersey on Foreign Bribery and Kickback Charges

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The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – was indicted today for his role in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA) and to defraud PetroTiger.

Acting Principal Deputy Assistant Attorney General Marshall Miller of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement.

Joseph Sigelman, 43, of Miami and the Philippines, was indicted today by a federal grand jury in the District of New Jersey and charged with conspiracy to violate the FCPA and to commit wire fraud, conspiracy to launder money, and substantive FCPA and money laundering violations.    Gregory Weisman, 42, of Moorestown, New Jersey, the former general counsel of PetroTiger, pleaded guilty on Nov. 8, 2013, to conspiracy to violate the FCPA and to commit wire fraud.    Sigelman’s co-CEO, Knut Hammarskjold, 42, of Greenville, South Carolina, pleaded guilty to the same charge on Feb. 18, 2014.

According to court records, Sigelman and others allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million.    To conceal the bribes, they first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform.  Sigelman and Hammarskjold provided Weisman invoices, including her bank account information.    The conspirators made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed.    Sigelman and his conspirators then took steps to conceal the bribe payments from PetroTiger’s board members.

In addition, court documents allege that Sigelman and others attempted to secure kickback payments while negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition.    In exchange for negotiating more favorable terms for the owners of the target company, two of the owners agreed to kick back to the conspirators a portion of the increased purchase price.    To conceal the kickback payments, Sigelman and others had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments and used the code name “Manila Split” to refer to the payments amongst themselves.
Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013.    Hammarskjold was arrested Nov. 20, 2013, at Newark Liberty International Airport.    Sigelman was arrested on Jan. 3, 2014, in the Philippines.    The charges against Sigelman, Hammarskjold and Weisman were unsealed on Jan. 6, 2014.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which cooperated with the department’s investigation.    The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter.    The department also thanks the Republic of the Philippines, including the Bureau of Immigration, and the Republic of Panama for their assistance in this matter.    Significant assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the FBI’s Newark Division.    The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Zach Intrater of the District of New Jersey.

Detroit-Area Physical Therapist, Physical Therapy Assistant and Unlicensed Doctor Convicted in $14.9 Million Medicare Fraud Scheme

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A federal jury in Detroit today convicted a physical therapist, physical therapy assistant and unlicensed doctor for their participation in a nearly $15 million Medicare fraud scheme.

Acting Assistant Attorney General David A. O’Neil 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 and Special Agent in Charge Lamont Pugh III of the Detroit Office of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations made the announcement.

Shahzad Mirza, 43, a physical therapist; Jigar Patel, 30, a physical therapy assistant; and Srinivas Reddy, 38, a foreign medical school graduate without a license to practice medicine were each found guilty of one count of conspiracy to commit health care fraud in connection with a scheme perpetrated from approximately July 2008 through September 2011 at Detroit area companies Physicians Choice Home Health Care LLC (Physicians Choice), Quantum Home Care Inc. (Quantum), First Care Home Health Care LLC (First Care), Moonlite Home Care Inc. (Moonlite) and Phoenix Visiting Physicians.  In addition, Mirza and Patel were each found guilty of two counts of health care fraud in connection with the submission of false claims to Medicare for home health services, and Reddy was found guilty of three counts of health care fraud in connection with the submission of false claims to Medicare for home health services and physician home visits.  Patel was found guilty of one count of money laundering in connection with his laundering of the proceeds of the fraud through his company MI Healthcare Staffing.

The defendants were charged in a superseding indictment returned Feb. 6, 2012.  Three other individuals charged in the indictment remain fugitives.

According to evidence presented at trial, Physicians Choice, Quantum, First Care and Moonlite operated a fraudulent scheme to bill Medicare for home health care services that were never provided.  The home health care companies paid kickbacks to recruiters who in turn paid Medicare beneficiaries cash and promised them access to narcotic prescriptions.  The conspirators created the company Phoenix Visiting Physicians, which employed unlicensed individuals, including Reddy, to visit patients and provide them with narcotic prescriptions as well as obtain the information necessary to fill out paperwork to refer them for medically unnecessary home health care services.

Evidence presented at trial showed that beneficiaries pre-signed medical paperwork that was provided to Patel and other physical therapist assistants to fill in with false information purporting to show that the care was provided, when it was not.  Patel, registered physical therapist Mirza and others would sign this paperwork as though they had provided services.  In the course of the conspiracy, Patel incorporated his own staffing company, MI Healthcare Staffing, through which he laundered proceeds of the fraud from home health care companies and a shell company owned and operated by his co-conspirators.

Physicians Choice and the related companies were paid nearly $15 million in the course of the conspiracy.

Sentencing for all three defendants has not yet been scheduled.

The investigation was led by the FBI and HHS-OIG, and was brought by the Medicare Fraud Strike Force, a joint effort of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  The case was prosecuted by Assistant Chief Catherine K. Dick and Trial Attorneys Matthew C. Thuesen and Rohan A. Virginkar of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.