Category Archives: Criminal Division

RBS Securities Japan Ltd Sentenced for Manipulation of Yen Libor

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RBS Securities Japan Limited, a wholly owned subsidiary of The Royal Bank of Scotland plc (RBS) that engages in investment banking operations with its principal place of business in Tokyo, Japan, was sentenced today for its role in manipulating the Japanese Yen London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
RBS Securities Japan was sentenced by U.S. District Judge Michael P. Shea in the District of Connecticut.    RBS Securities Japan pleaded guilty on April 12, 2013, to one count of wire fraud for its role in manipulating Yen LIBOR benchmark interest rates.    RBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a $50 million fine, which the court accepted in imposing sentence.    In addition, RBS plc, the Edinburgh, Scotland-based parent company of RBS Securities Japan, entered into a deferred prosecution agreement (DPA) with the government requiring RBS plc to pay an additional $100 million penalty, to admit and accept responsibility for its misconduct as set forth in an extensive statement of facts and to continue cooperating with the Justice Department in its ongoing investigation.    The DPA reflects RBS plc’s cooperation in disclosing LIBOR misconduct within the financial institution and recognizes the significant remedial measures undertaken by new management to enhance internal controls.
Together with approximately $462 million in regulatory penalties and disgorgement – $325 million as a result of a Commodity Futures Trading Commission (CFTC) action and approximately $137 million as a result of a U.K. Financial Conduct Authority (FCA) action – the Justice Department’s criminal penalties bring the total amount of the resolution with RBS and RBS Securities Japan to approximately $612 million.
“Today’s sentencing of RBS is an important reminder of the significant consequences facing banks that deliberately manipulate financial benchmark rates, and it represents one of the numerous enforcement actions taken by the Justice Department in our ongoing LIBOR investigation” said Acting Assistant Attorney General Raman. “As a result of the department’s investigation, we have charged five individuals and secured admissions of criminal wrongdoing by four major financial institutions.  Our enforcement actions have had a lasting impact on the global banking system, and we intend to continue to vigorously investigate and prosecute the manipulation of this cornerstone benchmark rate.”
“By colluding to manipulate the Yen LIBOR benchmark interest rate, RBS Securities Japan reaped higher profits for itself at the expense of unknowing counterparties, and in the process undermined the integrity of a major benchmark rate used in financial transactions throughout the world,” said Deputy Assistant Attorney General Snyder.  “Today’s sentence, in conjunction with the department’s agreement with parent company RBS, demonstrates the Antitrust Division’s commitment to prosecuting these types of far-reaching and sophisticated conspiracies.”
“The manipulation of LIBOR impacts financial products the world over, and erodes the integrity of the financial markets,” said Assistant Director in Charge Parlave.    “Without a level playing field in our financial marketplace, banks and investors do not have a threshold to which they can measure their hard work.    I commend the Special Agents, forensic accountants and analysts, as well as the prosecutors, for the significant time and resources they committed to investigating this case.”
According to court documents, LIBOR is an average interest rate, calculated based upon 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.
LIBOR is published by the British Bankers’ Association (BBA), a trade association based in London.    At the time relevant to the conduct in the criminal information, 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 is the result of a calculation based upon submissions from a panel of banks for that currency (the Contributor Panel) selected by the BBA.
According to the plea agreement, at various times from at least 2006 through 2010, certain RBS Securities Japan Yen derivatives traders engaged in efforts to move LIBOR in a direction favorable to their trading positions, defrauding RBS counterparties who were unaware of the manipulation affecting financial products referencing Yen LIBOR.    The scheme included efforts to manipulate more than one hundred Yen LIBOR submissions in a manner favorable to RBS Securities Japan’s trading positions.    Certain RBS Securities Japan Yen derivatives traders, including a manager, engaged in this conduct in order to benefit their trading positions and thereby increase their profits and decrease their losses.
The prosecution of RBS Securities Japan is being handled by Deputy Chief Patrick Stokes and Trial Attorney Gary Winters of the Criminal Division’s Fraud Section, and New York Office Assistant Chief Elizabeth Prewitt and Trial Attorneys Eric Schleef and Richard Powers of the Antitrust Division.    Deputy Chiefs Daniel Braun and William Stellmach and Trial Attorney Alex Berlin of the Criminal Division’s Fraud Section, Trial Attorneys Daniel Tracer and Kristina Srica of the Antitrust Division, Jeremy Verlinda of the Antitrust Division’s Economic Analysis Group, Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut, and the Criminal Division’s Office of International Affairs have also provided valuable assistance in this matter.    The investigation is being conducted by special agents, forensic accountants and intelligence analysts of the FBI’s Washington Field Office.
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.   For more information about the task force visit: www.stopfraud.gov .

Patient Recruiter and Therapy Staffing Company Owner Sentenced for Roles in $7 Million Health Care Fraud Scheme

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A patient recruiter and a therapy staffing company owner were sentenced today to serve 50 months and 46 months in prison, respectively, for their participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Ivan Alejo, 48, and Hugo Morales, 37, both of Miami, were sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida.   In addition to their prison terms, Alejo and Morales were both sentenced to serve three years of supervised release.   Alejo and Morales were also ordered to pay jointly and severally with their co-defendants $6,928,931 and $1,958,279, respectively, in restitution.
In August 2013, Alejo and Morales pleaded guilty before Judge Martinez to conspiracy to commit health care fraud.
Alejo worked as a patient recruiter at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.   Morales owned a therapy staffing company, Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.
According to court documents, co-conspirators of Alejo and Morales operated 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 not provided.
Alejo’s primary role in the scheme at Anna Nursing involved negotiating and paying kickbacks and bribes, interacting with patient recruiters and assisting in the submission of fraudulent claims to the Medicare program.   Alejo and his co-conspirators would pay kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided.   Alejo and his co-conspirators would pay kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation.   Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Alejo knew was in violation of federal criminal laws.
Morales’s primary role in the scheme at Anna Nursing involved operating Professionals Therapy, where he and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary.   Morales knew the documents he and others from Professionals Therapy falsified were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing, which Morales knew was in violation of federal criminal laws.
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 not medically necessary and/or 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 was prosecuted by Trial Attorney 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 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Unlicensed Miami Clinic Nurse Convicted at Trial and Sentenced for Role in $11 Million HIV Infusion Fraud Scheme

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An unlicensed nurse who fled after being charged in 2008 and was captured this year was sentenced today to serve 108 months in prison for her role in a fraud scheme that resulted in more than $11 million in fraudulent claims to Medicare.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Carmen Gonzalez, 39, of Cape Coral, Fla.,  worked at St. Jude Rehabilitation Center, a fraudulent HIV infusion clinic in Miami, that was controlled by her cousins, Jose, Carlos and Luis Benitez, aka the Benitez Brothers.   Gonzalez was also sentenced for failing to appear at a June 2008 bond hearing.    The sentencing follows her conviction at trial to one count of conspiracy to defraud the United States to cause the submission of false claims and to pay health care kickbacks and one count of conspiracy to commit health care fraud.    Gonzalez had previously pleaded guilty to a separate charge of failure to appear.
Gonzalez was sentenced by Chief United States District Judge Federico A. Moreno in Miami, who also sentenced her to  serve three years of supervised release.
Evidence at trial revealed that Gonzalez was an unlicensed nurse who paid thousands of dollars over a five month period to HIV beneficiaries so that St. Jude could submit millions of dollars in false and fraudulent claims to Medicare.   Gonzalez knew that St. Jude billed millions of dollars to Medicare for expensive HIV infusion therapy that was neither medically necessary nor provided.    Gonzalez fabricated patient medical records to facilitate and conceal the fraud, and these fabricated records were utilized to support the false and fraudulent claims submitted to Medicare on behalf of St. Jude.
On Oct. 17, 2013, Gonzalez pleaded guilty to knowingly and willfully failing to appear at a June 2008 hearing as directed by Judge Moreno.    Court documents reveal that Gonzalez was released on bond pending trial, but she knowingly and willfully failed to appear as directed by the court to a June 2008 hearing.
In January 2013, Gonzalez’s father, Enrique Gonzalez, was sentenced to 70 months in prison by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida for his role in separate health care fraud conspiracy.
The Benitez Brothers remain fugitives.    Anyone with information regarding their whereabouts is urged to contact HHS-OIG at 202-619-0088.
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 was prosecuted by Trial Attorneys Allan Medina and Nathan Dimock 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 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, 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 .

Army National Guard Colonel and Sergeant Indicted for Allegedly Defrauding Recruiting Assistance Program

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A retired colonel and a sergeant in the Army National Guard have been charged in a nine-count indictment in Albuquerque, N.M., for allegedly defrauding the National Guard Bureau and its contractor of approximately $12,000 by fraudulently obtaining recruiting bonuses, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Retired Colonel Isaac Alvarado, 74, of Albuquerque, N.M. was charged with one count of conspiracy to commit wire fraud, four counts of wire fraud and four counts of aggravated identity theft in an indictment that was filed this week in the U.S. District Court for the District of New Mexico.    Sergeant First Class Travis Nau, 40, also of Albuquerque, N.M., was charged with one count of conspiracy to commit wire fraud, three counts of wire fraud and three counts of aggravated identity theft.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. to administer the Guard Recruiting Assistance Program (G-RAP).    The G-RAP was a recruiting program that was designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard.    Through this program, a participating soldier could receive bonus payments for referring another individual to join.    Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.    To participate in the program, soldiers were required to create online recruiting assistant accounts.    The rules prohibited Army National Guard recruiters from participating in the G-RAP.
According to court documents, between approximately November 2007 and February 2012, Alvarado participated as a recruiting assistant in the G-RAP.    Nau, who worked in a recruiting office and is Alvarado’s son-in-law, allegedly provided Alvarado with the names and Social Security numbers of potential soldiers.    This enabled Alvarado to claim that he was responsible for referring these potential soldiers to join the military, when in fact he did not recruit any of them.    In addition, Nau advised at least two potential soldiers to falsely report that Alvarado had assisted in their recruitment even though he had not.    As a result, Alvarado allegedly received a total of approximately $12,000 in fraudulent recruiting bonuses.
An indictment is merely a charge and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, the defendants face up to five years in prison on the conspiracy count.    Each wire fraud count carries a maximum penalty of 20 years in prison.    Each count of aggravated identity theft carries a mandatory two-year sentence in prison.    Each charged count carries a maximum fine of up to $250,000, or twice the gross gain.
The case is being investigated by special agents from the Fort Bliss Army Criminal Investigation Command.    The case is being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section.

ADM Subsidiary Pleads Guilty to Conspiracy to Violate the Foreign Corrupt Practices Act

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A subsidiary of Archer Daniels Midland Company (ADM) pleaded guilty today and has agreed to pay more than $17 million in criminal fines to resolve charges that it paid bribes through vendors to Ukrainian government officials to obtain value-added tax (VAT) refunds, in violation of the Foreign Corrupt Practices Act (FCPA).
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney James A. Lewis of the Central District of Illinois and Special Agent in Charge David A. Ford of the FBI’s Springfield Division made the announcement.
“As today’s guilty plea shows, paying bribes to reap business benefits corrupts markets and undermines the rule of law,” said Acting Assistant Attorney General Raman.  “ADM’s subsidiaries sought to gain a tax benefit by bribing government officials, and then attempted to deliberately conceal their conduct by funneling payments through local vendors.  ADM, in turn, failed to implement sufficient policies and procedures to prevent the bribe payments, although ultimately ADM disclosed the conduct, cooperated with the government, and instituted extensive remedial efforts.  Today’s corporate guilty plea demonstrates that combating bribery is and will remain a mainstay of the Criminal Division’s mission.  We are committed to working closely with our foreign and domestic law enforcement partners to fight global corruption.”
Alfred C. Toepfer International Ukraine Ltd. (ACTI Ukraine), a subsidiary of ADM, pleaded guilty in the Central District of Illinois to one count of conspiracy to violate the anti-bribery provisions of the FCPA and agreed to pay $17.8 million in criminal fines.    The Department of Justice also entered into a non-prosecution agreement (NPA) with ADM in connection with the company’s failure to implement an adequate system of internal financial controls to address the making of improper payments both in Ukraine and by an ADM joint venture in Venezuela.
In a parallel action, ADM consented with the U.S. Securities and Exchange Commission (SEC)  to a proposed final judgment that orders the company to pay roughly $36.5 million in disgorgement and prejudgment interest, bringing the total amount of U.S. criminal and regulatory penalties to be paid by ADM and its subsidiary to more than $54 million.
According to the charges, from 2002 to 2008, ACTI Ukraine, a trader and seller of commodities based in the Ukraine, together with Alfred C. Toepfer International G.m.b.H. (ACTI Hamburg), another subsidiary of ADM, paid third-party vendors to pass on bribes to Ukrainian government officials to obtain VAT refunds.    The charges allege that, in total, ACTI Ukraine and ACTI Hamburg paid roughly $22 million to two vendors, nearly all of which was to be passed on to Ukrainian government officials to obtain over $100 million in VAT refunds, resulting in a benefit to ACTI Ukraine and ACTI Hamburg of roughly $41 million.
According to the NPA with ADM, a number of concerns were expressed to ADM executives, including an e-mail calling into question potentially illegal “donations” by ACTI Ukraine and ACTI Hamburg to recover the VAT refunds, yet nonetheless failed to implement sufficient anti-bribery compliance policies and procedures to prevent corrupt payments.
In addition to the monetary penalty, ADM and ACTI Ukraine also agreed to cooperate with the department, to periodically report the companies’ compliance efforts, and to continue implementing enhanced compliance programs and internal controls designed to prevent and detect FCPA violations.
The agreements acknowledge ADM’s timely, voluntary and thorough disclosure of the conduct; ADM’s extensive cooperation with the department, including conducting a world-wide risk assessment and corresponding global internal investigation, making numerous presentations to the department on the status and findings of the internal investigation, voluntarily making current and former employees available for interviews, and compiling relevant documents by category for the department; and ADM’s early and extensive remedial efforts.
The department acknowledges and expresses its appreciation for the cooperation and assistance of German law enforcement authorities, which, in a parallel investigation, reached a resolution with ACTI Hamburg regarding its role in the bribery scheme.
In addition, the department acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.
This ongoing investigation is being conducted by the FBI.    The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eugene Miller of the Central District of Illinois, with significant assistance from the Criminal Division’s Office of International Affairs.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .

NCIS Agent Pleads Guilty in International Navy Bribery Scandal

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A special agent with the Naval Criminal Investigative Service (NCIS) pleaded guilty today to participating in a massive international fraud and bribery scheme, admitting he shared with a foreign Navy contractor confidential information about ongoing criminal probes into the contractor’s billing practices in exchange for prostitutes, cash and luxury travel.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew Traver of the Naval Criminal Investigative Service, and Deputy Inspector General for Investigations James B. Burch of the U.S. Department of Defense Office of the Inspector General made the announcement after the plea was accepted by U.S. Magistrate Judge Jan Adler of the Southern District of California.    The plea is subject to acceptance by U.S. District Judge Janis Sammartino.   Sentencing is set for March 9, 2014, before Judge Sammartino.
Supervisory Special Agent John Bertrand Beliveau Jr., 44, pleaded guilty to conspiracy to commit bribery, which carries a maximum penalty of five years in prison, and bribery, which carries a maximum penalty of 15 years in prison.    In his plea agreement, Beliveau acknowledged that he regularly searched confidential NCIS databases for reports of investigations related to the contractor, Leonard Glenn Francis, chief executive of Singapore-based Glenn Defense Marine Asia (GDMA).    Beliveau admitted that, over the course of years, he helped Francis avoid multiple criminal investigations by providing copies of these reports plus advice and counsel on how to respond to, stall and thwart the NCIS probes.    This duplicity began while Beliveau was stationed in Singapore and continued for more than a year after Beliveau returned to the NCIS office in Quantico, Va.
Beliveau is one of five Navy officials and civilian contractors who are implicated so far in the widening corruption case involving hundreds of millions of dollars in Navy contracts.    In addition to Beliveau and Francis, also charged are U.S. Navy Commanders Michael Vannak Khem Misiewicz and Jose Luis Sanchez and GDMA executive Alex Wisidagama.    The charges against Francis, Misiewicz, Sanchez and Wisidagama are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
“Today, John Beliveau has admitted to accepting lavish gifts in exchange for revealing sensitive law enforcement information to a primary target of this massive bribery investigation,” said Acting Assistant Attorney General Raman.  “For nearly two years, Beliveau deliberately leaked the names of cooperating witnesses, reports of witness interviews, and plans for future investigative steps.  Through his corrupt conduct, Beliveau helped the target of the investigation evade the reach of law enforcement, and cost the U.S. Navy millions of dollars.  Thanks to the Navy’s extensive cooperation and assistance, and the hard work of the NCIS and DCIS agents assigned to this ongoing investigation, we have now been able to hold him to account.”
“Instead of doing his job, John Beliveau was leaking confidential details of investigations to the target himself,” said U.S. Attorney Duffy. “This is an audacious violation of law for a decorated federal agent who valued personal pleasure over loyalty to his colleagues, the U.S. Navy and ultimately his own country. His admissions are a troubling reminder that corruption may exist even among those entrusted with protecting our citizens and upholding our laws.”
“John Beliveau’s reprehensible actions, providing sensitive information to the targets of ongoing fraud investigations and accepting bribes, tragically tarnished his NCIS badge,” said NCIS Director Traver.   “Nevertheless, the tireless and dedicated work of NCIS and DCIS effectively brought this to a halt, and these agencies continue to vigilantly protect Department of Navy personnel and resources.”
“Today’s guilty plea of former NCIS Special Agent John Beliveau is part of an ongoing joint effort by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service and our enforcement partners to identify, investigate and bring to justice those seeking to enrich themselves at the expense of U.S. taxpayers,” said Deputy Inspector General for Investigations Burch.    “While the conduct of a vast majority of those in the U.S. Navy and law enforcement community is beyond reproach, we will vigorously pursue those individuals who put the safety and security of U.S. Navy personnel at risk.   The conduct of former Special Agent Beliveau is reprehensible and today’s guilty plea demonstrates the Defense Criminal Investigative Service will continue to pursue allegations of fraud and corruption that puts the Warfighter at risk.”
Among the law enforcement-sensitive information provided by Beliveau to Francis were the identities of the subjects of the investigations; information about witnesses, including identifying information about cooperating witnesses and their testimony; the particular aspects of GDMA’s billings that were of concern to the investigations; the fact that the investigations had obtained numerous email accounts and the identities of those accounts; the reports to prosecutors and their interactions with the investigations; and planned future investigative activities.
According to information provided in court, when authorities became aware of Beliveau’s duplicity, they began tracking Beliveau’s efforts to misappropriate information from the criminal investigation and then provide it to Francis.   Soon after that, Francis came to San Diego from Singapore for a meeting with Navy brass, where Francis was arrested.   Beliveau was taken into custody the same day in Virginia.
All told, Beliveau leaked information to Francis about criminal investigations into GDMA’s overbilling scheme that cost the Navy at least $7 million in fraudulent overpayments for “husbanding” services such as food, fuel and other supplies and services to the ships, according to the plea agreement.
In return for leaks of internal NCIS information and advice from Beliveau, Francis allegedly provided the agent with envelopes containing cash on at least five occasions, along with luxury travel from Virginia to Singapore, the Philippines and Thailand, the plea agreement stated.   On many occasions, beginning in 2008 and continuing through 2012 while Beliveau was posted in Singapore, Francis allegedly provided the NCIS agent with prostitutes, lavish dinners, entertainment and alcohol at high-end nightclubs.   The tab for each of these outings routinely ran into the thousands of dollars.
According to court records, in April of 2012 Beliveau complained to Francis, saying, “You give whores more money than you give me,” and, “I can be your best friend or worst enemy.”
Court records state that Beliveau and Francis tried to hide their illicit activity by employing techniques that Beliveau had learned from his specialized training as a law enforcement agent.   These steps included deleting emails, changing email accounts, creating covert email accounts shared by Beliveau and Francis, not transferring funds through the normal banking channels and using Skype chat and calls to transmit information.
This ongoing investigation is being conducted by NCIS, the Defense Criminal Investigative Service (DCIS) and the Defense Contract Audit Agency.   Significant assistance was provided by the Drug Enforcement Administration, Homeland Security Investigations and the DOJ Criminal Division’s Office of International Affairs, the Royal Thai Police and the Corrupt Practices Investigation Bureau Singapore.   This case is being prosecuted by Assistant U.S. Attorneys Mark Pletcher and Robert Huie of the Southern District of California and Director of Procurement Fraud Catherine Votaw and Trial Attorney Brian Young of the Criminal Division’s Fraud Section, as well as Special Trial Attorney Wade Weems on detail to the Fraud Section from the Special Inspector General for Afghan Reconstruction.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tipline at www.ncis.navy.mil or the DoD Hotline at www.dodig.mil/hotline , or call (800) 424-9098.

 

Houston Doctor Indicted for Her Alleged Role in $158 Million Medicare Fraud Scheme

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A Houston doctor has been arrested on charges related to her alleged participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Mike Fields of the Dallas Regional Office of the Department of Health and Human Services Office of the Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Sharon Iglehart, 56, of Houston, was charged in an indictment, filed in the Southern District of Texas and unsealed today, with one count of conspiracy to commit health care fraud and four counts of health care fraud.   If convicted, Iglehart faces a maximum penalty of 10 years in prison on each count.   Iglehart was arrested on Dec. 16, 2013, and made her initial appearance in federal court in Houston today.
According to the indictment, Iglehart allegedly participated in a scheme to defraud Medicare beginning in 2005 and continuing until May 2012.  The defendant allegedly caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through a Houston hospital.  A PHP is a form of intensive outpatient treatment for severe mental illness.
The indictment alleges that the defendant and her co-conspirators submitted or caused to be submitted approximately $158 million in claims to Medicare for PHP services purportedly provided by the hospital, when in fact the PHP services were medically unnecessary or never provided.
In February 2012, Mohammad Khan, an assistant administrator at the hospital who managed many of the hospital’s PHPs, was indicted for his role in the scheme.   Khan pleaded guilty to one count of conspiracy to commit health care fraud, one count of conspiracy to pay illegal kickbacks, and five counts of paying illegal kickbacks.   Khan has not yet been sentenced.
In October 2012, Earnest Gibson III, the administrator of the hospital, along with Earnest Gibson IV, William Bullock III, Robert Ferguson, Regina Askew, Leslie Clark and Robert Crane, were indicted for their roles in the scheme.   Leslie Clark pleaded guilty to one count of conspiracy to pay and receive illegal kickbacks.   Clark has not yet been sentenced.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, HHS-OIG, MFCU, Internal Revenue Service’s Houston Field Office, the Chicago Field Office of the Railroad Retirement Board’s Office of Inspector General, and the Office of Personnel Management’s Office of Inspector General 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 Texas.   The case is being prosecuted by Assistant Chief Laura M.K. Cordova 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 more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

In Search of Effective Ethics & Compliance Programs; By Professor Maurice Stucke, GeyerGorey LLP

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Maurice E. Stucke

University of Tennessee College of Law
December 10, 2013


Abstract: 

The U.S. Sentencing Commission’s Organizational Guidelines for over twenty years have offered firms a significant financial incentive to develop an ethical organizational culture. Nonetheless, corporate crime persists. Too many ethics programs remain ineffective.As this Article explores, the Guidelines’ current approach is not working. The evidence, including sentencing data over the past twenty years, reveals that few firms have effective ethics and compliance programs. Nor is there much hope that the Guidelines’ incentive will induce companies, after the economic crisis, to become more ethical.The problem is not attributable to several assumptions underlying the Guidelines. The empirical research, while still developing, suggests that compliance efforts can be effective, and that effective compliance is attainable. Instead, this Article explores how the Guidelines’ extrinsic, incentive-based approach to compliance does not cure, and likely contributes to, the problem.

 

 

Miami Home Health Company Owner and Recruiter Sentenced for Role in $48 Million Health Care Fraud Scheme

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A patient recruiter of a Miami health care company was sentenced to serve 108 months in prison today for his participation in a $48 million home health Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Emilio Amador, 46, was sentenced by U.S. District Judge Federico A. Moreno in the Southern District of Florida.   In addition to his prison term, Amador was sentenced to serve three years of supervised release and ordered to pay $24 million in restitution, jointly and severally with co-defendants.
In September 2013, Amador pleaded guilty before Judge Moreno to one count of conspiring to receive health care kickbacks and two counts of receiving health care kickbacks.
According to court documents, Amador was a patient recruiter who worked for Caring Nurse Home Health Care Corp., a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.
From approximately January 2006 through June 2011, Amador would recruit patients for Caring Nurse, and in doing so would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse in return for allowing Caring Nurse to bill the Medicare program on behalf of the patients Amador had recruited.   These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
According to court documents, Amador also pleaded guilty to his involvement with fraudulent billings for Nation’s Best Care Home Health Corp. as relevant conduct.   Amador was the owner, operator and president of Nation’s Best.   The fraudulent billings for Nation’s Best totaled approximately $30 million.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez, 44, and Raymond Aday, 49, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively.  The sentencings followed their December 2012 guilty pleas to one count each of conspiracy to commit health care fraud charged in an October 2012 indictment, which alleged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided.  Medicare paid approximately $33 million for those fraudulent claims.
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 Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely billed the Medicare program for more than $5.5 billion.   In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Three Patient Recruiters for Miami Home Health Company Plead Guilty for Roles in $48 Million Fraud Scheme

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Three patient recruiters for a Miami health care company pleaded guilty today for their participation in a $48 million home health Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Miami residents Marianela Martinez, 45; Omar Hernandez, 48; and Celia Santovenia, 49, pleaded guilty before U.S. District Judge Donald L. Graham in the Southern District of Florida to one count each of conspiracy to receive health care kickbacks.   Sentencing has been scheduled for Feb. 11, 2014.
According to court documents, Martinez, Hernandez and Santovenia were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Santovenia also worked for Good Quality Home Health Care Inc.   Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.
From approximately January 2006 through June 2011, the defendants would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients.   These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez, 44, and Raymond Aday, 49, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively.  The sentencings followed their December 2012 guilty pleas to one count each of conspiracy to commit health care fraud charged in an October 2012 indictment, which alleged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided.  Medicare paid approximately $33 million for those fraudulent claims.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under 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 Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely billed the Medicare program for more than $5.5 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.