Category Archives: Department of Justice

Three Miami-Area Home Health Agency Owners Charged for Role in Health Care Fraud Scheme

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Wednesday, March 14, 2018

Three Miami, Florida-area home health agency owners were charged in an indictment unsealed yesterday for their alleged participation in a health care fraud scheme involving a now-defunct home health agency in Miami.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge Robert F. Lasky of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Ailin Consuelo Rodriguez Sigler, 39; Zoila C. Rios, 57; and Tomas A. Rodriguez, 66, were charged in an indictment filed in the Southern District of Florida with one count of conspiracy to commit health care fraud and wire fraud, and three counts of health care fraud.  Sigler, Rios and Rodriguez were arrested yesterday morning and appeared yesterday afternoon before U.S. Magistrate Judge Alicia M. Otazo-Reyes.

The indictment alleges that from approximately January 2011 through November 2014, Sigler, Rios and Rodriguez, owners of Florida Patient Care Corp. of Miami, Florida, were involved in a fraudulent scheme whereby they agreed with the owners and operators of multiple home health therapy staffing companies and others to bill Medicare for services that were medically unnecessary, not eligible for Medicare reimbursement, or were never provided.

According to the indictment, Sigler, Rios, Rodriguez and their co-conspirators allegedly caused the submission of false and fraudulent claims to Medicare for home health therapy care, and physical and occupational therapy services purportedly provided by Florida Patient Care Corp.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  Fraud Section Trial Attorney Yisel Valdes is prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Japanese Fiber Manufacturer to Pay $66 Million for Alleged False Claims Related to Defective Bullet Proof Vests

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Thursday, March 15, 2018

Toyobo Co. Ltd. of Japan and its American subsidiary, Toyobo U.S.A. Inc., f/k/a Toyobo America Inc. (collectively, Toyobo), have agreed to pay $66 million to resolve claims under the False Claims Act that they sold defective Zylon fiber used in bullet proof vests that the United States purchased for federal, state, local, and tribal law enforcement agencies, the Justice Department announced today.

The settlement resolves allegations that between at least 2001 and 2005, Toyobo, the sole manufacturer of Zylon fiber, knew that Zylon degraded quickly in normal heat and humidity, and that this degradation rendered bullet proof vests containing Zylon unfit for use.  The United States further alleged that Toyobo nonetheless actively marketed Zylon fiber for bullet proof vests, published misleading degradation data that understated the degradation problem, and when Second Chance Body Armor recalled some of its Zylon-containing vests in late 2003, started a public relations campaign designed to influence other body armor manufacturers to keep selling Zylon-containing vests.  According to the United States, Toyobo’s actions delayed by several years the government’s efforts to determine the true extent of Zylon degradation.  Finally, in August 2005, the National Institute of Justice (NIJ) completed a study of Zylon-containing vests and found that more than 50 percent of used vests could not stop bullets that they had been certified to stop.  Thereafter, the NIJ decertified all Zylon-containing vests.

“Bulletproof vests are sometimes what stands between a police officer and death,” said Attorney General Jeff Sessions.  “Selling material for these vests that one knows to be defective is dishonest, and risks the lives of the men and women who serve to protect us. The Department of Justice is committed to the protection of our law enforcement officers, and today’s resolution sends another clear message that we will not tolerate those who put our first responders in harm’s way.”

“This settlement sends a strong message to suppliers of products to the federal government that they must be truthful in their claims, particularly with regard to health and safety,” said Carol Fortine Ochoa, Inspector General of the General Services Administration.

This settlement is part of a larger investigation undertaken by the Civil Division of the body armor industry’s use of Zylon in body armor.  The Civil Division previously recovered more than $66 million from 16 entities involved in the manufacture, distribution or sale of Zylon vests, including body armor manufacturers, weavers, international trading companies, and five individuals.  The settlement announced today brings the Division’s overall recoveries to over $132 million.  The United States still has lawsuits pending against Richard Davis, the former chief executive of Second Chance, and Honeywell International Inc.

The settlement announced today resolves allegations filed in two lawsuits, one brought by the United States and the other filed by Aaron Westrick, Ph.D., a law enforcement officer formerly employed by Second Chance who is now a Criminal Justice professor at Lake Superior University.  Dr. Westrick’s lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The Act also allows the government to intervene and take over the action, as it did in 2005 in Dr. Westrick’s case.  Dr. Westrick will receive $5,775,000.

This case was handled by the Justice Department’s Civil Division, along with the General Services Administration, Office of the Inspector General; the Department of Commerce, Office of Inspector General; the Defense Criminal Investigative Service; the U.S. Army Criminal Investigative Command; the Department of the Treasury, Office of Inspector General for Tax Administration; the Air Force Office of Special Investigations; the Department of Energy, Office of the Inspector General; and the Defense Contracting Audit Agency.

The claims settled by this agreement are allegations only; there has been no determination of liability.  The lawsuits resolved by the settlement are captioned United States ex rel. Westrick v. Second Chance Body Armor, et al., No. 04-0280 (PLF) (D.D.C.) and United States v. Toyobo Co. Ltd., et al., No. 07-1144 (PLF) (D.D.C.).

 

Former Employee of U.S. Army Corps of Engineers in Afghanistan Sentenced to Prison for Soliciting Approximately $320,000 in Bribes From Contractors

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Thursday, March 8, 2018

A former employee of the U.S. Army Corps of Engineers (USACE) based in Afghanistan was sentenced today to 100 months in prison for soliciting approximately $320,000 in bribes from Afghan contractors in return for his assistance in U.S. government contracts.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Acting U.S. Attorney John E. Childress of the Central District of Illinois; Special Agent in Charge Sean Cox of the FBI’s Springfield, Illinois Field Office; Special Inspector General for Afghanistan Reconstruction John F. Sopko; Special Agent in Charge Michael Mentavlos of the Defense Criminal Investigative Service’s (DCIS) Southwest Field Office and Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit (MPFU) made the announcement.

Mark E. Miller, 49, of Springfield, was sentenced by U.S. District Judge Richard H. Mills of the Central District of Illinois, who also ordered Miller to serve three years of supervised release following his prison sentence and forfeit $180,000 and a Harley-Davidson motorcycle.  Miller previously pleaded guilty to a one-count information charging him with seeking and receiving bribes.

As part of his guilty plea, Miller admitted that he worked for the USACE from 2005 until 2015, including in Afghanistan from 2009 to 2012, and maintained a residence in Springfield during that time.  From February 2009 to October 2011, Miller was assigned to a military base, Camp Clark, in eastern Afghanistan.  He was the site manager and a contracting officer representative for a number of construction projects in Afghanistan.

On Dec. 10, 2009, the USACE awarded a contract worth approximately $2.9 million to an Afghan construction company for the construction of a road from eastern Afghanistan to the Pakistani border.  This contract later increased in value to approximately $8,142,300.  Miller oversaw the work of the Afghan company on this road project, including verifying that the company performed the work called for by the contract and, if so, authorizing progress payments to the company by the USACE, he admitted.

Also as part of his guilty plea, Miller admitted that, in the course of overseeing the contract with the Afghan company, he solicited from the owners of the company approximately $280,000 in bribes in return for making things easier for the company on the road project, including making sure the contract moved along and was not terminated.  He further admitted that, after the contract was no longer active, he solicited an additional $40,000 in bribes in return for the possibility of future contract work and other benefits.

This matter was investigated by the FBI, DCIS, SIGAR and Army CID-MPFU, with assistance from the U.S. Postal Inspection Service, Fort Worth Division.  Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Gregory K. Harris of the Central District of Illinois are prosecuting the case.

Biloxi Physician Convicted for Role in $3 Million Compounding Pharmacy Fraud Scheme

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Monday, March 5, 2018

A federal jury found a Biloxi, Mississippi physician guilty Friday for his role in an approximately $3 million compounding pharmacy fraud scheme.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney D. Michael Hurst Jr. of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi, Field Division and Acting Special Agent in Charge Ted Magee of Internal Revenue Service Criminal Investigation’s (IRS-CI) New Orleans Field Office made the announcement.

Albert Diaz, M.D., 78, was convicted of one count of conspiracy to commit health care fraud and wire fraud, four counts of wire fraud, one count of conspiracy to distribute and dispense a controlled substance, four counts of distributing and dispensing a controlled substance, one count of conspiracy to falsify records in a federal investigation and five counts of falsification of records in a federal investigation following a five-day trial.  Sentencing has been scheduled for May 22, 2018 before U.S. District Judge Keith Starrett of the Southern District of Mississippi, who presided over the trial.

“Communities place extraordinary trust in medical professionals,” said Acting Assistant Attorney General Cronan.  “It is therefore particularly egregious when a physician compromises that trust, as Albert Diaz did when he played a pivotal role in causing millions of dollars in loss to our country’s health care programs.  The prosecution of Albert Diaz exemplifies the Criminal Division’s commitment to holding those involved in fraud schemes accountable for their actions.”

“When individuals defraud our military’s healthcare system TRICARE, harming the health and welfare of our men and women in uniform, they will be met with swift prosecution, severe punishment and the loss of their illicit gains,” said U.S. Attorney Hurst. “I applaud the tireless and determined work of these investigators and prosecutors in securing justice in this case.  Justice prevailed and justice will continue to roll.”

“In the past five years, health care fraud schemes have cost Mississippi taxpayers hundreds of millions of dollars,” said Special Agent in Charge Freeze.  “Today’s verdict should send a strong message that the FBI will continue to expose and investigate those who exploit our health care system at the expense of the taxpayer, and especially physicians who contribute to addiction by prescribing unnecessary controlled substances.”

“The jury found Dr. Albert Diaz guilty of conspiracy to commit healthcare fraud, which sent a message to all criminals seeking to defraud insurance companies – we’re on to you and will hold you responsible for your crimes,” said Acting Special Agent in Charge Magee.  “Dr. Diaz’s scheme to steal from TRICARE and other insurance companies not only cost the American taxpayers, but put the lives of his patients in danger.”

According to evidence presented at trial, between October 2014 and December 2015, Diaz participated in a scheme to defraud TRICARE and other insurance companies by prescribing medically unnecessary compounded medications, some of which included ketamine, a controlled substance, to individuals he had not examined.  The evidence further demonstrated that, based on the prescriptions signed by Diaz, Advantage Pharmacy in Hattiesburg, Mississippi dispensed these medically unnecessary compounded medications and sought and received reimbursement from TRICARE and other insurance companies totaling more than $3 million. The trial evidence further demonstrated that in response to a TRICARE audit, Diaz falsified patient records to make it appear as though he had examined patients before prescribing the medications.

The FBI, IRS-CI, the Defense Criminal Investigative Service, the U.S. Department of Health and Human Services Office of Inspector General, the Mississippi Bureau of Narcotics and other government agencies investigated the case.  Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative 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.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

Transport Logistics International Inc. Agrees to Pay $2 Million Penalty to Resolve Foreign Bribery Case

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Tuesday, March 13, 2018

Transport Logistics International Inc. (TLI), a Maryland-based company that provides services for the transportation of nuclear materials to customers in the United States and abroad, agreed to resolve criminal charges in connection with a scheme that involved the bribery of an official at a subsidiary of Russia’s State Atomic Energy Corporation and to pay a $2 million criminal penalty.  Three individuals have been charged for their alleged roles in the bribery scheme.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephen M. Schenning of the District of Maryland, Principal Deputy Inspector General April G. Stephenson of the U.S. Department of Energy’s Office of Inspector General (DOE-OIG) and Assistant Director in Charge Andrew W. Vale of the FBI’s Washington, D.C. Field Office made the announcement.

TLI entered into a deferred prosecution agreement (DPA) with the Department in connection with a criminal information filed in the District of Maryland charging the company with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA).  In the DPA, TLI and the Department agreed that, because of the company’s financial inability to pay the penalty calculated under the U.S. Sentencing Guidelines, the appropriate criminal penalty is $2 million.  As part of the agreement, TLI also committed to cooperate fully with the Department’s ongoing investigation, and to continue to implement a compliance and ethics program designed to prevent and detect violations of the FCPA and other anti-corruption laws throughout its operations.  In reaching the resolution with the Department, TLI received full credit for its substantial cooperation with the Department’s investigation and for engaging in remedial measures, including terminating the employment of all employees engaged in the misconduct.

“Bribery of foreign officials not only distorts markets and undermines democratic institutions; it can also pervert the incentives of those who are in a position to safeguard the public, as it did in this case involving the transportation of nuclear material,” said Acting Assistant Attorney General Cronan.  “Today’s resolution, along with the related charges against the corporate executives and the Russian official in this matter, underscore the Department’s continued commitment to holding both companies and individuals accountable for their roles in corruption-related crimes and for breaching the public’s trust.”

“The Department of Energy remains committed to ensuring the integrity of our contractors and subcontractors, as well as providing the nation transparency, accountability, and security when it comes to safe and reliable transport of sensitive materials,” said Principal Deputy Inspector General Stephenson.  “We appreciate the efforts of the FBI, the Justice Department’s FCPA Unit and the U.S. Attorney’s Office in pursuing this matter and will continue to work collaboratively with them to aggressively investigate those who seek to defraud Department programs.”

“Today’s charges reflect the determination and ability of the FBI to investigate and prosecute companies that engage in foreign corrupt business practices, regardless of how sophisticated or far-flung the scheme may be,” said Assistant Director in Charge Vale.  “No entity is above the law and those that try to perpetrate a similar scheme will be pursued by the FBI.”

According to admissions and court documents, beginning in at least 2004 and continuing until at least 2014, TLI conspired with others to corruptly pay more than $1.7 million to offshore bank accounts associated with shell companies, at the direction of, and for the benefit of, Vadim Mikerin, a Russian official at JSC Techsnabexport (TENEX), a subsidiary of Russia’s State Atomic Energy Corporation.  The bribe payments were made to help TLI secure improper business advantages and obtain and retain business with TENEX.   In order to effectuate and conceal the bribe payments, TLI executives and others caused fake invoices to be prepared, purportedly from TENEX to TLI, that described services that were never provided.  TLI then wired payments for those purported services to shell companies in Latvia, Cyprus and Switzerland to further the bribery scheme.

On June 17, 2015, TLI co-president Daren Condrey pleaded guilty to conspiracy to violate the FCPA and commit wire fraud.  On Aug. 31, 2015, Mikerin pleaded guilty to conspiracy to commit money laundering involving violations of the FCPA, and Mikerin was sentenced to 48 months in prison on Dec. 15, 2015.  On Jan. 12, an 11-count indictment was unsealed against TLI co-president Mark Lambert, which charged Lambert with one count of conspiracy to violate the FCPA and to commit wire fraud, seven counts of violating the FCPA, two counts of wire fraud and one count of international promotion money laundering.  The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The cases against TLI and Lambert are assigned to U.S. District Court Judge Theodore D. Chuang of the District of Maryland.

The case is being investigated by DOE-OIG and the FBI.  Assistant Chiefs Ephraim Wernick and Christopher J. Cestaro and Trial Attorney Derek J. Ettinger of the Criminal Division’s Fraud Section, as well as Assistant U.S. Attorneys David I. Salem and Michael T. Packard of the District of Maryland, are prosecuting the case.

The Criminal Division’s Office of International Affairs provided significant assistance in this matter.  The Department also thanks its law enforcement colleagues in Switzerland, Latvia and Cyprus for providing valuable assistance with the investigation and prosecution of the case.

The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Former CEO of Tennessee-Based Telemarketing Company Pleads Guilty to Misrepresenting Health Insurance Plans

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Wednesday, March 7, 2018

The former owner and chief executive officer of a Nashville, Tennessee-based telemarketing company pleaded guilty this morning to overseeing a fraudulent scheme in which limited-benefit health plans were sold to consumers as traditional health insurance, and to violating a federal court order that in 2010 froze his assets and shut down the company, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran of the Middle District of Tennessee.

Timothy Thomas, 55, of Brentwood, Tennessee, pleaded guilty to one count of mail fraud and one count of contempt before U.S. District Judge David Lawson, sitting by designation in the Middle District of Tennessee.  He is scheduled to be sentenced by Judge Lawson on June 25.  Thomas was charged in a 15-count indictment filed in October 2014.

According to admissions made as part of his plea, Thomas operated and controlled United Benefits of America (UBA) LLC, which was known at various times as United States Benefits (USB) and Health Care America.  From at least 2007 to 2010, Thomas hired salespeople to sell over the phone so-called “association memberships” created by third-party companies such as International Association of Benefits and Consumer Driven Benefits of America.  These memberships included bundled benefits, such as limited benefit health plans, prescription drug discount cards, accidental death and dismemberment benefits and lifestyle benefits, such as rental car discounts.  Thomas targeted his sales to customers who had been denied traditional health insurance because of preexisting conditions, he admitted.  The sales script used by Thomas attempted to portray the memberships as equal in quality to traditional health insurance, omitting the fact that limited benefit health plans left customers with the vast majority of the financial risk.

Thomas admitted that salespeople working for him made even more flagrant misrepresentations and omissions and used terms such as “deductibles” and “copays” to make customers believe they were buying traditional health insurance.  Customer service employees and the Better Business Bureau routinely notified Thomas about customers complaining that they had been deceived into believing the plans were similar to traditional health insurance.  Thomas oversaw a lax compliance program that was understaffed, with usually one employee monitoring up to 60 or 70 salespeople, and levied only occasional fines to salespersons who misrepresented or omitted key details of the plans.  Despite knowing of the rampant misrepresentations and omissions, Thomas rarely fired salespeople for lying to customers, but routinely fired salespeople for low sales numbers, he admitted.  When in 2009 a local news station, WSMV, ran a critical story on UBA featuring undercover footage of salespeople discussing misleading sales tactics, Thomas did not institute any meaningful changes in business practices.  He merely changed the name of his company from UBA to USB and instructed a subordinate to sign a letter to the Better Business Bureau falsely claiming that the companies had nothing to do with each other.

When the Federal Trade Commission (FTC) filed a lawsuit against Thomas and his company in August 2010, a federal judge in the Middle District of Tennessee issued an order freezing Thomas’s assets and placing his company into receivership.  Immediately after being informed of the court’s order, Thomas violated it by withdrawing more than $100,000 from a brokerage account and convincing a friend to deposit checks totaling $528,647, constituting proceeds of the scheme, into the friend’s bank account, he admitted.

As part of his plea agreement, Thomas agreed to forfeit $1.5 million, representing the amount he personally gained through the fraudulent scheme.

The case was investigated by the FBI, the U.S. Postal Inspection Service, the Department of Labor’s Office of Inspector General and the Department of Labor’s Employee Benefits Security Administration.  The FTC and Tennessee Division of Insurance provided substantial assistance.  Trial Attorney William E. Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Cecil VanDevender of the Middle District of Tennessee are prosecuting the case.

Beam Bros. Trucking Inc. and Its Principals Agree to Settle Civil False Claims Act Allegations

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Monday, March 12, 2018

Beam Bros. Trucking Inc. (BBT), and its principals Gerald Beam and Garland Beam, have agreed to pay $1,025,000 to resolve allegations under the False Claims Act that BBT overcharged the U.S. Postal Service (USPS) on contracts to transport mail.  BBT is a trucking company located in Mt. Crawford, Virginia.

“The Department of Justice takes seriously its role in protecting the federal procurement process from false claims,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “This settlement demonstrates that we will hold accountable federal contractors engaging in fraud, and will ensure that federal funds are protected from overcharges and abuse.”

“We are gratified to have contributed to this investigation and applaud the exceptional work by the investigative team for both protecting the contracting process and overall program costs,” said Special Agent in Charge Scott Pierce of the U.S. Postal Service Office of Inspector General.  “Along with our law enforcement partners, the USPS OIG will continue to aggressively investigate those who engage in activities designed to defraud the Postal Service.”

“Contractors working for the federal government are held to the same high ethical standards as full-time employees,” U.S. Attorney for the District of New Jersey Craig Carpenito said. “This settlement will return more than $1 million to the USPS.”

USPS contracts with trucking companies, including BBT, to transport mail throughout the United States.  On some contracts, USPS had provided trucking contractors with credit cards, known as Voyager Cards, to pay for fuel.  This settlement resolves allegations that BBT misused Voyager Cards to purchase fuel on contracts that did not allow for their use, resulting in inflated charges in violation of the False Claims Act.

The settlement resolves allegations made in lawsuit filed under the whistleblower provision of the False Claims Act by Bobby Blizzard, a former BBT employee.  The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  Mr. Blizzard’s share of the recovery has yet to be determined.

The settlement was the result of a coordinated effort between the United States Attorney’s Office for the District of New Jersey, the Civil Division of the Department of Justice, and the USPS, Office of the Inspector General.

The lawsuit, which was filed in the District of New Jersey, is captioned United States ex rel. Doe v. Beam Bros. Trucking, Inc., Civil Action No. 10-657 (D.N.J.).  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

Alabama Resident and Ringleader of Multi-Million Dollar Stolen Identity Tax Refund Fraud Schemes Sentenced to 30 Years in Prison

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Thursday, March 8, 2018

Over 8,800 Identities Stolen from the U.S. Army, Alabama State Agencies and Georgia Businesses

A Phenix City, Alabama, resident was sentenced today to 30 years in prison for his role in masterminding multiple stolen identity refund fraud (SIRF) schemes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Louis V. Franklin, Sr. of the Middle District of Alabama.

William Anthony Gosha III, a/k/a Boo Boo, was convicted, following a jury trial in November 2017, of one count of conspiracy, 22 counts of mail fraud, three counts of wire fraud, and 25 counts of aggravated identity theft.

According to the evidence presented at trial and sentencing, between November 2010 and December 2013, Gosha ran a large-scale identity theft ring with his co-conspirators, Tracy Mitchell, Keshia Lanier, and Tamika Floyd, who were all previously convicted and sentenced to prison.  Together they filed over 8,800 tax returns with the Internal Revenue Service (IRS) that sought more than $22 million in fraudulent refunds of which the IRS paid out approximately $9 million.

In November 2010, Gosha stole IDs of inmates from the Alabama Department of Corrections and provided the IDs to Lanier who used the information to seek fraudulent tax refunds.  Gosha and Lanier agreed to split the proceeds.  Gosha also stole employee records from a company previously located in Columbus, Georgia.  In 2012, Lanier needed an additional source of stolen IDs and approached Floyd, who worked at two Alabama state agencies in Opelika, Alabama: the Department of Public Health and the Department of Human Resources.  In both positions, Floyd had access to the personal identifying information of individuals, including teenagers.  Lanier requested that Floyd primarily provide her with identities that belonged to sixteen and seventeen year-olds.  Floyd agreed and provided thousands of names to Lanier and others at Lanier’s direction.

After receiving the additional stolen IDs, Gosha recruited Mitchell and her family to help file the fraudulent tax returns.  Mitchell worked at a hospital located at Fort Benning, Georgia, where she had access to the personal identification information of military personnel, including soldiers who were deployed to Afghanistan.  She stole soldiers’ IDs and used their information to file fraudulent returns.

In order to electronically file the fraudulent returns, Gosha, Lanier, and their co-conspirators applied for several Electronic Filing Identification Numbers (EFIN) with the IRS in the names of sham tax preparation businesses.  Gosha, Lanier, and their co-conspirators then used these EFINs to file the returns and obtain tax refund related bank products from various financial institutions, which provided them with blank check stock.  Gosha and his co-conspirators initially printed out the fraudulently obtained refund checks using the blank check stock.

However, the financial institutions halted Gosha’s and his co-conspirators’ ability to print checks.  As a result, they recruited U.S. Postal employees who provided Gosha and others with addresses on their routes to which the fraudulent refund checks could be directly mailed.  In exchange for cash, these postal employees intercepted the refund checks and provided them to Gosha, Lanier, Mitchell and others.  Gosha also directed tax refunds to prepaid debit cards and had those cards sent to addresses he controlled.

In addition, between January 2010 and December 2013, Gosha participated in a separate SIRF scheme with Pamela Smith and others, in which Gosha sold the IDs that he had stolen from the Alabama Department of Corrections to Smith and others.  Smith and others used the IDs to file returns that sought approximately $4.8 million in fraudulent refunds of which the IRS paid out approximately $1.85 million.  Smith also has been convicted and sentenced to prison for this conduct.

At Gosha’s sentencing, the government offered victim impact statements from several individuals whose identities were stolen, and from companies and governmental agencies where the identity theft breaches occurred.  An Alabama Department of Public Health representative noted, the identity theft was not only devastating financially, but it also had a chilling effect on the department’s ability to serve the residents of the State of Alabama.  A mother of a young U.S. Army soldier who was an identity theft victim described the consequences of the fraud on her and her family, stating:

While [my son] was fighting for our country and all back home[,] I received a very disturbing phone call from [an] Agent [] from the IRS that my son[,] while at Ft. Benning training to defend our country[,] the land of the free[,] had his identity stolen and fraudulent tax returns were filed with his social security number.  This news was devastating to think that my [] 19-year-old son[,] who was defending the very freedom this country stands [for] [,] was wronged by one of those people [he] was willing to die for.  My whole family could not believe what was happening.  We now had to worry about this terrible act by one of our own.  As I tried my best to keep composed and handle all of the gruesome mounds of paperwork to get this straightened out with the IRS, [my son] was then denied his tax refund [as result of this scheme].  This created a financial hardship on [him].  We were too afraid to tell [him] while he was deployed because we did not want to worry him and we wanted him to focus only on getting home alive and not have to worry about such an atrocious act by someone who did not even know [him].

In addition to the term of imprisonment, U.S. Chief District Court Judge Keith Watkins ordered Gosha to serve three years of supervised release and to pay restitution in the amount of $9,052,049.

Prior to Gosha’s sentencing, thirty of his co-conspirators have been sentenced, including Keisha Lanier who received 15 years and Tracy Mitchell who received over 13 years.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Franklin commended special agents of Internal Revenue Service-Criminal Investigation and U.S. Postal Service Office of Inspector General who investigated this case and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Pennsylvania Hospital and Cardiology Group Agree to Pay $20.75 Million to Settle Allegations of Kickbacks and Improper Financial Relationships

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Wednesday, March 7, 2018

UPMC Hamot (Hamot), a hospital based in Erie, Pennsylvania – and now affiliated with the University of Pittsburgh Medical Center (UPMC) – and Medicor Associates Inc. (Medicor), a regional physician cardiology practice, have agreed to pay the government $20,750,000 to settle a False Claims Act lawsuit alleging that they knowingly submitted claims to the Medicare and Medicaid programs that violated the Anti‑Kickback Statute and the Physician Self‑Referral Law, the Justice Department announced today.  Hamot became affiliated with UPMC after the conduct resolved by the settlement occurred.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper compensation arrangement.  Both the Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.

The settlement resolves allegations brought in a whistleblower action filed under the False Claims Act alleging that, from 1999 to 2010, Hamot paid Medicor up to $2 million per year under twelve physician and administrative services arrangements which were created to secure Medicor patient referrals.  Hamot allegedly had no legitimate need for the services contracted for, and in some instances the services either were duplicative or were not performed.

“Financial arrangements that improperly compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division.  “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs.”

The lawsuit was filed by Dr. Tullio Emanuele, who worked for Medicor from 2001 to 2005, under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery.  The Act also allows the government to take over the case or, as in this case, the whistleblower to pursue it.  In a March 15, 2017 ruling, the U.S. District Court for the Western District of Pennsylvania held that two of Hamot’s arrangements with Medicor violated the Stark Law.  The case was set for trial when the United States helped to facilitate the settlement.  Dr. Emanuele will receive $6,017,500.

“Federal law prohibits physicians from entering into financial relationships that may affect their medical judgment and drive up health care costs,” said U.S. Attorney Scott W. Brady.  “Today’s settlement demonstrates our commitment to ensuring that health care decisions are made based exclusively on the needs of the patient, rather than the financial interests of health care providers.”

This matter was handled on behalf of the government by the U.S. Attorney’s Office for the Western District of Pennsylvania, the Justice Department’s Civil Division, and the Department of Health and Human Services Office of the Inspector General.

The case is captioned United States ex rel. Emanuele v. Medicor Associates, Inc. et al., Civil Action No. 10-cv-00245-JFC (W.D. Pa.).  The False Claims Act claims resolved by this settlement are allegations only and there has been no determination of liability.

New Orleans Woman Convicted for Role in $3.2 Million Medicare Kickback Scheme

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Thursday, November 9, 2017

A federal jury found a New Orleans woman guilty today for her role in an approximately $3.2 million Medicare fraud and kickback scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Duane A. Evans of the Eastern District of Louisiana, Acting Special Agent in Charge Daniel Evans of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Field Office made the announcement.

After a three-day trial, Sandra Parkman, 61, was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks, two counts of health care fraud and five counts of accepting kickbacks.  Sentencing is scheduled for Jan. 17, 2018, before U.S. District Judge Kurt D. Engelhardt of the Eastern District of Louisiana, who presided over the trial.

According to evidence presented at trial, from 2004 to 2009, Parkman and others engaged in a scheme to provide medically unnecessary durable medical equipment, including power wheelchairs, to Medicare beneficiaries in and around New Orleans.  The evidence showed that Parkman received kickback payments from the equipment supply company in return for providing eligible Medicare beneficiaries’ personal information to the company, as well as to obtain physican signatures on order forms.

As a result of the scheme, Parkman’s co-defendant, Tracy Richardson Brown, caused Medicare to pay over $3.2 million based on those illegally obtained referrals, the evidence showed.

Brown was previously convicted following a trial in June 2016 and was sentenced to 48 months in prison.

This case was investigated by the FBI and HHS-OIG.  Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative 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.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.