Category Archives: Federal Bureau of Investigation

Owner and Patient Recruiter Sentenced to Prison for Their Roles in $258.5 Million Medicare Fraud Scheme

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An owner and operator of two community mental health centers in Baton Rouge, Louisiana, and a patient recruiter for a community mental health center in Houston, Texas, were sentenced  to prison today for their involvement in a $258.5 million Medicare fraud scheme involving partial hospitalization psychiatric (PHP) services.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney J. Walter Green of the Middle District of Louisiana, Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Office, Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division, and Louisiana State Attorney General James D. “Buddy” Caldwell made the announcement.

Roslyn F. Dogan, 53, of Baton Rouge, Louisiana, and James R. Hunter, 48, of Houston, Texas, were sentenced by U.S. District Court Chief Judge Brian A. Jackson in the Middle District of Louisiana to 90 months in prison and 60 months in prison, respectively.  In addition to the prison sentences, Dogan was ordered to pay $43.5 million and Hunter was ordered to pay $3.2 million in restitution.

After six days of trial, on May 21, 2014, a federal jury found Dogan guilty of conspiracy to commit health care fraud, and two counts of health care fraud, and also found Hunter guilty of conspiracy to commit health care fraud and conspiracy to pay and receive kickbacks.

According to evidence presented at trial, Dogan was a co-owner of Serenity Center of Baton Rouge, and a manager and marketer for both Serenity Center and Shifa Community Mental Health Center of Baton Rouge.  Dogan recruited Medicare beneficiaries who were living in nursing homes and assisted living facilities to attend the PHP programs at Shifa and Serenity, knowing the individuals did not need the psychotherapy programs.  She then devised methods to keep the patients at the facilities for as long as possible without invoking scrutiny from Medicare, including by having patients involuntarily committed to local inpatient psychiatric hospitals and then discharged and re-admitted to one of the Shifa facilities.  Additionally, Dogan directed administrators and therapists at the Shifa Baton Rouge facilities to falsify treatment records indicating that patients had received psychotherapy treatment when, in fact, the patients had not received such treatment.  She further concealed the fraud by directing that patient billing statements be intercepted from the mail 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.

Evidence at trial demonstrated that Hunter agreed to recruit Medicare beneficiaries to attend the PHP program at Shifa Community Mental Health Center of Texas in Houston in exchange for $1,500 per week in cash.  Hunter recruited Medicare recipients from group homes who were not appropriate for the PHP services, but who agreed to attend the program in exchange for $75 cash per week.  To ensure their admittance to the program, Hunter instructed each beneficiary as what to say to physicians regarding their supposed psychiatric symptoms.  As a result of the kickback scheme with Hunter, the Houston facility billed Medicare approximately $16.5 million.

According to court documents, the investigation into the three community mental health centers has resulted in the conviction of seventeen individuals, including therapists, marketers, administrators, owners and a medical director.  The companies collectively submitted more than $258 million in claims to Medicare for PHP services over a period of seven years.  Medicare paid approximately $43.5 million on those claims.

The case is being investigated by HHS-OIG, the FBI, and the Medicaid Fraud Control Unit of the Louisiana Attorney General’s Office, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana.  The case is being prosecuted by Trial Attorneys Abigail Taylor and Dustin M. Davis of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shubhra Shivpuri of the Middle District of Louisiana.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

HITACHI METALS LTD. AGREES TO PLEAD GUILTY FOR FIXING PRICES AND

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WASHINGTON — Hitachi Metals Ltd., an automotive parts manufacturer based in Tokyo, Japan, and successor in interest to Hitachi Cable Ltd. (collectively Hitachi), has agreed to plead guilty and to pay a $1.25 million criminal fine for its role in a conspiracy to fix prices and rig bids for automotive brake hose installed in cars sold in the United States and elsewhere, the Department of Justice announced today.

According to the one-count felony charge filed today in the U.S. District Court for the Northern District of Ohio in Toledo, Hitachi conspired to fix the prices of automotive brake hose sold to Toyota Motor Corporation and certain of its subsidiaries, affiliates and suppliers, in the United States and elsewhere (collectively Toyota).  In addition to the criminal fine, Hitachi has agreed to cooperate in the department’s ongoing investigation.  The plea agreement will be subject to court approval.

“Today’s guilty plea demonstrates the Antitrust Division’s commitment to hold companies accountable for engaging in illegal anticompetitive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division is dedicated to its mission to protect U.S. consumers and businesses.”

According to the charge, Hitachi and its co–conspirators conspired through meetings and conversations in which they discussed and agreed upon bids and price quotations to be submitted to Toyota, and to allocate the supply of automotive brake hose to Toyota.  In furtherance of the agreement, Hitachi sold automotive brake hose at non–competitive prices to Toyota in the United States and elsewhere.  Hitachi’s involvement in the automotive brake hose conspiracy lasted from at least as early as November 2005 until at least September 2009.

Hitachi manufactures and sells a variety of automotive parts, including automotive brake hoses, which are flexible hoses that carry brake fluid through the hydraulic brake system of automobiles.  The charges against Hitachi are the latest in the department’s on-going investigation into anticompetitive conduct in the automotive parts industry.  These are the first charges filed relating to automotive brake hose sold to automobile manufacturers.

To date, 44 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Including Hitachi, 30 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.4 billion in fines.

Hitachi is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty for corporations of a $100 million criminal fine for each violation.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, Lima Resident Agency, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 216-522-1400.

Detroit-Area Home Health Care Assistant Sentenced for Scheme to Bill Medicare Nearly $15 Million for Services Never Provided

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A physical therapist assistant was sentenced today to serve 50 months in prison for his role in a $14.9 million fraud scheme, through which he and others billed Medicare for home health services that they never provided, and provided beneficiaries with prescriptions for unnecessary painkillers and other narcotics to induce them to sign false medical documents to support the fraudulent billings.

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

Jigar Patel, 31, a physical therapist assistant from Madison Heights, Michigan, was sentenced by U.S. District Judge Terrence G. Berg in the Eastern District of Michigan.  In addition to his prison term, Patel was ordered to pay $1.9 million in restitution.

Patel, along with co-defendants Srinivas Reddy, 38, an unlicensed doctor from Bloomfield Hills, Michigan, and Shahzad Mirza, 43, a physical therapist from Canton, Michigan, were each convicted by a federal jury on April 30, 2014, of one count of conspiracy to commit health care fraud.  In addition, Mirza and Patel were each found guilty of two counts of health care fraud, and Reddy was found guilty of three counts of health care fraud.  Patel was also found guilty of one count of money laundering.  Reddy and Mirza will be sentenced at a later date.

According to evidence presented at trial, between July 2008 and September 2011, the defendants used four home health care companies – Physicians Choice Home Health Care LLC, Quantum Home Care Inc., First Care Home Health Care LLC, and Moonlite Home Care Inc. – to fraudulently bill Medicare for home health care services that were never provided.  Through those companies, the defendants paid kickbacks to recruiters for the referral of Medicare beneficiaries.  In turn, the recruiters paid the beneficiaries cash and promised them access to unnecessary prescriptions for painkillers and other narcotics.  Through a fifth company, Phoenix Visiting Physicians, the defendants employed unlicensed individuals, including Reddy, to provide the beneficiaries with the promised prescriptions and to obtain the necessary information to complete the referrals for medically unnecessary home health care services.

Evidence presented at trial showed that beneficiaries signed blank medical paperwork that Patel and others then completed with false information purporting to show that care was provided, when it was not.  Patel, Mirza and others signed this paperwork, certifying that they had provided the services.  In the course of the conspiracy, Patel incorporated his own staffing company, MI Healthcare Staffing, through which he laundered proceeds of the fraud.

As a result of the defendants’ fraudulent conduct, Medicare paid nearly $15 million.

The defendants were charged in a superseding indictment on Feb. 6, 2012.  Three other individuals charged in the indictment remain fugitives.  The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  The case is being prosecuted by Assistant Chief Catherine K. Dick and Trial Attorneys Matthew C. Thuesen and Rohan A. Virginkar of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

FIVE NORTHERN CALIFORNIA REAL ESTATE INVESTORS INDICTED FOR BID

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WASHINGTON — A federal grand jury in San Francisco returned an eight-count indictment against five real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in Northern California, the Department of Justice announced.

The indictment, filed today in U.S. District Court for the Northern District of California in San Francisco, California, charges Northern California real estate investors Joseph Giraudo, Raymond Grinsell, Kevin Cullinane, James Appenrodt and Abraham Farag with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others.  The indictment alleges that the defendants agreed to stop bidding or to refrain from bidding for properties at public foreclosure auctions in San Mateo County, California, in return for payoffs and concealing the fact that monies were diverted from mortgage holders, homeowners and others to co-schemers.  Additionally, Giraudo, Grinsell and Appenrodt were charged with bid rigging and fraud in San Francisco County, California.  To date, 47 individuals have agreed to plead or have pleaded guilty, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

“These defendants corrupted the public foreclosure auctions in San Mateo and San Francisco counties, and they did so to line their pockets with money that rightfully belonged to mortgage holders and others,” said Brent Snyder, Deputy Assistant Attorney for the Antitrust Division’s criminal enforcement program.  “As these charges demonstrate, the Antitrust Division will continue to pursue bidders at foreclosure auctions who violated the Sherman Act and defrauded mortgage holders and others.”

The indictment alleges, among other things, that beginning no later than August 2008 and continuing until January 2011, the defendants conspired to rig bids to obtain numerous properties sold at foreclosure auctions in San Mateo and San Francisco counties, paid others not to bid, accepted payoffs not to bid and, in the process, defrauded mortgage holders, other holders of debt secured by the auctioned properties and, in some cases, the defaulting homeowners.

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million.

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 93 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

FOUNDER OF DETROIT-AREA HOME HEALTH AGENCIES PLEADS GUILTY TO HEALTH CARE FRAUD CONSPIRACY

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The founder of three Detroit-area home health agencies pleaded guilty today in federal court for his role in a $22 million home health care fraud scheme.

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

Tayyab Aziz, 45, of Homer Glen, Illinois, pleaded guilty today before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.  His sentencing is scheduled for March 3, 2015.

According to admissions in his plea agreement, Aziz founded three Detroit-area home health care agencies, Prestige Home Health Services Inc. (Prestige), Royal Home Health Care Inc., and Platinum Home Health Services Inc. (Platinum).  Using these companies, Aziz admitted that he orchestrated a conspiracy to defraud Medicare through fraudulent billings for home health care services.

Specifically, Aziz admitted that he and his co-conspirators submitted fraudulent claims to Medicare for services that were medically unnecessary or never performed.  They also submitted claims for services purportedly provided to Medicare beneficiaries who were recruited through illegal kickbacks paid to the patients and recruiters.  To conceal the fraud, Aziz admitted that he and his co-conspirators created fictitious physical therapy files to document physical therapy and other services that had not actually been provided and were not medically necessary.  Aziz also created and submitted falsified records to the Michigan Community Health Accreditation Program (CHAP) in order for Prestige and Platinum to remain accredited Medicare providers.

As a result of Aziz’s fraudulent conduct, Medicare paid approximately $1,915,513.  Five of six other defendants in this case have also previously pleaded guilty.

This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  This case is being prosecuted by Trial Attorneys Niall M. O’Donnell and James P. McDonald of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

President of Houston Hospital and Three Others Convicted in $158 Million Medicare Fraud Scheme

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A federal jury in Houston today convicted the president of Riverside General Hospital (Riverside), his son, and two others for their participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment.  Ten defendants have now been convicted in connection with the Riverside fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service – Criminal Investigation’s (IRS-CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.  U.S. District Judge Lee H. Rosenthal of the Southern District of Texas presided over the trial.

“The former president of Riverside hospital, his son, and their co-conspirators systematically defrauded Medicare, treating mentally ill and disabled Americans like chits to be traded and cashed out to pad their own pockets,” said Assistant Attorney General Caldwell.  “For over six years, the Gibsons and their co-conspirators stuck taxpayers with millions in hospital bills, purportedly for intensive psychiatric treatment. But the ‘treatment’ was a sham – some patients just watched television all day, others had dementia and couldn’t understand the therapy they supposedly received, and other patients never even went to the hospital at all.  Today’s verdict sends another powerful message that the department will hold accountable anyone who seeks personal profits at the expense of America’s most vulnerable citizens.”

Earnest Gibson III, 70, the former president of Riverside, Earnest Gibson IV, 37, the operator of one of Riverside’s satellite locations, and Regina Askew, 49, a group home owner, were each convicted of conspiracy to commit health care fraud and conspiracy to pay kickbacks, as well as related counts of paying and receiving illegal kickbacks.  Robert Crane, 58, a patient recruiter, was convicted of conspiracy to pay and receive kickbacks.  Gibson III and Gibson IV were also convicted of conspiracy to commit money laundering.  Gibson III was acquitted of two substantive counts of paying and receiving illegal kickbacks.

According to evidence presented at trial, Gibson III, Gibson IV, and Askew operated a scheme to defraud Medicare beginning in 2005 and continuing until June 2012.  The defendants caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through the hospital.  A PHP is a form of intensive outpatient treatment for severe mental illness.

Specifically, evidence at trial demonstrated that the Medicare beneficiaries for whom Riverside and its satellite locations billed Medicare for PHP services did not qualify for or need PHP services.  Moreover, the Medicare beneficiaries rarely saw a psychiatrist and did not receive intensive psychiatric treatment.  In fact, some of the Medicare beneficiaries were suffering from Alzheimer’s and could not actively participate in any treatment even if they actually qualified to receive PHP services.  Nevertheless, Gibson III, Gibson IV and Askew submitted claims for reimbursement to Medicare claiming that PHP services were provided to the Medicare beneficiaries.

Evidence presented at trial also showed that Earnest Gibson III paid kickbacks to patient recruiters and to owners and operators of group care homes, including Askew, in exchange for those individuals delivering ineligible Medicare beneficiaries to the hospital’s PHPs.  Gibson IV also paid patient recruiters, including Crane and others, in exchange for those individuals delivering ineligible Medicare beneficiaries to the specific PHP operated by Gibson IV.

Approximately $158 million in claims to Medicare were submitted for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.  The proceeds from the health care fraud were used to promote the fraud scheme by paying kickbacks to patient recruiters and group home owners in exchange for their sending Medicare beneficiaries to the hospital’s PHPs.

Gibson III, Gibson IV, Askew and Crane are scheduled to be sentenced on Feb. 17, 2015.

Others involved in the fraudulent scheme have already pleaded guilty and are awaiting sentencing.  Mohammad Khan, an assistant administrator at the hospital, who managed many of the hospital’s PHPs, pleaded guilty to conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay illegal kickbacks, and five counts of paying illegal kickbacks.  William Bullock, an operator of a Riverside satellite location, as well as Leslie Clark, Robert Ferguson, Waddie McDuffie, and Sharonda Holmes, who were all involved in paying or receiving kickbacks, have also pleaded guilty to their roles in the scheme.

The case was investigated by the FBI, IRS-CI, and Texas MFCU, with assistance from the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Dallas Regional Office, the Railroad Retirement Board, Office of Inspector General’s Chicago Field Office 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 Chiefs Laura M.K. Cordova and Jennifer L. Saulino and Trial Attorney Ashlee C. McFarlane of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

FORMER EXECUTIVE OF JAPANESE AUTOMOTIVE PARTS MANUFACTURER

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WASHINGTON — A Cincinnati federal grand jury returned a one-count indictment against a former executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to allocate markets and fix prices of pinion-assist type electric powered steering assemblies, the Department of Justice announced today.

The indictment, filed yesterday in the U.S. District Court for the Southern District of Ohio charges Akira Wada, a former executive of Showa Corporation, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate markets, and to fix, stabilize, and maintain the prices of pinion-assist type electric powered steering assemblies sold to Honda in the United States and elsewhere.  Wada was the Manager and then General Manager of Sales Department 1 at Showa from at least as early as 2003 until at least June 2009.  In 2013 Wada became a Director and Operating Officer of Showa.

“Yesterday’s indictment again demonstrates that antitrust violations are not just corporate offenses but also crimes by individuals,” said Bill Baer, Assistant Attorney General for the Antitrust Division.  “The division will continue to vigorously prosecute executives who circumvent the law in order to maximize profits by harming consumers.”

The indictment alleges, among other things, that from at least as early as 2007 and continuing until at least September 2012, Wada and his co-conspirators participated in meetings, conversations, and communications to discuss the market allocation scheme and price quotations to be submitted to Honda in the United States and elsewhere.  It alleges that Wada and his co-conspirators submitted price quotations in accordance with the agreements reached at these meetings. Wada also directed, authorized, or consented to the participation of subordinate employees in the price fixing conspiracy.

Showa is a Japanese company with its principal place of business in Saitama, Japan.  Showa was engaged in the business of manufacturing and selling pinion-assist type electric powered steering.  On June 10, 2014, Showa pleaded guilty and agreed to pay a $19.9 million criminal fine for its role in the conspiracy.

Including Wada, 44 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing and bid rigging in the auto parts industry.  Twenty-six of these individuals have pleaded guilty and have been sentenced to serve prison terms ranging from a year and one day to two years.  Additionally, 29 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.4 billion in fines.

Wada is charged with market allocation and price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Yesterday’s indictment is the result of an ongoing federal antitrust investigation into market allocation, price fixing, bid rigging, and other anticompetitive conduct in the automotive parts industry, which is being conducted by four of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Cincinnati Field Office at 513-421-4310.

Two Former Rabobank Traders Indicted for Alleged Manipulation of U.S. Dollar, Yen Libor Interest Rates

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Two former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) derivative traders – including the bank’s former Global Head of Liquidity & Finance in London – have been charged in a superseding indictment for their alleged roles in a scheme to manipulate the U.S. Dollar (USD) and Yen London InterBank Offered Rate (LIBOR), a benchmark interest rate to which trillions of dollars in interest rate contracts were tied, the Justice Department announced today.  Six former Rabobank employees have now been charged in the Rabobank LIBOR investigation.

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

Earlier today, a federal grand jury in the Southern District of New York returned a superseding indictment charging Anthony Allen, 43, of Hertsfordshire, England; and Anthony Conti, 45, of Essex, England, with conspiracy to commit wire fraud and bank fraud and with substantive counts of wire fraud for their participation in a scheme to manipulate the USD and Yen LIBOR rate in a manner that benefitted their own or Rabobank’s  financial positions in derivatives that were linked to those benchmarks.

The indictment also charges Tetsuya Motomura, 42, of Tokyo, Japan, and Paul Thompson, 48, of Dalkeith, Australia, who were charged in a prior indictment with Paul Robson, a former Rabobank LIBOR submitter.  In addition to adding as defendants Allen and Conti, the superseding indictment alleges a broader conspiracy to manipulate both the USD LIBOR and the Yen LIBOR.

Robson and Takayuki Yagami, a former Rabobank derivatives trader, each pleaded guilty earlier this year to one count of conspiracy in connection with their roles in the scheme.

“Today, we have charged two more members of the financial industry with influencing Dollar LIBOR and Yen LIBOR to gain an illegal advantage in the market, unfairly benefitting their own trading positions in financial derivatives,” said Assistant Attorney General Caldwell.  “LIBOR is a key benchmark interest rate that is relied upon to be free of bias and self-dealing, but the conduct of these traders was as galling as it was greedy.  Today’s charges are just the latest installment in the Justice Department’s industry-wide investigation of financial institutions and individuals who manipulated global financial rates.”

“With today’s charges against Messrs. Allen and Conti, we continue to reinforce our message to the financial community that we will not allow the individuals who perpetrate these crimes to hide behind corporate walls,” said Deputy Assistant Attorney General Snyder.  “This superseding indictment, with its charges against Mr. Allen, makes an especially strong statement to managers in financial institutions who devise schemes to undermine fair and open markets but leave the implementation – and often the blame – with their subordinates.”

“With today’s indictments the FBI’s investigation into Rabobank’s manipulation of LIBOR benchmark rates expands in scope to include the U.S. Dollar,” said Assistant Director in Charge McCabe. “I would like to thank the special agents, forensic accountants, and analysts, as well as the prosecutors who have worked to identify and stop those who hide behind complex corporate and securities fraud schemes.”

According to the superseding indictment, at the time relevant to the charges, LIBOR was an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believed they would be charged if borrowing from other banks.   LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London.  LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.  The published LIBOR “fix” for U.S. Dollar and Yen currency for a specific maturity was the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.

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.

Rabobank entered into a deferred prosecution agreement with the Department of Justice on Oct. 29, 2013, and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.

According to allegations in the superseding indictment, Allen, who was Rabobank’s Global Head of Liquidity & Finance and the manager of the company’s money market desk in London, put in place a system in which Rabobank employees who traded in derivative products linked to USD and Yen LIBOR regularly communicated their trading positions to Rabobank’s LIBOR submitters, who submitted Rabobank’s LIBOR contributions to the BBA.  Motomura, Thompson, Yagami and other traders entered into derivative contracts containing USD or Yen LIBOR as a price component and they asked Conti, Robson, Allen and others to submit LIBOR contributions consistent with the traders’ or the bank’s financial interests, to benefit the traders’ or the banks’ trading positions.  Conti, who was based in London and Utrecht, Netherlands, served as Rabobank’s primary USD LIBOR submitter and at times acted as Rabobank’s back-up Yen LIBOR submitter.  Robson, who was based in London, served as Rabobank’s primary submitter of Yen LIBOR.  Allen, in addition to supervising the desk in London and money market trading worldwide, occasionally acted as Rabobank’s backup USD and Yen LIBOR submitter.  Allen also served on a BBA Steering Committee that provided the BBA with advice on the calculation of LIBOR as well as recommendations concerning which financial institutions should sit on the LIBOR contributor panel.

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

The investigation is being conducted by special agents, forensic accountants and intelligence analysts in the FBI’s Washington Field Office.  The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antitrust Division.  The Criminal Division’s Office of International Affairs has provided assistance in this matter.

The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad.  The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the LIBOR investigation.  The Securities and Exchange Commission also has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.   The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank.  Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.

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

Bioscan Principal Pleads Guilty in Multi-Million Dollar Health Care Fraud and Money Laundering Scheme

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A Florida managing member of a shell company pleaded guilty today in federal court in Tampa, Florida, for his role in a multi-million dollar health care fraud and money laundering scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Acting Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office made the announcement.

Gregory J. Sylvestri, 44, formerly of Lake Worth, Florida, pleaded guilty in the U.S. District Court for the Middle District of Florida to two charges related to money laundering of health care fraud proceeds.  His sentencing date will be set by the court at a later date.  In his plea agreement, Sylvestri agreed to the forfeiture of a $60,000 platinum and diamond engagement ring that he purchased with health care fraud proceeds.

According to his plea agreement, from June 2010 through April 2014, Sylvestri’s co-conspirators submitted over $12 million in fraudulent claims to Medicare through three purported health clinics, Cornerstone Health Specialists of Lakeland, Florida, Summit Health Specialists P.L. of Tampa, and Coastal Health Specialists LLC of Lakeland and Melbourne, Florida.  These fraudulent claims included claims resulting from illegal kickback arrangements and claims for radiology, audiology, neurology and cardiology services that were never rendered.  In fact, some of the services were purportedly provided to Medicare beneficiaries who had died before the supposed date of service.  Medicare paid over $2,500,000 in reimbursement on the fraudulent claims.

Sylvestri admitted that he and his co-conspirators used bank accounts for the clinics and shell companies, including his shell company, BONB LLC, aka BioScan, to conceal and disburse the fraud proceeds.

Four other defendants were indicted in this case on health care fraud and money laundering charges.  In addition to Sylvestri, one of the other defendants has pleaded guilty.  The remaining three defendants are scheduled for a jury trial in April 2015.  An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Middle District of Florida.  This case is being prosecuted by Trial Attorney Christopher J. Hunter of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Michigan Home Health Agency Owner Pleads Guilty in $22 Million Medicare Fraud Conspiracy

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A former owner and manager of two Detroit-area home health care agencies has pleaded guilty in federal court for his role in a $22 million Medicare fraud conspiracy.

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

Usman Butt, 40, of Shelby Township, Michigan, pleaded guilty before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to conspiracy to commit health care fraud and aiding or assisting in preparing a fraudulent tax return on Aug. 27, 2014, and the case was unsealed today.  Sentencing has been scheduled for Jan. 13, 2015.  His plea follows that of his former business partner and co-conspirator, Muhammad Aamir, who pleaded guilty on Aug. 20, 2014.

According to plea documents, Butt admitted that beginning in 2008 and continuing through January 2013, he conspired with others to bill Medicare for home health care services that were not actually rendered, not medically necessary, and procured through paying illegal kickbacks.

Specifically, Butt admitted that the physical therapy and skilled nursing services provided by his companies, Prestige Home Health Services Inc., based in Troy, Michigan, and Royal Home Health Care Inc., of Clawson and Troy, Michigan, were not medically necessary or even rendered.  Butt also admitted that he fabricated patient files to give the false appearance that the services were medically necessary and actually provided.

During the scheme, Butt submitted or caused the submission of false claims to Medicare, which in turn caused Medicare to pay approximately $12,607,262.  According to court records, the conspiracy resulted in the submission of fraudulent claims that caused Medicare to pay more than $22 million.  Butt also admitted that he assisted a co-conspirator in filing a false corporate tax return for Prestige, deducting illegal kickbacks as “business expenses” to save Prestige at least $321,485 in taxes due for 2009.

This case was investigated by the FBI, HHS-OIG, and IRS-CI, 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 Eastern District of Michigan.  This case is being prosecuted by Trial Attorneys Niall M. O’Donnell and James P. McDonald of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.