Category Archives: Medicaid Fraud Control Units

Signature HealthCARE to Pay More Than $30 Million to Resolve False Claims Act Allegations Related to Rehabilitation Therapy

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June 8, 2018

Signature HealthCARE, LLC (Signature), a Louisville, Kentucky based company that owns and operates approximately 115 skilled nursing facilities, including 7 in middle Tennessee, has agreed to resolve allegations that it violated the False Claims Act by knowingly submitting false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled, the Department of Justice announced today.  The settlement also resolves allegations that Signature submitted forged pre-admission certifications of patient need for skilled nursing to the state of Tennessee’s Medicaid program.  Under the settlement agreements, Signature has agreed to pay more than $30 million.  As part of the resolution, the State of Tennessee will receive a portion of the overall settlement.

“Today’s settlement demonstrates our continuing efforts to protect patients and taxpayer by ensuring that the care provided to beneficiaries of government-funded healthcare programs is dictated by clinical needs, not a provider’s fiscal interests,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “Nursing home facilities provide important services to our elderly, and those facilities must uphold the trust placed in them by billing the government only for reasonable and necessary services.”

The government alleged that Signature engaged in various practices that resulted in the submission of claims for unreasonable, unnecessary, and unskilled services to Medicare patients, including: (1) presumptively placing patients in the highest therapy reimbursement level, rather than relying on individualized evaluations to determine the level of care most suitable for each patient’s clinical needs; (2) providing the minimum number of minutes required to bill at a given reimbursement level while discouraging the provision of additional therapy beyond that minimum threshold; and, (3) pressuring therapists and patients to complete the planned minutes of therapy even when patients were sick or declined to participate in therapy.

“Health care providers who engage in deceptive practices place patients at unnecessary risk and contribute to the financial distress of our federal healthcare programs,” said U.S. Attorney Cochran for the Middle District of Tennessee.  “Our dedicated teams of civil enforcement attorneys will work tirelessly with the relators who report fraud such as this and with our law enforcement partners who investigate healthcare fraud.  When we determine that companies are cheating the taxpayers, we will hold them accountable as we have in this case.”

“Our most vulnerable citizens are put at risk when healthcare providers put their financial interests above their patients’ needs and valuable federal funds are diverted from where they are surely needed,” said U. S. Attorney Byung J. “BJay” Pak for the Northern District of Georgia. “This settlement demonstrates our commitment to pursuing healthcare providers who provide unnecessary care to advance their bottom line.”

“Signature was charged with illegally boosting profits by providing excessive amounts of therapy to patients whether they needed it or not,” said Special Agent in Charge Derrick L. Jackson for the U.S. Department of Health and Human Services, Office of Inspector General. “The decision to provide therapy should never be based on corporate financial considerations rather than a patient’s medical needs.”

The settlement resolves allegations filed in a lawsuit by Kristi Emerson and LeeAnn Tuesca, former Signature therapy employees, in federal court in Nashville, Tennessee.  The 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 this case.  Ms. Emerson and Ms. Tuesca will receive a portion of the recovered funds.

The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice, the United States Attorney’s Offices for the Middle District of Tennessee and the Northern District of Georgia, the Office of Inspector General of the Department of Health and Human Services, the Tennessee Bureau of Investigation. Department of Defense, Office of Inspector General, the Defense Criminal Investigative Service, and the Department of Health and Human Services, Office of the Inspector General.  Trial Attorneys Christelle Klovers and Denise Barnes of the Civil Division of the Department of Justice, Assistant United States Attorney Sarah K. Bogni of the Middle District of Tennessee, and Assistant United States Attorney Lena Amanti of the Northern District of Georgia represent the United States.  Assistant Attorney General Philip Bangle represents the State of Tennessee.

  The case is captioned United States ex rel. Emerson and Tuesca v. Signature HealthCARE, LLC, et al., Case No. 1:15-cv-00027 (M.D. Tenn.).  The claims resolved by the settlements are allegations only, and there has been no determination of liability.

Two Tennessee Health Care Executives Charged for Role in $4.6 Million Medicare Kickback Scheme

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April 9, 2018

Two Tennessee health care executives were charged in an indictment unsealed today for their alleged participation in a $4.6 million Medicare kickback scheme involving durable medical equipment (DME).

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Don Cochran of the Middle District of Tennessee, Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Atlanta region, Special Agent in Charge John F. Khin of the U.S. Department of Defense Criminal Investigative Service’s (DCIS) Southeast Field Office and Director Mark Gwyn of the Tennessee Bureau of Investigation (TBI) Medicaid Fraud Control Unit made the announcement.

John Davis, 40, of Brentwood, Tennessee, and Brenda Montgomery, 69, of Camden, Tennessee, were each charged with one count of conspiracy to defraud the United States and to pay and receive health care kickbacks, and seven counts of paying and receiving health care kickbacks.  Davis is the former CEO of Comprehensive Pain Specialists (CPS), a large, multi-state pain management company.  Montgomery is the owner, founder and CEO of CCC Medical Inc., a DME company with five locations in Tennessee and headquartered in Camden.  Davis and Montgomery were arrested this morning and appeared this afternoon before U.S. Magistrate Judge Alistair E. Newbern of the Middle District of Tennessee.

“The charges against John Davis and Brenda Montgomery, alleging almost three quarters of a million dollars in illegal health care kickbacks and the submission of over $4.6 million in fraudulent claims to Medicare, demonstrate the Department of Justice’s commitment to protect taxpayer dollars and to hold corporate executives accountable for fraudulent and abusive conduct,” said Acting Assistant Attorney General Cronan.  “Kickbacks such as those alleged in the indictment distort markets and undermine public trust.  The Criminal Division and our law enforcement partners will continue to root out fraud, waste and abuse in our health care programs, no matter how complex the schemes.”

“Our Medicare program is designed to help those who are most vulnerable and in need of medical services and equipment,” said U.S. Attorney Cochran.  “Stealing funds from our health care system places the vulnerable at greater risk and diverts public funds into the pockets of the greedy individuals who exploit those with the greatest need.  We will be un-relenting in our efforts to bring to justice, those individuals and corporations who choose to profit at the expense of the health of those individuals with the greatest need.”

“Kickback schemes like this one do not benefit patients or the Medicare program,” said Special Agent in Charge Jackson.  “These arrangements are simply designed to line the pockets of the defendants at the expense of the taxpayer.”

“In concert with our partner agencies, DCIS aggressively investigates fraud and corruption that undermines the integrity of Department of Defense programs,” said DCIS Special Agent in Charge Khin.  “These defendants selfishly put greed and personal gain before the safety and well-being of our military members, their families, and retirees, who deserve the best medical care available.”

“Having the support and cooperation of our partner local, state and federal agencies is critical in our combined efforts to protect Tennesseans from individuals attempting to derive a personal benefit at the expense of patients and taxpayers,” said TBI Director Gwyn.

The indictment alleges that from at least June 2011 until at least June 2017, Montgomery agreed to pay Davis, the CEO of CPS, illegal kickbacks in exchange for Medicare referrals for DME ordered by CPS employees that Davis referred to CCC Medical.  As alleged in the indictment, Montgomery agreed to pay Davis 60 percent of Medicare proceeds collected on claims billed for DME ordered by CPS providers and referred by Davis.  In addition, the indictment alleges that Davis and Montgomery took a number of steps to conceal their illegal agreement, including making kickback payments through a nominee, creating and filing false tax documents, and, for Davis, intervening as CEO to prevent the owners of CPS from obtaining their own Medicare DME supplier numbers that would have allowed CPS to bill for its own Medicare DME orders.

Beginning in or around May 2015, according to the indictment, Davis and Montgomery renegotiated their illegal agreement to further obscure their personal contract from Medicare and from CPS owners and employees.  The indictment alleges that from approximately May 2015 until approximately November 2015, Montgomery agreed to pay Davis $200,000 for the sham purchase of a shell entity known as ProMed Solutions LLC (ProMed).  Davis and Montgomery renegotiated the sham transaction after Montgomery complained that her referrals from CPS had been lower than expected, and Montgomery ultimately paid $150,000 for the shell, ProMed, according to allegations in the indictment.  The true purpose of this payment was to induce Davis to continue driving CPS referrals to CCC Medical, the indictment alleges.

The indictment alleges that Montgomery, through CCC Medical, submitted over $4.6 million in fraudulent claims to Medicare, and that Medicare paid a total of $2.6 million on those claims.  Further, the indictment alleges that Montgomery paid more than $770,000 in illegal kickbacks to Davis.

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 HHS-OIG, DCIS and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  Trial Attorney Anthony Burba of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan Raybould of the Middle District of Tennessee and 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 throughout 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 collectively billed the Medicare program for over $12.5 billion.

Pain Management Doctor Pleads Guilty in Health Care Fraud Case

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Thursday, August 31, 2017

Acting United States Attorney Steve Butler of the Southern District of Alabama announced today that Dr. Rassan M. Tarabein, 58, a neurologist residing in Fairhope, Alabama, pled guilty before Chief United States District Judge Kristi K. DuBose to one count of health care fraud and one count of unlawful distribution of a schedule II controlled substance.  As part of his plea agreement, Dr. Tarabein will no longer be able to practice medicine and prescribe controlled substances in the United States.  Chief Judge DuBose has scheduled sentencing for March 2, 2018.  Dr. Tarabein faces up to ten years in prison for health care fraud and up to twenty years in prison for unlawfully distributing a controlled substance.

On June 28, 2017, a federal grand jury for the Southern District of Alabama returned a 22–count superseding indictment against Dr. Tarabein, charging him with health care fraud, making false statements relating to health care matters, lying to a federal agent, unlawfully distributing schedule II controlled substances, and money laundering.   He was arrested two days later.

Dr. Tarabein previously operated the Eastern Shore Neurology and Pain Center, a private clinic in Daphne, Alabama where he offered services relating to neurology and pain management, such as spinal injections.  In his plea agreement, Dr. Tarabein admitted that from around 2004 to May 2017, he ran an insurance scam in which he induced patients to visit his clinic so that he could bill health care benefit programs for medically unnecessary tests and procedures.  The purpose of Dr. Tarabein’s admitted scheme was to maximize personal financial gain by fraudulently seeking payments from health care benefit programs such as Medicare, Medicaid, Blue Cross Blue Shield of Alabama, Humana, UnitedHealthcare, and other private insurers.  As part of his guilty plea, Dr. Tarabein admitted to violating the traditional standards of care in his medical practice by, for example, failing to provide informed consent to patients about procedures, discriminating against Alabama Medicaid patients in services rendered, fraudulently documenting patient records, submitting false claims to insurance companies, and issuing prescriptions for schedule II controlled substances without a legitimate medical purpose.

Dr. Tarabein has pending state criminal charges in Montgomery County, Alabama.  On June 16, 2017, a state grand jury returned a 2–count indictment against Dr. Tarabein, charging him with Medicaid fraud and theft of property in the first degree, each a felony offense.  On September 20, 2017, Dr. Tarabein is expected to plead guilty in state court to Medicaid fraud.

Acting United States Attorney Butler stated, “Today’s guilty plea reinforces our office’s dedication to protecting the public from corrupt physicians.  Doctors who exploit patients through medically unnecessary services to line their own pockets have no place in our health care system.  I commend the investigators who unraveled Dr. Tarabein’s scam for their commitment to uproot health care fraud.”

Attorney General Steve Marshall stated, “I am pleased that my Medicaid Fraud Control Unit had the opportunity to team with our federal law enforcement colleagues to investigate and bring to justice this defendant who not only violated his oath to his patients, but stole taxpayer money set aside to provide care for our most vulnerable citizens.  I am grateful to the U.S. Attorney’s Office for the Southern District of Alabama for its speedy resolution of the federal charges, as this defendant is held to account for his actions.”

Federal Bureau of Investigation (FBI) Special Agent in Charge Robert E. Lasky stated, “The FBI stands ready to work alongside our state, local, and federal partners to eliminate prescription drug abuse.  When doctors place money before the well-being of their patients, this task becomes nearly impossible.  This guilty plea is a testament to all the hard work and cooperation between the agencies that conducted this investigation.”

“The abuse of prescription drugs is a serious problem in our communities.  All too often, this abuse leads to addiction, shattered lives, and even death.  For the health and safety of our citizens, DEA and our law enforcement partners will continue to target those who illegally distribute these potentially dangerous drugs.  We hope that the conviction of Dr. Tarabein serves as a reminder to anyone who might illegally divert pharmaceuticals that they will be held accountable for the harm they cause,” said Stephen G. Azzam, Special Agent in Charge of DEA’s New Orleans Field Division.

“Today’s plea should serve as a wake-up call to those who intend to bill the government for medically unnecessary services and thereby enriching their own bottom line,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General (OIG).  “The nation is facing a very serious prescription drug crisis and the OIG, along with our state and federal law enforcement partners, take allegations such as these very seriously.”

The FBI, DEA, OIG, and Alabama Medicaid Fraud Control Unit are investigating the federal case.  Assistant United States Attorneys Sinan Kalayoglu and Gregory A. Bordenkircher are prosecuting the federal case in coordination with the Office of the Alabama Attorney General, Medicaid Fraud Control Unit.  Assistant Attorney General Bruce M. Lieberman is prosecuting the state case.

Doctor & Owner of Multiple Home Health Companies Sentenced in a nearly $60 Million Medicare Fraud Scheme

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Friday, August 18, 2017

DALLAS – Myrna S. Parcon, a/k/a “Merna Parcon,” 62, of Dallas and Ransome N. Etindi, 57, of Waxahachie, Texas, were sentenced yesterday by U.S. District Judge Jane Boyle for their role in a nearly $60 million Medicare fraud scheme, announced U.S. Attorney John Parker of the Northern District of Texas.

Parcon and Etindi each pleaded guilty to conspiracy to commit health care fraud. Judge Boyle sentenced Parcon to 120 months in prison and ordered her to pay $51,497,930.87 in restitution. Judge Boyle sentenced Etindi to 30 months in prison and ordered him to pay $18,309.171.21 in restitution. They are scheduled to surrender to the Bureau of Prisons on September 20, 2017.

Co-defendant Noble U. Ezukanma, 57, of Fort Worth, Texas, was convicted, following a five-day trial, in March 2017 of one count of conspiracy to commit health care fraud and six counts of health care fraud and is awaiting sentencing. Co-defendants Oliva A. Padilla, 57, of Garland, Texas and Ben P. Gaines, 55, of Plano, Texas, have pleaded guilty to their role in the scheme and are awaiting sentencing. Lita S. Dejesus, 70, of Allen, Texas, also pleaded guilty and was sentenced to 24 months in federal prison and ordered to pay $4,193,655.78 in restitution.

According to their pleas, Ezukanma, Parcon, and Dejesus owned/operated US Physician Home Visits (USPHV), a/k/a “Healthcare Liaison Professionals, Inc.” located on Viceroy Drive in Dallas. Parcon was the owner/manager and Ezukanma was a licensed medical doctor who had an ownership interest in USPHV. Both Ezukanma and Etindi provided their Medicare number to the company to use to submit Medicare claims. Dejesus served in various roles at USPHV, including overseeing Medicare billing.

Gaines formed A Good Homehealth (A Good), a/k/a “Be Good Healthcare, Inc.,” which was located in the same office as USPHV. Parcon, who owned and operated A Good, purchased the company through a “straw” buyer; both Gaines and Parcon concealed Parcon’s ownership. Parcon and Padilla formed Essence Home Health (Essence), a/k/a “Primary Angel, Inc.,” located on Midway Road in Addison, Texas. While the three companies appeared to be set up as three separate entities, the companies worked as one; the same employees often worked for all three companies and were often paid by all three companies.

According to the factual resumes for each defendant, from January 1, 2009 to approximately June 9, 2013, Ezukanma and Etindi certified 94% of the Medicare beneficiaries receiving home health services from A Good, and 65% of the Medicare beneficiaries receiving home health services from Essence. Had Medicare known of the true ownership and improper relationship between the three companies, Medicare would not have allowed these companies to enroll in the program and bill for services.

USPHV submitted billing under both Dr. Ezukanma’s and Dr. Etindi’s Medicare provider number, regardless of who actually performed the service. They billed at an alarming rate, generally billing for only the most comprehensive physician exam, and always adding a prolonged service code. USPHV submitted claims to Medicare for physician visits of 90 minutes or more, when most visits took only 15 to 20 minutes. Most all of USPHV patients came from home health companies soliciting certifications and recertifications for home health. More than 97% of USPHV Medicare patients received home health care, whether they needed it or not. The false certifications caused Medicare to pay more than $40 million for fraudulent home health services.

The case was investigated by the U.S. Department of Health and Human Services – Office of Inspector General, the FBI, the and the Texas Attorney General’s Medicaid Fraud Control Unit and were brought as part of the Medicare Fraud Strike.

Assistant U.S. Attorney Katherine Pfeifle prosecuted.

Cleveland Doctor Sentenced in Hospice Fraud Case

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Monday, August 14, 2017

OXFORD, Miss. – Robert H. Norman, Acting United States Attorney for the Northern District of Mississippi; Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General; Christopher Freeze, Special Agent in Charge at the Federal Bureau of Investigation, and Mississippi Attorney General Jim Hood announced that:

Dr. Nathaniel Brown, 62, of Cleveland, Mississippi, was sentenced Thursday, August 10, 2017 before United States District Judge Neal B. Biggers, Jr. in Oxford, Mississippi. Dr. Brown was sentenced to serve thirty-nine (39) months in federal prison followed by three (3) years supervised release and ordered to pay $1,941,254 in restitution to the Medicare program.

In January, Dr. Brown pled guilty to conspiracy to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 & 1349. Brown admitted to referring patients who were not hospice appropriate to Milestone Hospice and Sandanna Hospice which led to $1,941,254 in Medicare payments to Milestone and Sandanna. Brown also admitted to receiving $47,750 in payments by check from the hospice owner in addition to cash payments.

Dr. Brown is a corrupt doctor who participated in a hospice scam to exploit patients and their families,” said Special Agent in Charge Derrick L. Jackson, of the U.S. Department of Health and Human Services, Office of Inspector General. “The verdict today should send a clear message to dishonest medical professionals who abuse our health care system – they will be caught and face significant criminal charges.”

“Joint investigations continue to be indispensable in the fight against fraud in healthcare benefit programs,” said Attorney General Jim Hood. “We will continue to work with our federal and state partners in this ongoing battle to protect the resources needed to serve our most vulnerable citizens.”

“It is important the Medicare fund is properly guarded against inappropriate billing by health care providers, and patients are receiving those services billed to Medicare,” said Christopher Freeze, Special Agent in Charge of the FBI in Mississippi. “The FBI will continue to take a strong stance against individuals who engage in health care fraud.”

This case was investigated jointly by the US Department of Health and Human Services, Office of Inspector General, the Medicaid Fraud Control Unit of the Mississippi Attorney General’s Office and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Clay Dabbs and Clay Joyner.

Houston Home Health Agency Owner Sentenced to 480 Months in Prison for Conspiring to Defraud Medicare and Medicaid of More Than $17 Million

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Friday, August 18, 2017

WASHINGTON – The owner and operator of five Houston-area home health agencies was sentenced on Thursday to 480 months in prison for conspiring to defraud Medicare and the State of Texas’ Medicaid-funded Home and Community-Based Service (HCBS) and Primary Home Care (PHC) Programs of more than $17 million and launder the money that he stole from Medicare and Medicaid.  The HCBS and PHC Programs provided qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services” (PAS).  This case marks the largest PAS fraud case charged in Texas history.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office, Special Agent in Charge D. Richard Goss of IRS Criminal Investigation’s (CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

Godwin Oriakhi, 61, of Houston, was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas.  In March 2017, Oriakhi pleaded guilty to two counts of conspiracy to commit health care fraud and one count of conspiracy to launder monetary instruments.

According to admissions made as part of Oriakhi’s plea, he, his co-defendant daughter and other members of his family owned and operated Aabraham Blessings LLC, Baptist Home Care Providers Inc., Community Wide Home Health Inc., Four Seasons Home Healthcare Inc. and Kis Med Concepts Inc., all of which were home health agencies in the Houston area.  Oriakhi admitted that he, along with his daughter and other co-conspirators, obtained patients for his home health agencies by paying illegal kickback payments to patient recruiters and his office employees for hundreds of patient referrals.  In his plea, Oriakhi also admitted that he, along with his daughter and co-conspirators, paid Medicare and Medicaid patients by cash, check, Western Union and Moneygram for receiving services from his family’s home health agencies in exchange for the ability to use the patients’ Medicare and Medicaid numbers to bill the programs for home healthcare and PAS services.  Oriakhi admitted that he, his daughter and their co-conspirators also directly paid some of these patients for recruiting and referring other Medicare and Medicaid patients to his agencies.  Additionally, Oriakhi admitted that he, his daughter and other co-conspirators paid physicians illegal kickbacks payments, which Oriakhi and his co-conspirators called “copayments,” for referring and certifying Medicare and Medicaid patients for home health and PAS services.

Oriakhi further admitted that each time he submitted a claim predicated on an illegal kickback payment he knew he was submitting a fraudulent claim to Medicare or Medicaid based on his false representations that the claim and the underlying transaction complied with the federal Anti-Kickback Statute and other state and federal laws.  Oriakhi further admitted that he knew that Medicare and Medicaid would not otherwise pay for the fraudulent claims, according to his plea.  In addition to the home health care and PAS services fraud scheme, Oriakhi admitted that he and his co-conspirators used the money fraudulently obtained from Medicare and Medicaid to make illegal kickback payments to patient recruiters, employees, physicians and patients to promote the Medicare home health and Medicaid PAS fraud conspiracies, and ensure their successful continuation.

In total, Oriakhi that he and his co-conspirators submitted approximately $17,819,456 in fraudulent home healthcare and PAS claims to Medicare and Medicaid and received approximately $16,198,600 on those claims.

To date, three others have pleaded guilty based on their roles in the fraudulent scheme at Oriakhi’s home healthcare agencies.  Oriakhi’s daughter, Idia Oriakhi, and Charles Esechie, a registered nurse who was Baptist’s primary admissions nurse, each pleaded guilty to one count of conspiring with Oriakhi and others to commit health care fraud.  Jermaine Doleman, a patient recruiter, pleaded guilty to conspiring with Oriakhi and others to commit health care fraud and launder money.  Doleman was also charged in two other healthcare fraud cases.  Esechie was also sentenced on August 17, to 60 months in prison.  Idia Oriakhi and Jermaine Doleman are awaiting sentencing.

The case was investigated by the IRS-CI, FBI, HHS-OIG and MFCU 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 Senior Trial Attorney Jonathan T. Baum and Trial Attorneys Aleza S. Remis and William S.W. Chang of the Fraud Section of the Justice Department’s Criminal Division.

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.

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

Acting Manhattan U.S. Attorney Announces $13.4 Million Settlement Of Civil Healthcare Fraud Lawsuit Against US Bioservices Corp.

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Wednesday, August 23, 2017

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the New York Region (“HHS-OIG”), announced that the United States has settled a civil fraud case against US BIOSERVICES CORP. (“US BIO”) pursuant to which US BIO will pay a total of $13.4 million. The settlement resolves claims that US BIO violated the Anti-Kickback Statute and the False Claims Act by participating in a kickback scheme with Novartis PharmaceuticalS Corp. (“Novartis”) relating to the NOVARTIS drug Exjade. Specifically, the United States’ Complaint alleges that US BIO and NOVARTIS entered into a kickback arrangement pursuant to which US BIO was promised additional patient referrals and related benefits in return for refilling a higher percentage of Exjade than the two other pharmacies that also dispensed Exjade. The settlement will also resolve numerous state law civil fraud claims.

Yesterday, Chief U.S. District Judge Colleen McMahon approved a settlement stipulation to resolve the Government’s claims against US BIO. Under the settlement, US BIO is required to pay approximately $10.6 million to the United States and has made extensive admissions regarding its conduct. Further, as part of the settlement, US BIO will pay approximately $2.8 million to resolve the state law civil fraud claims. In prior lawsuits, the Government sued NOVARTIS and the two other pharmacies that participated in this same Exjade kickback scheme. The Government settled those lawsuits, pursuant to which NOVARTIS paid $390 million, the two other pharmacies paid $75 million, and NOVARTIS and the pharmacies made extensive admissions regarding their conduct.

Acting Manhattan U.S. Attorney Joon H. Kim said: “The integrity of the federal healthcare system requires that all providers, including pharmacies like US Bioservices, refrain from entering into kickback relationships. When healthcare providers accept kickbacks, they violate the law, subject what should be health-based decision-making to the influence of profit-seeking drug manufacturers, and thereby put their own financial interests ahead of the interests of their patients. This Office will continue to use its law enforcement tools to pursue healthcare providers who accept kickbacks or otherwise put their profits ahead of patient safety.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “The conduct displayed by US Bioservices compromised patient care and undermined the integrity of our nation’s health care programs. This settlement should serve as a warning to all providers that choose to let financial inducements cloud their medical judgment.”

As alleged in the Government’s Complaint, US BIO participated in a kickback scheme with NOVARTIS that violated the federal Anti-Kickback Statute and the False Claims Act. In connection with this scheme, US BIO submitted claims for thousands of Exjade prescriptions to Medicare and Medicaid, causing those programs to pay out millions of dollars for false claims tainted by kickbacks. As part of the settlement, US BIO admitted as follows:

  • In December 2005, US BIO signed a contract with Novartis relating to the distribution of Exjade. Under that contract, Novartis agreed that US BIO would be one of three specialty pharmacies (the “EPASS pharmacies”) permitted to dispense Exjade as part of Novartis’s EPASS network. US BIO, in turn, agreed to provide specialty pharmacy services to Exjade patients, including having clinical staff available to speak with patients and to answer clinical questions or concerns about Exjade.
  • In or about June 2007, Novartis began issuing monthly “Exjade Scorecards” to US BIO and the other two EPASS pharmacies that measured, among other things, the pharmacies’ “adherence” scores. The “adherence” score in the Exjade Scorecards showed how long Exjade patients continued to order refills, without excluding patients who stopped ordering refills due to side effects or patients who were directed to stop therapy by their physicians. Starting in or about July 2007, Novartis had discussions with US BIO regarding how US BIO could improve its “adherence” scores in the Exjade Scorecards.
  • In late 2007 and early 2008, and to improve its “adherence” score, US BIO trained its nurses to call Exjade patients and tell patients that not treating iron overload, for which Exjade is prescribed, could have severe consequences like organ failure, and that while Exjade had certain common side effects like diarrhea, such side effects typically went away with time. The nurses at US BIO did not use written scripts for the calls with Exjade patients.
  • In October 2008, Novartis implemented a new plan for allocating Exjade patient referrals among US BIO and the other EPASS pharmacies. Under that plan, Novartis would allocate 60% of all undesignated patient referrals to the EPASS pharmacy with the top “adherence” scores in the Exjade Scorecards and allocate 20% of the undesignated patient referrals to each of the other two EPASS pharmacies.

* * *

Mr. Kim thanked HHS-OIG and the Medicaid Fraud Control Units for New York, Washington, and California for their investigative efforts and assistance with this case.

The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Li Yu and Mónica P. Folch are in charge of the case.

Owner of Hudson County Medical Equipment Supply Store Pleads Guilty To $100,000 from Medicaid Fraud Scam

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TRENTON –Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor (OIFP) announced today that the owner of a Hudson County medical equipment supply store has pleaded guilty to fraudulently billing the Medicaid program more than $100,000 for medical supplies never provided to patients.

Alfredo Valdes, Jr., who owns T-N-T medical supplies in West New York, pleaded guilty to second-degree charges of health care claims fraud and theft by deception in a hearing before Superior Court Judge Mitzy Galis-Menendez in Hudson County. Under the terms of the plea agreement, the State will recommend that the 42-year-old Clifton resident be sentenced to four years in state prison. Valdes will also pay $101,000 in restitution to Horizon New Jersey Health, and sign a consent order agreeing to lifetime disbarment from participation as a provider in the New Jersey Medicaid program.

“Stealing from a program that provides financial assistance to those who cannot afford health insurance or health care services is not only a crime, it’s a disgrace,” said Attorney General Porrino. “This guilty plea ensures that the defendant will be held accountable for his actions and will never again be in a position to divert resources from those who truly need it.”

“Every dollar lost to Medicaid fraud is one less dollar available to help some of the most vulnerable citizens of our state,” said Acting Insurance Fraud Prosecutor Christopher Iu. “Our Medicaid Fraud Control Unit will continue to aggressively investigate and punish those exploit the Medicaid system for their personal enrichment.”

In pleading guilty, Valdes admitted that between January 2008 and March 2016 he fraudulently submitted claims totaling more than $100,000 to Horizon NJ Health, a provider of Medicaid services in the state. The claims falsely stated that Valdes had distributed durable medical equipment – including compression stockings, diapers and other items – to patients who, in fact, had died prior to the dates of the purported distributions.

Valdes is scheduled to be sentenced on January 5, 2018.

Deputy Attorney General Melissa Simsen represented the State in the plea hearing. Detectives Anthony Iannice and Kylie Mattis coordinated the investigation with assistance from Det. Megan Brennan of the Special Investigation Unit at Horizon New Jersey Health, and Analysts Keira McRae-Wiggins and Kelly Celenza. Acting Insurance Fraud Prosecutor Iu thanked the SIU Unit at Horizon for referring the matter to the Office of the Insurance Fraud Prosecutor.

John Lynch, Esq. represented Valdes at the plea hearing.

Acting Insurance Fraud Prosecutor Iu noted that some important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at www.NJInsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.

Follow the New Jersey Attorney General’s Office online at Twitter, Facebook, Instagram & YouTube. The social media links provided are for reference only. The New Jersey Attorney General’s Office does not endorse any non-governmental websites, companies or applications.

A.G. Schneiderman Announces Civil Suit And Criminal Charges Against Pharmacy Owner For Allegedly Defrauding Medicaid Of Millions

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Hin T. Wong Allegedly Paid Patients Kickbacks And Billed Medicaid For HIV Medications Never Dispensed

Defendant Allegedly Used Money Stolen From Medicaid To Fund Personal Expenses, Including Travel And Furniture 

NEW YORK – Attorney General Eric T. Schneiderman today announced a lawsuit and criminal charges against pharmacist Hin T. Wong, 49, of Manhattan, and NY Pharmacy, Inc. (“NY Pharmacy”) for allegedly defrauding the New York State Medicaid program out of millions of dollars. Wong, a licensed pharmacist and owner of NY Pharmacy, located at 131 Walker Street in Manhattan, allegedly paid undercover agents posing as Medicaid recipients kickbacks for HIV prescriptions and for referring other Medicaid recipients to bring their prescriptions to NY Pharmacy. Wong and NY Pharmacy also allegedly billed and were eventually paid over $60,0000 by Medicaid for refills on prescriptions submitted by undercover agents that NY Pharmacy either did not dispense or were predicated on the payment of a kickback.   Various state laws and Medicaid regulations prohibit the payment of kickbacks for the referral of patients or individual prescriptions. In addition, the  Attorney General also announced the filing of a civil asset forfeiture action seeking over $11 million in damages from Wong, NY Pharmacy and two other pharmacies owned by Wong that are now closed.

“Stealing from Medicaid in order to purchase fancy accessories and travel tickets is absolutely shameful,” said Attorney General Schneiderman. “We will not allow Medicaid to serve as a personal piggy bank for criminals. Fraudsters who seek to rip-off this vital program that helps millions of New Yorkers will be held accountable.”

The on-going investigation into NY Pharmacy being conducted by the Attorney General’s Medicaid Fraud Control Unit (“MFCU”) revealed that on multiple occasions between July 2014 and August 2017, Wong allegedly paid kickbacks to undercover MFCU agents posing as patients to fill prescriptions, most of which involved medication to treat HIV, at NY Pharmacy or at two other pharmacies she owned, which are now closed.  The defendants thereafter allegedly submitted claims for reimbursement to Medicaid through NY Pharmacy for refills that were not dispensed by the pharmacy, a scheme known as “auto-refilling.”

Simultaneous to today’s arrest, the Attorney General filed a civil asset forfeiture action against Wong, NY Pharmacy, and Wong’s two closed pharmacies in New York State Supreme Court, New York County seeking over $11 million in damages.  In papers filed in court today, the Attorney General alleges that Wong personally made millions from the scheme and used the proceeds, among other things, to make lavish credit card purchases of high-end retail items (including Prada and Vuitton), and to pay for travel expenses and expensive furniture. An investigational audit uncovered evidence indicating that Wong’s pharmacies did not purchase enough medication to support their substantial billings to Medicaid. Between January 1, 2014 and August 1, 2017, Wong’s pharmacies billed Medicaid and other insurers over $15 million for medications, but allegedly purchased only a fraction of the amount of drugs necessary to fill those prescriptions. As part of the civil action, the Attorney General also obtained a court order freezing the bank accounts held by the defendants to preserve money wrongfully obtained from Medicaid.

Investigators from the Attorney General’s Office with the assistance of investigators from the New York State Office of the Medicaid Inspector General executed a search warrant this morning at NY Pharmacy. Hin T. Wong and NY Pharmacy were arrested and charged by felony complaint filed in New York City Criminal Court, New York County with Grand Larceny in the Third Degree, a class D felony, and Medical Assistance Provider: Prohibited Practices (Kickbacks), a class E felony. Wong is expected to be arraigned later this afternoon. If convicted on the top count, Wong faces up to seven years in state prison. Wong may face additional criminal charges as the criminal investigation continues.

The Attorney General thanks the New York State Office of the Medicaid Inspector General under the leadership of Inspector General Dennis Rosen for its continued partnership and its assistance in this investigation.  The Attorney General also thanks Medicaid managed care insurers Amida Care and Metro Plus for referring the matter and for their cooperation throughout the investigation.

The charges against the defendants are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.

MFCU’s investigation was conducted by Investigator Nefertiti Clarke with the assistance of Supervising Investigator Dominick DiGennaro and Deputy Chief Investigator Kenneth Morgan. The audit investigation was conducted by Principal Auditor Investigator Cristina Marin and Auditor Investigator Megan Scott with the assistance of New York City Regional Deputy Chief Auditor Jonathan Romano and New York City Regional Chief Auditor Thomasina Smith.

The criminal case is being prosecuted by Special Counsel Imran S. Ahmed with the assistance of MFCU New York City Deputy Regional Director Twan Bounds and MFCU New York City Regional Director Christopher M. Shaw. The civil action is being brought by Senior Counsel Marie Spencer and Special Assistant Attorney General Elizabeth Kappakas with the assistance of MFCU Chief of Civil Enforcement Carolyn Ellis.  Special Assistant Attorney General Thomas O’Hanlon is the MFCU Chief of Criminal Investigations-Downstate. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney.

Essex County Pediatrician Sentenced to Prison for Medicaid Fraud

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TRENTON – Attorney General Christopher S. Porrino and the Office of Insurance Fraud Prosecutor announced today that an Essex County pediatrician has been sentenced to three years in state prison for submitting fraudulent claims to the Medicaid Program through which she falsely billed for working 24 hours or more a day.

Ibilola Ighama-Amegor, 55, whose Quality Pediatrix practice is located in Newark, must also pay $216,000 in restitution under a sentence handed down by Superior Court Judge Michael Petrolle in Newark on Friday.

Following a five-week jury trial in June, a jury found Amegor guilty of 48 counts of health care claims fraud and one count of Medicaid fraud, all in the third degree. Amegor was acquitted of second-degree theft by deception.

Deputy Attorneys General Crystal Callahan and Dennis Kwasnik tried the case for the Office of the Insurance Fraud Prosecutor’s Medicaid Fraud Control Unit.

“Dr. Amegor used her medical degree as a license to steal from a program that pays for medical care for the elderly and those who can’t afford health insurance,” said Attorney General Porrino. “She doesn’t belong in the medical profession, she belongs in prison, which is right where she’s going.”

“Doctors who file false insurance claims undermine the integrity of a system that depends on the trustworthiness of licensed professionals,” said Acting Insurance Fraud Prosecutor Christopher Iu. “Dr. Amegor’s sentence sends a powerful message that medical professionals who commit insurance fraud will be held accountable for their greed.”

At trial, the state presented testimony that Amegor submitted bills for 24 hours or more of work on 48 dates of service between April 30, 2008 and May 16, 2011. An investigation by the Office of the Insurance Fraud Prosecutor determined that Amegor’s practice was only open for approximately eight hours per day, three days a week.

Deputy Attorneys General Callahan and Kwasnik were assisted at trial by Detectives Janet Amberg and Janet Thai. Detective Kylie Mattis, analyst Elizabeth O’Brien, Detective Ron Allen, Detective Laura Parisi, and Senior Management Assistant B’leia Williams all testified at trial. The investigation was coordinated by Detectives Kylie Mattis and Laura Catizone, and analyst Elizabeth O’Brien. Acting Insurance Fraud Prosecutor Christopher Iu thanked the Medicaid Fraud Division within the State Comptroller’s Office and the Special Investigations Unit at Anthem (formerly Amerigroup) for referring the matter to the Office of the Insurance Fraud Prosecutor.

Acting Insurance Fraud Prosecutor Iu noted that some important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at www.NJInsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.

Follow the New Jersey Attorney General’s Office online at Twitter, Facebook, Instagram & YouTube. The social media links provided are for reference only. The New Jersey Attorney General’s Office does not endorse any non-governmental websites, companies or applications.