Category Archives: MDFL

United States Government Settles False Claims Act Allegations Against Florida Vein Clinic and Its Owner

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A Florida-based physician, Dr. Ravi Sharma, has agreed to pay $400,000 to resolve allegations that he and his clinics violated the False Claims Act by knowingly billing Medicare for vein injections and physician office visits performed by unqualified personnel, the Justice Department announced today.

“Vein injections and other invasive procedures should be performed by appropriately qualified personnel,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.   “We will not tolerate those who put patients’ health at risk for their personal gain and convenience.”

The government alleged that, between 2009 and 2010, Sharma owned and operated a clinic in the Tampa area called Premier Vein Centers.   Beginning in 2009, Sharma allegedly sent text messages to his office manager instructing her to perform varicose vein injections on patients when he was not in the office.   The government further alleged that, when Sharma was in the office, he performed unnecessary vein injections and unnecessary ultrasound imaging procedures associated with those vein injections.

Sharma also owned and operated, between 2009 and 2010, a weight loss clinic in the Tampa area called Life’s New Image.   Allegedly, unqualified personnel met with patients of the clinic, but Sharma billed those visits as physician office visits using his own Medicare provider number.   Sharma closed Premier Vein Centers and Life’s New Image in 2010.

“We are pleased to announce this very favorable resolution of our claims against this provider,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III.   “Again, it demonstrates our commitment to civil health care fraud enforcement in our district.”

The allegations covered by the settlement were originally raised in a lawsuit filed by Patti Lovell, the former office manager for Sharma, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and to receive a share of any recovery.   Lovell will receive $72,000.

As part of the settlement, Sharma entered into a three-year Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services.   The agreement requires Sharma to attend training courses provided by the Centers for Medicare and Medicaid Services and provides for an independent external review of his federal health care program coding and billing procedures.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida and the Department of Health and Human Services Office of Inspector General.

The lawsuit is captioned U.S. ex rel. Lovell v. Ravi Sharma, M.D. and Premier Vein Centers, 12-CV-133 (M.D. Fla.).   The claims resolved by the settlement are allegations only, and there has been no determination of liability.

 

Two Plead Guilty to Money Laundering Conspiracy in $10.5 Million Medicare Fraud Scheme

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Two men from Miami have pleaded guilty to laundering millions of dollars obtained through a $10.5 million Medicare fraud scheme using shell companies they controlled.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Health and Human Services Office of Inspector General (HHS-OIG) region including all of Florida made the announcement.

Rafael Roche, 43, and Alain Remy, 35, pleaded guilty on Oct. 24, 2013, and Oct. 23, 2013, respectively, in the U.S. District Court for the Middle District of Florida to an indictment charging them with conspiracy to commit money laundering involving the proceeds of a health care fraud scheme.  Remy is scheduled for sentencing on Jan. 16, 2014; Roche’s sentencing date has yet to be scheduled.  They each face a maximum penalty of 20 years in prison.

According to documents filed in the case, Roche, Remy and others conspired to engage in financial and monetary transactions of health care fraud proceeds from Renew Therapy Center of Port St. Lucie LLC (Renew Therapy), a comprehensive outpatient rehabilitation facility.  From November 2007 through August 2009, Renew Therapy submitted approximately $10,549,361 in fraudulent claims for reimbursement to Medicare for therapy services that were not legitimately prescribed and not legitimately provided to Medicare beneficiaries.  As a result of those fraudulent claims, Medicare deposited approximately $6,248,056 into a Renew Therapy bank account.  The fraud proceeds in that account were subsequently disbursed to various entities, including a combined total of $1,847,222 to Ariguanabo Investment Group Inc. and IRE Diagnostic Center Inc., shell companies that Roche and Remy controlled.

Court records indicate that more than $1.2 million was laundered through Ariguanabo Investment Group between Feb. 5, 2009, and Sep. 22, 2009.  The money was subsequently removed from the Ariguanabo Investment Group bank account to various individuals and entities, including to Ibiza Future Planning Inc., a shell company that Remy established and controlled.

More than $600,000 was laundered through IRE Diagnostic Center from Aug. 7, 2008, and Jan. 29, 2009.  The money was subsequently removed from the IRE Diagnostic Center bank account to various individuals and entities, including to A&R Medical Services of South Florida Inc., another shell company that Roche and Remy established and controlled.   This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and 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 more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Former Executive at Florida-Based Lender Processing Services Inc. Sentenced to Five Years in Prison for Role in Mortgage-Related Document Fraud Scheme

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A former executive of Lender Processing Services Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – was sentenced today to serve five years in prison for her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Middle District of Florida Robert E. O’Neill, and Special Agent in Charge Michelle S. Klimt of the FBI Jacksonville Division.

Lorraine Brown, 56, of Alpharetta, Ga., was sentenced by Senior U.S. District Judge Henry Lee Adams Jr. in the Middle District of Florida. In addition to her prison term, Brown was sentenced to serve two years of supervised release and ordered to pay a fine of $15,000.   On Nov. 20, 2012, Brown pleaded guilty to conspiracy to commit mail and wire fraud.   

“Lorraine Brown will spend five years in prison for her central role in a scheme to fraudulently execute thousands of mortgage-related documents while our nation’s housing market was at its most vulnerable point in generations,” said Acting Assistant Attorney General Raman.  “The documents that were fraudulently produced under Brown’s direction were relied upon in court proceedings, including a significant number of foreclosure and bankruptcy matters. Today’s sentencing represents appropriate punishment for someone who sought to capitalize on the nation’s housing crisis.”

“Floridians were hard hit by the downturn in the real estate market,” said U.S. Attorney O’Neill.  “We will continue to pursue individuals like Brown who took advantage of consumers for personal gain and contributed to the financial crisis.  Prosecuting financial crimes remains a priority for our office.”

“The investigation of sophisticated mortgage and corporate fraud schemes continues to be a priority for the Federal Bureau of Investigation as such criminal activities have a significant economic impact on our community,” said Special Agent in Charge Klimt.

Brown was an executive at LPS and the chief executive of DocX LLC, which was a wholly-owned subsidiary of LPS, until it was closed down in early 2010.    DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes.    Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices.

According to Brown’s plea agreement, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures of authorized personnel on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices.    Only specific personnel at DocX were authorized by clients to sign the documents, but the documents were fraudulently notarized as if actually executed by authorized DocX employees.

According to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit.   Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices.    To further increase profits, DocX also hired temporary workers to act as authorized signers.    These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients.   Some of these temporary workers were able to sign thousands of mortgage-related instruments a day.   Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.

After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country.   Many of these documents were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions.   Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.

This case is being prosecuted by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida.    This case was investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.

This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.

Four Former Wellcare Executives Found Guilty in Florida

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A federal jury in Tampa found four former executives of WellCare Health Plans Inc., a health maintenance organization (HMO) operator, guilty of various charges, including health care fraud, making false statements relating to health care matters and making false statements to a law enforcement officer, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Robert E. O’Neill of the Middle District of Florida and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office

Today, former WellCare Chief Executive Officer Todd S. Farha, 45, of Tampa, was convicted of two counts of health care fraud; former WellCare Chief Financial Officer Paul L. Behrens, 51, Odessa, Fla., was convicted of two counts of making false statements relating to health care matters and two counts of health care fraud; William L. Kale, 63, of Oldsmar, Fla., former vice president of Harmony Behavioral Health Inc. (a wholly-owned subsidiary of WellCare), was found guilty of two counts of health care fraud; and Peter E. Clay, 56, of Wellesley, Mass., former WellCare vice president of medical economics, was found guilty of making false statements to a law enforcement officer.

On March 2, 2011, a federal grand jury sitting in Tampa returned an indictment charging Farha, Behrens, Kale and Clay with various federal criminal violations related to a scheme to defraud the Florida Medicaid program, from the summer of 2003 through the fall of 2007, by making false and fraudulent statements relating to expenditure information for behavioral health care services.

WellCare operates HMOs in several states targeted for government-sponsored health care benefit programs like Medicaid.  Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration (AHCA), the Florida agency which administers the Medicaid program, to provide Florida Medicaid program recipients with an array of services, including behavioral health services.

In 2002, Florida enacted a statute that required Florida Medicaid HMOs to expend 80 percent of the Medicaid premium paid for certain behavioral health services upon the provision of those services.  In the event that the HMO expended less than 80 percent of the premium, the difference was required to be returned to AHCA.  As part of the scheme, the defendants falsely and fraudulently submitted inflated expenditure information in the company’s annual reports to AHCA, in order to reduce the WellCare HMOs’ contractual payback obligations for behavioral health care services.

On May 5, 2009, the government filed related charges in an information and deferred prosecution agreement (DPA) against WellCare.  Under that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States and cooperate with the government’s criminal investigation.  The company complied with all of the requirements of the DPA.  As a result, the information was later dismissed by the court following a government motion.

In May 2009, an information and plea agreement for Gregory West, 55, of Tampa, a former WellCare analyst, was unsealed.  In his plea agreement, West admitted to participating in the scheme to defraud the Medicaid program and agreed to cooperate in the government’s investigation.  At trial, West provided extensive and detailed testimony explaining the complex scheme.  Other former WellCare executives provided additional testimony about the four individuals’ roles in the scheme.

The maximum penalty for each of the health care fraud counts is 10 years in prison.  The maximum penalty for all other counts is five years in prison. A sentencing date has not yet been set.

Thaddeus M.S. Bereday, of Tampa, WellCare’s former general counsel, was severed from the trial in February of this year.  He will be tried separately, at a later date.  Defendants are presumed innocent until proven guilty in a court of law.

The jury returned not guilty verdicts with respect to several counts and was unable to reach a verdict on others.  The judge declared a mistrial as to those counts on which the jury was deadlocked.  The Justice Department will decide, at a later date, whether to retry the individuals on those charges.

This case was investigated by HHS-OIG, the FBI and the Florida Attorney General’s Medicaid Fraud Control Unit.  It was prosecuted by Senior Litigation Counsel John Michelich of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jay Trezevant and Cherie Krigsman of the Middle District of Florida and Special Assistant U.S. Attorney John Bowers.

Medicare Fraud Strike Force Charges 89 Individuals for Approximately $223 Million in False Billing

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Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in eight cities has resulted in charges against 89 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings.

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, FBI Assistant Director Ron Hosko, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Peter Budetti.

This coordinated takedown was the sixth national Medicare fraud takedown in Strike Force history.  In total, almost 600 individuals have been charged in connection with schemes involving almost $2 billion in fraudulent billings in these national takedown operations alone. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.  In addition, CMS, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

“Today’s announcement marks the latest step forward in our comprehensive efforts to combat fraud and abuse in our health-care systems,” said Attorney General Holder.  “These significant actions build on the remarkable progress that the HEAT has enabled us to make – alongside key federal, state, and local partners – in identifying and shutting down fraud schemes.  They are helping to deter would-be criminals from engaging in fraudulent activities in the first place. And they underscore our ongoing commitment to protecting the American people from all forms of health-care fraud, safeguarding taxpayer resources and ensuring the integrity of essential health-care programs.”

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

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

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided.  In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent billing to Medicare for services that were medically unnecessary or never performed.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $223 million in fraudulent billing.

“We have made it part of our core mission at the Department of Justice to hold accountable those who steal from the Medicare program to line their own pockets,” said Acting Assistant Attorney General Raman.  “There are Medicare fraudsters in prisons across the country – some who will be there for decades – who can attest to our determination, and our effectiveness.”

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

“Taxpayers expect us to work harder and smarter, and that is exactly what happened across the nation today,” said HHS Inspector General Levinson. “In addition to the work of my agents and other federal, state, and local law enforcement officials, investigators from nine other IG offices joined us today.  Working together we can break down silos, pool expertise, reduce costs, and the successful result speaks for itself.”

“Today’s takedown is the result of dedicated commitment to working with our law enforcement partners to root out fraud in the Medicare program,” said CMS Program Integrity Deputy Administrator Budetti.  “This collaboration has been strengthened by the Affordable Care Act, which provided CMS with the tools it needs to stop the flow of money while working to rid our programs of fraud, waste and abuse.”

In Miami, a total of 25 defendants, including two nurses, a paramedic and a radiographer, were charged today and yesterday for their participation in various fraud schemes involving a total of $44 million in false billings for home health care, mental health services, occupational and physical therapy, DME and HIV infusion.  In one case, three defendants were charged for participating in a $20 million home health fraud scheme involving a home health agency, Trust Care Health Services.  Court documents allege that the defendants bribed Medicare beneficiaries for their Medicare information, which was used to bill for home health services that were not rendered or that were not medically necessary.  According to court documents, the lead defendant spent much of the money from the scheme, and purchased multiple luxury vehicles, including two Lamborghinis, a Ferrari and a Bentley.

Eleven individuals were charged by the Baton Rouge Strike Force.  Five individuals were charged today, including two doctors, in New Orleans by the Baton Rouge Strike force for participating in a different $51 million home health fraud scheme.  According to court documents, the defendants recruited beneficiaries, offering cash and other incentives in exchange for their Medicare information, which was used to bill medically unnecessary home health services. The Baton Rouge Strike Force also announced a superseding indictment and an information charging six individuals, including another doctor, with over $30 million in fraud in connection with a community mental health center called Shifa Texas.  These charges come on top of charges brought against the owners and operators of Shifa Baton Rouge, a related community mental health center which is at the center of an alleged $225 million scheme charged in an earlier indictment.

In Houston, two individuals, including a nurse and a social worker, were charged today with fraud schemes involving at total of $8.1 million in false billings for home health care.  The defendants, who are brother and sister, allegedly used patient recruiters to obtain Medicare beneficiary information that they then used to bill for services that were not medically necessary and not provided.

Thirteen defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $23 million.  In one case, three individuals allegedly billed Medicare for more than $8.7 million in fraudulent billing for DME. According to the indictment, the defendants allegedly paid illicit kickbacks to patient recruiters to bribe beneficiaries to participate in the scheme. Once the individuals provided their Medicare information to recruiters, doctors and medical clinics conspiring with the defendants allegedly wrote prescriptions for medically unnecessary power wheelchairs, which they sold to the defendants for illegal kickbacks.

In Detroit, 18 defendants, including two doctors, a physician’s assistant and two therapists, were charged for their roles in fraud schemes involving approximately $49 million in false claims for medically unnecessary services, including home health, psychotherapy and infusion therapy.  In one case, three individuals were charged in a $12 million scheme where they allegedly held themselves out to be licensed physicians – which they were not – and signed prescriptions for drugs and documents about purported psychotherapy they provided.

In Tampa, nine individuals were charged in a variety of schemes, ranging from pharmacy fraud health care-related money laundering. In one case, four individuals were charged for their alleged roles in establishing and operating four supposed healthcare clinics in Tampa, Fl. – Palmetto General Health Care Inc., United Healthcare Center Inc., New Imaging Center Inc. and Lord Physical Rehabilitation Center Inc. – which they allegedly used to steal more than $2.5 million from Medicare for surgical procedures that were never performed.  The defendants allegedly billed Medicare for surgical procedures used to treat patients with high blood pressure by collapsing veins in the legs, but they did not actually perform the procedures.

In Chicago, seven individuals were charged, including two doctors, with a variety of health care fraud schemes.

In Brooklyn, N.Y., four individuals, including two doctors, were charged in fraud schemes involving $9.1 million in false claims. In one case, three additional individuals were allegedly involved in what is now alleged to be a $15 million scheme where massages by unlicensed therapists were billed to Medicare as physical therapy.  Six defendants were previously charged in the scheme. The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana; the Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

Florida-Based Lender Processing Services Inc. to Pay $35 Million in Agreement to Resolve Criminal Fraud Violations Following Guilty Plea from Subsidiary CEO Agreement Also Follows Closure of Subsidiary DocX Operations

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Lender Processing Services Inc. (LPS), a publicly traded mortgage servicing company based in Jacksonville, Fla., has agreed to pay $35 million in criminal penalties and forfeiture to address its participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.  The settlement, which follows a felony guilty plea from the chief executive officer of wholly owned LPS subsidiary DocX LLC, was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Florida Robert E. O’Neill.

 The non-prosecution agreement, which LPS entered into today with the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Florida, requires the company to make the payment and meet a series of other conditions.

 

Lorraine Brown, the former CEO of DocX LLC, pleaded guilty on Nov. 20, 2012, in federal court in Jacksonville to conspiracy to commit mail and wire fraud.   During her guilty plea, Brown admitted to her leadership role in the scheme.

 

LPS has taken a number of remedial actions to address the misconduct at DocX.   Among other things, LPS has wound down all of DocX’s operations, re-executed and re-filed mortgage assignments as appropriate and terminated Brown and others.   LPS has also demonstrated changes in its compliance, training and overall approach to ensuring its adherence to the law, and has retained an independent consultant to review and report on LPS’s document execution practices; assess related operational, compliance, legal and reputational risks; and establish a plan for reimbursing any financial injuries to mortgage servicers or borrowers.

 

According to the statement of facts accompanying the agreement, before its wind-down, DocX was in the business of assisting residential mortgage servicers with creating and executing mortgage-related documents to be filed with property recorders’ offices throughout the United States.   Employees of DocX, at the direction of Brown and others, falsified signatures on the documents.   Through this scheme and unbeknownst to the clients, Brown and subordinates at DocX directed authorized signers to allow other, unauthorized personnel to sign and to have documents notarized as if they were executed by authorized signers.   These signing practices were used at DocX from at least March 2003 until late 2009, and were implemented to increase profits.

 

Also to increase profits, Brown hired temporary workers to sign as authorized signers.     These temporary employees would sign mortgage-related documents at a much lower cost and without the quality controls represented to clients.   These documents were then falsely notarized by employees at DocX, allowing the fraud scheme to remain undetected.

 

After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country.   Many of these documents – particularly mortgage assignments, lost note affidavits and lost assignment affidavits – were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions.

 

In entering into the non-prosecution agreement with LPS, the Justice Department took several factors into consideration.   Soon after discovering the misconduct at DocX, LPS conducted a thorough internal investigation, reported all of its findings to the government, cooperated with the government’s investigation and effectively remediated any problems it discovered.   The government’s investigation also revealed that Brown and others at DocX took various steps to actively conceal the misconduct from detection, including from LPS senior management and auditors.

 

Brown, 51, of Alpharetta, Ga., faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.   She is scheduled to be sentenced on April 23, 2013, before U.S. District Judge Henry Lee Adams Jr. in Jacksonville.

 

This case is being handled by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Justice Department’s Criminal Division Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida.   The case is being investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.

 

Today’s disposition is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF).   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, 94 U.S. attorneys’ offices and state and local partners, it’s 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.

Florida Physician to Pay $26.1 Million to Resolve False Claims Allegations

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Steven J. Wasserman, M.D., a dermatologist practicing in Venice, Fla., has agreed to pay $26.1 million to resolve allegations that he violated the False Claims Act by accepting illegal kickbacks from a pathology laboratory and by billing the Medicare program for medically unnecessary services, the Justice Department announced today.   The settlement is the largest ever with an individual under the False Claims Act in the Middle District of Florida and one of the largest with an individual under the False Claims Act in U.S. history.

The government alleged that, in or around 1997, Dr. Wasserman entered into an illegal kickback arrangement with Tampa Pathology Laboratory (TPL), a clinical laboratory in Tampa, Fla., and Dr. José SuarezHoyos, a pathologist and the owner of TPL, in an effort to increase the lab’s referral business.   Under that agreement, Dr. Wasserman allegedly sent biopsy specimens for Medicare beneficiaries to TPL for testing and diagnosis.   In return, TPL allegedly provided Dr. Wasserman a diagnosis on a pathology report that included a signature line for Dr. Wasserman to make it appear to Medicare that he had performed the diagnostic work that TPL had performed.   The government alleged that Dr. Wasserman then billed the Medicare program for TPL’s work, passing it off as his own, for which he received more than $6 million in Medicare payments.   In addition, the government asserted that, in furtherance of his agreement with TPL, Dr. Wasserman substantially increased the number of skin biopsies he performed on Medicare patients, thus increasing the referral business for TPL.

The government further alleged that, in addition to his involvement in the alleged kickback scheme, Dr. Wasserman also performed thousands of unnecessary skin surgeries known as adjacent tissue transfers on Medicare beneficiaries.   Adjacent tissue transfers are complicated and often time-consuming procedures physicians sometimes use to close a defect resulting from the removal of a growth on a patient’s skin.   The governmentalleged that Dr. Wasserman performed many of these procedures in order to obtain the reimbursement for them, and not because they were medically necessary.

“Doctors who take illegal kickbacks and perform unnecessary procedures not only put their own financial self-interest over their duty to their patients, they raise the cost of health care for all of us as patients and as taxpayers,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice will not tolerate those who abuse the public health care programs to which we all contribute and on which we all depend.”

“This settlement represents a watershed achievement in our district’s civil healthcare fraud enforcement program,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida.  “Schemes of this magnitude require extraordinary remedies, and we are proud to have reached such an outstanding resolution for the taxpayers and their health programs.”

The allegations resolved by today’s settlement were initiated by a lawsuit originally filed in the District Court for the Middle District of Florida by Alan Freedman, M.D., a pathologist who formerly worked at TPL.   Dr. Freedman filed the lawsuit under the qui tam, or whistleblower provisions of the False Claims Act.   Under the False Claims Act, a private party may file suit on behalf of the United States for false claims and share in any recovery.   The United States has the right to intervene in the action, which it did in this case, filing its own complaint in October 2010.   Dr. Freedman will receive $4,046,000 of today’s settlement.

The United States previously settled with TPL and Dr. SuarezHoyos for $950,000 to resolve the allegations asserted against them in the same lawsuit.

“Anyone cheating patients and taxpayers should expect to pay a high price,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “Besides paying more than $26 million, Dr. Wasserman is excluded from treating patients and being paid under Medicare, Medicaid and all other federal health care programs.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

Principal Deputy Assistant Attorney General Delery and U.S. Attorney O’Neill thanked the joint investigation team, which includes special agents with the Department of Health and Human Services-OIG and the FBI, for their efforts in the investigation of this matter.

The claims settled by this agreement are allegations only; there has been no determination of liability.

Group of Owned and Affiliated Florida Hospitals Agree to Pay US $10.1 Million to Resolve False Claims Act Allegations

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FOR IMMEDIATE RELEASE
Tuesday, November 20, 2012
Group of Owned and Affiliated Florida Hospitals Agree to Pay US $10.1 Million to Resolve False Claims Act Allegations

Morton Plant Mease Health Care Inc. and its affiliated hospitals (Morton Plant) have agreed to pay $10,169,114 to the federal government to resolve allegations that they violated the False Claims Act by submitting false claims for services rendered to Medicare patients, the Justice Department announced today. Morton Plant owns and operates, or is affiliated with, Morton Plant Hospital, St. Joseph’s Hospital, Morton Plant North Bay Hospital, St. Anthony’s Hospital, Mease Countryside Hospital and Mease Dunedin Hospital. These hospitals are part of the BayCare Health System in Florida’s Pinellas, Hillsborough and Pasco counties.

 

The settlement announced today resolves allegations that, between July 1, 2006 and July 31, 2008, Morton Plant improperly billed for certain interventional cardiac and vascular procedures as inpatient care when those services should have been billed as less costly outpatient care or as observational status.

 

“Overbilling the government for routine procedures wastes valuable resources that could be used to care for other patients,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “At a time when we are trying to reduce public spending, it is especially important to ensure that hospitals do not overcharge the government by improperly inflating their billing.”

 

“We hold medical providers to a high standard in our district, and we will not hesitate to hold them to account when we find evidence of serious misconduct,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida. “This settlement should send a strong message that health care fraud enforcement is a growing priority in our office.”

 

Today’s settlement resolves a qui tam, or whistleblower, lawsuit filed by Randi Ferrare, a former director of Health Management Services at Morton Plant Hospital. Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and

share in any recovery. Ms. Ferrare will receive over $1.8 million as her share of the government’s recovery.

 

“When hospitals attempt to boost profits with improper inpatient admissions, they squander scarce dollars from Medicare and Medicaid,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Our corporate integrity agreements hold providers accountable for preventing such abuse of government health care programs.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion

 

The United States’ investigation was conducted by the U.S. Attorney’s Office for the Middle District of Florida, the Civil Division of the Department of Justice, the FBI and the Department of Health and Human Services, Office of Inspector General.

 

The claims settled by this agreement are allegations only; there has been no determination of liability.

 

The case is docketed as United States ex rel. Randi Ferrare v. Morton Plant Mease Health Care, Inc., No. 08:cv:01689-T-266MSS (M.D. Fl.).