Category Archives: USAO

Doctor Admits Taking Bribes In Test-Referral Scheme With NJ Clinical Lab

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NEWARK, N.J. – A Middlesex County doctor with practices in Jersey City, New Jersey, today admitted accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Anthony DelPiano, 53, of Monmouth Junction, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.

Including DelPiano, 35 people – 24 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has to date recovered more than $10.5 million through forfeiture.

According to documents filed in this and related cases and statements made in court:

DelPiano admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $2,300 per month. DelPiano’s referrals generated at least $1,752,603.24 in lab business for BLS.

On April 9, 2013, federal agents arrested David Nicoll, 40, of Mountain Lakes, New Jersey, Scott Nicoll, 33, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother, and Craig Nordman, 35, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 44, of Boonton, New Jersey. In June 2013, David and Scott Nicoll, Nordman and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme

The bribery count to which DelPiano pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for May 12, 2015. As part of his guilty plea, DelPiano must forfeit $204,475, representing the total bribe monies received from BLS.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Eric Welling; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS– Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Doctor Indicted On Charges He Illegally Distributed Drugs (EDPA)

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PHILADELPHIA – Dr. Jeffrey Bado, 59, of Philadelphia, PA, was charged today by indictment with illegally distributing pain medications from his Philadelphia and Bryn Mawr medical offices, announced United States Attorney Zane David Memeger.  Bado is charged with two counts of maintaining a drug-involved premises, 200 counts of illegally distributing oxycodone, a Schedule II controlled substance, outside the usual course of professional practice and for no legitimate medical purpose, as well as 33 counts of health care fraud and four counts of making false statements to federal agents.

 

According to the indictment, Bado, a doctor of Osteopathic Medicine, gave prescriptions for large numbers of oxycodone pills to “patients” who paid in cash for an “office visit” during which the “patient” would receive at most a cursory physical examination and little other medical care or treatment.  During their first visit to Bado’s practice, new patients would still get prescriptions for large amounts of oxycodone even though they provided little or no recent medical records to verify their claim of pain, or provided medical records that were not consistent with their claims of pain.

 

The indictment alleges that Bado’s prescribing mirrored the needs of drug addicts and drug traffickers.  Bado would allegedly comply with patient requests for pills with specific concentrations of oxycodone, and Bado would allegedly switch patients to pills with a higher street value even though there was no medical justification for the switch.  Bado allegedly continued to prescribe high amounts of oxycodone even when he knew that his patients were addicted to oxycodone, were using illegal drugs, or were not even taking the oxycodone pills as prescribed.

 

The indictment further alleges that Bado committed health care insurance fraud by billing Medicare and private insurers for patient visits that occurred in February 2010, when Bado was out of the office and traveling in Haiti.  Bado allegedly directed residents, nurses and other staff to see patients while he was away, and allegedly directed that they provide the patients with prescriptions that Bado had already filled out and signed.  Before departing for his trip, Bado allegedly made notations in and signed medical charts to make it appear as though he had seen the patients when in fact he was away in Haiti during their appointments.  Bado then allegedly had his office staff submit fraudulent claims to these patients’ health care insurers for the cost of the patients’ office visit as if Bado had seen these patients.  It is alleged that Bado subsequently made several materially false statements to federal agents regarding the arrangements he made before leaving for Haiti, including falsely claiming that he had not filled out in advance out any medical records for the patient appointments that occurred while he was in Haiti.

 

If convicted of all charges, Bado faces an estimated sentencing guideline range of at least 24 years in prison with a maximum sentence of 20 years in prison for each count of oxycodone distribution and maintaining a drug premises counts, 10 years in prison for each count of health care fraud, and five years in prison for each count of making false statement counts.  He also faces substantial fines and criminal forfeiture.

 

The case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services Office of the Inspector General, the Haverford Township Police Department and the Philadelphia Police Department.  It is being prosecuted by Assistant U.S. Attorneys Nancy Beam Winter and Andrew J. Schell.

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

Minnesota-Based ev3 to Pay United States $1.25 Million to Settle False Claims Act Allegations

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Medical device manufacturer ev3 Inc., formerly known as Fox Hollow Technologies Inc., has agreed to pay the United States $1.25 million to resolve allegations under the False Claims Act that Fox Hollow caused certain hospitals to submit false claims to Medicare for unnecessary inpatient admissions related to minimally-invasive atherectomy procedures, the Justice Department announced today.

“Today’s settlement demonstrates our commitment to ensure that the Medicare Trust Fund is used to pay for only necessary medical care,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “Charging the government for higher-cost inpatient services that patients do not need wastes the country’s precious health care resources.”

“It should come as no surprise to anyone that proper health care of a patient includes more than just competence of a provider, it requires accuracy and honesty in billing Medicare for the patient’s treatment,” said U.S. Attorney William J. Hochul Jr. of the Western District of New York.  “In this case, a medical device manufacturer allegedly induced hospitals to admit patients as inpatients for minimally-invasive procedures involving its device, even though many of those patients should have been treated as outpatients at significantly less cost.  This was done in order to collect higher Medicare reimbursements which ultimately drive up costs for all taxpayers and beneficiaries of government health programs.”

The United States alleged that Fox Hollow, which was acquired by ev3 Inc. in late 2007, knowingly caused 12 hospitals located throughout nine states to submit claims to Medicare for medically unnecessary inpatient stays for certain Medicare beneficiaries undergoing elective atherectomy procedures.  Atherectomy is a minimally-invasive surgical procedure that uses a small cutting device to remove atherosclerosis, or hardening of the arteries, from large blood vessels within the body, and it is intended to open up narrowed coronary arteries to increase blood flow and circulation.  One such device used in atherectomy procedures is the Silver Hawk Plaque Excision System sold by Fox Hollow.  The United States alleged that throughout 2006 and 2007, to increase hospital purchases of the Silver Hawk device, Fox Hollow advised hospitals that they should bill Silver Hawk atherectomy procedures as more expensive inpatient claims, as opposed to less costly outpatient claims.  As a result, certain hospitals allegedly claimed greater reimbursement than they were entitled to for treating Medicare beneficiaries who underwent Silver Hawk atherectomy procedures.

“Medical device makers that try to boost their profits by causing patients to be admitted for unnecessary and expensive inpatient hospital stays will be held accountable,” said Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).  “Both patients and taxpayers deserve to have medical decisions made based on what is medically appropriate.”

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  The lawsuit was filed by Amanda Cashi, who formerly worked as a Fox Hollow sales representative.  Cashi will receive $250,000.

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 the Attorney General and the Secretary of Health and Human Services.  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 $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with ev3 was the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of New York, the Civil Division’s Commercial Litigation Branch, and HHS-OIG.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

The civil lawsuit is captioned United States ex rel. Cashi v. Fox Hollow Technologies, Inc., et al. Civ. No. 09-CV-01066-S (W.D.N.Y.).

Unlicensed Detroit Doctor Convicted in $4.69 Million Medicare Fraud Scheme

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A federal jury in Detroit today convicted an unlicensed physician for his participation in a nearly $4.7 million Medicare fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office.

Wilfred Griffith, 64, of Detroit, a graduate of a foreign medical school with no medical license, was found guilty of one count of conspiracy to commit health care fraud and one count of conspiracy to solicit and receive health care kickbacks.  A sentencing hearing is scheduled for July 8, 2015, before U.S. District Judge Sean F. Cox of the Eastern District of Michigan.

According to evidence presented at trial, Griffith worked as an unlicensed physician at Phoenix Visiting Physicians in 2010 and 2011.  At that clinic, Griffith treated Medicare beneficiaries and used prescription pads pre-signed by Dr. Dwight Smith to prescribe medicine.

The evidence demonstrated that Griffith also referred Medicare beneficiaries to a Detroit-area home health company called Cherish Home Health Services Inc. (Cherish) in exchange for kickbacks.  In ordering the home health services, Griffith used the names and signatures of Dr. Smith and two other Detroit-area physicians to certify that the beneficiaries were homebound and needed home health services, when they did not.

Evidence showed that based on the fraudulent referrals from Griffith and others, Cherish submitted false claims to Medicare for home health services that were never provided and were not medically necessary.  Medicare beneficiaries pre-signed supporting medical paperwork that was then completed and signed by others at Cherish to falsely show that care was provided.

Between November 2009 and December 2013, Medicare paid Cherish nearly $4.7 million, which included more than $680,000 for home health services purportedly rendered to beneficiaries referred by Griffith using the names of Dr. Smith and the two other physicians.

Two other individuals have pleaded guilty for their roles in this scheme.  Zia Hassan, 48, the owner of Cherish, pleaded guilty on Jan. 16, 2015, and Nathan Miller, 53, a patient recruiter who referred beneficiaries to Hassan in exchange for cash kickbacks, pleaded guilty on Aug. 4, 2014.  On May 7, 2012, Dr. Smith also pleaded guilty to one count of conspiracy to commit health care fraud, and on June 12, 2014, U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan sentenced Dr. Smith to three years in prison.

The case was investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  The case is being prosecuted by Trial Attorney Katharine A. Wagner and Special Trial Attorney Katie R. Fink of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Patrick J. Hurford of the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

United States Settles False Claims Act Suit Against Good Shepherd Hospice Inc. and Related Entities

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Midwest Hospice Chain Allegedly Billed Medicare for Ineligible Patients

Today, Good Shepherd Hospice Inc., Good Shepherd Hospice of Mid America Inc., Good Shepherd Hospice, Wichita, L.L.C., Good Shepherd Hospice, Springfield, L.L.C., and Good Shepherd Hospice – Dallas L.L.C. (collectively Good Shepherd) agreed to pay $4 million to resolve allegations that Good Shepherd submitted false claims for hospice patients who were not terminally ill.  Good Shepherd is a for-profit hospice headquartered in Oklahoma City which provides hospice services in Oklahoma, Missouri, Kansas and Texas.

“The Medicare hospice benefit is intended to provide comfort and care to patients nearing the end of life,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “We will continue to aggressively pursue companies that abuse the hospice benefit to improperly inflate their profits.”

The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from pain, symptoms or stress) for a terminal illness and have a life expectancy of six months or less if their illness runs its normal course.  When a Medicare patient receives hospice services, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness.

The government alleged that Good Shepherd knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill.  Specifically, the United States contended that Good Shepherd engaged in certain business practices that contributed to claims being submitted for patients who did not have a terminal prognosis of six months or less, by pressuring staff to meet admissions and census targets and paying bonuses to staff, including hospice marketers, admissions nurses and executive directors, based on the number of patients enrolled.  The United States further alleged that Good Shepherd hired medical directors based on their ability to refer patients, focusing particularly on medical directors with ties to nursing homes, which were seen as an easy source of patient referrals.  The United States also alleged that Good Shepherd failed to properly train staff on the hospice eligibility criteria.

“Health care fraud puts profits above patients, and steals from taxpayers,” said U.S. Attorney Tammy Dickinson of the Western District of Missouri.  “In this case, company whistleblowers alleged that patients received unnecessary hospice care while Good Shepherd engaged in illicit business practices to enrich itself at the public’s expense.  Today’s settlement fairly resolves those issues and puts measures in place to prevent similar conduct in the future.”

In addition, as part of the settlement, each Good Shepherd entity agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG), which will provide for procedures and reviews to be put into place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

“Being a hospice provider in the Medicare program is a privilege, not a right,” said Special Agent in Charge Mike Fields of the HHS-OIG Dallas Region.  “Hospice providers that seek to boost profits by providing hospice services to Medicare beneficiaries who are not terminally ill compromise both the health of its patients as well as the integrity of Medicare.  Our agency will continue to hold such hospice providers accountable for their actions.”

The settlement resolves allegations filed by relators Kathi Cordingley and Tracy Jones, former employees of Good Shepherd, under the qui tam or whistleblower provisions of the False Claims Act, which authorize private parties to sue for fraud on behalf of the United States and share in the recovery.  The relators will receive approximately $680,000.

This suit is part of 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 the Attorney General and the Secretary of Health and Human Services.  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 $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Missouri and HHS-OIG.  The claims asserted against defendants are allegations only and there has been no determination of liability.

The lawsuit is captioned United States ex rel. Cordingley and Jones v. Good Shepherd Hospice, Mid America, Inc., No. 4:11-cv-1087 (W.D. Mo.).

Former Supervisory Contracting Officer Arrested in Navy Bribery Scandal

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A former senior federal contracting officer was arrested this morning for conspiracy to commit bribery in connection with his alleged role in a scheme to steer contracts and benefits to Glenn Defense Marine Asia (GDMA), a defense contracting firm headquartered in Singapore.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General of Investigations James B. Burch of the Department of Defense (DCIS) made the announcement.

“Today’s arrest in this ongoing investigation demonstrates our continued resolve to root out all of the corrupt officials involved in this bribery scheme,” said Assistant Attorney General Caldwell.  “As alleged, Paul Simpkins misused his position as a contracting officer at the U.S. Navy to obtain bribes of cash, air travel, hotel rooms, and prostitutes, and his actions tarnish the reputation earned by the vast majority of U.S. Navy officers and enlisted and civilian personnel.”

“With the arrest of Paul Simpkins, who was recently among the Defense Department’s high ranking civilians we have uncovered yet another tentacle of this pervasive bribery scheme,” said U.S. Attorney Duffy.  “The more we learn about the extent of the greed and corruption, the more determined we are to eviscerate it.”

“As we’ve mentioned previously, the GDMA investigation is far from over,” said Director Traver.  “NCIS will follow the evidence wherever it leads, to bring to justice those who were involved in perpetrating this massive fraud on the Department of the Navy and the American taxpayer.  Active leads remain and NCIS will stay on the case until our work is done.”

“As the filing of today’s Criminal Complaint and subsequent arrest of Paul Simpkins shows, the Defense Criminal Investigative Service and its law enforcement partners will continue to identify and investigate those individuals who seek to defraud the U.S. taxpayer,” said Deputy Inspector General of Investigations Burch.  “Any individual, regardless of position, who allowed Glenn Defense Marine Asia Ltd. to prosper at the expense of the American taxpayer, will be brought to justice.”

Paul Simpkins, 60, of Haymarket, Virginia, is the latest individual to be arrested in connection with a corruption probe involving the U.S. Navy, GDMA, and its owner, Leonard Glenn Francis.  At this morning’s hearing, United States Magistrate Judge Jones of the Eastern District of Virginia ordered Simpkins to be detained pending a bond hearing set for Feb. 4, 2015.  To date, seven individuals, including Francis, and GDMA have entered guilty pleas as part of the investigation.

According to a criminal complaint unsealed today, Simpkins held several manager-level contracting positions throughout the federal government, including Supervisory Contract Special at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007, and manager in the Department of Defense’s Office of Small Business Programs from December 2007 to August 2012.  The complaint alleges that between May 2006 and September 2012, Simpkins accepted several hundred thousand dollars in cash and wire transfers, travel and entertainment expenses, hotel rooms and the services of prostitutes.  In return, Simpkins allegedly helped steer lucrative U.S. Navy contracts to Francis and GDMA, advocated for and advanced the interests of GDMA in contract disputes, and assisted in preventing GDMA’s competitors from receiving U.S. Navy business.

The complaint specifically alleges that, beginning in early 2006, Simpkins and Francis held a series of meetings at a hotel in Singapore in which Francis agreed to provide Simpkins with things of value in return for help in steering lucrative ship husbanding contracts to GDMA.  Specifically, the complaint alleges that Francis paid Simpkins by hand-delivering over $150,000 in cash and by making several wire transfers to a bank account held in the name of Simpkins’s wife at the time.  To conceal the true nature of the wire transfers, Simpkins allegedly used an email account belonging to his mistress to advise Francis of the routing and account information of the bank account belonging to his wife.

In return for the things of value, Simpkins allegedly used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure lucrative ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines.  In addition, Simpkins allegedly interceded on GDMA’s behalf in contract disputes with the U.S. Navy.  The complaint specifically alleges that in 2006, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items.  Simpkins allegedly overruled his subordinate and extended GDMA’s contract.

In another example, Simpkins allegedly instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts.  The use of these meters would have ensured proper accounting of the actual amount of waste removed to ensure that no overbilling occurred.  Simpkins also allegedly instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions.

The charges contained in a complaint are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The ongoing investigation is being conducted by NCIS and DCIS.The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Senior Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.

Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Army National Guard Official Pleads Guilty for Accepting $30,000 Bribe

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An Army National Guard official pleaded guilty today for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to a retired sergeant major of the Minnesota Army National Guard and his consulting company.  Today’s guilty plea is the eighth in connection with an investigation into corruption within the National Guard Bureau related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.

Jason Rappoccio, 39, of Hampton, South Carolina, pleaded guilty before U.S. District Judge Liam O’Grady of the Eastern District of Virginia to one count of conspiracy to commit bribery and one count of bribery.  Rappoccio was indicted on Sept. 25, 2014, and will be sentenced on May 22, 2015.

According to plea documents, Rappoccio, who was an active duty sergeant first class in the Army National Guard, admitted to accepting a $30,000 bribe from Timothy Bebus, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC (Mil-Team).  In exchange, Rappoccio agreed to recommend the award of a $3.6 million contract to Mil-Team and to steer the contract to a Small Business Administration (SBA) 8(a) certified company, chosen by Bebus, that would sub-contract the work to Mil-Team.

Rappoccio admitted that he received the $30,000 bribe in installments to conceal the payment.  Bebus gave $6,000 in cash directly to Rappoccio at a meeting in Arlington, Virginia.  The remaining $24,000 was paid in a cashier’s check in the name of Rappoccio’s wife.

Rappoccio also admitted that days after receiving the $30,000 bribe, he solicited and received airline tickets for two of his family members from Bebus.  Three months later, Rappoccio also received NFL tickets worth $1,328 from another co-conspirator.  At the time that he accepted these additional benefits, Rappoccio agreed to steer an additional $4 million contract to Bebus and his company.

The case is being investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit.  The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.

Home Health Agency Owner Sentenced to 10 Years in Prison for Role in Miami Health Care Fraud Scheme

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Patient Recruiter Sentenced To Two Years In Prison For Participating In The Same Scheme

A South Florida man was sentenced to 10 years in prison today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services, as well as similar schemes at two additional Miami home health care agencies.  A second defendant was also sentenced to two years in prison today for his role as a patient recruiter in the fraud scheme at Professional Home Health.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.  Chief U.S. District Judge K. Michael Moore of the Southern District of Florida imposed the sentence.

Ernesto Fernandez, 48, of Miami, pleaded guilty on Nov. 26, 2014, to one count of conspiracy to commit health care fraud.  In addition to the 10-year prison sentence, Fernandez was also ordered to pay $2,163,057 in restitution and to forfeit $9,061,867, which represents the proceeds traceable to his criminal conduct at all three home health agencies.  Fernandez has been in custody since his bond was revoked on Jan. 30, 2015, for violating the condition of his bond prohibiting contact with victims or witnesses in the case except through counsel.

According to documents filed with his plea agreement, Fernandez was an owner and operator of Professional Home Heath.  He was also the owner and operator of two other South Florida home health agencies.  At each of these companies, Fernandez and his co-conspirators billed the Medicare program for expensive physical therapy and home health services that were not medically necessary or were not provided.  Fernandez admitted that he caused patient documentation to be falsified, and planned, organized and oversaw the submission of fraudulent claims to the Medicare program.

Fernandez also admitted to being a patient recruiter for all three home health agencies.  In that capacity, Fernandez recruited patients for the agencies in exchange for kickbacks, knowing that the agencies would bill the Medicare program on behalf of the recruited patients for expensive home health and therapy services that were not medically necessary or not provided.

Juan Valdes, 37, of Palm Springs, pleaded guilty on Nov. 10, 2014, to one count of conspiracy to defraud the United States and receive health care kickbacks.  In addition to the two-year prison sentence, Valdes was also ordered to pay 204,526 in restitution.

According to documents filed with his plea agreement, Valdes was a patient recruiter for Professional Home Health.  In that role, he solicited kickbacks and bribes from the owners and operators of Professional Home Health in exchange for providing beneficiaries to allow Professional Home Health to bill Medicare for home health services that were not medically necessary or not provided.

Fernandez and Valdes are the seventh and eighth defendants to be sentenced in connection with the fraudulent schemes at Professional Home Health.  Dennis Hernandez and Jose Alvarez, both owners and operators of Professional Home Health, were each sentenced to 10 years in prison on Jan. 29, 2015.  Joel San Pedro, a manager and supervisor of Professional Home Health, was sentenced to 97 months in prison on Jan. 29, 2015.  Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison on Aug. 27, 2014.  Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison on Sept. 29, 2014.  Alina Hernandez, a patient recruiter for Professional Home Health, was sentenced to two years in prison on Jan. 29, 2015.

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

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 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.

Four Florida Residents Sentenced to Federal Prison for Roles in $6 Million Miami Home Health Care Fraud Scheme

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Four South Florida residents were sentenced today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services.  Two of the defendants were also sentenced in connection with their conduct in similar schemes at other Miami home health care agencies.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.  Chief U.S. District Judge K. Michael Moore of the Southern District of Florida imposed the sentences.

Dennis Hernandez, 32, of Miami, was sentenced to serve 120 months in prison and ordered to pay $1,438,186 in restitution.  Jose Alvarez, 48, of Miami, was sentenced to serve 120 months in prison and ordered to pay $2,972,570 in restitution.  Joel San Pedro, 45, of Miami, was sentenced to serve 97 months in prison and ordered to pay $4,938,432 in restitution.  Alina Hernandez, 38, of West Palm Beach, was sentenced to serve 24 months in prison and ordered to pay $204,526.05 in restitution.

Dennis Hernandez, Alvarez, San Pedro and Alina Hernandez each pleaded guilty to one count of conspiracy to commit health care fraud in November 2014.

In connection with their guilty pleas, each of the defendants admitted that Professional Home Health was actually operated for the purpose of billing the Medicare program for expensive physical therapy and home health services that were not medically necessary or not provided.  Dennis Hernandez, San Pedro and Alvarez admitted to being managers, supervisors, owners and operators at Professional Home Health.  In those capacities, they coordinated and oversaw the submission of fraudulent claims at Professional Home Health, and falsified patient documentation to make it appear that Medicare beneficiaries qualified for and received home health services that were, in fact, not medically necessary or not provided.  Dennis Hernandez and Alvarez also admitted to partaking in similar schemes at additional Miami-area home health agencies.

Additionally, all four defendants admitted to acting as patient recruiters for Professional Home Health.  In this role, they solicited and received kickbacks and bribes from other co-conspirators at Professional Home Health in exchange for recruiting beneficiaries who neither needed, nor, in some cases, received services.

From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for fraudulent home health claims.

Earlier this year, two other individuals pleaded guilty and were sentenced in connection with the same scheme.  Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison.  Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison.  Both were also ordered to pay $6,257,142 in restitution.  A sentencing hearing for Ernesto Fernandez and Juan Valdes, co-defendants in the case, is scheduled for Feb. 3, 2015.

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

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure Auctions

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Two Georgia real estate investors pleaded guilty today for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta.  According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia.  Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012.  Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.  “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Gwinnett County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office.  “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 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.