Category Archives: USAO

Michigan Physician Pleads Guilty for Role in $19 Million Medicare Fraud Scheme

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A Detroit-area physician, who orchestrated the submission of fraudulent claims for physician home visits and directed fraudulent referrals for home health care by his employee physicians as part of a $19 million home health care fraud scheme, pleaded guilty today for his role in the conspiracy.

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

Dr. Rajesh Doshi, 59, of Bloomfield Hills, Michigan, pleaded guilty before Senior U.S. District Judge Arthur J. Tarnow of the Eastern District of Michigan to conspiracy to commit health care fraud and one count of health care fraud.  The sentencing hearing is set for March 3, 2015.

According to his plea agreement, Dr. Doshi admitted that between October 2005 and September 2012, he conspired with others to commit health care fraud by referring Medicare beneficiaries for home health care that was not medically necessary, and then submitting false and fraudulent claims for the purported care to Medicare for reimbursement.  Dr. Doshi admitted that he submitted these false claims through Home Physicians Services (HPS), a medical practice he owned in Southfield, Michigan.  Although Dr. Doshi owned HPS, he hid his ownership because of prior state court convictions.

Specifically, Dr. Doshi admitted that he paid kickbacks to recruiters to obtain Medicare beneficiaries for HPS and home health agencies owned by co-conspirators.  Dr. Doshi and his co-conspirators then falsified medical and billing records for purported physician home visits, sometimes adding diagnoses to make it appear that the beneficiaries qualified for and required home care when they did not, and other times, “upcoding” physician home visits to higher levels of complexity than actually performed.

Dr. Doshi also admitted that he solicited and received kickbacks from home health agency owners in exchange for the referral of beneficiaries to those agencies, regardless of whether the beneficiaries qualified for or needed home health care.  He then directed HPS physicians to falsify medical documentation and certify Medicare beneficiaries as homebound even though the HPS physicians had never met the beneficiaries or the beneficiaries were not actually homebound.

Between October 2005 and September 2012, Dr. Doshi and his co-conspirators caused Medicare to pay more than $19 million based on false claims.  Three other physicians and one physician assistant have already pleaded guilty for their involvement in the health care fraud conspiracy related to the scheme at HPS.

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

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

Five Florida Residents Plead Guilty for Roles in $6 Million Miami Home Health Care Fraud Scheme

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Five South Florida residents pleaded guilty this week 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 also pleaded guilty 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.

Dennis Hernandez, 32, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud, and Juan Valdes, 37, of Palm Springs, Florida, pleaded guilty to one count of conspiracy to defraud the United States and receive health care kickbacks before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida on Nov. 10. 2014.  Jose Alvarez, 48, and Joel San Pedro, 44, both of Miami, and Alina Hernandez, 38, of West Palm Beach, Florida, each pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 13, 2014 before Judge McAliley.  Sentencing hearings are set for Jan. 29, 2015.

According to admissions in their plea agreements, Dennis Hernandez, San Pedro and Alvarez held positions of influence at Professional Home Health, including those of owner/operator and manager/supervisor.  Through Professional Home Health, they billed the Medicare program for expensive physical therapy and home health services that were not medically necessary or were not provided.  The three defendants admitted that they and their co-conspirators coordinated 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.

Additionally, each of the five defendants admitted to being 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.

Dennis Hernandez and Alvarez also admitted to participating in similar criminal conduct at additional Miami-area home health agencies.

From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for these 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 serve 70 months in prison.  Annilet Dominguez, an administrator of Professional Home Health, was sentenced to serve 68 months in prison.  Both were also ordered to pay $6,257,142 million in restitution.

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 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Owner of Miami Home Health Company Pleads Guilty for Role in $30 Million Health Care Fraud Scheme

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An owner of a Miami home health care company pleaded guilty today for his role in a $30 million home health Medicare fraud scheme.

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

Ramon Regueira, 66, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud.  Sentencing is scheduled for Jan. 21, 2015.

According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  Regueira admitted that he and his co-conspirators operated Nation’s Best for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.

Specifically, Regueira admitted that he and his co-conspirators paid kickbacks and bribes to patient recruiters who provided patients to Nation’s Best, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services.    Regueira and his co-conspirators then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care services.

From January 2007 through November 2012, Nation’s Best submitted approximately $35 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 million for these fraudulent claims.

The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.  To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Careall Companies Agree to Pay $25 Million to Settle False Claims Act Allegations

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CareAll Management LLC and its affiliated entities (collectively “CareAll”) have agreed to pay $25 million, plus interest, to the United States and the state of Tennessee to resolve allegations that CareAll violated the False Claims Act by submitting false and upcoded home healthcare billings to the Medicare and Medicaid programs, the Department of Justice announced today.  CareAll is based in Nashville, Tennessee, and is one of Tennessee’s largest home health providers.

“Home health agencies may only bill Medicare and Medicaid for care that is necessary and covered by the programs,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “This settlement is another example of the department’s commitment to ensuring that home health care dollars – which are so vital to ensure the care of homebound patients – are spent for their intended purposes.”

This settlement resolves allegations that between 2006 and 2013, CareAll overstated the severity of patients’ conditions to increase billings and billed for services that were not medically necessary and rendered to patients who were not homebound.

“This case demonstrates that enforcement of the False Claims Act is a priority of the U.S. Attorney’s Office for the Middle District of Tennessee,” said U.S. Attorney David Rivera for the Middle District of Tennessee.  “The U.S. Attorney’s Office and our law enforcement partners are committed to protecting the public and vigorously pursuing all those who knowingly submit false claims affecting the Medicare and Medicaid programs.”

This is CareAll’s second settlement of alleged False Claims Act violations within the last two years.  In 2012, CareAll paid nearly $9.38 million for allegedly submitting false cost reports to Medicare.  As part of the settlement announced today, the companies agreed to be bound by the terms of an enhanced and extended corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG) in an effort to avoid future fraud and compliance failures.

“Fraudulent home-based services are surging across the country,” said Special Agent in Charge Derrick L. Jackson of HHS-OIG in Atlanta.  “We will continue to protect both Medicare and taxpayers, and ensure that funds are not siphoned off by companies more concerned with the bottom line than patient care.”

Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery.  The relator in this case, Toney Gonzales, will receive more than $3.9 million as his share of the recovery.

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 HHS.  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 $23.1 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, HHS-OIG and the Tennessee Bureau of Investigation.

The case is docketed as United States ex rel. Gonzales v. J.W. Carell Enterprises, Inc., et al., No. 12-0389 (M.D. Tenn.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Former United States Navy Military Sealift Command Contractor and Co-Founder of Government Contracting Company Sentenced to Prison

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A former contractor for the U.S. Navy Military Sealift Command (MSC) and a co-founder of a Chesapeake, Virginia, government contracting company were sentenced today for their roles in a scheme to bribe and provide illegal gratuities to public officials to secure lucrative military 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, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Office, Executive Assistant Director Charles T. May Jr. of the Naval Criminal Investigative Service (NCIS), and Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office made the announcement.  United States District Judge Rebecca Beach Smith of the Eastern District of Virginia imposed the sentences.

Scott B. Miserendino Sr., 55, of Stafford, Virginia, and Timothy S. Miller, 58, of Chesapeake, Virginia, were sentenced to serve 96 months in prison and 24 months in prison, respectively.  Miserendino was also ordered to forfeit $212,000 and Miller was ordered to forfeit $167,000.  Miller was also ordered to pay a fine of $25,000.  In August 2014, Miserendino pleaded guilty to one count of conspiracy to commit bribery and one count of bribery, and Miller pleaded guilty to providing illegal gratuities to Miserendino and Kenny E. Toy, the former Afloat Programs Manager for the N6 Command, Control, Communication, and Computer Systems Directorate.

According to admissions in his plea agreement, Miserendino was a government contractor at the MSC, which is the leading provider of transportation for the U.S. Navy.  In that position, Miserendino worked closely with Toy, who exercised substantial influence over the MSC contracting process.  In November 2004, Miserendino and Toy initiated a bribery scheme that spanned five years, involved multiple co-conspirators, including two companies, and resulted in Miserendino and Toy receiving more than $265,000 in cash, among other things of value, in exchange for official acts in connection with the award of MSC contracts.

Specifically, Miserendino and Toy solicited cash from co-conspirators, including a $50,000 cash payment from Miller and his business partner, Dwayne A. Hardman, to influence the award of government contracts.  Miserendino admitted that he and Toy also accepted other things of value in exchange for official acts, including a vacation rental, laptop computers, flat screen televisions, a football helmet signed by Troy Aikman, a wine refrigerator and softball bats.

According to Miller’s admissions, during the scheme, his company received approximately $2.5 million in business from the MSC, despite its limited record of past performance in the industry.  Miserendino and Toy also directed $3 million in business from MSC to another company run by other co-conspirators.

After the cash payments were delivered, Miller admitted that he directed the creation of a false promissory note disguising the illegal gratuities as a personal loan to another individual.  Miserendino also admitted to engaging in a scheme to conceal his criminal activity by arranging for more than $85,000 to be paid to Hardman in an attempt to dissuade him from reporting the bribery scheme to law enforcement authorities.

Earlier this year, five other individuals pleaded guilty and were sentenced in connection with the bribery scheme:

  • Toy pleaded guilty to bribery and was sentenced to eight years in prison and ordered to forfeit $100,000;
  • Hardman pleaded guilty to bribery and was sentenced to eight years in prison and ordered to forfeit $144,000;
  • Michael P. McPhail pleaded guilty to conspiracy to commit bribery and was sentenced to three years in prison and ordered to forfeit $57,000;
  • Roderic J. Smith pleaded guilty to conspiracy to commit bribery and was sentenced to four years in prison and ordered to forfeit $175,000; and
  • Adam C. White pleaded guilty to conspiracy to commit bribery and was sentenced to two years in prison and ordered to forfeit $57,000.

The case was investigated by the FBI, NCIS and DCIS, and prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the Eastern District of Virginia.

Biotronik Inc. to Pay $4.9 Million to Resolve Claims that Company Paid Kickbacks to Physicians

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Biotronik Inc. of Lake Oswego, Oregon, has agreed to pay the United States $4.9 million to resolve allegations made under the False Claims Act that the company made various improper payments to induce physicians to use devices that it manufactured and sold, the Justice Department announced today.

“When medical device manufacturers make improper payments to physicians, they encourage medical decision-making based on financial gain rather than the best interests of patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that beneficiaries of federal health care programs receive appropriate medical care.”

The settlement resolves allegations that Biotronik, through the payment of kickbacks to physicians, caused hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for the implantation of Biotronik pacemakers, defibrillators and cardiac resynchronization therapy devices.  Biotronik allegedly induced electrophysiologists and cardiologists practicing in Nevada and Arizona to continue using Biotronik devices, or to convert to Biotronik devices, by paying the implanting physician in the form of repeated meals at expensive restaurants and inflated payments for membership on a physician advisory board.

“Today’s resolution of claims underscores one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said U.S. Attorney Benjamin Wagner for the Eastern District of California.

The settlement announced today stems from a whistleblower complaint filed by a former Biotronik employee, Brian Sant, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit.  The act permits the United States to intervene and take over the lawsuit, as it did in this case as to some of Sant’s allegations.  Sant will receive approximately $840,000 of the federal settlement.

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 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Biotronik Inc. was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the Eastern District of California, the U.S. Department of Health and Human Services-Office of Inspector General and the FBI.

The lawsuit is captioned United States ex rel. Sant v. Biotronik, Inc., No. 2:09-CV-03617 KJM EFB (E.D. Cal.).  The claims settled by this agreement are allegations only, and there has been no determination of liability.

Detroit-Area Man Arrested in Connection with Home Health Care Fraud Scheme

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A Detroit-area resident was arrested today for his role in a $2.7 million home health care fraud scheme.

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

Javed Akhtar, 47, of Brownstown, Michigan, was arrested pursuant to a criminal complaint charging him with participating in a health care fraud scheme involving two home health agencies in Wayne, Michigan:  Life Choice Home Health Care LLC (Life Choice), which he owned, and Angle’s Touch Home Health Care LLC (Angle’s Touch).  Both Life Choice and Angle’s Touch purported to provide in-home health care services to Medicare beneficiaries.

According to the complaint, Akhtar served as a patient recruiter for Angle’s Touch and Life Choice, where he allegedly paid kickbacks to Medicare beneficiaries in exchange for their Medicare beneficiary information and their signatures on false medical records.  The complaint alleges that Angle’s Touch and Life Choice then billed Medicare for services purportedly provided to those beneficiaries that were not actually provided, were not medically necessary, or in instances where the claims were illegally procured through the payment of kickbacks.

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

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

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

Owner and Administrator of Two Miami Home Health Companies Sentenced to 80 Months in Prison for $74 Million Fraud Scheme

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The owner and administrator of two Miami home health care companies was sentenced today to serve 80 months in prison for her participation in a $74 million Medicare fraud scheme.

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.  U.S. District Judge Marcia G. Cooke in the Southern District of Florida imposed the sentence.

Elsa Ruiz, 45, of Miami, pleaded guilty in July 2014 to one count of conspiracy to commit health care fraud.  In addition to the prison sentence, Ruiz was ordered to pay $45 million in restitution.

Ruiz was an owner and operator of Professional Home Care Solutions Inc. and an administrator of LTC Professional Consultants Inc., both of which purported to provide home health and therapy services to Medicare beneficiaries.  According to admissions during her plea hearing, Ruiz and her co-conspirators operated LTC and Professional Home Care for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.

According to her admissions, Ruiz’s primary role in the scheme was to negotiate and pay kickbacks to patient recruiters and to otherwise oversee the schemes operating out of LTC and Professional Home Care.  Specifically, Ruiz and her co-conspirators paid kickbacks to patient recruiters for the referral of patients and for the provision of prescriptions, plans of care, and certifications for medically unnecessary therapy and home health services.  Ruiz and her co-conspirators used these prescriptions, plans of care, and medical certifications to fraudulently bill the Medicare program for home health care services.

From approximately January 2006 to June 2012, LTC and Professional Home Care submitted approximately $74 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $45 million on those claims.

The case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.

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

Alabama Real Estate Investor Pleads Guilty to Conspiracy to Commit Mail Fraud

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An Alabama real estate investor pleaded guilty yesterday for his role in a conspiracy to commit mail fraud related to public real estate foreclosure auctions held in southern Alabama, the Department of Justice announced today.  To date, 10 individuals and two companies have pleaded guilty in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes in the Alabama real estate foreclosure auction industry.

Chad E. Foster, a resident of Theodore, Alabama, pleaded guilty yesterday to an indictment filed in the U.S. District Court for the Southern District of Alabama, charging him with one count of conspiracy to commit mail fraud affecting a financial institution.  According to court documents, Foster knowingly joined a conspiracy with others to, among other things, fraudulently acquire title to selected properties at artificially suppressed prices, to conduct secret, second auctions open only to members of the conspiracy, to make payoffs to and receive payoffs from co-conspirators, and to divert money away from financial institutions, homeowners and others with a legal interest in selected properties.

“This guilty plea demonstrates the Antitrust Division’s resolve to pursue those who conspire to defraud distressed homeowners and financial institutions,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “The division will continue to hold accountable individuals who subvert the competitive process for their own gains.”

“We are committed to partnering with the Antitrust Division,” said FBI Special Agent in Charge Robert F. Lasky of the Mobile Field Office.  “And we will hold accountable those individuals who profited illegally at the expense of financial institutions and struggling homeowners.”

The charge of conspiracy to commit mail fraud affecting a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine.

Yesterday’s charge stems from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Alabama should call the Antitrust Division at 202-598-4000, or visit www.justice.gov/atr/contact/newcase.htm.

Yesterday’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.

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

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

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

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

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

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

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

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

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

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