Tag Archives: Dustin Davis

Pharmacist Pleads Guilty to Health Care Fraud Charges for Role in $192 Million Compounded Medication Scheme; Pharmacy Marketer Also Pleads Guilty

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Tuesday, July 25, 2017

The Pharmacist in Charge of a Hattiesburg, Mississippi compounding pharmacy pleaded guilty today to health care fraud charges for his role in a scheme that defrauded TRICARE and private insurance companies out of at least $192 million in payments for medically unnecessary compounded medications.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Harold Brittain of the Southern District of Mississippi, Special Agent in Charge Christopher Freeze of the FBI’s Jackson Division, Special Agent in Charge Jerome R. McDuffie of the Internal Revenue Service – Criminal Investigation’s New Orleans Field Office and John F. Khin and the Defense Criminal Investigative Service Southeast Field Office made the announcement.

May, 40, of Lamar County, Mississippi, pleaded guilty to one count of conspiracy to commit health care fraud and money laundering before U.S. District Judge Keith Starrett of the Southern District of Mississippi. Sentencing has been scheduled for October 17 before Judge Starrett.

As part of his guilty plea, May admitted that he conspired with others to select compounded medication formulas based on profitability, rather than on effectiveness or patient need. He further admitted that he conspired with co-owners of the pharmacy to circumvent fraud prevention measures, such as collecting copayments, so that patients were incentivized to receive, and continue to receive, medically unnecessary medications.  According to plea documents, May dispensed these medically unnecessary compounded medications and caused fraudulent claims to be submitted to TRICARE, a health care program that benefits members of the U.S. armed forces, and other health care benefit programs. Based on these fraudulent claims, May and his co-conspirators received at least $192 million in reimbursements.

In a related case, Gerald Schaar, 46, of Biloxi, Mississippi, pleaded guilty to one count of conspiracy to commit health care fraud for his role in the scheme to defraud TRICARE. According to plea documents, Schaar admitted to soliciting physicians and other medical professionals to write prescriptions without seeing patients for medically unnecessary compounded medications dispensed by the pharmacy. According to the plea documents, Schaar further admitted to conspiring with others to falsify patient records to make it appear as though medical professionals had seen patients prior to the date prescriptions were written, when in reality, no examinations had occurred. As a result of the fraudulent prescriptions obtained by Schaar, and ultimately forwarded to the pharmacy, TRICARE reimbursed approximately $2.3 million in false and fraudulent claims submitted by the pharmacy. Sentencing for Schaar has been scheduled for October 17 before Judge Starrett.

This case was investigated by the FBI Jackson Division’s Hattiesburg Resident Agency, the IRS Criminal Investigation, the Defense Criminal Investigative Service, Health and Human Services Office of Inspector General, the Mississippi Bureau of Narcotics, and other government agencies. Trial Attorneys Dustin Davis and Katherine Payerle of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion. 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.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.

Baton Rouge-Based Medicare Fraud Strike Force Announces Charges Against Four More Individuals For Health Care Fraud And Related Offenses

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Thursday, July 13, 2017

BATON ROUGE, LA – Acting United States Attorney Corey R. Amundson announced today the unsealing of two federal grand jury indictments charging four individuals with health care fraud and related offenses. The cases were unsealed as part of the 2017 National Health Care Fraud Takedown, during which federal, state, and local law enforcement partners announced charges of more than 400 defendants across 41 different federal judicial districts.

The Medicare Fraud Strike Force is part of the joint initiative announced in May 2009 between the U.S. Department of Justice and the U.S. Department of Health and Human Services to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. In December 2009, a Medicare Fraud Strike Force team was deployed in the U.S. Attorney’s Office in Baton Rouge, Louisiana. Strike Force teams bring together the resources of the U.S. Department of Health and Human Services—Office of Inspector General, the Federal Bureau of Investigation, the U.S. Department of Justice’s Criminal Division—Fraud Section, the U.S. Attorneys’ Offices, and other law enforcement agencies, including, in Baton Rouge, the Louisiana Attorney General’s Medicaid Fraud Control Unit. Over the past seven years, the team has continued working in Baton Rouge and expanded across southern Louisiana.

Louisiana Spine & Sports

In the first case, a federal grand jury has returned an indictment charging John Eastham CLARK, M.D., age 65, of Baton Rouge, Louisiana, and Charlene Anita SEVERIO, age 54, of Walker, Louisiana, with conspiracy to commit wire fraud and health care fraud. The charges stem from Dr. CLARK and SEVERIO’s role in a $4.4 million fraud scheme in which Dr. CLARK and SEVERIO allegedly submitted false claims to Medicare and private insurance companies on behalf of Louisiana Spine & Sports LLC, a pain management clinic in Baton Rouge co-owned by Dr. CLARK. Namely, according to the indictment, Dr. CLARK, and SEVERIO, his billing supervisor, falsified claims to indicate that certain minor surgical procedures occurred on separate days as patient visits, and then instructed employees to create false records substantiating those claims. The indictment also alleges that the defendants submitted false claims seeking reimbursement for medically unnecessary quantitative urinalysis tests. The indictment charges both defendants with two counts of conspiracy to commit wire fraud and health care fraud, and charges Dr. CLARK with an additional two counts of health care fraud. This ongoing investigation is being handled by Dustin Davis, who serves as Assistant Chief of the Department of Justice’s Criminal Division—Fraud Section, Assistant U.S. Attorney Adam Ptashkin, and Jared Hasten of the Fraud Section.

Express ACA

In the second case, a federal grand jury has returned an indictment charging Keaton L. COPELAND, age 32, of Miramar, Florida, and Dorothy V. DELIMA, a/k/a Dorothy V. Copeland, age 45, of Davie, Florida, with a scheme to submit fraudulent health insurance applications to Blue Cross/Blue Shield of Louisiana and other private insurers. According to the indictment, the defendants owned and operated Express ACA, LLC, a health insurance brokerage company in Florida, and they devised a scheme to submit fraudulent health insurance applications to various insurers for health insurance plans that would satisfy the Affordable Care Act’s “minimum essential coverage” requirement. Specifically, according to the indictment, the defendants submitted numerous fraudulent applications for so-called “bronze plans,” the premiums for which were fully subsidized by the U.S. Government, without the named applicants’ knowledge, consent, or authorization. The indictment charges both COPELAND and DELIMA with conspiracy to commit wire fraud and five counts of wire fraud, and the indictment also charges COPELAND with additional counts of wire fraud and aggravated identity theft. This ongoing investigation is being handled by Assistant United States Attorneys J. Brady Casey and Ryan R. Crosswell.

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Since its inception, the Baton Rouge-based Medicare Fraud Strike Force has charged more than 80 defendants with health care fraud and related offenses, achieving a 95% conviction rate and sending nearly 50 of those defendants to federal prison.

Acting U.S. Attorney Corey Amundson stated, “Our medical providers spend countless hours caring for our everyday ailments, improving and extending our lives, and often fighting for us in our most desperate hours. They are rightly viewed as some of the most trusted and respected members of our society. Too often, the few dishonest providers hijack this well-earned respect and trust to line their own pockets through fraud. My office, which has sent nearly 50 healthcare fraud defendants to federal prison since the inception of the Medicare Fraud Strike Force, will continue to work tirelessly with our outstanding federal, state, and local partners to root out these bad actors. I greatly appreciate all those who have contributed to this important and successful law enforcement effort.”

“The indictments returned in both of these cases affirm our commitment to protecting the integrity of our nation’s health insurance programs,” said Special Agent-in-Charge C.J. Porter of the United States Department of Health and Human Services, Office of Inspector General’s (OIG) Dallas Regional Office. “These investigations are also indicative of our continuing efforts to work closely with our Federal and State law enforcement partners to identify and bring to justice those who deliberately manipulate health insurance systems to fraudulently obtain money from Medicare, Medicaid and other federally funded health care programs.”

Jeffrey S. Sallet, the Special Agent-in-Charge of the New Orleans Division of the Federal Bureau of Investigation, stated, “Countless Americans rely on the Medicare and Medicaid programs for essential health coverage. The New Orleans Division of the FBI, along with its local, state and federal partners, will continue to identify and pursue any individuals or entities who would seek to harm and diminish these programs through fraud.”

Louisiana Attorney General Jeff Landry stated, “The success of this initiative shows that collaboration between law enforcement agencies at all levels combats crime. Our investigators work around the clock to fight waste, fraud, and abuse in Medicaid. My office and I are committed to doing all we can to save taxpayer money and protect this program for the people in our State that need it the most. I am proud of the results our team achieved during this operation and what we do daily to reduce Medicaid fraud.”

NOTE: An indictment is an accusation by the Grand Jury. The defendants are presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.

Owner and Recruiter for Louisiana and Texas Mental Health Clinics Convicted as Part of $258 Million Health Care Fraud Scheme in Baton Rouge, Louisiana

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An owner and operator of community mental health centers in Baton Rouge, Louisiana, as well as a patient recruiter for a related facility in Houston, Texas, were convicted on Wednesday, May 21, 2014, for their roles in a $258 million Medicare fraud scheme involving three facilities that filed fraudulent claims for psychiatric services that were unnecessary or never actually provided.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Walt Green for the Middle District of Louisiana, Special Agent in Charge Michael J. Anderson for the FBI’s New Orleans Field Office, Special Agent in Charge Mike Fields for the Dallas Region of the Department of Health and Human Services (HHS) Office of Inspector General and Louisiana State Attorney General James Buddy Caldwell made the announcement.
“These convictions resulted from a massive fraud involving thousands of false billings for mental health services that were either not needed or not given,” said Acting Assistant Attorney General O’Neil.  “It was a sophisticated scheme involving kickbacks, falsified medical records and false billings.  We will use all tools at our disposal – from data to traditional law enforcement techniques – to root out these schemes and bring the appropriate people to justice.”
“These significant convictions are the latest example of our ongoing commitment to rooting out health care fraud throughout our community,” said U.S. Attorney Green.    “We will use all of the tools and resources at our disposal to prosecute those who submit false information and false claims to Medicare – especially where, as in this case, those claims cost the United States tens of millions of dollars and were filed using the names and identities of Medicare beneficiaries who are particularly vulnerable.    I appreciate the tremendous assistance we received in this case, and in our other anti-health care fraud efforts, from the Department’s Criminal Division and our federal and state law enforcement partners.”
“The success of this broad sweeping, complex healthcare fraud investigation could not have been possible without the tremendous collaboration between all agencies involved,” said Special Agent in Charge Anderson.    “It clearly demonstrates how law enforcement can make such a significant community impact as a result of such strong partnerships.”
“Whenever Medicare providers are motivated by greed, our most vulnerable citizens, the elderly, are put at risk,” said Special Agent in Charge Fields.  “Our HHS-OIG agents will continue to work closely with our law enforcement partners to investigate providers who will stop at nothing to loot the Medicare Trust Fund.”
Roslyn F. Dogan, 53, of Baton Rouge, Louisiana, and James R. Hunter, 49, of Houston, Texas, were found guilty after a six-day jury trial before Chief U.S. District Judge Brian A. Jackson of the Middle District of Louisiana.    Dogan was convicted of conspiracy to commit health care fraud and two counts of health care fraud.    Hunter was convicted of conspiracy to commit health care fraud and conspiracy to pay and receive health care kickbacks.
The investigation into these three community mental health centers – Shifa Community Mental Health Center of Baton Rouge (Shifa Baton Rouge), Serenity Center of Baton Rouge (Serenity Center), and Shifa Community Mental Health Center of Texas (Shifa Texas) – has resulted in the convictions of 17 individuals employed by the facilities, including therapists, marketers, administrators, owners and the medical director.    The investigation is ongoing.
According to court documents, the companies billed Medicare more than $258 million over a period of seven years for partial hospitalization program services for the mentally ill that were unnecessary or never provided.
Further according to court documents, Dogan was part owner of Serenity Center as well as the marketer for Serenity Center and Shifa Baton Rouge.  As part of the scheme, Dogan would arrange for Medicare-eligible patients to be sent to Shifa Baton Rouge and Serenity Center and admitted to those facilities, regardless of whether the patients needed partial hospitalization program services.  In order to increase billings to Medicare, Dogan, along with others in management, instructed administrators and therapists to falsify patient treatment records for services that had not been provided.  Dogan also concealed the fraud at Shifa Baton Rouge and Serenity Center by directing that patient billing statements be intercepted from patients’ mail in order 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.
According to court documents, Hunter, a resident of Houston, was paid $1,500 per week in cash to direct patients to attend the partial hospitalization program at Shifa Texas.  Hunter, in turn, paid each patient $75 per week to attend the program.  In an effort to get patients admitted to Shifa Texas, Hunter instructed patients as to the types of symptoms and diagnoses to describe to physicians in order to be admitted to the program.
The individuals who have pleaded guilty in this case include:

  •          Dr. Zahid Imran  – Imran, a Baton Rouge area psychiatrist, served as Shifa’s medical director and co-owner of Serenity Center and Shifa Texas.  As part of the scheme, Imran would admit mentally ill patients to the facilities, some of whom were inappropriate for partial hospitalization.  Imran would then re-certify these patients’ appropriateness for the program, in an effort to continue to bill Medicare for services.  In order to support their fraudulent Medicare billing, Imran and others would falsify patient treatment records to reflect services on dates where no such services were provided.

 

  •          Hoor Naz Jafri – Jafri was an owner of all three facilities in Baton Rouge and Houston and a marketer for Shifa Baton Rouge and Serenity Center.  Jafri was also part owner of two affiliated residential facilities; patients who lived at these apartments were required to attend the programs at Shifa Baton Rouge and Serenity Center, regardless of whether these patients actually needed or desired the services.  As a marketer for Shifa Baton Rouge and Serenity Center, Jafri caused patients to be admitted to the facilities who were inappropriate for the services.  As management at all three facilities, Jafri directed administrators and therapists at these facilities to falsify records for treatment that patients did not in fact receive.

 

  •          Sedra Signater and Arthur Smith – Signater and Smith were the administrators of Shifa and Serenity Center, respectively.  At the direction of management, Signater and Smith fabricated and instructed other therapists at the facilities to fabricate patient treatment records to indicate therapy had been provided to patients, when in fact, no such therapy had been provided.  These fabricated records formed the basis of the fraudulent billings to Medicare.

 

  •          Erica Williams and Kyeiana Murray – Williams and Murray were office managers of Shifa Texas and Shifa Baton Rouge, respectively.  Williams also served as the admissions coordinator of Shifa Texas.  As the office managers at these facilities, Murray and Williams facilitated and coordinated the collection of the falsified patient treatment records and submitted these records for billing to Medicare.  Williams also directed therapists at Shifa Texas to falsify patient treatment records and coordinated the payment of kickbacks to patient recruiter James Hunter in Houston.

 

  •          Robert Booker, Teryl Vincent, Todd Ulmer, June Durio, Nancy Reed, Jason Myer, Anna Ngang and Patrick Wallace – Booker, Vincent, Ulmer, Durio, Reed and Myer, therapists at Shifa Baton Rouge and Serenity Center, and Anna Ngang and Patrick Wallace, therapists at Shifa Texas, were directed by Signater, Smith, and Williams to falsify patient treatment records for group therapy sessions they had not conducted.

The case was investigated by HHS-OIG, the FBI, and the Medicaid Fraud Control Unit of the Louisiana State 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.  This case is being prosecuted by Trial Attorneys Abigail Taylor and Dustin 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 1,900 defendants who have collectively billed the Medicare program for almost $6 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with 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 .