Tag Archives: Kickbacks

GeyerGorey LLP Opens New York Office

Posted on by

FOR IMMEDIATE RELEASE

PRLog (Press Release) – Feb. 18, 2013 – WASHINGTON — GeyerGorey LLP today announced the opening of a new office in New York. This is the firm’s fourth office.  The New York office now joins with the firm’s Washington, D.C., Philadelphia and Boston offices in providing international and inside-the-beltway experience to individuals and companies that have become — or wish to avoid becoming — the subject of federal criminal law enforcement agency interest. Partner Robert J. Zastrow, resident in the Boston office, will oversee client matters in New York.
GeyerGorey LLP aims to meet the needs of companies for advice and training in compliance with federal criminal laws and in the detection of wrongdoing by corporate employees. The firm also specializes in the defense of white-collar criminal cases. The firm’s Web site may be found at www.GeyerGorey.com.

The New York office is located at 112 W. 34th Street, 17th Floor, New York, NY  10120.  The office telephone number is (212) 920-0676.  For further information, please call Robert Zastrow at (212) 920-0676 or send an email to [email protected].

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Today’s disposition is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF).   The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

Former Department of Defense Contractor Sentenced to 30 Months in Prison for Smuggling Kickback Proceeds from Afghanistan to the United States

Posted on by
A former employee of a Department of Defense contracting company at Bagram Airfield, Afghanistan, was sentenced today to serve 30 months in prison for attempting to smuggle $150,000 in kickback proceeds he received for steering U.S. government subcontracts to an Afghan company, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Barry Grissom of the District of Kansas.

 Donald Gene Garst, 51, of Topeka, Kan., was sentenced by U.S. District Judge Julie A. Robinson in Topeka.  In addition to his prison term, Garst was sentenced to serve one year of supervised release and was ordered to pay a fine of $52,117.  The department previously forfeited the $150,000 Garst had attempted to smuggle into the United States.

Garst pleaded guilty on Nov. 9, 2012, to a one-count information charging him with bulk cash smuggling.  According to court documents, Garst was employed by a private U.S. company that was contracted by the U.S. government and its armed forces at Bagram Airfield from January 2009 to May 2011.  Garst was involved in identifying, evaluating and monitoring subcontracts awarded to Afghan companies by his employer, and he used his position to meet executives of an Afghan construction company called Somo Logistics.  Garst then entered into an agreement with the Afghans under which he would receive kickback payments on a contract-by-contract basis in return for treating Somo Logisitcs favorably in the contracting process.

In December 2010, Garst accepted a kickback for $60,000 on the first subcontract awarded to Somo Logistics.  The subcontract was for the term lease of heavy equipment meant to be used for construction on Bagram Airfield.  Garst hand-carried approximately $20,000 of the kickback proceeds into the United States, and he received the remainder via a series of structured wire transfers from Somo Logistics executives.

In May 2011, Garst accepted a $150,000 kickback for a second subcontract for the lease of heavy construction equipment.  Garst shipped the $150,000 in cash to the United States, and his failure to declare the value of the shipment was discovered by law enforcement.

Garst had further agreed to receive $400,000 on a third subcontract, but his scheme was discovered by law enforcement before he could receive that payment.

This case is being prosecuted by Assistant U.S. Attorney Jared Maag and Trial Attorney Wade Weems of the Criminal Division’s Fraud Section.  The case was investigated by Special Agents with the Army Criminal Investigations Division and the Defense Criminal Investigative Service, with assistance from the Special Inspector General for Afghanistan Reconstruction and the FBI.

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

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

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

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

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

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

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

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

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

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

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

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

Financial Consultant Extradited to the United States for Alleged Scheme to Defraud the U.S. Export-import Ban

Posted on by

Manuel Ernesto Ortiz-Barraza, an independent financial consultant, was extradited to the United States today for his alleged role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of over $2.5 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Western District of Texas Robert Pitman and Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank.

Ortiz-Barraza, 56, was charged in an indictment unsealed on Oct. 19, 2011, in the Western District of Texas with one count of conspiracy to commit wire and bank fraud, three counts of wire fraud and one count of bank fraud for his alleged role in a scheme with several others to defraud the Ex-Im Bank.  Based on a provisional arrest warrant, Mexican authorities arrested Ortiz-Barraza in Mexico on Feb. 13, 2012, and he has been awaiting extradition to the United States, a process which was recently finalized by the Mexican courts.

According to the U.S. indictment and court documents, Ortiz-Barraza and his co-conspirators allegedly conspired to obtain Ex-Im Bank guaranteed loans through banks by creating false loan applications, false financial statements and other documents purportedly for the purchase and export of U.S. goods into Mexico.  Ortiz-Barraza and his co-conspirators allegedly falsified shipping records to support their claims of doing legitimate business and did not ship the goods that were guaranteed by the Ex-Im Bank.  After the loan proceeds were received, Ortiz-Barraza and his co-conspirators allegedly split the loan proceeds among themselves.  As a result of the alleged fraud, the conspirators’ loans defaulted, causing the Ex-Im Bank to pay claims to lending banks on a loss of over $2.5 million.

The charges and allegations contained in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

The Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing.  The Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.

The case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Spitzer of the Western District of Texas, El Paso Division.  The case was investigated by the Ex-Im Bank Office of Inspector General, Homeland Security Investigations in El Paso, under the leadership of Acting Special Agent in Charge Dennis Ulrich; Internal Revenue Service-Criminal Investigation in Washington, D.C., under the leadership of Special Agent in Charge Rick A. Raven; and the U.S. Postal Inspection Service in Washington, D.C., under the leadership of Inspector in Charge Daniel S. Cortez.  Substantial assistance was provided by the U.S. Marshals Service and the Criminal Division’s Office of International Affairs in Washington, D.C.  The Department of Justice is particularly grateful to the government of Mexico for their assistance in this matter.

Four Sentenced to Prison in Florida Community Mental Health Center Case

Posted on by
The owners of three Miami-area assisted living facilities and an affiliated psychologist were sentenced to prison today in connection with a health care fraud scheme, involving now-defunct Miami-area health provider Health Care Solutions Network Inc. (HCSN), in which Medicare was billed for mental health treatments that were unnecessary or not provided.

The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

U.S. District Judge Cecilia M. Altonaga sentenced Serena Joslin, 32, of Looneyville, W.Va., to 63 months in prison, following her previous guilty plea to conspiracy to commit health care fraud.  Raymond Rivero, 55, Daniel Martinez, 46, and Ivon Perez, 50, all of Miami, were each sentenced to 28 months in prison.  All three had previously pleaded guilty to conspiracy to violate the anti-kickback statute.

According to court documents, HCSN operated community mental health centers both in Miami and North Carolina, including partial hospitalization programs (PHP) – a form of intensive treatment for severe mental illness.  HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not provided.

In Miami, HCSN obtained beneficiaries by paying kickbacks to owners and operators of assisted living facilities (ALF) or by otherwise recruiting them from the facilities and from nursing homes.  Rivero, Martinez and Perez admitted during their guilty pleas to referring Medicare beneficiaries to HCSN in exchange for cash bribes.  Rivero, former owner of Miami-based God Is First ALF; Martinez, former owner of Homestead, Fla.-based Mi Renacer ALF; and Perez, former owner of Homestead-based Kayleen and Denis Care Corp., are no longer permitted to operate such facilities as a condition of their guilty pleas.

According to court documents, ALF residents referred to HCSN by Rivero, Martinez and Perez were not qualified to be placed in PHP and were only selected because they had Medicare or state of Florida Medicaid benefits.  In some cases, ALF patients suffered from dementia, Alzheimer’s disease or mental retardation, or were otherwise unable to benefit from mental health services.

According to court documents, Joslin, a licensed psychologist, was hired by HCSN in North Carolina in April of 2010 as a clinical coordinator and later promoted to clinical director. In those roles, she conspired with other HCSN employees to fabricate medical documents to substantiate alleged PHP treatment that was medically unnecessary and, in many instances, not even provided to the beneficiaries.  Joslin admitted that many of the HCSN patients were unqualified for the PHP program because they suffered from conditions such as mental retardation and dementia, and that she directed therapists to fabricate medical records to support HCSN’s fraudulent billing to the Medicare program.  Joslin was also required to surrender her North Carolina license to provide mental health treatment as part of her plea agreement.

According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.

In addition to the prison terms, Judge Altonaga sentenced Joslin, Rivero, Martinez and Perez each to serve three years of supervised release, and ordered them to pay $4,464,728; $90,896; $76,358; and $89,245 in restitution, respectively.

The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section.  The cases were investigated by the FBI and HHS-OIG and were 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.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Former Miami Clinic Director Sentenced to 70 Months in Prison for Role in HIV Infusion Fraud Scheme

Posted on by
A former Miami HIV infusion clinic director was sentenced today to serve 70 months in prison for his role in a $26.2 million HIV infusion fraud scheme, announced Assistant Attorney General Lanny Breuer of the Criminal Division, U.S. Wifredo A. Ferrer of the Southern District of Florida, Acting Special Agent in Charge  Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
Enrique Gonzalez, 67, formerly of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida.  In addition to his prison term, Judge Altonaga sentenced Gonzalez to serve three years of supervised release and ordered him to pay $17,590,896 in restitution to HHS.

On Nov. 13, 2012, Gonzalez pleaded guilty to one count of conspiracy to defraud the United States, to cause the submission of false claims, and to pay health care kickbacks, and one count of conspiracy to commit health care fraud.

Gonzalez admitted that between August 2002 and March 2004, he conspired with co-defendant Ronald Harris, a Miami physician, and alleged co-conspirators to operate Physicians Med-Care and Physicians Health (together the “Physicians Clinics”), two Miami HIV infusion clinics.  According to court documents, the Physicians Clinics were owned and controlled by alleged co-conspirators Carlos Benitez and his brother Luis Benitez.  The Physicians Clinics purported to specialize in treating patients with HIV, but were operated for the sole purpose of committing Medicare fraud, according to court documents.  Gonzalez was a director of Physicians Med-Care and, at the direction of his co-conspirators, was responsible for the finances of the Physicians Clinics.

Gonzalez admitted that he agreed with his co-conspirators to handle the finances for the Physicians Clinics, moving the money paid by the Medicare program out of the Physicians Clinics’ accounts and into accounts owned and controlled by his co-conspirators.  According to court documents, Harris signed blank checks that Gonzalez used to transfer funds to various Benitez-owned entities and others, as directed by his co-conspirators.  In addition, Gonzalez agreed to provide cash to various co-conspirators at the Physicians Clinics to be used to pay bribes and kickbacks to the Medicare beneficiaries in return for those beneficiaries allowing the Physicians Clinics to bill the Medicare program for HIV infusion services that were not medically necessary and often not provided.

Gonzalez admitted that during his association with Physicians Med-Care, the clinic billed the Medicare program approximately $24.5 million in HIV infusion therapy claims, for which the clinic received $16.7 million in payments.  Gonzalez also admitted that during his time with Physicians Health, the clinic billed Medicare approximately $1.7 million and received approximately $800,000 in payment from the Medicare program for fraudulent services.

Gonzalez was a fugitive from justice from the time of his indictment in 2008, until he was located and detained in Peru in late 2011.  Gonzalez was extradited to the United States in July of 2012.  Gonzalez’ daughter, Carmen Gonzalez, was indicted in a related case and is currently a fugitive.

Co-defendant Harris pleaded guilty on Aug. 26, 2008, to one count of conspiracy to defraud the United States, to cause the submission of false claims and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims to the Medicare program.  Harris pleaded guilty in connection with his role as the medical director for the Physicians Clinics.  On Nov. 4, 2008, Harris was sentenced to serve 84 months in prison for his role in the scheme.

Carlos and Luis Benitez and Thomas McKenzie were charged separately with health care fraud and money laundering crimes in an indictment unsealed on June 11, 2008.  According to the separate indictment, the defendants provided the money and staff necessary to open the Physicians Clinics, the Medicare patients that the clinics needed to bill the Medicare program and transportation for the HIV patients who visited the clinics.  Carlos and Luis Benitez and McKenzie were charged for their role in committing approximately $109 million in HIV infusion fraud and money laundering through the Physicians Clinics and nine other HIV infusion clinics.

On Sept. 18, 2008, McKenzie pleaded guilty to one count of conspiracy to commit health care fraud and one count of submitting false claims to the Medicare program, and admitted to his role in a $119 million HIV infusion fraud scheme.  On Dec. 18, 2008, McKenzie was sentenced to serve 14 years in prison.

Carlos and Luis Benitez are also fugitives.  Anyone with information regarding the whereabouts of the fugitives is urged to contact HHS-OIG fugitive reporting phone line at 888-476-4453.

The defendants who have not been convicted are presumed innocent unless and until proven guilty.

The Physicians Med-Care and Physicians Health case is being prosecuted by Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and the DHS Office of Inspector General.

The case 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.  The Department also thanks the Peruvian National Police Interpol Unit for their assistance.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is 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.

Owner of Texas Durable Medical Equipment Companies Convicted in Fraud Scheme

Posted on by
A Texas federal judge convicted the owner of two Texas-based durable medical equipment companies today on multiple health care fraud charges following a five-day bench trial, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Hugh Marion Willet, 69, of Fort Worth, Texas, was found guilty by U.S. District Judge Jane J. Boyle in the Northern District of Texas on all seven counts of the June 2012 second superseding indictment: one count of conspiracy to commit health care fraud and six counts of health care fraud stemming from a durable medical equipment (DME) fraud scheme.  Willett?s wife, Jean Willett, previously pleaded guilty to the same charges and was sentenced in September 2012 to serve 50 months in prison.

The evidence at trial showed that between 2006 and 2010, the Willets co-owned and operated JS&H Orthopedic Supply LLC and Texas Orthotic and Prosthetic Systems Inc., which claimed to provide orthotics and other DME to beneficiaries of Medicare and private insurance benefit programs including Aetna, Blue Cross Blue Shield and CIGNA.

Evidence presented in court proved that both of these companies intentionally submitted claims to Medicare and other insurers for products that were materially different from and more expensive than what was actually provided, and that Hugh Marion Willett was a knowing and willing participant in the fraud.

At sentencing, currently scheduled for April 18, 2013, Hugh Marion Willett faces a maximum potential penalty of 10 years in prison and a $250,000 fine on each count.

The case is being prosecuted by Fraud Section Trial Attorney Ben O’Neil and Deputy Chief Sam Sheldon of the Justice Department?s Criminal Division.  The case was investigated by the FBI and the Department of Health and Human Services Office of Inspector General (HHS-OIG) and brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section.

Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 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.

Seven Arrested, Charged with $22 Million Detroit-area Home Health Care Fraud Scheme

Posted on by
Six Detroit-area residents and one Chicago-area resident were arrested today by federal agents on charges arising from the ongoing investigation into an alleged $22 million home health care fraud scheme.  The indictment was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office; Special Agent in Charge Lamont Pugh III of the Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office; and Special Agent in Charge Erick Martinez of the Internal Revenue Service Criminal Investigation (IRS-CI) Detroit Field Office.

According to the 18-count indictment returned Jan. 15, 2013, and unsealed today, the seven individuals allegedly participated in a Medicare fraud scheme operating out of four Oakland County, Mich., home health agencies claiming to provide in-home health services: Royal Home Health Care Inc., Prestige Home Health Services Inc., Platinum Home Health Services Inc. and Empirical Home Health Care Inc.  The indictment alleges Medicare paid the agencies approximately $22 million for fraudulently reported services since August 2008.

In addition to the arrests, law enforcement agents suspended Medicare payments to four health care companies associated with the alleged scheme.

Muhammad Aamir, 42; Usman Butt, 39; Hemal Bhagat, 31; Syed Shah, 50; Tariq Tahir, 46; and Raquel Ellington, 56, of the Detroit area; and Tayyab Aziz, 43, from the Chicago area, each are charged with conspiracy to commit health care fraud.  All but Aziz are also charged with health care fraud and with conspiracy to violate the Anti-Kickback Statute.  Butt, Bhagat, Shah and Aziz are additionally charged with conspiracy to commit money laundering.

According to the indictment, Aamir and Butt owned and operated Prestige; Butt, Bhagat and Shah owned and operated Royal; and Aamir owned and operated Platinum and Empirical – all of which allegedly claimed to provide home health therapy services to Medicare beneficiaries that were unnecessary and/or were never performed.  The indictment alleges Tahir and Ellington recruited Medicare beneficiaries, paying them kickbacks for their Medicare information and signatures on documents that detailed physical therapy and/or skilled nursing services that were either never rendered or not medically necessary.  Aamir, Butt, Bhagat, Shah, Tahir and Ellington are also charged with conspiring to pay kickbacks to Tahir and Ellington for their recruiting work.  Butt, Bhagat, Shah and Aziz allegedly conspired to launder the proceeds of the scheme.

The charges of health care fraud conspiracy and health care fraud each carry a maximum potential penalty of 10 years in prison and a $250,000 fine.  The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum potential penalty of five years in prison and a $25,000 fine.  The charge of conspiracy to commit money laundering carries a maximum potential penalty of 20 years in prison and a $500,000 fine.

An indictment is merely a charge and defendants are presumed innocent unless nad until proven guilty.

The case is being prosecuted by Trial Attorney Niall M. O’Donnell of the Criminal Division’s Fraud Section.  The investigation is conducted jointly by the FBI and HHS-OIG, as part of the Medicare Fraud Strike Force, and IRS-CI, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 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.

Georgia Men Plead Guilty to Bribing Official to Secure Government Contracts Defendants Admit to Overcharging Defense Department More Than $900,000

Posted on by
WASHINGTON – Two men employed by a machine products vendor in Albany, Ga., have pleaded guilty to bribing a public official working for a military organization at the Marine Corps Logistics Base Albany (MCLB-Albany) to secure contracts for machine products, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Thomas J. Cole Jr., 43, and Fredrick W. Simon, 55, both of Albany, each pleaded guilty before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.

During their guilty pleas, Cole, the general manager of an Albany-based machine products vendor, and Simon, an employee responsible for processing sales orders, admitted to participating in a scheme to secure sales order contracts from the Maintenance Center Albany (MCA) at MCLB-Albany by subverting a competitive bid process.  The MCA is responsible for rebuilding and repairing ground combat and combat support equipment, much of which has been utilized in military missions in Afghanistan and Iraq, as well as other parts of the world.  To accomplish the scheme, Cole and Simon bribed a MCA purchase tech responsible for placing machine product orders.  Cole and Simon admitted to participating in the scheme at the purchase tech’s suggestion, after Simon had spoken with the purchase tech about how his company could obtain business from the MCA.  Cole and Simon admitted that, at the purchase tech’s request, they paid the purchase tech a bribe of at least $75 for each of the more than 1,000 sales orders MCA placed with their company.  According to court documents, the purchase tech would transmit sales bids to Simon and then communicate privately to him exactly how much money the company should bid for each particular order.  Cole and Simon admitted that these orders were extremely profitable, often times exceeding the fair market value of the machine products, sometimes by as much as 1,000 percent.

Cole and Simon further admitted that, at the purchase tech’s urging, in 2011 they began routing some orders through a second company, owned by Cole, because the volume of orders MCA placed with the first company was so high.  They also admitted that the purchase tech increased the bribe required for orders as the scheme progressed.  Cole and Simon admitted to paying the purchase tech approximately $161,000 in bribes during the nearly two-year scheme.  Cole admitted to personally receiving approximately $209,000 in proceeds from the scheme; Simon admitted to personally receiving approximately $74,500.  Both admitted that the total loss to the Department of Defense from overcharges associated with the machine product orders placed during the scheme was approximately $907,000.

At sentencing, Cole and Simon each face a maximum penalty of 15 years in prison and a fine of not more than twice the pecuniary loss to the government.  As part of their plea agreements with the United States, Cole and Simon both agreed to forfeit the proceeds they received from the scheme, as well as to pay full restitution to the Department of Defense.  Sentencing has not yet been scheduled.

The case is being prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.  The case is being investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit and the Defense Criminal Investigative Service.