Tag Archives: Obstruction

Rowlett Woman Sentenced to 48 Months in Federal Prison for Role in Healthcare Fraud Conspiracy

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Wednesday, July 26, 2017

DALLAS — Charity Eleda, R.N., 56, of Rowlett, Texas, was sentenced this morning in federal court in Dallas on a health care fraud conspiracy conviction, announced U.S. Attorney John Parker of the Northern District of Texas.

Eleda was sentenced by U.S. District Judge Sam A. Lindsay to 48 months in federal prison and ordered to pay $397,294.51 in restitution to Medicare. She has been in custody since April 2016, after a federal jury found her guilty of various health care fraud offenses.

Eleda, along with co-defendants, Jacques Roy, M.D., 59, of Rockwall, Texas; Cynthia Stiger, 54, of Dallas; and Wilbert James Veasey, Jr., 65, of Dallas, were each convicted following a six-week-long trial on one count of conspiracy to commit health care fraud. In addition, Roy was convicted on eight, Veasey on three and Eleda on four counts of health care fraud. Roy was also convicted on two counts of making a false statement relating to healthcare matters and one count of obstruction of justice. Eleda was also convicted on three counts of making false statements for use in determining rights of benefit and payment by Medicare.

Three other defendants charged in the case, Cyprian Akamnonu and his registered nurse wife, Patricia Akamnonu, both of Cedar Hill, Texas, and Teri Sivils, of Midlothian, Texas, each pleaded guilty before trial to one count of conspiracy to commit health care fraud. Cyprian and Patricia Akamnonu are each currently serving a ten-year federal prison sentence. They were also ordered to pay $25 million in restitution. Sivils pleaded guilty in April 2015, and was sentenced to 3 years probation.

The government presented evidence at trial that Dr. Roy, Stiger, Veasey and Eleda engaged in a large-scale, sophisticated health care fraud scheme in which they conspired together and with others to defraud Medicare and Medicaid through companies they owned/controlled: Medistat Group Associates, P.A., Apple of Your Eye Health Care Services, Inc., Ultimate Care Home Health Services and Charry Home Care Services.

As part of the conspiracy, Stiger, Veasey and Eleda, along with others, improperly recruited individuals with Medicare coverage to sign up for Medicare home health care services. Eleda recruited patients from The Bridge homeless shelter in Dallas, sometimes paying recruiters $50 per beneficiary they found and directed to her vehicle parked outside the shelter’s gates. Eleda and other nurses would falsify medical documents to make it appear as though those beneficiaries qualified for home health care services that were not medically necessary. Eleda and the nurses prepared Plans of Care (POC), also known as 485’s, which were not medically necessary, and these POCs were delivered to Dr. Roy’s office and not properly reviewed by any physician.

Dr. Roy instructed his staff to certify these POCs, which indicated to Medicare and Medicaid that a doctor, typically Dr. Roy, had reviewed the treatment plan and deemed it medically necessary. That certifying doctor, typically Dr. Roy, certified that the patient required home health services, which were only permitted to be provided to those individuals who were homebound and required, among other things, skilled nursing. This process was repeated for thousands of POCs, and, in fact, Medistat’s office included a “485 Department,” essentially a “boiler room” to affix fraudulent signatures and certifications.

Once an individual was certified for home health care services, Eleda, nurses who worked for Stiger and Veasey, and other nurses falsified visit notes to make it appear as though skilled nursing services were being provided and continued to be necessary. Dr. Roy would also visit the patients, perform unnecessary home visits, and then order unnecessary medical services for the recruited beneficiaries. Then, at Dr. Roy’s instruction, Medistat employees would submit fraudulent claims to Medicare for the certification and recertification of unnecessary home health care services and other unnecessary medical services.

The government presented further evidence at trial that the scope of Dr. Roy’s fraud was massive; Medistat processed and approved POCs for 11,000 unique Medicare beneficiaries from more than 500 different home health agencies. Dr. Roy entered into formal and informal fraudulent arrangements with Apple, Charry, Ultimate and other home health agencies to ensure his fraudulent business model worked and that he maintained a steady stream of Medicare beneficiaries.

The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) and was brought as part of the Medicare Fraud Strike Force supervised by the Criminal Division Fraud Section and the U.S. Attorney’s Office for the Northern District of Texas.

Assistant U.S. Attorneys P.J. Meitl and Nicole Dana and First Assistant U.S. Attorney Chad Meacham prosecuted the case.

Halliburton Agrees to Plead Guilty to Destruction of Evidence in Connection with Deepwater Horizon Tragedy Third Corporate Guilty Plea Obtained by the Deepwater Horizon Task Force

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Halliburton Energy Services Inc. has agreed to plead guilty to destroying evidence in connection with the Deepwater Horizon disaster, the Department of Justice announced today.  A criminal information charging Halliburton with one count of destruction of evidence was filed today in U.S. District Court in the Eastern District of Louisiana.

Halliburton has signed a cooperation and guilty plea agreement with the government in which Halliburton has agreed to plead guilty and admit its criminal conduct.  As part of the plea agreement, Halliburton has further agreed, subject to the court’s approval, to pay the maximum-available statutory fine, to be subject to three years of probation and to continue its cooperation in the government’s ongoing criminal investigation.  Separately, Halliburton made a voluntary contribution of $55 million to the National Fish and Wildlife Foundation that was not conditioned on the court’s acceptance of its plea agreement.

According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions and fire, which resulted in the deaths of 11 rig workers and the largest oil spill in U.S. history.  Following the blowout, Halliburton conducted its own review of various technical aspects of the well’s design and construction.  On or about May 3, 2010, Halliburton established an internal working group to examine the Macondo well blowout, including whether the number of centralizers used on the final production casing could have contributed to the blowout.  A production casing is a long, heavy metal pipe set across the area of the oil and natural gas reservoir.  Centralizers are protruding metal collars affixed at various intervals on the outside of the casing.  Use of centralizers can help keep the casing centered in the wellbore away from the surrounding walls as it is lowered and placed in the well.  Centralization can be significant to the quality of subsequent cementing around the bottom of the casing.  Prior to the blowout, Halliburton had recommended to BP the use of 21 centralizers in the Macondo well.  BP opted to use six centralizers instead.

As detailed in the information, in connection with its own internal post-incident examination of the well, in or about May 2010, Halliburton, through its Cementing Technology Director, directed a Senior Program Manager for the Cement Product Line (Program Manager) to run two computer simulations of the Macondo well final cementing job using Halliburton’s Displace 3D simulation program to compare the impact of using six versus 21 centralizers.  Displace 3D was a next-generation simulation program that was being developed to model fluid interfaces and their movement through the wellbore and annulus of a well.  These simulations indicated that there was little difference between using six and 21 centralizers.  Program Manager was directed to, and did, destroy these results.

In or about June 2010, similar evidence was also destroyed in a later incident.  Halliburton’s Cementing Technology Director asked another, more experienced, employee (“Employee 1”) to run simulations again comparing six versus 21 centralizers.  Employee 1 reached the same conclusion and, like Program Manager before him, was then directed to “get rid of” the simulations.

Efforts to forensically recover the original destroyed Displace 3D computer simulations during ensuing civil litigation and federal criminal investigation by the Deepwater Horizon Task Force were unsuccessful.

In agreeing to plead guilty, Halliburton has accepted criminal responsibility for destroying the aforementioned evidence.

The guilty plea agreement and criminal charge announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill.  The Deepwater Horizon Task Force, based in New Orleans, is supervised by Acting Assistant Attorney General Mythili Raman and led by John D. Buretta, who serves as the director of the task force.  The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana and other U.S. Attorney’s Offices; and investigating agents from:  the FBI; Department of the Interior, Office of Inspector General; Environmental Protection Agency, Criminal Investigation Division; Environmental Protection Agency, Office of Inspector General; National Oceanic and Atmospheric Administration, Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.

The case is being prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black and Rohan Virginkar.

An information is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

Former Director of Accounting and Outside Auditor of American Mortgage Specialists Inc. Plead Guilty to Roles in Fraud Against BNC National Bank

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(ed. note: Would not want to be in the cross-hairs of this cross-agency group of fraud enforcers.)
Former Director of Accounting and Outside Auditor of American Mortgage Specialists Inc. Plead Guilty to Roles in Fraud Against BNC National Bank

The former director of accounting and the former outside auditor of Arizona-based residential mortgage loan originator American Mortgage Specialists Inc. (AMS) pleaded guilty in Arizona to conspiracy to defraud BNC National Bank and obstruction of justice, respectively, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Timothy Q. Purdon of the District of North Dakota; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Steve A. Linick, Inspector General of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) announced today.

Lauretta Horton, 45, and David Kaufman, 69, both residents of Arizona, pleaded guilty yesterday before U.S. District Judge Daniel L. Hovland of the District of North Dakota, who took the pleas in Arizona federal court.   Horton and Kaufman were charged in separate criminal informations unsealed on Oct. 2, 2012, for their roles in the fraud scheme against BNC.

“ While the nation was reeling from a financial downturn, Lauetta Horton conspired with AMS executives to deceive BNC Bank about AMS’s true financial stability, and AMS auditor David Kaufman lied to federal investigators to impede their investigation,” said Assistant Attorney General Breuer.  “Horton and Kaufman’s guilty pleas reflect our continued vigilance in investigating and punishing criminal conduct relating to the financial crisis.”

“Banks in North Dakota were not immune from illegal conduct related to the mortgage crisis that impacted banks all across the country,” said U.S. Attorney Purdon. “These guilty pleas are the result of close collaboration with our federal investigative partners and the Justice Department’s Criminal Division and should send the message that the Department of Justice is committed to prosecuting cases such as these wherever they might arise.”

  “As the controller and director of accounting of mortgage originator AMS, Horton sent to TARP-recipient BNC National Bank false financial statements she had prepared so that BNC would continue to fund AMS,” said Special Inspector General Romero.   “In a cover-up and an attempt to impede the federal grand jury investigation, AMS’s external auditor Kaufman lied to SIGTARP agents about his telling an AMS executive that he had changed the financial statements so that BNC would not discover the truth.   Kaufman is the third person convicted of lying to SIGTARP agents, which shows that SIGTARP will aggressively pursue those who fail to tell the truth and impede our investigations.”

“This is a significant case because it holds accountable an individual who participated in a scheme to defraud a member bank of the Federal Home Loan Bank System, and another individual who lied to federal investigators,” said Inspector General Linick.   “This case is a reminder that there are consequences for giving investigators false information and manipulating numbers.”

AMS was in the business of originating residential real estate mortgage loans to borrowers and then selling the loans to institutional investors.   In 2006, AMS entered into a loan participation agreement with BNC whereby BNC provided funding for the loans issued by AMS.  According to court documents, Horton, the director of accounting at AMS, conspired from February 2009 to April 2010 to defraud BNC by making false representations regarding the financial well-being of AMS in order for AMS to continue to obtain funding from BNC.  Specifically, Horton admitted to inflating asset items and altering financial information in the AMS balance sheet provided to BNC to falsely reflect that AMS had substantial liquid assets when, in fact, it did not.

According to court documents, Kaufman, a certified public accountant and the outside auditor of AMS’ annual financial statements, lied to federal agents during the criminal investigation and obstructed the grand jury investigation.   Specifically, Kaufman admitted denying to agents that he had a conversation with an AMS executive in which Kaufman explained to the AMS executive that Kaufman had combined two expenses on AMS’s financial statements in order to conceal the true nature and extent of AMS’s financial condition from BNC.

Although BNC’s holding company had received approximately $20 million under the TARP and had injected approximately $17 million of the TARP funds into BNC, BNC incurred losses exceeding the millions received from TARP.  BNC then did not make its required TARP dividends to the Department of Treasury for nearly two years.

At sentencing, scheduled for May 6, 2013, Kaufman and Horton face a maximum penalty of 10 years and five years in prison, respectively.

The investigation was conducted by agents assigned to the Offices of the Inspector General of SIGTARP and of FHFA.  The case is being prosecuted by Trial Attorney Robert A. Zink and Senior Litigation Counsel Jack B. Patrick of the Criminal Division’s Fraud Section and by Assistant U.S. Attorney Clare Hochhalter of the District of North Dakota, with the assistance of Trial Attorney Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section.

This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov .

Former FBI Agent and Alleged Co-Conspirators Indicted for Scheme to Obstruct Federal Fraud Investigation

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FOR IMMEDIATE RELEASE
Thursday, October 18, 2012
Former FBI Agent and Alleged Co-Conspirators Indicted for Scheme to Obstruct Federal Fraud Investigation

WASHINGTON – A federal grand jury in Salt Lake City today returned an 11-count indictment charging a former FBI special agent and two alleged accomplices with a scheme to use the agent’s official position to derail a federal investigation into the conduct of one of the alleged conspirators.  The charges were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the District of Utah David B. Barlow and Department of Justice Inspector General Michael E. Horowitz.

The indictment charges former FBI special agent Robert G. Lustyik Jr., 50, of Sleepy Hollow, N.Y.; Michael L. Taylor, 51, of Harvard, Mass., the principal of Boston-based American International Security Corporation (AISC); and Johannes W. Thaler, 49, of New Fairfield, Conn., each with one count of conspiracy, eight counts of honest services wire fraud, one count of obstructing justice and one count of obstructing an agency proceeding.

“According to the indictment, while active in the FBI, former Special Agent Lustyik used his position in an attempt to stave off the criminal investigation of a business partner with whom he was pursuing lucrative security and energy contracts,” said Assistant Attorney General Breuer.  “He allegedly acted through a childhood friend to secure promises of cash, purported medical expenses and business proceeds in exchange for abusing his position as an FBI agent.  The alleged conduct is outrageous, and we will do everything we can to ensure that justice is done in this case.”

DOJ Inspector General Horowitz stated:  “Law enforcement officers are sworn to uphold the law.  Agents who would sell their badges and impede the administration of justice will be vigorously pursued.”

According to the indictment, Robert Lustyik was an FBI special agent until September 2012, assigned to counterintelligence work in White Plains, N.Y.  The indictment also states that from at least June 2011, the three alleged conspirators had a business relationship involving the pursuit of contracts for security services, electric power and energy development, among other things, in the Middle East, Africa and elsewhere.

The indictment alleges that in September 2011, Taylor learned of a federal criminal investigation, begun in Utah in 2010, into whether Taylor, his business and others committed fraud in the award and performance of a contract with the U.S. Department of Defense.

Soon thereafter, Taylor allegedly began to give and offer things of value to Lustyik in exchange for Lustyik’s agreement to use his official position to impair and impede the Utah investigation.  The indictment also alleges that Thaler, a childhood friend of Lustyik’s, served as a conduit between Taylor and Lustyik, passing information and things of value.

Specifically, the indictment charges that Taylor offered Lustyik a $200,000 cash payment; money purportedly for the medical expenses of Lustyik’s minor child; and a share in the proceeds of several anticipated contracts worth millions of dollars.

According to the indictment, Lustyik used his official FBI position to impede the Utah investigation by, among other things, designating Taylor as an FBI confidential source, texting and calling the Utah investigators and prosecutors to dissuade them from charging Taylor and attempting to interview potential witnesses and targets in the Utah investigation.  As alleged in the indictment, Lustyik wrote to Taylor that he was going to interview one of Taylor’s co-defendants and “blow the doors off this thing.”  Referring to the Utah investigation, Lustyik also allegedly assured Taylor that he would not stop in his “attempt to sway this your way.”

According to the indictment, Lustyik, Taylor and Thaler attempted to conceal the full extent of Lustyik’s relationship with Taylor from the Utah prosecutors and agents, including by making and planning to make material misrepresentations and omissions to federal law enforcement involved in the investigation of Taylor.

For example, the indictment alleges that on Sept. 8, 2012, after Taylor was searched at the border and his computer seized, Lustyik sent a text message to Thaler, stating: “You might have to save me and testify that only you r doing business.”  Nine days later, according to the indictment, Thaler told federal law enforcement agents – in a voluntary, recorded interview – that Lustyik was not involved in Taylor’s and Thaler’s business.

The pair also allegedly used an email “dead drop” to avoid leaving a record of their interactions and used the names of football teams and nicknames as part of their coded communications.

Taylor and Lustyik were both previously arrested on prior criminal complaints in this case.  Taylor has been detained pending trial and Lustyik received a $2 million bond.  Thaler is expected to surrender to authorities tomorrow.

If convicted, the defendants each face a maximum potential penalty of five years in prison on the conspiracy charge, 20 years in prison on each of the wire fraud charges, 10 years in prison on the obstruction of justice charge and five years in prison on the obstruction of an agency proceeding charge.  Each charge also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.  The indictment also seeks forfeiture of any proceeds traceable to the conspiracy, wire fraud and obstruction of justice offenses.

The case is being investigated by the Department of Justice Office of the Inspector General and prosecuted by Trial Attorneys Kevin Driscoll and Maria Lerner of the Criminal Division’s Public Integrity Section; Acting Deputy Chief Pamela Hicks, Acting Assistant Deputy Chief Jeannette Gunderson and Trial Attorney Ann Marie Blaylock of the Criminal Division’s Asset Forfeiture and Money Laundering Section; and Assistant U.S. Attorney Carlos Esqueda.

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