Jury Convicts All Seven Defendants in $97 Million Medicare Fraud Scheme

A federal jury in Houston today convicted two owners of a former Houston mental health care company, Spectrum Care P.A. (Spectrum), several of its employees and the owners of certain Houston group care homes for their participation in a $97 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office and Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of Inspector General (HHS-OIG), the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU),  Special Agent in Charge Joseph J. Del Favero of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG) and Special Agent in Charge Scott Rezendes of Field Operations of the Office of Personnel Management’s Office of Inspector General (OPM-OIG) made the announcement following a  jury trial before U.S. District Judge Vanessa Gilmore in the Southern District of Texas.
Physicians Mansour Sanjar, 81, and Cyrus Sajadi, 66, the owners of Spectrum, were each convicted of conspiracy to commit health care fraud and conspiracy to pay kickbacks as well as related counts of health care fraud and paying illegal kickbacks.   Adam Main, 33, a physician’s assistant, was convicted of conspiracy to commit health care fraud and related counts of health care fraud.   Shokoufeh Hakimi, 66, administrator of Spectrum, was convicted of conspiracy to commit health care fraud, conspiracy to pay kickbacks and a related count of paying an illegal kickback.   Chandra Nunn, 35, a group home owner, was also convicted of conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks and related counts of receiving illegal kickbacks.   Sharonda Holmes, 40, a patient recruiter, was convicted of conspiracy to pay and receive kickbacks and a related count of receiving an illegal kickback.   Shawn Manney, 51, a group home owner, was convicted of conspiracy to pay and receive illegal kickbacks.
According to evidence presented at trial, Sanjar and Sajadi orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until their arrest in December 2011.  Sanjar and Sajadi owned Spectrum, which purportedly provided partial hospitalization program (PHP) services.  A PHP is a form of intensive outpatient treatment for severe mental illness.   The Medicare beneficiaries for whom Spectrum billed Medicare for PHP services did not qualify for or need PHP services.  Sanjar, Sajadi, Main and Moore signed admission documents and progress notes certifying that patients qualified for PHP services, when in fact, the patients did not qualify for or need PHP services.  Sanjar and Sajadi also billed Medicare for PHP services when the beneficiaries were actually watching movies, coloring and playing games–activities that are not covered by Medicare.
Evidence presented at trial showed that Sanjar, Sajadi and Hakimi paid kickbacks to Nunn, Holmes, Manney and other group care home operators and patient recruiters in exchange for delivering ineligible Medicare beneficiaries to Spectrum.  In some cases, the patients received a portion of those kickbacks.   According to evidence presented at trial, Spectrum billed Medicare for approximately $97 million in services that were not medically necessary and, in some cases, werenot provided.
Sanjar, Sajadi and Nunn are scheduled to be sentenced on Sept. 8, 2014.   Main, Hakimi, Holmes and Manney are scheduled to be sentenced on Sept. 15, 2014.
The case was investigated by the FBI, HHS-OIG, Texas MFCU, RRB-OIG and OPM-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 Texas.   The case is being prosecuted by Assistant Chief Laura M.K. Cordova and Trial Attorneys Jonathan T. Baum and William S.W. Chang of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 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.

Owner of Houston Medical Equipment Companies Indicted for $3.4 Million Medicare Fraud Scheme

Huey P. Williams Jr., the owner and operator of two durable medical equipment (DME) companies, was arrested yesterday for his alleged role in a $3.4 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
The indictment charges Williams, 44, of Katy, Texas, with one count of health care fraud, which carries a maximum penalty of 10 years in prison upon conviction.   Williams is expected to make his initial appearance in U.S. District Court for the Southern District of Texas in Houston.
According to the indictment, Williams orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until July 2010.   Williams allegedly submitted false and fraudulent claims to Medicare through his Houston-area DME companies – Hermann Medical Supplies Inc. and Hermann Medical Supplies II (Hermann Medical) – which purported to provide orthotics and other DME to Medicare beneficiaries.
Hermann Medical allegedly submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or never provided.   Many of the orthotic devices were components of an arthritis kit and were purported to be for the treatment of arthritis-related conditions.   From December 2006 through July 2010, Williams submitted claims of approximately $3.4 million to Medicare.
An indictment is merely a formal accusation.   Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, HHS-OIG and MFCU 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 Texas.   The case is being prosecuted by Trial Attorney Ashlee Caligone McFarlane of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Houston Doctor Indicted for Her Alleged Role in $158 Million Medicare Fraud Scheme

A Houston doctor has been arrested on charges related to her alleged participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Mike Fields of the Dallas Regional Office of the Department of Health and Human Services Office of the Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Sharon Iglehart, 56, of Houston, was charged in an indictment, filed in the Southern District of Texas and unsealed today, with one count of conspiracy to commit health care fraud and four counts of health care fraud.   If convicted, Iglehart faces a maximum penalty of 10 years in prison on each count.   Iglehart was arrested on Dec. 16, 2013, and made her initial appearance in federal court in Houston today.
According to the indictment, Iglehart allegedly participated in a scheme to defraud Medicare beginning in 2005 and continuing until May 2012.  The defendant allegedly caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through a Houston hospital.  A PHP is a form of intensive outpatient treatment for severe mental illness.
The indictment alleges that the defendant and her co-conspirators submitted or caused to be submitted approximately $158 million in claims to Medicare for PHP services purportedly provided by the hospital, when in fact the PHP services were medically unnecessary or never provided.
In February 2012, Mohammad Khan, an assistant administrator at the hospital who managed many of the hospital’s PHPs, was indicted for his role in the scheme.   Khan pleaded guilty to one count of conspiracy to commit health care fraud, one count of conspiracy to pay illegal kickbacks, and five counts of paying illegal kickbacks.   Khan has not yet been sentenced.
In October 2012, Earnest Gibson III, the administrator of the hospital, along with Earnest Gibson IV, William Bullock III, Robert Ferguson, Regina Askew, Leslie Clark and Robert Crane, were indicted for their roles in the scheme.   Leslie Clark pleaded guilty to one count of conspiracy to pay and receive illegal kickbacks.   Clark has not yet been sentenced.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, HHS-OIG, MFCU, Internal Revenue Service’s Houston Field Office, the Chicago Field Office of the Railroad Retirement Board’s Office of Inspector General, and the Office of Personnel Management’s Office of Inspector General 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 Texas.   The case is being prosecuted by Assistant Chief Laura M.K. Cordova 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 more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.