Physicians and Other Health Care Professionals

February 2003

As a result of a plea agreement, an individual practitioner in Indiana was sentenced to 21 months in prison and ordered to pay over $1.9 million to specifically named entities who suffered injuries due to his role in a scheme to defraud insurance carriers and cancer patients. With the help of his officer manager, the practitioner, who operated a medical center, aggressively marketed the center to terminally ill cancer patients. The treatments offered at the center included drugs not approved by the Food and Drug Administration. These treatments were billed as if the patients were receiving chemotherapy. Patients were accepted to the center based on their ability to pay rather than their condition and often had to make a cash payment to enter the program. In addition, the practitioner received kickbacks from a medical supply company for referring Medicare patients to them.

A Michigan podiatrist, who had been found guilty on two counts of health care fraud and two counts of mail fraud, was sentenced to 51 months confinement for each count to be served concurrently and ordered to pay $983,000 in restitution.

A North Carolina individual practitioner was sentenced to 21 months imprisonment and ordered to pay $493,000 in restitution for obstruction of criminal investigations of health care offenses.

In New York, an individual practitioner was ordered to pay a $30,000 fine for violating the anti-kickback statute. The doctor received kickback payments from a medical supply company, a MRI center and a lab.

In Georgia, a physician was sentenced to 41 months confinement for unlawful dispensation of a controlled substance and false claims. As owner of a family practice, he distributed OxyContin and other Schedule II narcotics to Medicaid, privately insured, and cash paying patients without a medical reason. In addition, the physician was reportedly taking various controlled substances while treating Medicare and Medicaid patients.

Home Health Agencies

February 2003

In Missouri, six co-defendants were sentenced for conspiring to defraud the United States through a system of kickbacks for patient referrals and the filing of false claims that resulted in overpayments from Medicare and Medicaid. The individuals sentenced included a licensed medical doctor, a registered nurse, a billing service owner, an employee who provided medical billing services, and two owners of several residential care facilities and HHAs. The six were ordered to pay respective restitution amounts totaling $526,000; and four were sentenced to prison. One central aspect of the scheme involved the owners’ referral of patients from their residential facilities to doctors in exchange for them to certify the patients as homebound and eligible for their home health services. This arrangement allowed the doctors to bill Medicare and Medicaid for patient visits and the HHAs to bill Medicare and Medicaid for providing home health services.

Ambulance Companies

February 2003

The owner of two ambulance companies in Texas was sentenced to 24 months imprisonment and ordered to pay $260,000 in restitution for wire fraud and health care fraud. The owner billed Medicare for ambulance runs that were not provided. In addition, she continued to bill Medicare for services after the companies had closed for business.

An ambulance company owner in Pennsylvania was sentenced to 15 months imprisonment and ordered to pay $30,000 in restitution for mail fraud and failure to file a tax return. Because of a fraud conviction, the owner was previously excluded from Medicare and Medicaid. As a result, he used a “straw party” to start two ambulance companies and billed Medicare and Medicaid for transports that were non-compensable or medically unnecessary; he also failed to file tax returns.

Misuse of Grant Funds

February 2003

A contract bookkeeper for an agency receiving DHHS grant funds was sentenced to 18 months incarceration and ordered to pay $216,000 in restitution for embezzlement and tax evasion. The grant funds were to be used for providing aging services for Native American tribes in Montana. The bookkeeper embezzled funds by issuing unauthorized payments; she either pre-signed checks or forged authorizing signatures on checks. In addition, she created a fraudulent work contract and submitted claims for contract work that was never performed; she also failed to file income tax returns during the time of embezzlement.

Durable Medical Equipment

February 2003

In Florida, a DME company owner was ordered to pay $206,000 in restitution for false claims and conspiracy to defraud the government. The owner submitted fraudulent claims for therapeutic ventilators, urological supplies and suction pumps.

In Florida, a salesperson for a DME company was ordered to pay $59,000 in restitution for false claims. The salesperson initiated DME claims for two fictitious Medicare beneficiaries.

A California durable medical equipment company owner was sentenced to 12 months in prison and ordered to pay $38,000 in restitution for health care fraud and money laundering. The owner instructed a medical clinic to refer business to his company in exchange for a percentage of his net profit. In addition, the owner repeatedly instructed the clinic to change medical diagnoses on Medicare claims and to add medically unnecessary items to orders. The owner used the proceeds from the fraud to pay the clinic for the referrals.

Psychiatric Services

February 2003

In West Virginia, the president and vice president of a counseling center were sentenced. The president was sentenced to 1 year and 1 day in prison and ordered to pay $175,000 in restitution for mail fraud and theft of federal funds; and the vice president was ordered to pay $4,000 in restitution for mail fraud. The two defendants contracted physicians to provide psychiatric services only on scheduled Saturdays but submitted claim forms that were pre-signed by the physicians for services rendered on weekdays. In addition, pre-signed claim forms submitted to Medicare and Medicaid indicated a licensed psychiatrist rendered the service when, in fact, a licensed psychiatrist did not provided the service. The president was also involved in a scheme that embezzled funds from four federally subsidized housing projects. While managing the housing complexes, she filed invoices to the U.S. Department of Housing and Urban Development for work that was never done.

Prescription Drug Fraud

February 2003

An Indiana physician was sentenced to 51 months incarceration and ordered to pay $29,000 in restitution for health care fraud, dispensing a controlled substance and possession with intent to distribute a controlled substance. The physician prescribed OxyContin to a Medicaid recipient outside the scope of professional practice and without a legitimate medical purpose. The investigation revealed that the physician was the highest prescriber of OxyContin in the state, prescribing five times more OxyContin than the next highest physician.

In Pennsylvania, three individuals were sentenced for their involvement in a scheme that led to the distribution of large quantities of prescription drugs. A pharmacy owner was sentenced to 54 months incarceration and ordered to pay $9,000 in fines and assessments; the two other individuals were sentenced, one of them to 30 months incarceration and the other to 6 months incarceration. As the owner of a small independent neighborhood pharmacy, the pharmacist was involved in multiple conspiracies including using physicians’ names and Drug Enforcement Administration numbers without legal authorization to create false hard copy prescriptions in order to cover up his illegal drug distribution. In addition, the pharmacist conspired with others who brought items to the pharmacy such as televisions, DVD and CD players in exchange for controlled substances.

In Pennsylvania, an individual was sentenced to 7 months imprisonment and ordered to pay $5,000 in restitution for acquiring a controlled substance by deception and health care fraud. During an 18-month period, using his wife's Federal Employee Health Benefits, the individual visited at least 67 physicians and 18 pharmacies in order to obtain OxyContin tablets.

In Maryland, an individual pled guilty to insurance fraud and was sentenced to 2 years supervised probation. The individual was visiting five different doctors to fraudulently obtained Schedule II narcotics. In less than two years, one doctor wrote over 110 prescriptions for the individual. The prescriptions were written in her husband’s name and filled using her husband’s health insurance plan.

Mental and Social Services

February 2003

A community mental health center (CMHC) therapist in Texas was sentenced for mail fraud; the employee paid $19,000 in restitution at sentencing. As a licensed occupational therapist, the employee caused the mailing of 45 fraudulent claims to Medicare. The administrator at the CMHC convinced the therapist to prepare and sign backdated occupational therapy assessments to support the fraudulent claims.

Child Support Enforcement

February 2003

In Florida, a man was sentenced to 5 years probation and ordered to pay $92,000 in restitution for failure to pay child support. Since March 1994, he failed to pay support for his son. In an attempt to evade paying, he held at least five different jobs while living in Tennessee.

In Iowa, a man was sentenced to 27 months incarceration, with 12 months deducted for time served in connection with a state conviction, 1 year supervised release and ordered to pay $87,000 in restitution for failure to pay child support. The judge ordered that the man be detained and immediately turned over to the Bureau of Prisons to begin serving his sentence.

In Michigan, a man pled guilty to failure to pay child support and will be required to complete a 3-year probationary term and repay all past due support pursuant to a payment plan to be determined by the court. The man currently owes almost $79,000 in overdue support for his two daughters.

In Washington, D.C., a man was sentenced to 90 days incarceration, 5 years probation and ordered to pay $77,000 in restitution for failure to pay child support. In 1989, the man was ordered to pay $700 a month in support of his three children. As a computer consultant, he usually earned between $45 and $50 an hour; in 2000, his annual income exceeded $76,000. Most support payments received were a result of wage garnishments which have been difficult to maintain since the man often works for several companies during a year.

In Ohio, a man was sentenced to 6 months electronic monitoring, 5 years probation and ordered to pay $71,000 in restitution for failure to pay child support. In 1984, the man was ordered to pay $818 a month for his three children. From August 1998 through August 2000, he earned $60,000 but only made one $20 payment.

In Iowa, a man was sentenced to 6 months home confinement with electronic monitoring, 3 years probation and ordered to pay $56,000 in restitution for failure to pay child support.

In New York, a man was sentenced to 3 months time served, 5 years probation and ordered to pay $44,000 in restitution for failure to pay child support. In addition, he must maintain his current monthly support obligation of $350. In July 2002, the man was arrested and was remanded into custody after being deemed a flight risk by the court. In September 2002, he pled guilty and was released on bail; he was in the United States Marshal’s Service custody for 3 months.

In Ohio, a man was sentenced to 17 months in prison, 5 years supervised probation and ordered to pay $30,000 in restitution and pay a $500 fine for failure to pay child support. The man also owes $22,000 in overdue support in an unrelated case in New York. In addition, another of the man’s children became a ward of the state since neither he nor the mother supported the child. The man worked in various positions in the retail industry and frequently moved and changed jobs in order to avoid wage garnishments.

In Ohio, a man was sentenced to 8 months in prison and ordered to pay $25,000 in restitution for failure to pay child support. Although working in Florida as a mechanic, he never made a voluntary payment.

In Arkansas, a man pled guilty and was sentenced to 5 years probation and ordered to pay $24,000 in restitution for failure to pay child support. Although the man was ordered in 1987 to pay support, he never made any payments.

In South Dakota, a man was sentenced to 5 years supervised probation and ordered to pay $21,000 in restitution for failure to pay child support. The man was ordered to pay support for his two children in 1998.

In Virginia, a man was sentenced to 5 years probation and ordered to pay $17,000 in restitution for failure to pay child support. Although ordered to pay $65 a week, the man only made three involuntary payments during the period July 1998 through December 2002.

Other Cases of Interest

February 2003

In Wisconsin, a man was sentenced to 84 months imprisonment and ordered to pay $233,000 in restitution for his scheme to defraud the government. The man assumed several false identities and applied for and received Social Security retirement benefits using the false identities. In addition, using a false identity and Social Security number, he obtained contract employment.

In New York, a woman was sentenced to 15 months incarceration and ordered to pay $96,000 in restitution for her involvement in stealing, altering and distributing private health insurance checks, Medicare checks and United States Treasury checks.