January 2008 Criminal Enforcement Report
In New Jersey, a podiatrist was sentenced to 24 months in prison and ordered to pay $350,000 in restitution for his guilty plea to health care fraud. An investigation revealed that the podiatrist performed routine foot care on residents in community rooms of low-income buildings then billed the Medicare program as if he performed more complex procedures. In fact, residents were only getting their nails clipped. In August 2007, the podiatrist agreed to pay $868,000 to resolve his false claims act liability for the same conduct.
In Maryland, an employee of the Association for Retarded Citizens (ARC) was sentenced to 2 years incarceration, all but 6 days suspended, for neglect of vulnerable adults. In addition, she was placed on 2 years of probation during which time she cannot work with vulnerable adults. Investigation revealed that on a cold day in December 2006, the ARC employee left two developmentally disabled women in the company's minivan, unsupervised, at a local shopping mall while she shopped for over an hour. ARC received reimbursement from the Maryland Medicaid for services provided to the vulnerable adults.
Child Support Enforcement
In Nevada, a man was sentenced to 5 years probation and ordered to pay over $78,000 in restitution for failure to pay child support. Ordered to pay child support as part of his 1992 divorce, the man failed to pay for the support of his daughter now emancipated. In March 2007, the man was located and arrested in Nevada based on a warrant issued from the Western District of Michigan. The case was transferred to the State of Nevada where he subsequently pled guilty.
February 2008 Criminal Enforcement Report
In California, a physician was sentenced to 30 months in prison and ordered to pay $558,000 in restitution for his involvement in a conspiracy to defraud the Medicare program. The physician wrote prescriptions and signed certificates of medical necessity for enteral nutrition products, motorized wheelchairs, and hospital beds that were not necessary and, in most cases, were not provided to beneficiaries. The physician received kickbacks from a DME company for each fraudulent prescription. In addition, the physician billed Medicare for treating patients who were recruited to come to his clinic with the promise of receiving free ensure products. Patients were then referred for ancillary services for which the physician received kickbacks from companies he referred patients to. In Illinois, a psychologist was sentenced to 22 months in prison and ordered to pay $170,000 in restitution for health care fraud. The psychologist billed Medicare for group and individual psychotherapy services that he did not provide. An investigation revealed that the psychologist, who visited facilities once or twice a week to conduct assessments, billed Medicare for psychotherapy services provided to patients 4 to 5 days a week that were either not performed as billed or were for dates of service when he was not actually present at the facilities. In 2005, the psychologist fled the U.S. to Israel. In April 2007, he was arrested by Israeli National Police and in September he was extradited back to the U.S. where he pled guilty.
In New Jersey, the owner/operator of several adult day care centers and his brother, who worked at the facilities, were sentenced to 6 months and 55 months in prison, respectively, for conspiracy to commit health care fraud. An investigation revealed that the brothers knowingly submitted inflated attendance figures causing the Medicaid program to pay for beneficiaries who never attended the day care centers. In February 2007, a $5.5 million civil settlement was reached with Horizon and its associated entities for the false billings to Medicaid.
Prescription Drug Fraud
In Washington D.C., a man was sentenced to 57 months imprisonment and ordered to forfeit $11,700 in cash and his vehicle for unlawful distribution of Oxycodone within 1000 feet of a school. In 2006, the man sold Oxycodone in front of an elementary school. After a search of the man's home, hundreds of pills of controlled substances were recovered.
In Washington, a pharmacist was sentenced to 18 months in prison and ordered to pay $1.6 million in restitution for conspiracy to commit health care fraud and money laundering. The pharmacist and her husband owned a retail pharmacy with locations in Bellevue, Kent and Tacoma. The couple, who pled guilty to their involvement in the scheme, fraudulently billed the Medicaid program for drugs, diapers, gloves and incontinence supplies that were never provided to beneficiaries. As part of the conspiracy, the couple recruited Medicaid patients to their pharmacy by offering them gift certificates for free goods, and then created false records including physician prescriptions and delivery receipts. The pharmacist's husband was sentenced in November 2007 to 63 months in prison and is held jointly responsible for the $1.6 million restitution amount. In addition, the couple's former attorney and their business partner were sentenced related to their involvement in the scheme. In Michigan, a doctor was sentenced to 20 months in prison and ordered to pay $73,000 in restitution for his scheme to defraud Medicare and a private insurer. As part of the scheme, the doctor waited one year before he submitted claims, used original progress notes to generate additional claims, and then submitted the fraudulent claims for dates of service when no service was rendered. The doctor, who is a foreign national, faces possible deportation at the conclusion of his prison sentence.
Misuse of Grant Funds
In Ohio, a man was sentenced to 27 months in prison and ordered to pay over $557,000 in restitution for mail fraud and aiding and abetting. The man was the owner of a non-profit agency that contracted with counties in Ohio to provide foster care services. The agency received Administration for Children and Families grant funds from the State of Ohio. The investigation revealed that the man diverted money from the non-profit agency into a for-profit business that he controlled. Money that he claimed paid for foster case services was actually routed to his own personal investment accounts. In addition, the man concealed his ownership in the business and provided false documentation to auditors.
Durable Medical Equipment
In Texas, two durable medical equipment (DME) company owners were sentenced for their scheme to defraud the Government. One defendant was sentenced to 37 months in prison and ordered to pay $458,000 in restitution; the other defendant was sentenced to 30 months in prison and ordered to pay $446,000 in restitution. As part of their guilty pleas, the defendants admitted to conspiring with others to pay illegal kickbacks to a Dallas physician for fraudulent certificates of medical necessity (CMNs). The defendants paid the physician $200 for each fraudulent CMN which were then used to bill the Medicare program for power wheelchairs and accessories. The physician received a 16-month prison sentence for his role in a similar conspiracy to defraud Medicare.
In Kentucky, a former owner of a durable medical equipment (DME) company pled guilty and was sentenced to 1 year of probation and ordered to pay $79,000 in restitution for false statements. In addition, the owner pled guilty on behalf of his company for false statements relating to health care matters. The investigation revealed that the DME company provided nearly all of its customers with a 3-piece back brace but billed Medicare and Medicaid for a more expensive post-surgical back brace. As part of the scheme, prescriptions for back braces were altered and then submitted to Medicare and Medicaid to support the claim for payment.
In Oregon, a woman was sentenced to 39 months imprisonment and ordered to pay $108,000 in restitution after being convicted for charges of making false claims and theft. During the 3-day trial, evidence showed that the woman engaged in a scheme whereby she claimed to be providing in-home care to a Medicaid recipient who was actually only pretending to be disabled. The woman's co-defendant died prior to trial. For seven years, the women billed Medicaid for phantom services and then split the Medicaid payments.
April 2008 Criminal Enforcement Report
Durable Medical Equipment
In Texas, the owner of a medical equipment supplier was sentenced to 24 months in prison and ordered to pay $4.4 million in restitution for her role in a health care fraud kickback scheme. The woman paid runners between $800 and $1,000 for each certificate of medical necessity (CMN) that physicians signed. She then used the fraudulent CMNs to bill Medicare and Medicaid for power wheelchairs provided to beneficiaries that were not medically necessary.
In Washington, D.C., the owner of a non-emergency transportation company was sentenced to 1 year and 1 day in prison, 6 months home detention and ordered to forfeit over $211,000 for health care fraud. The man billed Medicaid for 6,660 transportation services for D.C. Medicaid recipients that were not provided.
Other Cases of Interest
In Ohio, a man was sentenced to 2 years imprisonment and ordered to pay $155,000 in restitution, including over $94,000 to Medicaid, for aggravated identity theft. The investigation revealed that the man stole the identity of a Texas Medicare beneficiary more than 20 years ago and began using the identity in 1998 to obtain Medicaid and public assistance benefits. In 2004, the man began using the identity to obtain services covered by Medicare including an extended stay in a skilled nursing facility and for wound care services that he received while living in a homeless shelter for which Medicare paid over $61,000.
In New Jersey, a pharmacy owner was sentenced to 5 months in prison, 5 months in home detention and ordered to pay a $5,000 fine for adulteration of drugs and filing a false tax return. The man, who owned several pharmacies in New Jersey, billed Medicaid for prescription drugs provided to beneficiaries that were obtained on the black market from illicit sources. He also used his pharmacies to launder money and to transfer funds out of the country.
Child Support Enforcement
In Indiana, a man was sentenced to 8 years incarceration with 4 years suspended, 4 years probation and ordered to pay over $58,000 in restitution for failure to pay child support. The man, who was residing in Kentucky, was arrested in October 2007 and subsequently pled guilty to 2 counts of failure to pay child support.
May 29, 2008, U.S. Attorney, Northern District of OH
June 2008 Report
June 30, 2008, US Attorney District of NJ
June 28, 2008, U.S. Attorney, Central District of CA
June 27, 2008, U.S. Attorney District of KS
June 19, 2008, Middle District of PA
June 18, 2008, City of New York Department of Investigation
Joint Investigation by DOI and Federal Authorities Leads to The Arrest of Three Individuals on Charges of Participating in a Medicaid Card Fraud Scheme -- Today's arrests are the result of an ongoing probe into Medicaid fraud (PDF)