Health Care Fraud Blog

Detroit-Area Patient Recruiter Pleads Guilty

Sun, 22 Apr 2012 20:43:38 -0500

WASHINGTON – A Detroit-area patient recruiter pleaded guilty today for his participation in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

Daron Elder, 28, of Southfield, Mich., pleaded guilty in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, he faces a maximum penalty of 10 years in prison and a $250,000 fine. However, the advisory sentencing guidelines call for a term of imprisonment of 30-37 months, restitution in the amount of almost $3 million, plus a $1 million fine.

According to the plea documents, Elder was a patient recruiter for a medical clinic in the Detroit area, Blessed Medical Clinic. Elder paid indigent Medicare beneficiaries cash kickbacks to receive diagnostic tests that he knew were medically unnecessary. In return for the cash kickbacks, the Medicare beneficiaries allowed their identification to be used in the submission of fraudulent claims. The government will argue at sentencing that Elder’s conduct caused the submission of approximately $2.5 million dollars in fraudulent claims to Medicare.

N.J. Doctor Sentenced to Two Years in Prison for Health Care Fraud

Sun, 15 Apr 2012 09:25:09 -0500

NEWARK, N.J. – Dr. Michael P. Stein, 63, a New Jersey doctor, was sentenced today to 24 months in prison for defrauding Blue Cross Blue Shield for approximately three-quarters of a million dollars by submitting false claims for services never performed.

Between August 2004 and September 2010 Stein owned and operated Randolph Otolaryngology. Stein purportedly treated a patient with the initials J.F. for nasal problems and billed Blue Cross Blue Shield for the services.

However, investigators determined that Stein submitted fraudulent claims with Blue Cross Blue Shield for procedures that were not performed. Evidence revealed that Stein submitted claims for approximately 900 nasal endoscopies he purportedly conducted, when only a few were actually performed. Stein also admitted he filed false claims for office visits and medical procedures that occurred while he was out of the country on vacation.

Blue Cross Blue Shield paid Stein $725,156.45 from as a result of the fraudulent false claims submitted, and, under the plea agreement, Stein agreed to pay restitution and forfeiture for the entire amount.

In addition to the prison term, restitution and forfeiture, Stein was ordered to serve three years of supervised release. His medical license has been surrendered.

Medicare Fraud Cases on the Rise

Wed, 21 Dec 2011 15:43:41 -0500

Medicare Fraud Cases on The Rise

http://gooznews.com/?p=3453

By GoozNews

Federal prosecutors brought a record number of cases of health care fraud in fiscal 2011, a new report said, with Florida and its huge Medicare-dependent population remaining the epicenter of fraudulent claims.

The latest data, drawn from federal records by the Transactional Records Access Records database at Syracuse University, showed total prosecutions jumped 68.9 percent to 1,235 cases compared to 2010, a record increase.

The huge increase was fueled largely by a sharp jump in cases brought in Puerto Rico, where prosecutors charged 548 defendants with health care fraud last year, up from just 119 the previous year. Most of those were minor cases. But even without the Puerto Rican cases, fraud prosecutions nationwide were up sharply and reached the highest level since 2000.

Miami led the nation in activity, accounting for nearly one out of every nine health care fraud prosecutions, followed by Houston. Together, federal prosecutors in those two districts accounted for over one out of every five health care fraud prosecutions.

“The good news is
there’s lots of prosecutions.

The bad news is there’s

lots of prosecutions.”

The Obama administration stepped up its enforcement activity in late 2009 with the creation of tasks forces in nine cities to root out Medicare and Medicaid fraud. “They’re really going after these cases very aggressively, and I think you’ll see prosecutions increase even more over the next few years,” said Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association, which was launched in 1985 by insurers to help root out both private and public sector fraud in the industry.

“The good news is there’s lots of prosecutions,” he said. “The bad news is there’s lots of prosecutions. The real question is what will CMS (the Center for Medicare and Medicare Services) do to prevent these frauds from taking place in the first place.”

A typical case concluded in Trenton last week when a federal judge sentenced a former senior manager of Columbia, Md.-based Maxim Health Care Services, one of the nation’s leading home health care providers, to five months in prison for setting up a phony office that billed Medicaid and the Veterans Administration nearly a million dollars. The criminal charges were part of a nationwide investigation of Maxim that led in September to an out-of-court settlement where the firm – to avoid a conviction that might have disqualified it from the programs – agreed to pay the government $150 million in criminal and civil penalties.

Experts and even defense attorneys say health care fraud, estimated to cost the government $70 billion a year, won’t be curbed until the government figures out how to short-circuit schemes through better monitoring of claims before they are paid and better screening of firms before they are allowed to sell services to the programs. Last June, CMS launched a data-mining program that will review Medicare claims before payment to identify individual providers that show huge spikes in activity. “CMS is on the right track,” Saccoccio said.

“They have to blow up the bill now, investigate later system,” agreed Andrew Ittleman, a white collar criminal defense attorney at Fuerst Ittleman in Miami. While he says that many cases involve companies in legitimate billing disputes with the government, he agreed “it’s not at all misguided given the size of the problem and the magnitude of the fraud.”

“The more sinister cases down here involve people who set up broom closets without an address and bill Medicare as long as they can before they high-tail it to Cuba or wherever in Latin America,” he said. “Magistrates aren’t even giving pre-trial release to some of these defendants because we don’t have an extradition treaty with Cuba.”

This story appeared first in The Fiscal Times.

Senators want better assessment of Medicare fraud detection program

Wed, 21 Dec 2011 15:39:59 -0500

BY JOSEPH MARKS 12/20/2011

Medicare officials should better evaluate whether a new system designed to spot fraudulent claims and roll back the program's roughly $50 billion in annual improper payments is living up to its potential, a bipartisan group of senators said Tuesday.

The Centers for Medicare and Medicaid Service responded that it had been measuring results from the $100 million system since soon after its July launch and would update Congress on the results soon.

"The predictive modeling program is well on its way to achieving the kind of results CMS expected," agency officials said.

CMS plans to launch the new system nationwide this summer. But without clear metrics to gauge successes and failures neither the agency nor Congress will be able to determine whether the program is doing what it's supposed to, the senators said in a letter to Peter Budetti, director of CMS' Center for Program Integrity.

"As is often said, one cannot manage what one cannot measure," Sens. Tom Carper, D-Del.; Scott Brown, R-Mass.; and Tom Coburn, R-Okla.; said. Carper is chairman of the Senate Homeland Security Subcommittee on Federal Financial Management, which oversees CMS' financial issues. Brown is that panel's ranking Republican and Coburn, a physician, is a subcommittee member.

The predictive analysis tool was designed to flag common patterns of Medicare fraud such as suspicious billing patterns or a great distance between the hospital where treatment occurred and the claimant's home address. The plan is for CMS officials to halt those payments and immediately investigate them for possible fraud.

Legislative requirements that most Medicare claims be paid within 30 days traditionally has meant that CMS paid out claims before investigating them -- what officials call the "pay and chase" model.

The senators' letter concludes with a list of 10 questions focused on how much money the tool has clawed back, what lessons CMS officials have learned from the system's implementation so far, and whether those lessons have changed how the agency pays claims and which Medicare services providers it contracts with.

The predictive analytics program is similar to several fraud detection tools used by the Recovery Accountability and Transparency Board, which tracks spending on President Obama's $840 billion stimulus bill. That program has kept stimulus money lost to fraud at below 1 percent compared with a rate of up to 7 percent for government spending generally.

Plans to roll out similar tools on a governmentwide basis are working their way through Congress and the White House.

Miami Medicare Fraud: Medicare fraud bill reintroduced

Wed, 21 Dec 2011 15:37:02 -0500

From the Miami Herald Blog:

Medicare fraud bill reintroduced U.S. Rep. Ileana Ros-Lehtinen, R-Miami, has reintroduced legislation that would double the fines and jail time for people convicted of Medicare fraud. It also creates a new criminal offense punishable with a 10 year minimum sentence for those who knowingly sell or distribute the ID numbers of Medicare beneficiaries. The legislation also bars those who have been part of Medicare fraud in the past from billing Medicare if they switch companies. It also facilitates real-time information sharing among law enforcement agencies to aid in uncovering and dismantling Medicare scams. "South Florida has been known as the epicenter of Medicare fraud for years," she said. "It is time we took the fight to those who seek to defraud Medicare and prey on our most vulnerable citizens. This bill not only increases the penalties for those who engage in Medicare fraud, but also sets up a pro-active paradigm that will help stem the tide of abuse in South Florida and across the nation." The bill takes particular aim at Medicare theft in Miami-Dade County, widely regarded as the nation's capital of healthcare fraud. Medicare fraud in South Florida costs taxpayers between $3 billion and $4 billion every year, according to law enforcement and healthcare officials. Nationwide, Medicare and other healthcare fraud is estimated to cost $68 billion annually.

Former Maxim Healthcare Services Senior Manager Sentenced To Prison For Health Care Fraud

Tue, 06 Dec 2011 12:16:36 -0500

FOR IMMEDIATE RELEASE

Eight Others, Including Senior Managers, Previously Sentenced for

Felony Charges Arising out of Maxim’s Activities

TRENTON, N.J. – A former senior manager and 13-year employee of Maxim Healthcare Services, Inc. (“Maxim”), was sentenced today to five months in prison and five months of home confinement with electronic monitoring for his involvement in the unlicensed operation of Maxim office that billed nearly a million dollars to government health care programs, J. Gilmore Childers, First Assistant U.S. Attorney announced.

Bryan Lee Shipman, 38, of Athens, Ga., pleaded guilty in Trenton federal court on June 17, 2010, to an Information charging him with one count of health care fraud. Shipman was charged in connection with his role as a regional account manager supervising Maxim’s decision to open and operate Maxim’s Gainesville, Ga., office without a license from 2008 through 2009, when he and others directed billings from that office to be submitted for reimbursement by the Medicaid program as if they were from another, licensed office. Shipman entered his guilty plea before U.S. District Judge Anne E. Thompson, who also imposed the sentence today in Trenton federal court.

On Sept. 12, 2011, Maxim – one of the nation’s leading providers of home healthcare services – entered into a settlement agreement to resolve criminal and civil charges relating to a nationwide scheme to defraud Medicaid programs and the Veterans Affairs program of more than $61 million. Maxim was charged in a criminal Complaint with conspiracy to commit health care fraud, and entered into a Deferred Prosecution Agreement (“DPA”) with the Department of Justice. The agreement allows Maxim to avoid a health care fraud conviction on the charges if it complies with the DPA’s requirements. As required by the DPA, Maxim agreed to pay approximately $150 million – a criminal penalty of $20 million and approximately $130 million in civil settlements in the matter, including to settle federal False Claims Act claims.

Shipman is one of nine individuals – eight former Maxim employees, including three senior managers, and the parent of a former Maxim patient – to have pleaded guilty to and been sentenced on felony charges arising out of the submission of fraudulent billings to government health care programs, the creation of fraudulent documentation associated with government program billings, or false statements to government health care program officials regarding Maxim’s activities.

According to documents filed in this and related cases and statements made in court:

Shipman had been employed by Maxim for 13 years, the last eight as a regional account manager. As a regional account manager, Shipman reported directly to one of two nationwide vice presidents, who in turn reported to Maxim’s president. He also managed 13 offices in 2008 with hundreds of employees and total annual sales of more than $42 million, much of which derived from government programs. In his last full year of employment, Shipman earned more than $325,000, and was among the top 25 individuals at Maxim in terms of compensation out of the more than 80,000 individuals employed by Maxim in that year.

Shipman’s annual compensation – which ranked him within the top .03% of the Company – was based to a significant degree on meeting sales goals. Shipman said his superiors demanded levels of growth based “not on any market analysis, but simply on a belief that dramatic growth was necessary regardless of market conditions.” It was in response to that pressure, Shipman said, that he authorized and supervised the unlicensed operation of the Gainesville office.

At one point, when Maxim employees believed a state regulator would be visiting the office, lower-level employees were directed by Shipman and others to provide false information to the state regulator in an effort to prevent the Medicaid program from learning about the unlicensed operation of the office.

In addition to the prison term, Judge Thompson sentenced Shipman to two years of supervised release and ordered him to pay a $10,000 fine.

The other eight individuals who pleaded guilty were sentenced by Judge Thompson as follows:

Gregory Munzel, 35, of Charleston, S.C., was employed as a regional account manager, reporting directly to a vice president, responsible for Maxim offices throughout the southeastern United States. He pleaded guilty on Dec. 4, 2009, to one count of making false statements relating to health care fraud matters. During his plea hearing, Munzel admitted that he was aware individuals he supervised were submitting time cards for work that had not actually been done – a practice Munzel said was in response to pressure from Maxim superiors to increase revenue. Munzel also acknowledged forging caregiver credentials such as CPR cards throughout his time at Maxim, in order to make it appear that the caregivers were properly credentialed, when they were not. Munzel indicated he learned the practice from his supervisors when he first joined Maxim, and that those under him engaged in the practice when he took on a leadership role with the company. Munzel was sentenced on Sept. 29, 2011, to three months of home confinement as part of a two-year term of probation. Munzel was also ordered to pay a $1,000 fine.

Matthew Skaggs, 39, was employed as a regional account manager, reporting directly to a vice president, responsible for Maxim’s offices in Texas. He pleaded guilty on Sept. 23, 2010, to making false statements relating to health care fraud matters. During his plea hearing, Skaggs acknowledged having knowingly made false statements to a surveyor from Texas’ Medicaid Program, who was investigating the operation of an unlicensed Maxim office in Houston. Skaggs was sentenced on June 10, 2011, to a three-year term of probation and ordered to pay a $4,000 fine.

Andrew Sabbaghzadeh, 30, of Clay, N.Y., was employed as an account manager; and Jason Bouche, 27, of Paradise Valley, Ariz., was employed as a recruiter at Maxim’s Tempe, Ariz. office. They pleaded guilty to health care fraud on Nov. 4, 2009, and April 23, 2010, respectively. During their plea hearings, Sabbaghzadeh and Bouche acknowledged creating fraudulent time cards in order to bill government programs. They acknowledged that in some instances, Maxim employees cut signatures from legitimate time cards and pasted them onto forged time cards in order to submit them for reimbursement. Sabbaghzadeh was sentenced on Sept. 26, 2011, to six months of home confinement as part of a three-year term of probation. Sabbaghzadeh was also ordered to pay a $2,000 fine. Bouche was sentenced on Nov. 17, 2011, to a two-year term of probation and ordered to pay a $500 fine.

Donna Ocansey, 49, of Medford, N.J., was employed as a director of clinical services (supervising nurse) in Maxim’s Cherry Hill, N.J., office. She pleaded guilty on May 28, 2010, to making false statements relating to health care fraud matters. Ocansey, a registered nurse (RN), had responsibility for, among other things, ensuring that Medicaid-required supervisory visits of patients were conducted periodically – meaning that an RN periodically visited each patient to check each patient’s condition and the care the patient was receiving from Maxim Home Health Aides, who lack the skills and training of RNs. During her plea hearing, Ocansey acknowledged that she fabricated documentation in order to make it appear that other nurses had conducted Medicaid-mandated supervisory visits, when in fact they had not. Ocansey stated that she fabricated documentation in response to pressure from her superiors at Maxim, who expected her to make sure that all supervisory visits were completed without providing adequate resources for her to do so. Ocansey was sentenced on Oct. 18, 2011, to four months of home confinement as part of a a three-year term of probation. Ocansey was also ordered to pay a $2,000 fine.

Mary Shelly Janvier-Pierre, 43, of Lake Worth, Fla., and Sandy Cave, 39, of West Palm Beach, Fla., pleaded guilty to health care fraud on Feb. 1, 2010, and June 21, 2010, respectively. During their plea hearings, Janvier-Pierre, who had been employed by Maxim’s West Palm Beach office as a licensed practical nurse; and Cave, the mother of a former pediatric patient of Maxim, admitted to their roles in a scheme to fraudulently bill Medicaid, through Maxim, for services that were not rendered. Janvier-Pierre and Cave acknowledged that they agreed to submit billings as if Janvier-Pierre was taking care of Cave’s child, when she was not. Janvier-Pierre and Cave then split the money Janvier-Pierre received for purportedly providing the care. As a result of the scheme, Maxim was paid more than $70,000 by Florida’s Medicaid program. Janvier-Pierre was sentenced on Sept. 21, 2011, to six months of home confinement as part of a three-year term of probation. Cave was sentenced on Nov. 17, 2011, to five months of home confinement as part of a three-year term of probation. Cave was also ordered to pay a $1,000 fine.

Marion Morton, 45, of North Charleston, S.C., was employed as a home health aide and personal care assistant by Maxim’s Charleston, S.C., office. He pleaded guilty on May 3, 2010, to one count of making false statements relating to health care fraud matters. During his plea hearing, Morton acknowledged that, at the instruction of Maxim employees, he fabricated timecards reflecting work he had not done. On multiple occasions, Maxim submitted bills to Medicaid based on timecards which showed he worked more than 24 hours on certain days. Morton was sentenced on May 24, 2011, to a three-year term of probation and ordered to pay a $5,000 fine.

First Assistant U.S. Attorney Childers credited special agents and investigators from HHS/OIG, under the direction of Special Agent in Charge Thomas ODonnell; the FBI, under the direction of Special Agent in Charge Michael B. Ward; and VA OIG, under the direction of Special Agent in Charge Jeffrey Hughes for conducting the multi-year investigation.

The government is represented by Assistant U.S. Attorney Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit.

11-471

Defense counsel:

Maxim: Laura Laemmle-Weidenfeld Esq.; Robert Luskin Esq., Washington

Gregory Munzel: John Lacey Esq., Roseland, N.J.

Bryan Lee Shipman: Peter Bennett Esq., Middletown, N.J.

Matthew Skaggs: David Sellinger Esq., Florham Park, N.J.

Andrew Sabbaghzadeh: James Hopkins Esq., Syracuse, N.Y.

Jason Bouche: Chester Keller Esq., Assistant Federal Public Defender, Newark

Donna Ocansey: Jeffrey Carney Esq., Hackensack, N.J.

Mary Shelly Janvier Pierre: Michael Salnick Esq., West Palm Beach, Fla.

Sandy Cave: Chester Keller Esq., Assistant Federal Public Defender, Newark

Marion Morton: John Renner Esq., Marlton, N.J.

Former Owner And President Of Allied Health Care Services, Inc. Sentenced To More Than 16 Years In Prison In $135 Million Medical Equipment Lease Scheme

Mon, 05 Dec 2011 11:09:42 -0500

FOR IMMEDIATE RELEASE

Charles Schwartz Also Ordered to Pay $155 Million in Restitution and Forfeiture

NEWARK, N.J. – The former owner and president of Allied Health Care Services, Inc., an Orange, N.J., durable medical equipment corporation, was sentenced today to 195 months in prison for organizing and executing a $135 million phony lease scheme that caused losses of more than $80 million and victimized more than 50 financial institutions, U.S. Attorney Paul J. Fishman announced.

Charles K. Schwartz, 58, of Sparta, N.J., pleaded guilty on April 13, 2011, to one count of mail fraud. Schwartz was previously charged by Complaint and arrested by special agents of the FBI on September 2, 2010. He has been in federal custody since that time. Schwartz entered his guilty plea before U.S. District Judge Susan D. Wigenton, who also imposed the sentence today in Newark federal court.

“Charles Schwartz, who once bragged that victims fell for his fraud ‘hook, line and sinker,’ stole tens of millions of dollars from financial institutions and bankrupted his own company to float his Ponzi scheme and luxury lifestyle,” said U.S. Attorney Fishman. “It is particularly offensive that he claimed to be leasing medical equipment that is used by people with significant healthcare needs, and his deception justifies his 16-year sentence. The health care industry is a vital part of New Jersey’s fabric, and those who criminally exploit our success will not be tolerated.”

According to documents filed in this case and statements made in court:

From at least 2002 through July 2010, Schwartz, through Allied Health Care Services, Inc. (“Allied”), convinced financial institutions to pay more than $135 million by telling them that the money would be used to lease valuable medical equipment. In reality, the purported medical equipment supplier did not provide Schwartz and Allied with any equipment during that time. Instead, the “supplier” created phony invoices which appeared to reflect legitimate transactions.

As part of the scheme, Schwartz approached various financial institutions and informed them that Allied needed to lease particular medical equipment. Using the phony invoices from the “supplier,” Schwartz convinced the financial institutions to enter into leasing arrangements. Pursuant to these arrangements, the financial institutions purchased the medical equipment – which they immediately leased to Schwartz and Allied – and sent payment for the medical equipment to the purported supplier. The “supplier” then sent the money received from the financial institutions (minus his 3 to 5 percent payment) to an entity created by Schwartz to facilitate the fraud.

In addition to spending millions of dollars on properties in New Jersey and New York, including a horse farm, Schwartz used the money in Ponzi-scheme fashion to repay earlier bank loans that were a part of the scheme. By August 2010, several financial institutions from which Schwartz had obtained loans filed lawsuits against Schwartz and Allied, claiming he owed them at least $20 million. Allied and Schwartz were forced into involuntary bankruptcy in August 2010 and September 2010, respectively. Losses from the scheme now total at least $80 million. Schwartz admitted that more than 50 victim financial institutions lost a total of between $50 and $100 million as a result of the scheme.

Schwartz and the medical equipment “supplier” undertook efforts throughout the scheme to deceive bank examiners who wanted to inspect the non-existent medical equipment, which had been purchased by the financial institutions. Schwartz admitted that in advance of expected inspections by financial institutions, he directed others to alter serial numbers or create fraudulent serial numbers on existing ventilators to match fraudulent invoices he had supplied to the various financial institutions. At times, when financial institutions sought to review documentation regarding Allied’s leasing of the ventilators to its customers, Schwartz falsely told the financial institutions that the information was protected by Health Insurance Portability and Accountability Act regulations. At one point during an August 2010 conversation between Schwartz and the “supplier,” Schwartz commented that the financial institutions had fallen “hook, line and sinker” for the false explanation given to bank examiners who asked why the purported supplier used his home address on certain invoices.

In addition to the prison term, Judge Wigenton sentenced Schwartz to three years of supervised release and ordered him to pay $80 million in restitution. Judge Wigenton also ordered Schwartz to forfeit $75 million.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, for the investigation which led to today’s sentence.

The government is represented by Assistant U.S. Attorneys Jacob T. Elberg and Joseph Mack of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

11-475

Defense counsel: John Whipple Esq., Chatham, N.J.

Medicare Fraud in New Jersey: Diakon agrees to pay federal government $10.5 million

Sun, 04 Dec 2011 08:00:17 -0500

Diakon agrees to pay federal government $10.5 million

Diakon Hospice Saint John, which operates hospice care at facilities in Hazleton, Allentown, and Wyomissing, has agreed to resolve its liability for violations of the False Claims Act by paying the United States $10.56 million.

The announcement was made today by the United States Attorney’s Office for the Middle District of Pennsylvania and the U.S. Department of Health and Human Services' Office of the Inspector General.

According to those offices, from Oct. 1, 2004 through Oct. 1, 2010, Diakon erroneously submitted claims to the Medicare Program for hospice care provided to Medicare beneficiaries during periods of time in which the beneficiaries were not eligible for hospice benefits under the Medicare regulations.

Earlier this year, Diakon voluntarily disclosed to federal authorities that it had received improper Medicare and Medicaid payments. By voluntarily disclosing improper billing practices, Diakon

avoided a government lawsuit under the FCA and was able to negotiate a settlement.

The FCA provides that parties who voluntarily disclose violations of the act are liable for double damages, instead of triple damages and civil penalties between $5,500 and $11,000 for each violation.

“Health care providers that make billing compliance, self policing, and self reporting a priority foster trust in the health care industry” said Nick DiGiulio, special agent in charge for the United States Department of Health and Human Services’ Office of Inspector General. “These actions demonstrate that Diakon Hospice Saint John cares about returning money, incorrectly attained, to our federal health payment programs.”

To read the complete story, see Friday's Times Leader.

Patient Recruiter Pleads Guilty in Connection with $5.4 Million Medicare Fraud Scheme in Detroit

Sat, 03 Dec 2011 18:57:25 -0500

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Tuesday, November 29, 2011

Patient Recruiter Pleads Guilty in Connection with $5.4 Million Medicare Fraud Scheme in Detroit

WASHINGTON – A patient recruiter pleaded guilty today for his participation in a Medicare fraud scheme operated out of three Detroit-area health care clinics, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

Santiago Villa-Restrepo, 33, of Miami, pleaded guilty before U.S. District Judge Arthur J. Tarnow in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, Villa-Restrepo faces a maximum penalty of 10 years in prison and a $250,000 fine.

According to the plea documents, Villa-Restrepo recruited Medicare beneficiaries for three Detroit-area health care clinics owned by co-conspirators. In exchange for cash bribes paid by Villa-Restrepo and others, the beneficiaries agreed to attend the clinics where they provided their Medicare provider numbers and other information, which allowed the clinics to bill for diagnostic tests that were medically unnecessary, and in some cases, not provided at all. According to court documents, Medicare was billed $5.4 million for medically unnecessary diagnostic tests by the clinics associated with the scheme.

Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

This case is being prosecuted by Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan, with assistance from Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-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 Eastern District of Michigan.

Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Pompano Beach, Fla.-Area Assisted Living Facility Owner Pleads Guilty to Fraud and Kickback Scheme

Sat, 03 Dec 2011 18:53:15 -0500

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Wednesday, November 30, 2011

Pompano Beach, Fla.-Area Assisted Living Facility Owner Pleads Guilty to Fraud and Kickback Scheme

WASHINGTON – The owner and operator of a Pompano Beach, Fla.-area assisted living facility pleaded guilty today for his role in a Medicare fraud kickback scheme that funneled patients through a fraudulent mental health company and a Medicaid fraud scheme that billed for assisted living services that were never provided, announced the Department of Justice, the FBI, the Department of Health and Human Services (HHS) and the Medicaid Fraud Control Unit (MFCU) of the Florida Office of the Attorney General.

Joseph B. Williams, 41, pleaded guilty before U.S. District Judge Jose E. Martinez in Miami to two counts of conspiracy to commit health care fraud. Williams was the owner and operator of Avondale Manors Retirement Home, an assisted living facility operating in Pompano Beach, and a company called Diversified Marketing Group Inc.

Williams admitted that in exchange for illegal health care kickbacks, he agreed to provide Medicare beneficiaries who resided at Avondale to American Therapeutic Corporation (ATC) for intensive mental health treatment called partial hospitalization program services. ATC purported to operate partial hospitalization programs in seven different locations throughout south Florida and Orlando. According to court documents, Williams was paid approximately $30 per beneficiary per day the beneficiary attended ATC. ATC paid the kickbacks mostly by check made out to Diversified.

According to his plea, Williams knew that ATC fraudulently billed Medicare for the partial hospitalization program treatment that his referrals purportedly received.

According to court documents, ATC’s principals paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and its related company, the American Sleep Institute (ASI). In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for partial hospitalization program services. Ultimately, ATC and ASI billed Medicare for more than $200 million in medically unnecessary services.

Williams also admitted that he billed Medicaid for assisted living services purportedly provided at Avondale when, in fact, those services were never provided. Williams paid owners and operators of halfway houses to obtain the personal identifiers of Medicaid enrollees who resided in those halfway houses and used that information to bill Medicaid fraudulently. Williams also billed Medicaid for assisted living services provided to residents of Avondale at times when they were not receiving any services.

According to the plea agreement, Williams’s participation in the fraud resulted in more than $2 million in fraudulent billing to the Medicare and Medicaid programs. At sentencing, scheduled for Feb. 8, 2012, Williams faces a maximum of 10 years in prison and a $250,000 fine for each count.

ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.

Today’s guilty plea was 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; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

The case is being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and MFCU 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 Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants that collectively have billed the Medicare program for more than $2.9 billion. In addition, HHS’s 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.

Health Care Fraud Strike Force in Baton Rouge LA Catches 4 Louisiana Physicians Writing Hundreds of Bogus Prescriptions

Tue, 22 Nov 2011 09:17:03 -0500

BATON ROUGE, La. — Four Louisiana physicians wrote hundreds of bogus prescriptions that powered multimillion-dollar health-care frauds in the Baton Rouge area, according to evidence amassed by the nearly two-year-old local Medicare Fraud Strike Force.

Yet all four physicians remain licensed to practice medicine, including two who pleaded guilty and a third convicted at a jury trial in August. The fourth doctor, who had previous probations of his license, is fighting the charges in his indictment.

In a similar case that dates from before creation of the Strike Force, the Advocate reports (http://bit.ly/uTiKlA ) a Louisiana physician in 2009 retained his medical license even though he was convicted of health care fraud.

Officials of the Louisiana State Board of Medical Examiners declined to comment on the targeted physicians — three of whom had their licenses suspended or placed on probation for questionable prescription practices before being charged in the Medicare fraud cases. Doctors can continue practicing medicine while their licenses are on probation, but cannot during a suspension.

The Medicare Strike Force fraud cases are not related to the medical board's previous disciplinary actions against the four physicians, court and board records show.

The license of Dr. Sofjan Lamid, 82, of Mandeville, was twice suspended in the 1990s for alleged over-prescription of painkillers.

Lamid was ordered by the Board of Medical Examiners in 1991 to surrender "for life his DEA permit for prescription and dispensation of controlled drugs," according to the board order.

But Lamid retained authority to prescribe Medicare-funded power wheelchairs for patients. In August of 2011, Lamid was convicted by a federal jury in Baton Rouge on charges he accepted kickbacks for writing unnecessary prescriptions for power wheelchairs that resulted in fraudulent Medicare costs of $2.5 million. He has not yet been sentenced.

Rita Arceneaux, the Board of Medical Examiners' executive assistant, said board officials could not talk about any physicians charged in the Medicare investigations, including those already convicted.

The medical license of Dr. Anthony S. Jase, 41, of New Orleans, was placed on probation for three years in October 2010 for his failure to control prescription pads used to obtain amphetamines, codeine, Hydrocodone and Lomotil. Jase also was ordered by the Board of Medical Examiners to cease the practice of medicine in the field of "management of non-malignant chronic or intractable pain."

Those penalties were imposed before Jase completed a prior three-year period of license probation ordered in 2008 for what the board described as his acceptance of "cash for office-visit fees calculated ... on the amount of medications prescribed."

Jase pleaded guilty this year in a federal case that alleges he and others bilked Medicare out of more than $470,000 for unnecessary equipment or services. He agreed he owes restitution of $230,963 to Medicare.

Another Louisiana physician, now waiting for his Baton Rouge trial on Medicare fraud charges, had his license placed on probation for five years by the Board of Medical Examiners in May 2010.

That physician, Dr. Michael Selwyn Hunter, 54, of New Orleans, also was stripped of his right to practice in the "management of non-malignant chronic or intractable pain or in the treatment of obesity." The board ordered Hunter not to prescribe any medications for weight control or weight reduction.

Now, Hunter is accused in a federal indictment in Baton Rouge of providing bogus prescriptions for home health care services that fueled an alleged illegal scheme that netted $14.9 million from Medicare.

Dr. Dahlia Kirkpatrick, 63, of LaPlace, remains licensed to practice medicine in Louisiana even though she is serving a 30-month prison term for providing unnecessary prescriptions to a medical equipment retailer who defrauded Medicare of $302,811. She pleaded guilty in October 2010 and was informed at sentencing that she and the retailer are jointly responsible for repayment of Medicare's loss.

Rita Arceneaux, the Board of Medical Examiners' executive assistant, said board officials could not talk about any physicians charged in the Medicare investigations, including those already convicted.

Miami Health Care Fraud: ALF operators, recruiters plead guilty in major Medicare fraud case

Tue, 22 Nov 2011 09:08:44 -0500

Operators of South Florida assisted-living facilities and halfway houses charged in one of the nation’s biggest Medicare fraud cases are rushing to plead guilty rather than face risky trials and long prison sentences.

Six defendants are now looking at shorter federal sentences because of their plea agreements.

And a seventh defendant, Joseph B. Williams, 41, who ran an assisted-living facility in Pompano Beach, plans to plead guilty next week to defrauding the taxpayer-funded Medicare program, court records show.

Those seven are among 10 residential operators and recruiters charged in September with supplying patients to Miami-based American Therapeutic Corp., whose owners pleaded guilty earlier this year. Lawrence Duran and Marianella Valera, are serving 50-year and 35-year prison sentences for running a racket to rip off $200 million from Medicare for purported therapy at their chain of seven mental health clinics in South Florida and Orlando.

Among their patient suppliers: Ramchand Ramrup, who ran an assisted-living facility in Palm Beach County with a recent history of state violations.

Miami Medicare Fraud: Feds targeting South Florida halfway-house owners who take kickbacks for Medicare patients

Sun, 13 Nov 2011 08:49:07 -0500

The article below illustrates why having excellent legal defense for Medicare and Healthcare Fraud is so important. If you have been accused of Medicare, Medicaid, or Healthcare Fraud, contact Robert Malove for a free consultation.

954-861-0384

From the Miami Herald, Nov 13, 2011

jweaver@MiamiHerald.com (BY JAY WEAVER AND MICHAEL SALLAH)

http://m.miamiherald.com/mh/db_42928/contentdetail.htm?contentguid=enIfTql7&full=true#display

A Miami couple sent to prison for decades could never have carried out one of the nation’s biggest healthcare scams without assisted-living facilities and halfway houses supplying them scads of residents covered by Medicare, authorities say.

Now, the Justice Department has charged 10 residential operators in a first-ever Medicare investigation into people who prosecutors say pocketed bribes for providing patients with substance abuse problems to mental-health clinics owned by Larry Duran and Marianella Valera.

Miami-based American Therapeutic Corp. — owned by Duran and partner Valera, who were recently sentenced to 50 and 35 years in prison, respectively — was at the center of an elaborate plot to fleece $200 million from the taxpayer-funded Medicare program.

Medicare paid American Therapeutic, with seven clinics in South Florida and Orlando, $83 million over the past decade for group-therapy sessions that could not have helped people with drug and alcohol addictions, Justice Department lawyers say. Patients with drug addictions received treatment for mental illnesses they didn’t have, such as bipolar disorder. In many other instances, no treatment was provided at all.

Last week, the controversy of ALF and halfway house operators suspected of taking kickbacks for Medicare patients dominated part of a state task force’s hearing in Miami-Dade County on abuse and neglect in the industry.

So far in the federal prosecution, four residential operators in the Fort Lauderdale area have pleaded guilty to healthcare fraud. Other defendants are expected to follow their example to avoid jury trials and potentially lengthy prison sentences, according to sources familiar with the case.

Those convicted in recent weeks: Natalie Maria Evans, Irene Trematerra, and Robert and Nikki Jenkins, who collectively ran seven halfway houses. Each operator was paid $15 to $30 daily for each patient they sent to American Therapeutic’s clinics, which submitted millions of dollars in false claims as a result, court records show.

The Medicare patients were pawns in the scheme, receiving little to no compensation, according to some patients interviewed by The Miami Herald.

Evans, who pleaded guilty to defrauding Medicare and faces up to 10 years in prison, was president of Vision of Hope Recovery. The company operated five halfway houses in Fort Lauderdale.

According to a statement filed with her plea, Evans admitted she “referred beneficiaries to [American Therapeutic] for mental health treatment solely on the basis of whether they were covered by Medicare and even though most of her residents were simply recovering drug addicts and/or alcoholics.”

To keep the racket going, a multimillion-dollar slush fund was tapped for bribes by American Therapeutic’s one-time marketing director, Margarita Acevedo, of West Kendall. Earlier this year, Acevedo became the first of 34 accused healthcare executives, psychiatrists, counselors, recruiters and residential operators to plead guilty in the American Therapeutic case.

The ongoing prosecution, investigated by the FBI and Health and Human Services’ Office of Inspector General, has yielded about 16 guilty pleas and one trial conviction of American Therapeutic executive Judith Negron.

As part of her plea deal, Acevedo cooperated with authorities and fingered a cast of patient recruiters and residential operators who fed hundreds of Medicare beneficiaries to American Therapeutic.

Acevedo, who kept a ledger of recruiters, patients and kickback payments, was assisted by another marketing executive for American Therapeutic, Joseph Valdes, who also pleaded guilty this year.

They collaborated with American Therapeutic’s two owners, Duran and Valera, to direct the recruitment of patients from ALF and halfway houses, according to Justice Department trial attorney Jennifer Saulino. The executives used a healthcare shell company, Medlink, to launder Medicare payments for the kickback payments, she said in court papers.

Of the 10 residential operators charged with healthcare fraud and kickback violations, one defendant has a particularly tarnished history as an ALF operator: Ramchand “Ramy” Ramrup.

Ramrup’s attorney, Bruce Lehr, declined to comment.

Ramrup ran one of the most troubled assisted-living facilities in Palm Beach County, records show. Since 2005, state inspectors have turned up nearly 100 violations at Boynton Beach Assisted Living Facility, including caretakers failing to give crucial medications to frail elders, misappropriating residents’ money, and failing to clean filthy and decrepit rooms.

In 2006, the home was warned when one of its residents turned up at a hospital covered in oozing bedsores, dirt and his own feces.

That same year, the state banned the facility from taking in new residents until it stopped repeating the same problems.

But in the ensuing five years, the home racked up dozens more violations, including sick and elderly residents roaming from the ALF and later being picked up by police.

Ramrup’s facility was hit four times with fines, including a $5,500 penalty in 2007, but inspectors continued to turn up the same violations every year.

This past week, the state task force held a hearing at Florida International University to address abuse and neglect in the ALF industry. As part of the debate, ALF owners and advocates for residents said the payment of kickbacks for Medicare patients was rampant — especially in South Florida — even though so-called patient brokering has been illegal in the state since 1996.

The task force was appointed by Gov. Rick Scott in May after a Miami Herald series, Neglected to Death, showed the state allowed dozens of facilities to stay open even after they had been caught abusing and neglecting residents, leading to scores of deaths.

The task force will recommend changes to the flawed ALF system for the upcoming Florida legislative session.

Accused of Health Care Fraud? Call Now- Free Consultation: 954-861-0384

White Collar Crime: Health Care Fraud (2010-2011 ed.)

Thu, 10 Nov 2011 12:10:02 -0500

Book Reviews
By Jon May

Originall posted at: http://www.nacdl.org/champion.aspx?id=22923

White Collar Crime: Health Care Fraud (2010-2011 ed.)

By Benson Weintraub and Robert David Malove

Thomson West (2010)

Reviewed by Jon May

Health care fraud costs American taxpayers an estimated $60 billion a year. While this is a significant amount, it is only a small fraction of the $3.3 trillion that the nation is expected to expend on health care in 2012. This may be the reason health care fraud was not a major priority of the Department of Justice until the last few years. But health care fraud is a priority today, and DOJ is expanding support for task forces around the country to target this crime.

This is good news, both for taxpayers and criminal defense lawyers. But representing an individual charged with health care fraud is unlike defending most other federal offenses. The delivery of health care services is highly regulated and the difference between conduct that is permissible and conduct that is proscribed is often quite subtle. A lawyer who is unfamiliar with the territory will be faced with having to learn a whole new vocabulary of acronyms. Although the FBI is often the agency an attorney will encounter after a case has been indicted, much of the investigation will have been conducted by agents from HHS (Department of Health & Human Services). Most of the regulations the attorney will need to learn will have been promulgated by CMS (Centers for Medicare & Medicaid Services). If the allegations of fraud concern the pricing of pharmaceuticals, the defense attorney will need to understand the difference between AWP (average wholesale price) and WAC (wholesale acquisition cost). If corporate fraud is alleged, counsel will need to know the requirements of SOX (Sarbanes Oxley Act) and the FCA (False Claims Act).

Navigating this labyrinth of agencies and regulations is a daunting task. Fortunately, Benson Weintraub and Robert Malove have provided a road map in their treatise, White Collar Crime: Health Care Fraud. This book can be consulted on a particular topic or read cover-to-cover. I read the book cover-to-cover and I recommend that any lawyer not already an expert in the field do so as well. Unlike treatises where the writing style is practically impenetrable, Weintraub and Malove’s prose is eminently readable. This is important because it is not sufficient to know what sort of conduct is made unlawful under 18 U.S.C. § 1347(b) (the general health care fraud statute) or 42 U.S.C. § 1320a-79b(h) (the anti-kickback statute) (Chapter 4); defense counsel must also know what conduct is permitted by the Stark Act (Chapter 5). While these regulations may not be as extensive or complex as tax or securities regulations, they are complicated enough.

Intent is often the central issue in white collar cases. So too with health care fraud. The Patient Protection and Affordable Care Act of 2010 (PPACA) significantly altered the government’s burden to prove mens rea in prosecutions under 18 U.S.C. § 1347(b) and 42 U.S.C.

§ 1320a-7b(h). While Health Care Fraud addresses this change in the law, it also includes a discussion of decisions that had previously rejected constitutional challenges to these statutes on the grounds that the greater scienter required under the law mitigated any vagueness in the statutes. Upon reviewing Weintraub and Malove’s discussion of these decisions (Chapters 4 and 9), counsel may decide that the PPACA has now rendered these statutes vulnerable to attack.

Finally, in order to craft a response to the government’s allegations, it is essential for practitioners to understand the mechanics of certain frauds. If practitioners think the law is complicated, then they might be in for a surprise when they first consider how the pharmaceutical industry has gone about selling drugs for thousands of times more than the cost of manufacturing them. Gram for gram, the distribution of licit drugs is far more profitable than trafficking in cocaine, heroin, or marijuana — which is why so many ex-drug traffickers are now being prosecuted for health care fraud.

Unlike some areas of tax or securities law, defense lawyers need not devote their entire practice to health care fraud to master the subject. This is an area they can learn. Nevertheless, there is a mountain of material to consider. With Weintraub and Malone’s Health Care Fraud as a guide, they will be able to avoid stepping off into the abyss. And at $120, it is the cheapest malpractice insurance they will ever buy.

Attorney general in Tampa to discuss prescription drug abuse

Sun, 06 Nov 2011 21:25:59 -0500

TAMPA --

Originally from: http://www2.tbo.com/news/news/2011/oct/28/2/attorney-general-to-speak-on-efforts-to-battle-pre-ar-298876/

Nine doctors and two pharmacists were among 22 people caught in a federal drug sweep today Friday accusing them of illegally peddling prescription drugs.

The arrests were announced this afternoon when local, state and federal agents made arrests after federal arrests warrants were unsealed.

U.S. Attorney General Eric Holder announced the crackdown – called Pill Nation II – at a news conference along with Michele Leonhart, Drug Enforcement Administration administrator, and U.S. Attorney Robert O'Neill.

Holder said today's sweep and its initial namesake last year√ led to the arrest of 118 people; the revocation or surrender of 80 DEA certificates that doctors need to dispense controlled substances; the closing of 40 pain clinics; and the seizure of more than $19 million in assets.

"The days of easily acquiring these drugs from corrupt doctors and pharmacists is coming to an end," Holder said.

Holder said Florida is the epicenter of the nation's prescription drug abuse problem.

He said of 55 million pills of the pain killer Oxycodone sold nationwide, 85 percent of them were sold in Florida.

"This is having a devastating impact beyond the state," Holder said.

Holder said numbers of overdoses attributed to illegally obtained prescription drugs now are higher than deaths caused by street drugs like heroin and cocaine.

Holder credited cooperation among local, state and federal agencies in getting an upper hand on the scourge.

He pointed to a state law that took effect in September as an example. It bans dispensing pain pills at offices or clinics where prescriptions are written.

But he said that has led to a spike in the number of applications for new pharmacies, often by unqualified people.

Doctors arrested were Aimee Joy Martin, 35, of Bradenton; Sanjeev Grover, 48, of Tampa; John Anthony Gianoli III of St. Petersburg; Ronald John Heromin, 46, of Tampa and Miami; Ihab Barsoum of Pasco County; James Richard Shelburne, 74, of Tampa; Edward Mosley of Bradenton and Brandon; T.J. McNichol of Brandon; and Debra Roggow of Lee County.

The pharmacists were Paul Vincent Rivers, 40, of Polk County; and Youssef Saleeb, 27, of Winter Park.

Others were arrested, accused of sending the illegal pills from Pasco County to Kentucky.

Leonhart said Florida is providing illegal prescription drugs along the East Coast and into the Midwest. She said highways to the state are known on the street as "The Oxy Express" or "The Pill Pipeline."

She said recent arrests and education efforts are "turning the corner in the fight."

"We have turned up the heat on pill mills," she said.

Among those in attendance at the news conference was Florida Attorney General Pam Bondi.

She said she and the others will not let up on illegal prescription pushers.

"They are drug dealers wearing white coats," she said.