Examples of Healthcare Fraud Investigations - Fiscal Year 2011
The following examples of healthcare fraud investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Iowa Pharmacist Sentenced For Health Care Fraud
On September 21, 2011, in Sioux City, Iowa, David J. Easton, of Everly, Iowa, was sentenced to 42 months in prison, two years of supervised release and ordered to pay $165,170 in restitution to Medicaid and $35,616 in restitution to Coventry Health Care. Easton pleaded guilty on September 17, 2010, to health care fraud, money laundering, and aggravated identity theft charges. According to his plea agreement, Easton owned and operated Medicap pharmacy in Spencer, Iowa. He admitted that, from about 2003 to 2006, he defrauded Medicaid and Coventry Health Care out of more than $200,000 by submitting false claims for prescriptions. He used the identities and identification numbers of Medicaid patients when he submitted false prescription claims to the Medicaid program. Easton used some of the proceeds of his schemes to purchase a Cadillac Escalade.
Co-Defendants in Health Care Fraud and Money Laundering Scheme Sentenced
On August 24, 2011, in Nashville, Tenn., Glenesha Bowling-Moye was sentenced to 18 months in prison, followed by two years of supervised release and ordered to pay $1,245,002 in restitution ($1,166,696 of the restitution is due jointly and severally with her co-defendant). Tabitha Jones was sentenced to 12 months and a day, followed by two years of supervised release and ordered to pay $1,166,696 in restitution (owed jointly and severally with Moye). According to court documents, Moye and Jones were joint owners and operators of EBC Healthcare (EBC), a company that operated in the Middle District of Tennessee and elsewhere. EBC was both a Medicare Provider and TennCare Participating Provider engaged primarily in the business of submitting claims to Medicare and TennCare for services purportedly provided to Medicare beneficiaries and TennCare beneficiaries. Through EBC, Moye and Jones regularly caused claims to be submitted to, and received payments from, Medicare and TennCare. Moye and Jones, through EBC, caused fraudulent claims, totaling approximately $1,144,025, to be submitted to Medicare and TennCare for psychotherapy and other services that were either never provided or provided by personnel not licensed by the State of Tennessee to perform the services. Moye also owned GEMM Senior Services (GEMM) and executed the health care fraud scheme through that company as well causing fraudulent claims totaling approximately $78,306.
Tennessee Woman Sentenced for Health Care Fraud and Money Laundering
On July 22, 2011, in Nashville, Tenn., Candyce Jones was sentenced to 36 months in prison, followed by three years of supervised release, and ordered to pay $654,653 in restitution. According to court documents, Jones owned and operated Merrilee Healthcare, a limited liability company that operated in the Middle District of Tennessee. Merrilee was both a Medicare Provider and TennCare Participating Provider engaged primarily in the business of submitting claims to Medicare and TennCare for services purportedly provided to Medicare beneficiaries and TennCare beneficiaries. Through Merrilee, Jones regularly caused claims to be submitted to, and received payments from, Medicare and TennCare. Beginning in or about March 2005, and continuing until in or about February 2008, Jones, through Merrilee, caused fraudulent claims, in excess of approximately $1,100,000, to be submitted to Medicare and TennCare for psychotherapy and other services that either were never provided or were provided by unlicensed individuals. Jones withdrew funds from a company bank account, obtained a cashier’s check and used the check to purchase real estate in Nashville.
Tennessee Physician Sentenced for Health Care Fraud and Failure to File a Tax Return
On July 15, 2011, in Knoxville, Tenn., Allen R. Foster, M.D., a resident of Gatlinburg, Tenn., who previously practiced medicine in the Morristown and Knoxville areas, was sentenced to 12 months in prison, followed by three years of supervised release. Foster was also ordered to pay $74,307 in restitution to Medicare, to pay $65,837 in restitution to TennCare, and to pay $596,761 in restitution to the Internal Revenue Service (IRS). On February 22, 2011, Foster pleaded guilty to health care fraud and tax related offenses. Pursuant to the plea agreement, Foster also agreed to surrender his license to practice medicine to the Tennessee Board of Medical Examiners. According to court documents, Foster engaged in a scheme to defraud Medicare and TennCare by fraudulently billing those health care benefit programs for 15-minute office visit codes for "fast-track" patients who actually did not have a 15-minute office visit encounter with a provider at Foster's practice. Foster also failed to file a tax return for the calendar year 2005.
Atlanta Chiropractor Sentenced for Health Care Fraud
On June 24, 2011, in Atlanta, Ga., Andrew L. Sokol, of Marietta, Georgia, was sentenced to 57 months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $6,599,456. Sokol pleaded guilty in October 2010 to participation in a conspiracy to commit health care fraud by fraudulently submitting millions of dollars of insurance claims for physical therapy services that were not actually provided. Sokol was a licensed chiropractor who owned and operated “WellnessOne” chiropractic clinics throughout metro Atlanta. WellnessOne offered massage, personal training, and chiropractic services to its patients, but fraudulently billed these services to insurance companies as physical therapy. Sokol routinely waived patients’ co-payments and deductibles, resulting in the patients being compensated – with gift cards and other items of value – while paying nothing for the massages and chiropractic adjustments they received at WellnessOne. Evidence showed that from January 2005 through September 2007, Sokol employed licensed medical doctors and physical therapists in order to bill a massage as physical therapy, even though these licensed providers never saw the majority of patients. Instead, massage therapists actually gave the massages. Beginning in 2006, Sokol permitted patients to visit a local gym in the Atlanta area and then fraudulently billed those gym visits to insurers as physical therapy. When that arrangement ended, Sokol had small gyms built in the WellnessOne clinics and fraudulently billed personal training sessions to insurers as physical therapy.
Ohio Physician Sentenced for Health Care Fraud and Tax Fraud
On June 9, 2011, in Columbus, Ohio, Dr. Rajiv Yakhmi, 46, of Powell, Ohio, was sentenced 12 months and one day in prison and ordered to pay $310,000 plus interest and penalties to the Internal Revenue Service (IRS) and an additional $590,278 to the government and private health care insurers he defrauded. Yakhmi pleaded guilty on January 11, 2011, to one count of health care fraud and to one count of willfully filing a false income tax return with the IRS. According to court documents, Yakhmi is a licensed medical doctor who had an office in Columbus, Ohio. Between October 2005 and November 2007, Yakhmi contracted with DosHealth billing service to submit medical claims on his behalf to the Medicare and Medicaid programs as well as to private insurers. DosHealth relied on patient information provided by Yakhmi to submit medical claims to Medicare, Medicaid and private insurers. Yakhmi knowingly submitted or caused to be submitted claims for patient office visits and medical services, knowing that such services were wrongfully coded, medically unnecessary or not provided to his patients. In addition, on Wednesdays during part of 2006 and 2007, Yakhmi accepted only cash from his patients for medical services and office visits which he knowingly failed to report as income on his 2006 and 2007 federal income tax returns. In addition, in late 2006, Yakhmi devised a scheme to evade federal income taxes by opening a checking account in the name of “Spyder Medical.” He wrote checks from his business checking account to “Spyder Medical” to make it appear as though he had purchased the equipment from “Spyder Medical” for his medical practice; thereby claiming a fraudulent expense of $108,000 on his 2006 tax return. In November 2007, Yakhmi began only accepting cash payments from his patients for all office visits and medical services. Yakhmi knowingly failed to report a significant amount of these cash payments as income to the IRS on his 2007 and 2008 tax returns.
Owner of Community Support Service Corporation Sentenced
On April 26, 2011, in Raleigh, N.C., Shirlene Reese Boone, of Murfreesboro, North Carolina, was sentenced to 144 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $3,550,840 to the Medicaid Investigations Unit, $1,061,820 to the Internal Revenue Service, and $46,059 to the North Carolina Employment Security Commission. Boone previously pleaded guilty to multiple charges including conspiracy to commit health care fraud, aggravated identity theft, and failure to collect and pay over payroll taxes. Boone was the principal owner, manager, and registered agent for Metropolitan Counseling Services, Inc. (MCS), a registered non-profit North Carolina corporation that provided community support services and HIV case management. From 1997, to May, 2010, Boone, through MCS routinely submitted claims for reimbursement to the Medicaid program for community support services and HIV case management. Community support and HIV case management services were designed to assist the state’s disabled and economically disadvantaged individuals diagnosed with certain medical conditions. Many of the claims submitted to Medicaid by Boone were false in that they demanded payment for services that never happened. As the president of the corporation, Boone held back federal withholding taxes and FICA taxes from employee wages. While Boone filed quarterly payroll tax reports for all of the quarters during the period July 1, 2005, through September 30, 2006, she did not pay any of these taxes.
Owner of Pain Management Clinics Sentenced to Over 12 Years for Drug Trafficking Conspiracy
On February 24, 2011, in New Orleans, La., Candace Wilson, of Chalmette, Louisiana, was sentenced to 151 months in prison for conspiracy to distribute and dispense controlled substances, conspiracy to commit health care fraud, and conspiracy to commit money laundering. The judge also ordered Wilson to pay $82,072 in restitution to the Louisiana Medicaid Program and to serve three years of supervised release. In March 2009, Wilson pleaded guilty to conspiring with co-defendants Monica Jones, Joseph Braud, Thadrian Johnson, Ples Dobbins, Deshawn Whatley, Jimmie Lee Winters, and Joshua Williams to illegally distribute and dispense controlled substances, , conspiracy to commit health care fraud, and conspiracy to commit money laundering. Wilson and her sister, Monica Jones, established Stanton Trinity Medical Group, Inc., Maximum Pain Management, LLC, and Reddi Care Ambulatory Clinic, LLC, pain management clinics in New Orleans, Lafayette, and Baton Rouge, Louisiana. According to the statement of facts presented to the court, Wilson, Jones, Dobbins, and Johnson (a pharmacist) also opened a pharmacy, Southern Discount Drugs, to service the customers of Stanton Trinity Medical Group. The clinics offered “pain management” by writing prescriptions that were neither for legitimate medical purposes nor within the bounds of professional medical practice, and only accepted cash for medical services. In some instances, controlled substances and/or prescriptions for controlled substances were distributed without the recipient seeing a physician, and the cost of a doctor visit was determined by the type of controlled substances the patient wanted. Wilson further admitted that following the closure of Southern Discount Drugs, the defendants recruited individuals entitled to Medicaid benefits and paid cash in exchange for using their Medicaid numbers to illegally obtain controlled substances for distribution. Wilson used the illegal proceeds to purchase numerous luxury vehicles and real estate. Additionally, Wilson admitted that she deposited and instructed others to deposit into bank accounts the illegal proceeds in amounts less than $10,000 to avoid currency transaction reporting requirements.
Former CPA Sentenced to Prison on Tax and Health Care Fraud Charges
On January 18, 2011, in Los Angeles, Calif., Eli Gichon, of Encino, was sentenced to 51 months in prison and three years on supervised release after pleading guilty to healthcare fraud and tax charges. Gichon was also ordered to pay restitution of $4,093,263 to Medicare and $1,400,353 to the Internal Revenue Service. According to court records, Gichon was a Certified Public Accountant who operated Airport Medical Supply (AMS) from within the premises of Eli’s Airport Cleaners, a dry cleaning business he owned and operated in Van Nuys. In his plea agreement, Gichon admitted that he employed co-defendants Christopher Hill and Feliciano Dy to work as marketers for AMS. January 2003 through March 2009, Gichon admitted he obtained beneficiary information needed to bill Medicare for durable medical equipment by paying kickbacks to Hill, Dy, and others to recruit beneficiaries for AMS. To recruit the Medicare beneficiaries for AMS, the marketers would promise the beneficiaries cash and/or free durable medical equipment. Additionally, they would transport the recruited beneficiaries to AMS. Gichon admitted that he used the recruited beneficiaries’ information to prepare false claims for durable medical equipment, such as power wheelchairs and accessories, hospital beds, and mattresses that were not provided to the beneficiaries and/or were not medically necessary. He and others created false invoices from a non-existent medical supply company to substantiate that AMS had purchased the non-existent durable medical equipment. Gichon’s scheme resulted in a loss to Medicare of approximately $4,093,263. In addition to the health care fraud scheme, Gichon admitted that he subscribed to a false tax return for the 2006 tax year when he failed to report over $912,000 in income. Gichon admitted that for the years 2004, 2005, and 2006, he received over $3,813,000 in receipts from Medicare through AMS that he did not report on his personal income tax returns. Gichon’s failure to report the income to the IRS resulted in tax due of over $1,400,000. On January 10, 2011, Christopher Hill was sentenced to 27 months in prison, three years of supervised release, and ordered to pay restitution of $116,078. Feliciano Dy was sentenced on September 27, 2010, to 5 years of probation and ordered to pay restitution of $193,412.
Texas Ambulance Company Owner Sentenced to 15 Years In Federal Prison and Ordered to Pay $1.3 Million in Restitution
On October 13, 2010, in Dallas, Texas, Muhammed Nasiru Usman was sentenced to 180 months in prison and ordered to pay more than $1.3 million in restitution for various offenses, including health care fraud and money laundering, related to a health care fraud scheme he ran. According to court documents, Usman, the owner operator of Royal Ambulance Service, Inc. and First Choice EMS, Inc., and two co-defendants, Shaun Outen and David McNac, ran a health care fraud scheme where Royal and First Choice primarily transferred patients on a non-emergency basis to and from dialysis treatments three times per week. The government presented evidence that Usman, Outen and McNac conspired to defraud Medicare and Medicaid by submitting fraudulent claims related to the transportation of dialysis patients. As part of the conspiracy, the defendants told Royal and First Choice employees to omit facts when documenting their transports of Royal and First Choice patients, such as whether the patients walked to the ambulance, in order to qualify the transports for reimbursement. Additionally, many of the companies’ records revealed that patients simply rode to their appointments in a captain’s chair in the back of the ambulance rather than lying on a stretcher. Usman, Outen and McNac were responsible for submitting more than $3.5 million in fraudulent claims to Medicare and Medicaid through Royal Ambulance and First Choice EMS, resulting in payments of more than $1.3 million. Outen and McNac pleaded guilty and are awaiting sentencing.
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