Date: March 13, 2020
DENVER –A jury sitting in U.S. District Court in Denver found former Veterans Affairs (VA) employee Joseph Prince of Aurora, Colorado guilty of felony health care fraud, conspiracy, payment of illegal kickbacks and gratuities, money laundering charges and conflict of interest. The verdict is the result of an eight-day jury trial before U.S. District Court Judge Raymond P. Moore. Prince’s bond was continued and he was ordered to home incarceration pending his sentencing.
According to the indictment and evidence presented at trial, Prince was a Beneficiary Provider Relationships Specialist with the VA’s Spina Bifida (SB) Health Care Benefits Program, which covers medical needs of children of certain veterans of the Korea and Vietnam wars suffering from SB. Prince worked for a VA call center in Denver, and spoke with health care providers and SB beneficiaries or their families regarding their health care needs and care reimbursement.
Prince defrauded the VA’s Spina Bifida Health Care Benefits Program by signing up the family members of the program’s beneficiaries as home health “contractors” with sham home health entities run by Prince’s associates. Prince knew that the sham home health entities were not authorized providers by the VA. He nonetheless encouraged the family members to submit bills despite the fact that they were not approved providers and to include the bills for services that either were not provided or were not allowed by the VA. He then accepted payments from the associated home health entities for referrals he himself made to those agencies. Prince’s referrals led to payments totaling approximately $20 million from the VA to the Prince-related home health agencies, which were run by associates including his wife, his brother-in-law, his half-sister, and friends.
Ultimately Prince referred approximately 45 SB beneficiaries to the sham home health entities. The total amount of fraudulent claims paid by the SB Health Care Benefits Program to the five Home Health Entities totaled approximately $19 million. Of that amount, Prince received approximately $1.5 million in kickbacks from two home health entities between December 2017 and June 2018.
“The sizeable amount of false claims Joseph Prince submitted and subsequent kickbacks he received are an affront to government programs intended to help the public,” said Andy Tsui, IRS Criminal Investigation Special Agent in Charge, Denver Field Office. “It is unacceptable to abuse a position of trust for personal financial gain and for those that do, IRS-Criminal Investigation will seek justice on behalf of the true beneficiaries of government benefits programs.”
“The recent conviction of Joseph Prince is significant and highlights the FBI’s collaboration with the United States Attorney’s Office as we hold this defendant accountable for abusing his position as an official at the Department of Veteran’s Affairs to manipulate government contracts for personal gain,” said FBI Denver Special Agent in Charge Dean Phillips. “The FBI will continue to use all available tools to detect illegal conflicts of interest and bribery schemes in government entities.”
“The crimes perpetrated by Joseph Prince and his associates were especially troubling since Prince was a VA official,” said Gregg Hirstein, Special Agent in Charge, VA Office of Inspector General. “The Department of Veterans Affairs Office of Inspector General is committed to holding accountable those who illegally enrich themselves using VA programs intended to help our nation’s veterans and their dependents, who deserve to be served by a workforce of the highest integrity. I am thankful for the close coordination of the investigative agencies and the United States Attorney’s Office to quickly end this massive fraud.”
“To steal from a program that is intended to help our veterans and their children who suffer from serious medical conditions is reprehensible,” said U.S. Attorney Jason Dunn. “Mr. Prince was also harming the American taxpayers and will now pay a significant price for his actions.”
Long-time friend of Prince and co-conspirator Roland Vaughn pled guilty to paying an illegal gratuity to a public official on August 1, 2019, and is scheduled to be sentenced by Judge Moore on April 9, 2020. Glenn and Catherine Beach, who were also friends of Mr. Prince, pleaded guilty to paying an illegal gratuity to Prince. The Beaches will be sentenced on April 1, 2020.
Prince will be sentenced on June 11, 2020. Felony Conflict of Interest carries a penalty of not more than five years in prison and a fine of not more than $250,000 or two times the gain or loss from the offense per count. Health care fraud carries a penalty of not more than 10 years in prison and a fine of not more than $250,000 or two times the gain or loss from the offense per count. Conspiracy to Commit an Offense against the United States carries a penalty of not more than five years in prison and a fine of not more than $250,000 or two times the gain or loss from the offense. Soliciting/Receiving an Illegal Gratuity carries a penalty of not more than two years in prison and a fine of not more than $250,000 or two times the gain or loss from the offense per count. Unlawful Monetary Transactions carries a penalty of not more than 10 years in prison and a fine the greater of $250,000 or two times the value of the property involved in the transaction per count. Money Laundering carries a penalty of not more than 20 years in prison and a fine the greater of $500,000 or twice the value of property involved in the transaction per count.
The government will seek forfeiture of specific assets and restitution to the Veterans Health Administration in the amount of approximately $19 million.
This case was investigated by IRS-CI, VA’s Office of the Inspector General, and the FBI.
This case is being prosecuted by Assistant U.S. Attorneys Anna K. Edgar and Hetal J. Doshi.