Date: June 12, 2020
DENVER – Joseph Prince of Aurora, Colorado was sentenced yesterday to serve 192 months (16 years) in federal prison for health care fraud, conspiracy, payment of illegal kickbacks and gratuities, money laundering, and conflict of interest charges. Prince was also ordered to serve 3 years of supervised release and pay $18,777,134.68 in restitution to the Veteran's Health Administration. Prince, who appeared at the sentencing hearing free on bond, was remanded at the hearing's conclusion.
According to the indictment and evidence presented at trial, Prince was one of two Case Management Liaisons for the VA's Spina Bifida (SB) Health Care Benefits Program. The program covers the medial needs of children of certain veterans of the Korea and Vietnam wars with SB. Acting as a subject matter expert working in a Denver call center, Prince spoke with health care providers and SB beneficiaries or their families regarding their health care needs and reimbursement for care under the program.
As the architect of an elaborate conspiracy based on a fictional VA home health program the defendant invented, Prince recruited friends and family members to open "home health agencies" knowing they lacked the necessary medical licenses or credentials to bill the VA for SB beneficiaries' home health services. The defendant directed every aspect of the home health agencies; no changes were made to business operations without his knowledge, review, and approval.
Further, with direct access to the SB beneficiaries and their family members, Prince identified himself to them as the one in charge of the fictional program. He represented that he had the authority on behalf of the VA to approve family members as home health care providers for the SB beneficiaries, even though the caregivers had no specific training certifications. He told these family members to sign up as contractors with "vetted" home health agencies, which were those companies owned by his friends and family. The defendant then directed the completion and submission to the VA of fraudulent and inflated claims for home health services by unapproved providers through unlicensed home health companies.
A written plan of care from a medical professional was required for a beneficiary to receive home health benefits under the SB program. In furtherance of his scheme to defraud, Prince would often pre-populate the number of hours the beneficiary was eligible for home health care on a physician's written plan before submitting the plan for the physician's signature. Then when speaking to the beneficiaries, Prince would instruct them to submit logs reflecting the maximum hours of plan service even when beneficiaries said they did not or could not provide that many hours of service, often presenting false information to the beneficiaries about what they were permitted to bill for under the program.
The defendant instructed the home health companies regarding how much to charge the VA for the fraudulent claims, directing them to keep approximately 80% of the paid amount for the company and send just 20% to the caregiver family member. When beneficiaries questioned the disparity between the caregiver's pay and the agency's pay on statements of benefits, Prince lied about agency expenses incurred to operate the home health entities.
Between June, 2017 and June, 2018, Prince referred approximately 45 SB beneficiaries to the sham home health entities. During that time, the home health entities submitted fraudulent claims totaling over $20 million to the VA, and approximately $18 million of that was paid out to five home health entities from the SB Health Care Benefits Program. Prince benefited from the scheme through payments to one of the companies owned by his wife, and from kickbacks paid to him by two of the agencies. As part of his agreement with these two, Prince received kickbacks of 50% of the VA payments for each beneficiary after expenses. Prince received approximately $1.5 million in kickbacks from two of the home health entities between December, 2017 and June, 2018.
As a federal government employee, Prince unlawfully used his public office to benefit himself and receive illegal kickbacks and gratuities.
"Mr. Prince exploited his inside knowledge of the VA's Spina Bifida Health Care Benefits Program for personal gain, victimizing a program designed for a group in need of extra assistance," said IRS-CI Special Agent in Charge Andy Tsui. "As this sentence shows, IRS-Criminal Investigation will identify, investigate, and bring to justice those who attempt to defraud government programs designed to support our country's citizens."
"The defendant stole from taxpayers and from a program designed to help those who served our nation," said U.S. Attorney Jason R. Dunn. "The defendant will be spending a substantial amount of time in prison because of his fraudulent behavior."
"Our nation's veterans deserve the best healthcare and services available provided by honest public servants," said Gregg Hirstein, Special Agent in Charge, VA Office of Inspector General. "This sentencing underscores VA OIG's commitment to protecting American taxpayers from corrupt federal employees using their position for financial gain."
"Bribery and corruption pose a fundamental threat to our governmental agencies and the public's confidence in them," said FBI Denver Special Agent in Charge Michael Schneider. "Joseph Prince's actions took a significant toll on our community's trust in the Office of Veteran's Affairs and its pocketbooks, siphoning away money that could be used for resources beneficial to those who need it most, our veterans who served our country. The sentence today reflects the tremendous effort in this joint investigation by the FBI, IRS and VA-OIG with prosecution by the Colorado United States Attorney's Office as we sought justice for our selfless veterans and to hold accountable those who selfishly abuse their authority."
Co-conspirator and long-time friend 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 June 25, 2020. Additional friends Glenn Beach and Catherine Beach each pleaded guilty to paying an illegal gratuity to Prince and are scheduled to be sentenced on June 22, 2020.
Prince was indicted by a federal grand jury in Denver on June 21, 2018, and was found guilty by a trial jury on March 12, 2020. He was sentenced by U.S. District Court Judge Raymond P. Moore.
This case was investigated by IRS-Criminal Investigation, VA's Office of the Inspector General, and the FBI.
This case was prosecuted by Assistant U.S. Attorneys Anna K. Edgar and Hetal J. Doshi.