243 INDIVIDUALS CHARGED IN $712 MILLION MEDICARE FRAUD CASE

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, June 18, 2015
National Medicare Fraud Takedown Results in Charges Against 243 Individuals for Approximately $712 Million in False Billing

Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today a nationwide sweep led by the Medicare Fraud Strike Force in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings.  In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act.  This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.  

Attorney General Lynch and Secretary Burwell were joined in the announcement by FBI Director James B. Comey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of CMS Center for Program Integrity Shantanu Agrawal, M.D.

The defendants are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft.  The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and pharmacy fraud.  More than 44 of the defendants arrested are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which is the fastest-growing component of the Medicare program overall.

“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch.  “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others.  They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.  In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.  We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”

“This Administration is committed to fighting fraud and protecting taxpayer dollars in Medicare and Medicaid,” said Secretary Burwell.  “This takedown adds to the hundreds of millions we have saved through fraud prevention since the Affordable Care Act was passed.  With increased resources that have allowed the Strike Force to expand and new tools, like enhanced screening and enrollment requirements, tough new rules and sentences for criminals, and advanced predictive modeling technology, we have managed to better find and fight fraud as well as stop it before it starts.”

According to court documents, the defendants participated in alleged schemes to submit claims to Medicare and Medicaid for treatments that were medically unnecessary and often never provided.  In many cases, patient recruiters, Medicare beneficiaries and other co-conspirators allegedly were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $712 million in fraudulent billing.

“The people charged in this case targeted the system each of us depends on in our most vulnerable moments,” said Director James Comey.  “Health care fraud is a crime that hurts all of us and each dollar taken from programs that help the sick and the suffering is one dollar too many.”

“Every day, the Criminal Division is more strategic in our approach to prosecuting Medicare Fraud,” said Assistant Attorney General Caldwell.  “We obtain and analyze billing data in real-time.  We target hot spots – areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud – and we are speeding up our investigations.  By doing this, we are increasingly able to stop schemes at the developmental stage, and to prevent them from spreading to other parts of the country.”

“Health care fraud drives up health care costs, wastes taxpayer money, undermines the Medicare and Medicaid programs, and endangers program beneficiaries,” said Inspector General Levinson.  “Today’s takedown includes perpetrators of prescription drug fraud, home health care fraud, and personal care services fraud, three particularly harmful types of fraud plaguing our health care system.  This record-setting takedown sends a message to would-be perpetrators that health care fraud is a risky way to line your pockets.  Our agents and our law enforcement partners stand ready to protect these vital programs and ensure that those who would steal from federal health care programs ultimately pay for their crimes.”

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.

Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings.  Today’s announcement marks the first time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.

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In Miami, a total of 73 defendants were charged with offenses relating to their participation in various fraud schemes involving approximately $263 million in false billings for home health care, mental health services and pharmacy fraud.  In one case, administrators in a mental health center billed close to $64 million between 2006 and 2012 for purported intensive mental health treatment to beneficiaries and allegedly paid kickbacks to patient recruiters and assisted living facility owners throughout the Southern District of Florida.  Medicare paid approximately half of the claimed amount.

In Houston and McAllen, Texas, 22 individuals were charged in cases involving over $38 million in alleged fraud.  One of these defendants allegedly coached beneficiaries on what to tell doctors to make them appear eligible for Medicare services and treatments and then received payment for those who qualified.  The company that paid the defendant for patients submitted close to $16 million in claims to Medicare, over $4 million of which was paid.    

In Dallas, seven people were charged in connection with home health care schemes.  In one scheme, six owners and operators of a physician house call company submitted nearly $43 million in billings under the name of a single doctor, regardless of who actually provided the service.  The company also significantly exaggerated the length of physician visits, often times billing for 90 minutes or more for an appointment that lasted only 15 or 20 minutes.  

In Los Angeles, eight defendants were charged for their roles in schemes to defraud Medicare of approximately $66 million.  In one case, a doctor is charged with causing almost $23 million in losses to Medicare through his own fraudulent billing and referrals for DME, including over 1000 expensive power wheelchairs and home health services that were not medically necessary and often not provided.

In Detroit, 16 defendants face charges for their alleged roles in fraud, kickback and money laundering schemes involving approximately $122 million in false claims for services that were medically unnecessary or never rendered, including home health care, physician visits, and psychotherapy, as well as pharmaceuticals that were billed but not dispensed.  Among these are three owners of a hospice service who allegedly paid kickbacks for referrals made by two doctors who defrauded Medicare Part D by issuing medically unnecessary prescriptions.

In Tampa, five individuals were charged with participating in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions in physician services and tests that never occurred.  In one case, a licensed pain management physician sought reimbursement for nerve conduction studies and other services that he allegedly never performed.  Medicare paid the defendant over $1 million for these purported services.

In Brooklyn, N.Y., nine individuals were charged in two separate criminal schemes involving physical and occupational therapy.  In one case, three individuals face charges for their roles in a previously charged $50 million physical therapy scheme.  In the second case, six defendants were charged for their roles in a $8 million physical and occupational therapy scheme.

In New Orleans, 11 people were charged in connection with $110 million in home health care and psychotherapy schemes.  In one case, four individuals who operated two companies – one in Louisiana and one in California – that mass-marketed talking glucose monitors (TGMs) across the country allegedly sent TGMs to Medicare beneficiaries regardless of whether they were needed or requested.  The companies billed Medicare approximately $38 million for the devices and Medicare paid the companies over $22 million.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

In addition to the Strike Force, today’s enforcement actions include cases brought by the U.S. Attorney’s Offices of the Southern District of California, Southern District of Illinois, Northern District of Ohio, Western District of Kentucky, District of Maryland, District of Connecticut, District of Alaska and the Southern District of Georgia.

A complaint or indictment is merely a charge, and defendants are presumed innocent until proven guilty.

The Affordable Care Act has provided new tools and resources to fight fraud in federal health care programs. The law provides an additional $350 million for health care fraud prevention and enforcement efforts, which has allowed the Justice Department to hire more prosecutors and the Strike Force to expand from two cities to nine. It also toughens sentencing for criminal activity, enhances provider and supplier screenings and enrollment requirements, and encourages increased sharing of data across government.

In addition to providing new tools and resources to fight fraud, the Affordable Care Act clarified that for sentencing purposes, the loss is determined by the amount billed to Medicare and increased the sentencing guidelines for the billed amounts, which has provided a strong deterrent effect due to increased prison time, particularly in the most egregious cases.

OWNER OF HOME HEALTH COMPANIES RECEIVES PRISON SENTENCE IN $74 MILLION FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, November 5, 2014
Owner and Administrator of Two Miami Home Health Companies Sentenced to 80 Months in Prison for $74 Million Fraud Scheme

The owner and administrator of two Miami home health care companies was sentenced today to serve 80 months in prison for her participation in a $74 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.  U.S. District Judge Marcia G. Cooke in the Southern District of Florida imposed the sentence.

Elsa Ruiz, 45, of Miami, pleaded guilty in July 2014 to one count of conspiracy to commit health care fraud.  In addition to the prison sentence, Ruiz was ordered to pay $45 million in restitution.

Ruiz was an owner and operator of Professional Home Care Solutions Inc. and an administrator of LTC Professional Consultants Inc., both of which purported to provide home health and therapy services to Medicare beneficiaries.  According to admissions during her plea hearing, Ruiz and her co-conspirators operated LTC and Professional Home Care for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.

According to her admissions, Ruiz’s primary role in the scheme was to negotiate and pay kickbacks to patient recruiters and to otherwise oversee the schemes operating out of LTC and Professional Home Care.  Specifically, Ruiz and her co-conspirators paid kickbacks to patient recruiters for the referral of patients and for the provision of prescriptions, plans of care, and certifications for medically unnecessary therapy and home health services.  Ruiz and her co-conspirators used these prescriptions, plans of care, and medical certifications to fraudulently bill the Medicare program for home health care services.

From approximately January 2006 to June 2012, LTC and Professional Home Care submitted approximately $74 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $45 million on those claims.

The case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

DIRECTOR OF NURSING AT HOME HEALTH AGENCY ARRESTED FOR FRAUD

FROM:  JUSTICE DEPARTMENT 
Thursday, January 23, 2014
Home Health Agency Owner and Director of Nursing Indicted

The operator and director of nursing of a home health agency based in Richmond, Texas, was arrested yesterday for her alleged role in a Medicare fraud scheme and a conspiracy to structure bank withdrawals.   The owner and operator of the same home health agency was also arrested yesterday for his alleged role in the conspiracy to structure bank withdrawals.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Lucy Cruz of the Houston Field Office of the IRS-Criminal Investigation Division (IRS-CI), Special Agent in Charge William Fergus of the Chicago Regional Office of the United States Railroad Retirement Board-Office of Inspector General (RRB-OIG), Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

The director of nursing, Stella Maduka, 49, of Richmond, was charged with one count of healthcare fraud and eight counts of structuring withdrawals, which each carry a maximum penalty of 10 years in prison, and one count of making false statements relating to healthcare matters and one count of conspiracy to structure bank withdrawals to avoid reporting requirements, which each carry a maximum penalty of five years in prison.   The owner, Felix Maduka, 54, of Richmond, who is also Stella Maduka’s husband, was charged with one count of conspiracy to structure bank withdrawals to avoid reporting requirements and eight counts of structuring bank withdrawals.

According to the indictment, Stella Maduka used a Texas-based billing service to bill Medicare for home health services that were never provided and, in many instances, not medically necessary.   Stella Maduka also created phony medical records to perpetrate the healthcare fraud.   Stella Maduka and Felix Maduka structured more than $100,000 in cash withdrawals from the bank accounts where they received Medicare payments to avoid detection by the federal government.

An indictment is merely a formal accusation.   Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the FBI, IRS-CI, RRB-OIG, HHS-OIG, and MFCU under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.   The case is being prosecuted by Trial Attorney William S.W. Chang of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, Health and Human Services’ Centers for Medicare & Medicaid Services, working in conjunction with Health and Human Services-Office of the Inspector General, is taking steps to increase accountability and decrease the presence of fraudulent providers.

MEDICAL CLINIC OWNER PLEADS GUILTY FOR ROLES IN HEALTH CARE FRAUDS TOTALING OVER $20 MILLION

FROM:  JUSTICE DEPARTMENT 
Tuesday, January 7, 2014
Medical Clinic Owner Pleads Guilty in Miami for Role in Multiple Health Care Fraud Schemes Totaling Over $20 Million

The owner and operator of a Miami medical clinic pleaded guilty today in connection with multiple health care fraud schemes involving the defunct clinic Merfi Corp.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.

Isabel Medina, 49, of Miami, pleaded guilty before U.S. District Judge Ursula Ungaro of the Southern District of Florida to conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison.   Sentencing has been scheduled for March 14, 2014.

According to court documents, Medina was an owner and operator of Merfi, a Miami medical clinic which employed physicians, physician assistants and other medical professionals who were authorized by law to dispense prescriptions for home health care services.   Through Merfi, Medina and her co-conspirators provided fraudulent home health and therapy prescriptions and other medical documentation to the owners and operators of Flores Home Health Care Inc. and other home health care agencies, as well as to patient recruiters, in return for kickbacks and bribes.

Flores Home Health and these other home health care agencies purported to provide home health and therapy services to Medicare beneficiaries, but were in fact operated for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.

Medina has acknowledged that her involvement in fraudulent schemes at multiple home health care companies, including Flores Home Health, resulted in losses to the Medicare Program exceeding $20 million.

The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division's Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.   This case is being prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

MIAMI MAN PLEADS GUILTY IN $42 MILLION MEDICARE FRAUD SCHEME

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, August 2, 2012
Miami Home Health Care Agency Owner Pleads Guilty in $42 Million Medicare Fraud Scheme

The owner and operator of a Miami health care agency pleaded guilty today for his participation in a $42 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

Eulises Escalona, 43, pleaded guilty before U.S. District Judge Joan A. Lenard to one count of conspiracy to commit health care fraud. In addition, as part of his plea agreement, Escalona agreed to forfeit to the government two residential properties and cash proceeds of the fraud contained in several bank accounts.

According to the court documents, Escalona was the owner of Willsand Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries.

According to plea documents, Escalona conspired with patient recruiters for the purpose of billing the Medicare program for unnecessary home health care and therapy services. Escalona and his co-conspirators paid kickbacks and bribes to patient recruiters in return for these recruiters providing patients to Willsand Home Health, as well as prescriptions, Plans of Care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. Escalona and his co-conspirators would pay kickbacks and bribes directly to physicians in exchange for those physicians providing home health and therapy prescriptions, POCs and medical certifications to Escalona and his co-conspirators. Escalona used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services, which Escalona knew was in violation of federal criminal laws.

According to plea documents, at Willsand Home Health, patient files for Medicare beneficiaries were falsified to make it appear that such beneficiaries qualified for home health care and therapy services when, in fact, many of the beneficiaries did not actually qualify for such services. Escalona knew that in many cases the patient files at Willsand Home Health were falsified.

From approximately January 2006 through November 2009, Escalona and his co-conspirators submitted approximately $42 million in false and fraudulent claims to Medicare and Medicare paid approximately $27 million on those claims.

The plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Jeffrey C. Mazanec, Acting Special Agent-in-Charge of the FBI?s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

This case is being prosecuted by Senior Trial Attorney Joseph S. Beemsterboer 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 Southern District of Florida.