FORMER OWNER L.A. MEDICAL CLINIC MANAGEMENT COMPANY PLEADS GUILTY IN MEDICARE FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, August 15, 2014

Former Owner of Los Angeles Medical Clinic Management Company Pleads Guilty in $3.2 Million Medicare Fraud Scheme

The former owner of a Los Angeles medical clinic management company pleaded guilty today in connection with his role in a scheme to defraud Medicare.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Mihran “Mike” Meguerian, 37, of Glendale, California, pleaded guilty before U.S. District Judge Beverly R. O’Connell in the Central District of California to one count of conspiracy to commit health care fraud.

According to court documents, Meguerian owned Med Serve Management (Med Serve), a medical clinic management company located in Van Nuys, California.   Meguerian admitted that from approximately July 2008 through February 2009, he engaged in a conspiracy to commit health care fraud, in part through the operation of Med Serve.   Meguerian admitted that he oversaw medical clinics that wrote prescriptions for medically unnecessary power wheelchairs and other durable medical equipment (DME).   Meguerian and his co-conspirators then sold the prescriptions to DME supply companies, knowing that the prescriptions were fraudulent.   The DME supply companies submitted the fraudulent prescriptions to Medicare in false and fraudulent claims.

From approximately July 2008 through February 2009, DME supply companies submitted approximately $3,367,661 in fraudulent claims to Medicare using fraudulent prescriptions from Meguerian’s clinics, and Medicare paid approximately $1,438,760 for those claims.   Meguerian’s sentencing is scheduled for Nov. 17, 2014.

This case was investigated by the FBI and was brought as part of the Medicare Fraud Strike Force, which is supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.   This case is being prosecuted by Trial Attorneys Fred Medick and Blanca Quintero 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 1,900 defendants who have collectively billed the Medicare program more than $6 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.

FORMER MEDICAL EQUIPMENT COMPANY INDICTED FOR ROLE IN MEDICARE FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, October 24, 2013

Former Owner of Salt Lake City Medical Equipment Supply Company Indicted and Three Company Employees Plead Guilty for Roles in Medicare Fraud Scheme
A former owner of a Salt Lake City medical equipment supply company has been indicted and three former company employees have pleaded guilty for allegedly engaging in a $20 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney David B. Barlow of the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office, Special Agent in Charge Gerry Roy of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Kansas City Regional Office, and Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service’s (DCIS) Southwest Field Office made the announcement.

Jacob Kilgore, 34, of Fruit Heights, Utah, was indicted in the District of Utah on three counts of health care fraud, three counts of false statements relating to health care matters, and three counts of wire fraud.

According to court documents, Kilgore was the co-owner, vice president, and regional sales manager of Orbit Medical Inc. (Orbit), a durable medical equipment supplier located in Salt Lake City specializing in power wheelchairs.  From approximately September 2008 through June 2011, Kilgore allegedly directed a scheme to defraud Medicare by submitting false and fraudulent claims to Medicare for power wheelchairs.  Court documents allege that Kilgore and others falsified medical records – including power wheelchair prescriptions and chart notes obtained from physicians – to make it appear that beneficiaries qualified to receive power wheelchairs when they did not and that the claims otherwise met all Medicare requirements.  Kilgore and others then used these falsified documents to support false and fraudulent claims from Orbit to Medicare.

Additionally, former Orbit sales representatives Morgan Workman, 35, of Farmington, Utah; David Evans, 29, of South Jordan, Utah; and Hunter Hartman, 29, of Ladera Ranch, Calif., have each pleaded guilty to conspiring to commit health care fraud, based on the same alleged scheme to defraud Medicare.  They are awaiting sentencing.

The scheme allegedly resulted in more than $20 million in claims from Orbit to Medicare for power wheelchairs, of which Medicare paid more than $15 million.

The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The case was investigated by the FBI, HHS-OIG and DCIS.  This case is being prosecuted by Trial Attorney Niall M. O’Donnell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark Y. Hirata of the U.S. Attorney’s Office for the District of Utah.

DOCTOR RECEIVES 151 YEAR PRISON SENTENCE FOR ROLE IN $77 MILLION MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, September 16, 2013
“No Show” Doctor Sentenced to 151 Months in Prison in Connection with $77 Million Medicare Fraud Scheme

Gustave Drivas, M.D., 58, of Staten Island, N.Y., was sentenced to serve 151 months in prison for his role as a “no show” doctor in a $77 million Medicare fraud scheme.  The State of New York revoked Dr. Drivas’s medical license earlier this year.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

Drivas was convicted by a jury on April 8, 2013, of health care fraud conspiracy and health care fraud after a seven-week trial.  He was acquitted of kickback conspiracy.  Including Drivas, 13 individuals have been convicted of participating in the massive fraud scheme, either through guilty pleas or trial convictions.  In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Drivas to three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered him to forfeit $511,000 and ordered him to pay restitution in the amount of $50.9 million.

The evidence at trial showed that Drivas knowingly authorized his co-conspirators at a Brooklyn medical clinic to use his Medicare billing number to charge Medicare for more than $20 million in medical procedures and services that were never performed.  In return, he received more than $500,000 for his role in the scheme.  According to court documents, from 2005 to 2010, Drivas was the medical director of or a rendering physician at a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (collectively “Bay Medical clinic”).  The evidence established that Drivas was a “no show” doctor, who almost never visited the clinic except to pick up his check.  The evidence also showed that the clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary and never provided.

The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries.  The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010.  This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian.  The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.

To generate the large amounts of cash needed to pay the patients, Drivas’s business partners and co-conspirators recruited a network of external money launderers who cashed checks for the clinic.  Clinic owners wrote clinic checks payable to various shell companies controlled by the money launderers.  These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds.  The money launderers cashed these checks and provided the cash back to the clinic.  Clinic employees used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.

This case was 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 Eastern District of New York.  The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys William C. Campos and Shannon C. Jones of the Eastern District of New York.

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 its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

CLINICAL DIRECTOR FOR HEALTH CARE CLINIC SENTENCED IN $50 MILLION MEDICARE FRAUD

FROM: U.S. DEPARTMENT OF JUSTICE

Thursday, December 20, 2012
Clinical Director for Miami-based Health Care Clinic Sentenced to Prison for Role in $50 Million Medicare Fraud Scheme

WASHINGTON – A former clinical director for Biscayne Milieu, a Miami-based mental-health clinic, was sentenced today to 100 months in prison for his participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced 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; Michael B. Steinbach, Acting Special Agent in Charge 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.

Rafael Alalu, 47, of Miami, was sentenced today by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. Alalu was convicted on Aug. 24, 2012, of one count of conspiracy to commit health care fraud and two substantive counts of health care fraud, following a two-month jury trial. The evidence at trial showed that Alalu participated in treating ineligible patients, concealing that fact by falsifying patient files and writing fraudulent group therapy notes, and instructing others to do the same. In addition to the prison term, Alalu was ordered to pay more than $5.6 million in restitution, jointly and severally with his co-defendants.

Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. Antonio and Jorge Macli and Sandra Huarte – the owners and operators of Biscayne Milieu – and Dr. Gary Kushner – its medical director – were each convicted at trial of various offenses and are scheduled for sentencing in March 2013.

According to the evidence at trial, the defendants and their co-conspirators caused the submission of over $50 million dollars in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided. Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia and would not benefit from group therapy, or had no mental health diagnosis but were seeking exemptions for their U.S. citizenship applications. The evidence at trial showed that once these ineligible patients were admitted to Biscayne Milieu, Alalu and others concealed the fraud by falsifying patients’ group therapy notes to reflect legitimate PHP treatment that was never provided, and directed others to do so.

The case is being prosecuted by Assistant U.S. Attorneys Michael Davis and Marlene Rodriguez of the U.S. Attorney’s Office for the Southern District of Florida, and by Trial Attorney James V. Hayes of the Fraud Section of the Justice Department’s Criminal Division. The case was investigated by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by 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 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

2 BROOKLYN CLINIC EMPLOYEES PLEAD GUILTY TO ROLES IN $71 MILLION MEDICARE FRAUD SCHEME

FROM: U.S. DEPARTMENT OF JUSTICE

Wednesday, November 28, 2012
Two Brooklyn Clinic Employees Plead Guilty in Connection With $71 Million Medicare Fraud Scheme

Co-Defendant Pleaded Guilty Yesterday for Role in Scheme

WASHINGTON – Two Brooklyn, N.Y., residents pleaded guilty today for their roles in a $71 million Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of New York Loretta E. Lynch; Acting Assistant Director in Charge Mary E. Galligan of the FBI’s New York Field Office; and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

Katherina Kostiochenko, 34, pleaded guilty today before U.S. District Judge Nina Gershon in the Eastern District of New York to one count of conspiracy to commit health care fraud, one count of health care fraud and one count of conspiracy to pay kickbacks. Sergey V. Shelikhov, 51, pleaded guilty today before Judge Gershon to one count of conspiracy to commit health care fraud.

Co-conspirator Leonid Zheleznyakov, 28, pleaded guilty yesterday before Judge Gershon to one count of conspiracy to commit health care fraud for his role in the scheme.

Kostiochenko, Shelikhov and Zheleznyakov were employees of a clinic in Brooklyn that operated under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (Bay Medical clinic). According to court documents, owners, operators and employees of the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $71 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

According to the criminal complaint, the co-conspirators allegedly paid kickbacks to corrupt Medicare beneficiaries in a room at the clinic known as the "kickback room," in which the conspirators paid approximately 1,000 kickbacks totaling more than $500,000 during a period of approximately six weeks from April to June 2010.

Kostiochenko, Shelikhov and Zheleznyakov pleaded guilty to conspiring to commit health care fraud for their roles in the Bay Medical scheme. Kostiochenko also pleaded guilty to paying cash kickbacks to Medicare beneficiaries as part of the scheme.

At sentencing, Kostiochenko faces a maximum penalty of 25 years in prison, and Shelikhov and Zheleznyakov both face a maximum penalty of 10 years in prison. Kostiochenko and Zheleznyakov are scheduled for sentencing on March 12, 2013, and Shelikhov is scheduled for sentencing March 13, 2013.

In total, 16 individuals have been charged in the Bay Medical scheme, including two doctors, nine clinic owners/operators/employees and five external money launderers. To date, 10 defendants have pleaded guilty for their roles in the conspiracy. Six individuals await trial before Judge Gershon on Jan. 22, 2013.

The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.

The case 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 New York. 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 its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

DETROIT RESIDENT SENTENCED TO 30 MONTHS IN PRISON FOR PART IN MEDICARE FRAUD SCHEME

FROM:  U.S. DEPARTMENT OF JUSTICE
Thursday, June 7, 2012
Co-Owner of Detroit-Area Therapy Company Sentenced to 30 Months for Medicare Fraud Scheme
WASHINGTON – The co-owner of a Detroit-area physical and occupational therapy company was sentenced today to 30 months in prison for his leading role in a more than $1.9 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

Victor Jayasundera, 59, was sentenced by U.S. District Judge Avern Cohn in the Eastern District of Michigan.  In addition to his prison term, Jayasundera was sentenced to three years of supervised release and was ordered to pay $855,484 in restitution, joint and several with his co-defendants.

Jayasundera pleaded guilty on Jan. 18, 2012, to the charges against him in a superseding indictment:  one count of conspiracy to commit health care fraud and six counts of health care fraud.  According to the superseding indictment, Jayausundera co-owned a company known as Jos Campau Physical Therapy with co-defendant Fatima Hassan.  Jos Campau Physical Therapy did not have a Medicare provider number and was not entitled to bill Medicare for therapy services.

According to the superseding indictment and evidence presented at the trial of a co-defendant, Jos Campau paid kickbacks to recruiters who obtained Medicare beneficiary information and signatures needed to create fictitious physical and occupational therapy files.  The Medicare beneficiaries pre-signed forms and visit sheets that were later falsified to indicate that they received therapy services that were never provided.

Jayasundera, a physical therapist, falsified patient evaluation forms and fictitious patient notes for physical therapy services that were never rendered.  Jayasundera and his co-owner also hired and paid an occupational therapist and an uncertified occupational therapy assistant to falsify medical files.  The occupational therapist created patient evaluation forms for beneficiaries whom she had never met, seen or evaluated.  The uncertified therapy assistant fabricated and signed patient notes for occupational therapy visits.  The uncertified therapy assistant did not provide the services reflected in the fictitious patient notes.

Jayasundera and his co-owner sold the fictitious physical and occupational therapy files to multiple fraudulent therapy companies that had obtained Medicare provider numbers.  Those companies billed the fictitious files created by Jos Campau Physical Therapy to Medicare and paid kickbacks to Jos Campau Physical Therapy based on these billings.  Jayasundera and his co-owner split the profits from the sale of the falsified files.

Between approximately June 2005 and May 2007, the false files created and sold by Jos Campau Physical Therapy resulted in the submission of approximately $1.9 million in fraudulent claims to the Medicare program for physical and occupational therapy services that were never rendered.

Jayasundera’s co-owner, Fatima Hassan, pleaded guilty on Aug. 25, 2011, for her role in the scheme, and on May 17, 2012, was sentenced to 48 months in prison.  Carol Gant, the occupational therapist, and Vanessa Dowell, the uncertified occupational therapy assistant, also pleaded guilty in 2011.  Tariq Mahmud, the owner of a Medicare provider company that bought and billed Jos Campau Physical Therapy’s fake files, was convicted at trial on Feb. 2, 2012, for his role in the scheme and is scheduled to be sentenced on July 19, 2012.

Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s 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 was prosecuted by Trial Attorney Catherine K. Dick and Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section.  It 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 1,330 individuals who collectively have falsely billed the Medicare program for more than $4 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.