Eight Los Angeles-Area Residents Charged in an Alleged Medicare Fraud

May 2, 2012

The Federal Bureau of Investigation (FBI) on May 2, 2012 released the following:

“Eight Los Angeles-Area Residents Charged in Nationwide Medicare Fraud Strike Force Takedown

Total of 107 Defendants Charged in Seven Cities for Approximately $452 Million in False Billing

LOS ANGELES—Eight Los Angeles-area residents, including two doctors, were charged today for their roles in schemes to submit more than $14 million in false billing to Medicare, announced the Departments of Justice and Health and Human Services (HHS).

The charges in Los Angeles are part of a nationwide takedown by Medicare Fraud Strike Force operations in seven cities that led to charges against 107 individuals for their alleged participation in schemes to collectively submit more than $452 million in fraudulent claims to Medicare. This takedown involved the highest amount of false Medicare billing in a single takedown in strike force history.

“The results we are announcing today are at the heart of an Administration-wide commitment to protecting American taxpayers from health care fraud, which can drive up costs and threaten the strength and integrity of our health care system,” said United States Attorney General Eric Holder. “We are determined to bring to justice those who violate our laws and defraud the Medicare program for personal gain. As today’s takedown reflects, our ongoing fight against health care fraud has never been more coordinated and effective.”

“Medicare fraud drains vital resources and harms consumers across the nation,” said United States Attorney André Birotte Jr. “The problem is national in scope and it calls out for the type of coordinated national response that today’s crackdown represents. This office is dedicated to working with all our partners, both locally and nationally, to protect this important public program that serves our elderly and disabled.”

“As today’s strike force operation demonstrates, health care fraud is not limited to just one or two types of health care providers,” said Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of HHS’s Office of Inspector General (OIG). “Whether it is a physician, a business owner, or any other provider, OIG and our law enforcement partners are committed to pursuing those that attempt to steal precious dollars from the Medicare program.”

According to court documents filed in the Central District of California, two Orange County doctors and two of their co-schemers were charged for allegedly submitting nearly $5.7 million in false claims to Medicare for durable medical equipment (DME). Specifically, the defendants billed Medicare for enteral nutrition, a liquid nutritional supplement. Medicare will only pay for enteral nutrition if a patient has a feeding tube. According to the indictment, Dr. Augustus Ohemeng, 62, of Buena Park, and Dr. George Tarryk, 72, of Seal Beach, wrote fraudulent prescriptions for enteral nutrition for patients who did not have feeding tubes. Co-defendant George Samuel Laing, 41, of Sylmar, who managed the clinic where Tarryk and Ohemeng practiced, allegedly received kickbacks in exchange for referring the prescriptions to Ivy Medical Supply, owned by co-defendant Emmanuel Chidueme, 59, of Mira Loma. Ivy then fraudulently billed Medicare for the enteral nutrition, even though it was not medically necessary and was not delivered to patients in the quantities billed to Medicare. Ohemeng, Tarryk, Laing, and Chidueme were arrested this morning and are scheduled to make their initial appearances before a U.S. Magistrate Judge this afternoon.

“The charges announced today emphasize disturbing health care fraud trends, including the arrest of physicians, that exploit federal health care meant for those in need,” said Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The cases charged in Southern California and around the U.S. indicate the staggering amount of fraud adversely affecting the U.S. economy and illustrate the need for the continued focus on protecting federally funded health care programs.”

In a separate case, two defendants were arrested on charges related to their DME company, Latay Medical Services, which allegedly submitted more than $8 million in fraudulent billings to Medicare for power wheelchairs, orthotics, and hospital beds that were either not provided or were medically unnecessary. The indictment charges Latay’s owner, Bolademi Adetola, 46, of Harbor City, and Latay employee Yuri Martin Lopez, 46, of Lawndale, with obtaining fraudulent prescriptions for the DME, creating fake documentation to make it seem as though the DME had been delivered when it had not, and delivering DME less expensive than that listed on Latay’s Medicare claims.

Two additional defendants are scheduled to self-surrender today on charges related to Greatcare Home Health Inc., a home health agency that received more than $5.4 million from Medicare for skilled nursing and physical therapy services that were often either never performed or performed by unlicensed individuals. Greatcare’s owner, Hee Jung Mun, also paid illegal kickbacks to doctors, individuals known as marketers, and patients themselves in order to recruit Medicare beneficiaries. Mun, along with three other Greatcare employees, have already pleaded guilty to the fraud and are awaiting sentencing before U.S. District Judge Dean D. Pregerson. Yeong Ja Lee, 50, of Mid-City, is scheduled to make her initial court appearance this afternoon on charges that she visited and provided services to patients without a license and created false documentation for Greatcare and one of its referring doctors. Sang Whan Ahn, 60, of Koreatown, is also scheduled to appear on charges that she acted as a marketer, accepting kickbacks in exchange for referring patients to Greatcare.

As a part of the operation, members of the strike force in Los Angeles also executed three search warrants today.

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 more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Central District of California, the Southern District of Florida, the Eastern District of Michigan, the Southern District of Texas, the Middle District of Louisiana, the Northern District of Illinois, and the Middle District of Florida; and agents from the Federal Bureau of Investigation, HHS-OIG, and state and local Medicaid Fraud Control Units, including the California Department of Justice and Los Angeles Sheriff’s Department’s Health Authority Law Enforcement Task Force.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

To learn more about HEAT, go to: http://www.stopmedicarefraud.gov.

CONTACT:
Assistant United States Attorney Kristen A. Williams
Major Frauds Section
(213) 894-0526

Special Assistant United States Attorney Grant Gelberg
Major Frauds Section
(213) 894-2872

Assistant United States Attorney Consuelo S. Woodhead
Major Frauds Section
(213) 894-3987″

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Manhattan U.S. Attorney Announces Charges Against 36 Individuals for Allegedly Participating in $279 Million Health Care Fraud Scheme

February 29, 2012

The Federal Bureau of Investigation (FBI) on February 29, 2012 released the following:

“Preet Bharara, the United States Attorney for the Southern District of New York; Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”); and Raymond W. Kelly, the Police Commissioner of the City of New York (“NYPD”), announced today the unsealing of charges against 36 defendants involved in a systematic scheme to defraud private insurance companies of more than $279 million under New York’s no-fault automobile insurance law. The indictment includes racketeering charges against eight members and associates of a criminal organization consisting primarily of individuals of Russian descent who were the owners and controllers of fraudulent medical clinics (the “No Fault Organization”), as well as 10 licensed doctors and three attorneys. The alleged scheme identified today is the largest single no-fault automobile insurance fraud ever charged, and the first case of its kind to allege violations of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act.

All of the defendants were arrested this morning in connection with today’s charges. Thirty-five were taken into custody in New York and New Jersey and will be presented and arraigned in Manhattan federal court before U.S. Magistrate Judge Theodore H. Katz later this afternoon. One defendant was arrested in Duluth, Minnesota and will be presented tomorrow in federal court in the District of Minnesota.

Manhattan U.S. Attorney Preet Bharara said: “Today’s charges expose a colossal criminal trifecta, as the fraud’s tentacles simultaneously reached into the medical system, the legal system, and the insurance system, pulling out cash to fund the defendants’ lavish lifestyles. As alleged, the scheme relied on a cadre of corrupt doctors who essentially peddled their medical licenses like a corner fraudster might sell fake IDs, except those medical licenses allowed unlawful entry, not to a club or a bar, but to a multi-billion-dollar pool of insurance proceeds.”

FBI Assistant Director in Charge Janice K. Fedarcyk said: “Our investigation uncovered a pattern of lucrative fraud exploiting New York’s no-fault auto insurance system to the tune of more than a quarter-of-a-billion dollars. The criminal enterprise, while it lasted, was obscenely profitable. The scheme not only unjustly enriched the defendants and defrauded insurance companies. Auto insurance fraud is also a crime that indirectly victimizes every driver in New York.”

NYPD Commissioner Raymond W. Kelly said: “Our undercover officers were treated like thousands of other ‘patients’ receiving therapy, tests, and medical equipment they didn’t need. I want to congratulate the U.S. Attorney’s Office and the agents and detectives assigned to the joint FBI-NYPD Organized Crime Task Force for bringing this investigation to a successful conclusion.”

The following allegations are based on the unsealed indictment and other documents filed today in Manhattan federal court:

Under New York state law, every vehicle registered in the state is required to have no-fault automobile insurance, which enables the driver and passengers of a registered and insured vehicle to obtain benefits of up to $50,000 per person for injuries sustained in an automobile accident, regardless of fault (the “No-Fault Law”). The No-Fault Law requires prompt payment for medical treatment, thereby obviating the need for claimants to file personal injury lawsuits in order to be reimbursed. Under the No-Fault Law, patients can assign their right to reimbursement from an insurance company to others, including medical clinics that provide treatment for their injuries. New York state law also requires that all medical clinics in the state be incorporated, owned, operated, and/or controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No-Fault Law. Insurance companies will not honor claims for medical treatments from a medical clinic that is not actually owned, operated, and/or controlled by a licensed medical practitioner.

From at least 2007 through 2012, the No-Fault Organization has engaged in a massive and sophisticated scheme to defraud automobile insurance companies of hundreds of millions of dollars by, among other things, creating and operating medical clinics that provided unnecessary and excessive medical treatments in order to take advantage of the No-Fault Law. In order to mislead New York authorities and private insurers, the true owners of these medical clinics (“Clinic Controllers”), almost all of whom were also members and associates of a criminal organization consisting primarily of individuals of Russian descent, paid licensed medical practitioners, including doctors, to use their licenses to incorporate the professional corporations, through which the medical clinics billed the private insurers for the bogus medical treatments. These doctors effectively operated as “straw owners” of the clinics.

The Clinic Controllers paid thousands of dollars in kickbacks to runners who recruited automobile accident passengers to receive medically unnecessary treatments from the no-fault clinics. They also instructed the clinic doctors/straw owners to prescribe excessive and unwarranted referrals for various “modality treatments” for every patient they saw. The treatments included physical therapy, acupuncture, and chiropractic treatments—as many as five times per week for each—and treatments for psychology, neurology, orthopedics, and audiology. Clinic doctors also prescribed unnecessary MRI’s, x-rays, orthopedics, and medical supplies. The Clinic Controllers received thousands of dollars in kickbacks for patient referrals from the owners of the modality clinics (“Modality Controllers”), who were members and associates of the same criminal organization to which the members of the No-Fault Organization and Clinic Controllers belonged.

The Clinic Controllers also referred patients to personal injury lawyers who filed bogus lawsuits on behalf of the patients and coached them on what injuries to claim in order to get as many treatments as possible. The personal injury lawyers also paid the Clinic Controllers thousands of dollars in kickbacks for these referrals.

In order to conceal and disguise the millions of dollars in claims paid by the automobile insurance companies, the members of the No-Fault Organization laundered the money through shell companies and corrupt check-cashing services. Often, checks would be written from the No-Fault or Modality Clinics with the payee line left blank, and in amounts less than $10,000 in order to avoid potential financial institution reporting requirements and other scrutiny. The checks were then cashed through check-cashers who made the checks payable to shell companies they controlled in order to conceal the true nature and purpose of the checks. The cash was then returned to members of the No-Fault Organization to fund kickbacks and for their personal use. At other times, the members and associates of the No-Fault Organization paid themselves through their own shell companies and then used the criminal proceeds to fund expensive vacations and to purchase luxury goods.

***

A chart identifying each defendant, the charges, and the maximum penalties, is below. The case is assigned to U.S. District Judge J. Paul Oetken.

U.S. Attorney Preet Bharara thanked the FBI and the NYPD for their work in the 18-month investigation, which he noted is ongoing. Mr. Bharara also thanked the National Insurance Crime Bureau and the investigative units of the insurance companies that provided invaluable assistance with the investigation, as well as the Manhattan District Attorney’s Office.

The case is being prosecuted by the office’s Organized Crime Unit. Assistant U.S. Attorneys Daniel S. Goldman, Nicholas L. McQuaid and Carolina Fornos are in charge of the prosecution. Assistant U.S. Attorney Jason L. Cowley of the office’s Asset Forfeiture Unit is responsible for the forfeiture of assets.

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

Count Charge Maximum Penalty
Count one RICO conspiracy (mail fraud and money laundering) 20 years
Count two Conspiracy to commit health care fraud 10 years
Count three Conspiracy to commit mail fraud 20 years
Count four Conspiracy to commit money laundering 20 years
Defendant Age/Residence Alleged Role in the Scheme Charges Maximum Penalty
Mikhail Zemlyansky 35/Hewlett, NY Clinic/modality controller Counts one, two, three, four 70 years
Michael Danilovich 38/Brooklyn, NY Clinic/modality controller Counts one, two, three, four 70 years
Yuriy Zayonts 40/Staten Island, NY Clinic/modality controller Counts one, two, three, four 70 years
Mikhail Kremerman 41/Staten Island, NY Clinic/modality controller Counts one, two, three, four 70 years
Matthew Conroy 42/Melville, NY Attorney Counts one, two, three, four 70 years
Michael Barukhin 32/Brooklyn, NY Clinic/modality controller Counts one, two, three, four 70 years
Mikhail Ostrumsky 42/Brooklyn/NY Clinic controller Counts one, two, three, four 70 years
Boris Treysler 42/Brooklyn/NY Clinic controller Counts one, two, three, four 70 years
Andrey Anikeyev 37/Fort Lee, NJ Modality controller Counts two, three, four 50 years
Vladimir Grinberg 35/Staten Island, NY Modality controller Counts two, three, four 50 years
Vladislav Zaretskiy 40/Staten Island, NY Clinic/modality controller Counts two, three, four 50 years
Yevgeniy Shuman 33/Brooklyn, NY Clinic manager Counts two, three, four 50 years
Dmitry Slobodyansky 41/Brooklyn, NY Modality controller Counts two, three, four 50 years
Alexander Sandler 57/East Brunswick, NJ Clinic controller Counts two, three 30 years
Gregory Mikhalov 56/Brooklyn, NY Modality controller Counts two, three 30 years
Michael Morgan 33/Port Washington, NY Modality controller Counts two, three 30 years
Mark Danilovich 60/Brooklyn, NY Modality controller Counts two, three 30 years
Jeffrey Lereah 56/Suffern, NY Modality manager Counts two, three 30 years
Dmitry Lipis 44/Brooklyn, NY Clinic manager Counts two, three 30 years
Lynda Tadder 34/Brooklyn, NY Clinic manager Counts two, three 30 years
Maria Diglio 47/Garden City, NY Attorney Counts two, three 30 years
Sol Naimark 53/Flushing, NY Attorney Counts two, three 30 years
Sergey Gabinsky 54/Brooklyn, NY Doctor Counts two, three 30 years
Tatyana Gabinskaya 57/Brooklyn, NY Doctor Counts two, three 30 years
Joseph Vitoulis 42/Valley Stream, NY Doctor Counts two, three 30 years
Lauretta Grzegorczyk 64/Staten Island, NY Doctor Counts two, three 30 years
Eva Gateva 48/Bronx, NY Doctor Counts two, three 30 years
Zuheir Said 64/Bronx, NY Doctor Counts two, three 30 years
David Thomas 42/Hopewell Junction/NY Doctor Counts two, three 30 years
Billy Geris 53/Morganville, NJ Doctor Counts two, three 30 years
Mark Shapiro 46/Brooklyn, NY Doctor Counts two, three 30 years
Robert Della Badia 72/South Salem, NY Doctor Counts two, three 30 years
Michelle Glick 33/Duluth, MN Acupuncture practitioner Counts two, three 30 years
Pavel Poznansky 52/Brooklyn, NY Acupuncture practitioner Counts two, three 30 years
Chad Greenshner 45/Flushing, NY Chiropractic practitioner Counts two, three 30 years
Constantine Voytenko 40/Brooklyn, NY Chiropractic practitioner Counts two, three 30 years

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Douglas McNabb – McNabb Associates, P.C.’s

Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Ten Individuals Charged by a Federal Grand Jury for Alleged Conspiracy to Commit Health Care Fraud

January 19, 2012

The Feral Bureau of Investigation (FBI) on January 19, 2012 released the following:

“Ten Individuals Arrested for Health Care Fraud

SAN JUAN, PR—On January 12, 2012, a federal grand jury returned two indictments against 10 individuals for conspiracy to commit health care fraud, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The investigation was led by the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), with the collaboration of the United States Secret Service (USSS) and the Federal Bureau of Investigation (FBI).

Gilberto Gómez, president of Monte Mar Health Corporation (Monte Mar), PROMEDS Medical Inc. (PROMEDS) and Quality Care Medical Supply (Quality); Yolanda García-Rodríguez, aka “Yolanda Gómez,” wife of Gómez and president of PROMEDS, secretary/treasurer of Monte Mar and an authorized official of Quality; Lissette Acevedo, independent sales coordinator; Doctor Francisco Garrastegui; Luisa Nieves, independent sales coordinator; Glendaly Báez, billing director for Monte Mar, PROMEDS and Quality; Mario Rivera, independent sales coordinator; and Marcos Sarraga, independent sales coordinator, are charged in a 39-count indictment for conspiracy to commit health care fraud and a forfeiture allegation of $1,956,750.54. The government seeks to forfeit two bank accounts, one investment account, and a Gallery Plaza Condominium located in the Condado area in San Juan, Puerto Rico.

The indictment alleges that from on or about November, 2008, until on or about May, 2010, Monte Mar submitted at least 1,518 false and fraudulent claims to Medicare totaling approximately $2,993,127.35 for Durable Medical Equipment (DME) that was not medically necessary, causing Medicare to disburse approximately $1,440,597.65. In March 2010, the indictment further alleges that after Monte Mar had been placed in a pre-payment status by Medicare, defendants Gilberto Gómez and Yolanda García-Rodríguez purchased PROMEDS and submitted false claims to Medicare seeking reimbursement for DME, including power wheelchairs, power pressure reducing air mattresses and knee orthosis. PROMEDS submitted at least 359 fraudulent claims to Medicare totaling approximately $786,368.34, causing Medicare to disburse approximately $335,493.12. In October 2010, the indictment alleges that a third company, Quality, was purchased by Gómez and García-Rodríguez after PROMEDS had been placed in a pre-payment status by Medicare. From on or about October 2010, until May, 2011, Quality submitted at least 115 false claims to Medicare totaling approximately $298,321.26, causing Medicare to disburse approximately $180,659.77. The indictment alleges a total amount of $4,077,816.95 fraudulently billed by using Monte Mar, PROMEDS and Quality, where Medicare disbursed a total of approximately $1,956,750.54.

Doctor Francisco Garrastegui was a physician licensed to practice medicine in Puerto Rico but not a Medicare provider. Garrastegui signed and completed false progress notes, prescriptions, Certificate of Medical Necessity (CMNs) and Statements of Ordering Physician for Medicare beneficiaries that were billed by Monte Mar, PROMEDS and Quality. The doctor was paid kickbacks by the three health corporations for the preparation of these false documents. The other defendants’ participation during the conspiracy involved the creation and submission of the fraudulent claims to Medicare.

The health care fraud scheme charged in the second indictment involves Luz M. Vega, president of Preferred Medical Equipment (PME), Doctor Francisco Garrastegui, Lissette Acevedo, Luisa Nieves and María Elisa Pérez. According to the 60-count indictment, from on or about April 2010, until on or about March 2011, PME submitted false claims to Medicare, seeking reimbursement for Durable Medical Equipment including: power wheelchairs, power pressure reducing air mattresses, wheelchair accessories, lumbar-sacral orthosis, knee orthosis and hospital beds. The co-conspirators submitted at least 95 fraudulent claims totaling approximately $210,223.47, causing Medicare to disburse approximately $107,876.73. Defendants Garrastegui, Acevedo and Nieves also participated in the first conspiracy charged in the previously mentioned indictment. The government seeks to forfeit $107,876.73 and one bank account.

“As part of the nation’s health care system, Medicare serves vulnerable populations,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “Today’s arrests by HHS-OIG agents and our law enforcement partners show that we will not tolerate criminals who engage in fraudulent schemes which deplete the Medicare program of funds which are destined for our elderly population, in order to enrich themselves.”

“HHS/OIG works diligently to investigate allegations of Medicare fraud. Today’s arrests involving durable medical equipment (DME) fraud demonstrate our resolve to bring these subjects to justice. Furthermore, as seen on the attached chart (DME data), our efforts, along with the U.S. Attorney’s Office and our law enforcement partners, have made a dramatic reduction on the total dollars billed and paid for DME in Puerto Rico.”

“The U.S. Secret Service is committed to investigate any financial fraud crimes to include identity theft along with our partner agencies to safeguard our financial system,” said Pedro Gómez, Special Agent in Charge. We will continue to investigate these types of crimes to the fullest extent of the law and bring to justice these criminals that engage in identity theft to facilitate other criminal activities.”

HHS-OIG, USSS, and the FBI conducted the investigations. The agencies that conducted the arrests were HHS-OIG, USSS, FBI, and the U.S. Marshal Service.

The cases are being prosecuted by Assistant U.S. Attorneys Julia Díaz-Rex, health care fraud coordinator, and Héctor Ramírez-Carbó, and Special Assistant U.S. Attorney Wallace A. Bustelo.

If found guilty, the defendants could face a possible sentence of 10 years in prison for the health care fraud offense with a consecutive term of imprisonment of two years for the aggravated identity theft offense and a fine of up to $250,000. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Medicare Fraud Strike Force Charges 91 Individuals for Approximately $295 Million in False Billing

September 7, 2011

The Federal Bureau of Investigation (FBI) on September 7, 2011 released the following:

“WASHINGTON— Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in eight cities has resulted in charges against 91 defendants, including doctors, nurses, and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $295 million in false billing.

Attorney General Holder and Secretary Sebelius were joined in the announcement by FBI Executive Assistant Director Shawn Henry, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, and HHS Inspector General Daniel R. Levinson.

As part of a coordinated action, 70 individuals were charged by Strike Force prosecutors in indictments unsealed yesterday and today in six cities alleging a variety of Medicare fraud schemes involving approximately $263.6 million in false billings. As part of takedown operations last week, 18 additional defendants were charged in Detroit and one defendant was charged in Miami in cases unsealed on Sept. 1, 2011, for their alleged roles in Medicare fraud schemes involving approximately $29.4 million in fraudulent claims. Additionally, two individuals are scheduled to appear in court today on charges filed on Aug. 24, 2011, for their roles in a separate $2 million health care fraud scheme. This coordinated takedown involved the highest amount of false Medicare billings in a single takedown in Strike Force history.

The joint Department of Justice-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state, and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Over the course of the past week, approximately 400 law enforcement agents from the FBI, HHS-Office of Inspector General (HHS-OIG), multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown. In addition to making arrests, agents also executed 18 search warrants in connection with ongoing strike force investigations.

“The defendants charged in this takedown are accused of stealing precious taxpayer resources and defrauding Medicare – jeopardizing the integrity of our health care system and our nation’s most critical health care program for personal gain,” said Attorney General Holder. “Our highly coordinated, nationwide Strike Force operations are working aggressively to combat Medicare fraud and our anti-health care fraud efforts have never been more innovative, collaborative, aggressive – or effective. We will continue to work with our law enforcement partners and partners across government to fight against health care fraud.”

“Today’s arrests are a powerful warning to those who would try to defraud taxpayers and Medicare beneficiaries,” said HHS Secretary Sebelius. “These arrests illustrate close cooperation between the Medicare program that identified these fraudsters and the law enforcement officials who acted swiftly to cut them off. And our efforts to stop criminals don’t end here because the Affordable Care Act gives us new tools to prevent Medicare fraud before it is committed – better protecting seniors and the integrity of the Medicare program for generations to come.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to defraud the Medicare program, health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, physical and occupational therapy, mental health services, psychotherapy, and durable medical equipment (DME).

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided. In many cases, indictments and complaints allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided. Collectively, the doctors, nurses, medical professionals, health care company owners and others charged in the indictments and complaints are accused of conspiring to submit a total of approximately $295 million in fraudulent billing.

“The health care system is part of our nation’s infrastructure and we must do everything in our power to protect the integrity of Medicare and the system at large,” said FBI Executive Assistant Director Henry. “Working together as partners, we can stop criminals who seek to steal American taxpayers’ hard-earned dollars and we help ensure our nation’s health care system is there for those who need it.”

“As charged in these indictments, the defendants cover nearly the entire spectrum of health care providers, and perpetrated a variety of fraudulent schemes,” said Assistant Attorney General Breuer. “From Brooklyn to Miami to Los Angeles, the defendants allegedly treated the Medicare program like a personal piggy bank. Today’s Strike Force operations should serve as a wake-up call to would-be fraudsters nationwide. With Strike Force teams now in nine cities across the country, and employing sophisticated, data-driven law enforcement methods, we are determined to hold criminally responsible those who defraud Medicare.”

“The warning should be unambiguously clear by now,” said HHS Inspector General Levinson. “We will continue using the combined law enforcement might of Strike Forces around the country to combat health care fraud.”

In Miami, 45 defendants, including one doctor and one nurse, were charged today and yesterday for their participation in various fraud schemes involving a total of $159 million in false billings for home health care, mental health services, occupational and physical therapy, DME, and HIV infusion. Another defendant in Miami was charged on Sept. 1, 2011, for a $1 million Medicare fraud scheme. In one case, 24 defendants are charged for participating in a community mental health center fraud scheme involving more than $50 million in fraudulent billing. According to court documents, the defendants allegedly paid patient recruiters to refer ineligible beneficiaries to the mental health center. In some instances, beneficiaries who were residents of halfway houses were allegedly threatened with eviction if they did not agree to attend the mental health center.

In Houston, two individuals were charged today with fraud schemes involving $62 million in false billings for home health care and DME. According to an indictment, one defendant allegedly sold beneficiary information to 100 different Houston-area home health care agencies in exchange for illegal payments. The indictment alleges that the home agencies then used the beneficiary information to bill Medicare for services that were unnecessary or never provided.

Ten defendants were charged in Baton Rouge, La., for participating in schemes involving more than $24 million related to false claims for home health care and DME. According to one indictment, a doctor, nurse, and five other co-conspirators participated in a scheme to bill Medicare for more than $19 million in skilled nursing and other home health services that were medically unnecessary or never provided.

Six defendants, including two doctors, were charged in Los Angeles for their roles in schemes to defraud Medicare of more than $10.7 million. In Brooklyn, three defendants, including two doctors, were charged for a fraud scheme involving more than $3.4 million in false claims for medically unnecessary physical therapy. Two defendants, including a doctor, are making initial appearances today in U.S. federal court in Dallas after being charged for a scheme to defraud Medicare of approximately $2.1 million.

In Detroit, 18 defendants, including three doctors, were charged last week for schemes to defraud Medicare of more than $28 million. According to an indictment, 14 of the defendants participated in a home health care scheme that submitted more than $14 million in false claims to Medicare.

Finally, four defendants including one doctor, were charged in Chicago for their alleged roles in schemes to defraud Medicare of more than $4.4 million.

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 more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

An indictment is merely a charge and defendants are presumed innocent until proven guilty.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Birdie Leroy Revis of Houston Pleaded Guilty in Houston Federal Court to Conspiracy to Violate the Anti-Kickback Statute

August 6, 2011

The U.S. Attorney’s Office Southern District of Texas on August 5, 2011 released the following:

“Recruiter in Multi-Million Dollar Health Care Fraud Scheme Pleads Guilty to Conspiracy to Violate the Anti-Kickback Statute

HOUSTON – An accused recruiter in a multi-million dollar health care fraud scheme scheduled for trial on Monday, has instead pleaded guilty to conspiracy to violate the Anti-Kickback Statute, United States Attorney José Angel Moreno announced today. Birdie Leroy Revis, 60, of Houston, pleaded guilty before United States District Judge David Hittner this morning to conspiracy to violate the Anti-Kickback Statute. Trial had been scheduled to begin with jury selection on Monday, Aug. 8, 2011.

Revis was a recruiter for Sefan Medical Supply (Sefan), a durable medical equipment provider, located in Houston. Based upon the joint investigative efforts of the agencies comprising the Medicare Fraud Strike Force into a $2.8 million scheme to defraud Medicare by Sefan, evidence was obtained proving that Revis’ role in the scheme was to provide Medicare beneficiary information to Sefan. Sefan, in turn, then billed Medicare for medically unnecessary durable medical equipment and supplies which were either not provided to Medicare beneficiaries or a lesser product from what was billed to Medicare was provided. The information was provided on a prescription form for arthritis kits. All the kits included a knee adjustment with air chamber, rigid frame back brace, elbow with joint, ankle gauntlet, flex glove with elastic finger, heat lamp with stand and a wrist brace. Sefan would order these items for both the left and right side. If the beneficiaries received any items, they did not receive the rigid brace items billed to Medicare, instead they would receive neoprene sleeves, which was not covered by Medicare.

Revis provided to Sefan information for more than 686 beneficiaries for which Sefan paid Revis approximately $400 per beneficiary for a total of more than $353,000. With the information provided by Revis, Sefan billed Medicare for more than $2.8 million worth of claims for arthritis kits and was paid more than $1.7 million for those fraudulent claims.

Revis remains on bond pending sentencing, which is set on Nov. 2, 2011. Revis faces a maximum of up to five years in prison to be followed by up to a three-year-term of supervised release and a fine of up to $250,000 for the kickback conspiracy conviction.

The owner of Sefan and the physician whose signature was on the prescriptions have also been convicted following their respective pleas of guilty to conspiracy to commit health care fraud. Kate Ose Olear, the owner of Sefan, was sentenced to 57 months in prison on Feb. 10, 2011, by United States District Judge David Hittner. John Edward Perry III, the physician, pleaded guilty in June 2010. He remains on bond pending his sentencing on Oct. 21, 2011, before United States District Judge Gray H. Miller.

The investigation leading to the charges in this case was conducted by the Medicare Fraud Strike Force comprised of agents with the Department of Health and Human Services, Drug Enforcement Administration Diversion Division, Texas Attorney General Medicaid Fraud Control Unit, United States Railroad Retirement Board and the FBI. Assistant United States Jennifer Lowery and Special Assistant United States Attorney Justin Blan are prosecuting the case.”

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Four Detroit Residents Charged with Alleged Health Care Fraud Scheme

December 8, 2010

Four Detroit-area residents were arrested today by federal agents from the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) and the FBI as part of an ongoing investigation into a $14.5 million home health care fraud scheme, announced the Departments of Justice and HHS.

In a two-count second superseding indictment returned on December 2, 2010, and unsealed yesterday, four additional individuals are alleged to have participated in a Medicare fraud scheme operated out of Patient Choice Home Healthcare (Patient Choice) and All American Home Care (All American), two Oakland County, Michigan, home health agencies that purported to provide in-home health services. Maira Suleman, 30; John Thomas, 32; Sherry Prescott, 50; and Myra Jones, 50, were each charged with conspiracy to commit health care fraud. Pramod Raval, M.D., 57, who was previously charged with conspiracy to violate the Anti-Kickback Statute, was also charged with conspiracy to commit health care fraud in the indictment unsealed today.

Twenty-one individuals, including the four arrested today, have now been charged for their alleged roles in this health care fraud scheme. The original indictment was returned on January 12, 2010, with the first superseding indictment returned on July 13, 2010. To date, 10 individuals have pleaded guilty for their roles.

Superseding indictments occur when the government discovers addition information they did not have prior to issuing the original indictment. Typically, individuals included in an original indictment will attempt to work out a plea agreement with the government in exchange for names of others that may have been involved in the scheme. However, the trustworthiness of such claims is questionable, yet the government is permitted to use the information to indict others that are allegedly involved.

The indictment alleges that Medicare paid Patient Choice and All American more than $14.5 million for services that were medically unnecessary and/or not provided between August 2007 and September 2009. The charge of health care fraud conspiracy carries a maximum penalty of 10 years in prison and a $250,000 fine. The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum prison sentence of five years and a fine of up to $25,000.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Seven More Indicted in Houston for Alleged Participation in Health Care Fraud Scheme

October 18, 2010

Seven additional Houston-area residents who allegedly served as patient recruiters and a nurse have been charged for their alleged participation in a $5 million Medicare home health care fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced Friday. The individuals were scheduled to make their initial appearances Thursday and Friday in U.S. District Court in Houston before Magistrate Judge Stephen Wm. Smith.

A superseding indictment filed October 7, 2010, and unsealed today in U.S. District Court in Houston charges Clifford Ubani, 52; Ezinne Ubani, 45; Princewill Njoku, 51; Caroline Njoku, 45; Mary Ellis, 54; Michelle Turner, 42; Cynthia Garza-Williams, 49; Adelma Casas Sevilla, 44; and Sammie Wilson, 69, with conspiracy to commit health care fraud. Florida Holiday Island, 50; Margaret Pleasant, 45; Estella Joseph, 61; Terrie Porter, 47; and Erica Walker, 30, are charged with conspiracy to pay or receive kickbacks, along with Clifford Ubani, Princewill Njoku, Caroline Njoku, Ellis, Turner, and Garza-Williams. These individuals are also charged with separate counts relating to the payment and receipt of kickbacks. Ezinne Ubani, Princewill Njoku and Ellis are also charged with making false statements in the submission of claims to the Medicare program. Clifford Ubani, Ezinne Ubani, Princewill Njoku, Caroline Njoku, Ellis, Turner, and Garza-Williams were charged in the original indictment filed on June 21, 2010.

Typically, a superseding indictment occurs when the government obtains additional or new evidence and wants to charge more individuals with participation in the alleged scheme. The new evidence is most likely derived from others that have already been indicted and are seeking a better plea deal. The government uses this tactic often in order to bring additional charges against other individuals.

According to the superseding indictment, Clifford Ubani, Ezinne Ubani, Princewill Njoku, and Caroline Njoku were the owners and operators of Family Healthcare Services. The superseding indictment alleges that these owners and operators submitted false and fraudulent claims to the Medicare program for purportedly providing home health care services that were not medically necessary and/or not rendered. According to the superseding indictment, the Medicare program paid Family Healthcare Services approximately $5 million based on the false and fraudulent claims.

Caroline Njoku, Ellis, Turner, Garza-Williams, Wilson, Island, Pleasant, Joseph, Porter, and Walker allegedly recruited Medicare beneficiaries to be placed at Family Healthcare Services for skilled nursing services, and in return allegedly were paid kickbacks by Clifford Ubani, Princewill Njoku, and others for the referrals. According to the superseding indictment, Ezinne Ubani, Princewill Njoku, Ellis, Garza-Williams, and Sevilla allegedly falsified or helped falsify patient files to make it appear that Medicare beneficiaries qualified for and received home health care services that were not medically necessary and/or not provided.

The maximum sentence for committing health care fraud is 10 years in prison. The maximum sentence for conspiracy to pay or receive kickbacks, each individual count of paying and/or receiving kickbacks, and making false statements in determining rights for benefit and payment by Medicare is five years in prison. The superseding indictment seeks forfeiture of assets held by the defendants.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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