Miami-Area Residents Mayelin Santoyo and Jose Martin Olivares Indicted by a Federal Grand Jury for Alleged Roles in $190 Million Medicare Fraud Scheme

October 1, 2013

The Federal Bureau of Investigation on September 27, 2013 released the following:

“WASHINGTON—Two Miami-area residents were indicted in connection with their alleged participation in a $190 million Medicare fraud scheme.

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 HHS Office of Inspector General (HHS-OIG) Office of Investigations, Miami Office, made the announcement after the indictment was unsealed.

Mayelin Santoyo, 28, and Jose Martin Olivares, 36, were each charged with one count of conspiracy to defraud the United States and to receive illegal health care kickbacks and two counts of receiving health care kickbacks. Each charge carries a maximum penalty of five years in prison upon conviction.

According to the indictment, the scheme that Santoyo and Olivares allegedly participated in lasted from approximately February 2006 to October 2010. The scheme was orchestrated by the owners and operators of American Therapeutic Corporation (ATC) and its management company, Medlink Professional Management Group Inc. (Medlink). ATC and Medlink were Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando. Both corporations have been defunct since their owners were arrested in October 2010.

The indictment alleges that Santoyo and Olivares served as patient brokers who provided ineligible patients to ATC in exchange for kickbacks in the form of checks and cash. The amount of the kickback was based on the number of days each recruited patient spent at ATC. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services and who attended treatment programs that were not legitimate PHPs so that ATC could bill Medicare for the medically unnecessary services. According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare.

ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers, and marketers of ATC and Medlink have pleaded guilty or have been convicted at trial. In September 2011, ATC owner Lawrence Duran was sentenced to 50 years in prison for his role in orchestrating and executing the scheme to defraud Medicare.

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

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. The case is being prosecuted by Trial Attorneys Anne P. McNamara and Robert A. Zink of the Fraud Section.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 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.”

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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

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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.


Former Owner of Los Angeles Medical Clinic Management Company Mikran “Mike” Meguerian Indicted by a Federal Grand Jury Alleging a $13 Million Medicare Fraud Scheme

October 1, 2013

The Federal Bureau of Investigation on September 30, 2013 released the following:

“WASHINGTON—The former owner of a Los Angeles medical clinic management company has been indicted for his role in a $13 million scheme to defraud Medicare.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte, Jr. 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.

Mikran “Mike” Meguerian, 36, of Glendale, California, was indicted in the Central District of California on one count of conspiracy to commit health care fraud and five counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Meguerian was arrested on September 26, 2013, and the indictment was unsealed following his initial appearance in federal court on September 27, 2013.

According to court documents, Meguerian owned Med Serve Management, a medical clinic management company located in Van Nuys, California. From approximately 2006 through February 2009, he allegedly engaged in a conspiracy to commit health care fraud, in part through the operation of Med Serve. According to court documents, Meguerian oversaw several medical clinics that generated prescriptions and other medical documents 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. Court documents allege that, based on these fraudulent prescriptions, the DME supply companies then submitted false and fraudulent claims to Medicare.

Court documents allege that fraudulent prescriptions from Meguerian’s clinics were instrumental in generating approximately $13.6 million in fraudulent claims to Medicare, and Medicare paid approximately $7.6 on those claims.

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

The case was investigated by 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 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 1,500 defendants who have collectively billed the Medicare program for more than $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.”

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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 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.


Former Owner of Los Angeles Equipment Supply Company Valery Bogomolny Indicted by a Federal Grand Jury Alleging a $4 Million Medicare Fraud Scheme

October 1, 2013

The Federal Bureau of Investigation on September 30, 2013 released the following:

“WASHINGTON—A former owner of a Los Angeles medical equipment supply company has been indicted for allegedly engaging in a $4 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte, Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Valery Bogomolny, 41, of Los Angeles, California, was indicted in the Central District of California on six counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Bogomolny was taken into custody on September 27, 2013, and the indictment was unsealed following his initial appearance in federal court that afternoon.

According to court documents, Bogomolny was the owner and president of Royal Medical Supply, a durable medical equipment (DME) supply company located in Los Angeles. From approximately January 2006 through October 2009, he allegedly engaged in a scheme to commit health care fraud through the operation of Royal by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare. Court documents allege that Bogomolny knew the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary.

Bogomolny, through Royal, allegedly submitted approximately $4 million in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Royal approximately $2.7 million on those claims.

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 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 Central District of California. This case is being prosecuted by Trial Attorney Fred Medick 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 1,500 defendants who have collectively billed the Medicare program for more than $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.”

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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 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.


“Mobile Doctors’ Chicago CEO and Doctor Arrested on Federal Health Care Fraud Charges”

August 28, 2013

The Federal Bureau of Investigation (FBI) on August 27, 2013 released the following:

Offices Searched in Three Cities

CHICAGO—The chief executive officer of Chicago-based Mobile Doctors, which manages physicians who make house calls in six states, and one of its physicians in Chicago were arrested today on federal health care fraud charges. At the same time, federal agents executed search warrants at Mobile Doctors’ offices in Chicago, Detroit, and Indianapolis, as well as warrants to seize up to $2.568 million in alleged fraud proceeds from various bank accounts. The charges allege a scheme to fraudulently increase (also known as “upcoding”) Medicare bills for in-home patient visits that Mobile Doctors falsely claimed were more complicated and longer than they actually were. The charges also allege that Mobile Doctors’ physicians falsely certified that patients were confined to their homes, enabling home health care agencies to claim fees for additional services for patients who were not actually qualified to receive them.

Agents from the FBI, the U.S. Department of Health and Human Services Office of Inspector General, and other law enforcement agencies executed the arrest, search, and seizure warrants in connection with the charges and also a broader ongoing investigation that includes allegedly illegal billing practices for medically unnecessary tests and services not performed by a physician.

Arrested were Dike Ajiri, 42, of Wilmette, CEO of Mobile Doctors, which he has effectively owned since 1996, and Banio Koroma, 63, of Tinley Park, a physician who has worked for Mobile Doctors since approximately 2007. Mobile Doctors, located at 3319 N. Elston Ave., in Chicago, arranges patient home visits and contracts with doctors who perform the visits. The physicians assign their rights to bill and collect payment to Mobile Doctors in return for being paid directly by the company. Mobile Doctors’ website claims that its associated physicians have made more than 500,000 house calls since its inception. In addition to Chicago, the company has branches in Detroit and Flint, Michigan; San Antonio and Austin, Texas; Indianapolis; Kansas City; Phoenix; and St. Louis.

Ajiri was charged with health care fraud, and Koroma was charged with making false statements relating to health care benefits in a criminal complaint that was filed yesterday and unsealed today after the arrests. Both were scheduled to appear at 3 p.m. today before U.S. Magistrate Judge Mary Rowland in U.S. District Court.

The arrests and charges were announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Robert J. Shields, Jr., Acting Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Lamont Pugh, III, Special Agent in Charge of the Chicago Regional Office of the HHS-OIG. The Railroad Retirement Board Office of Inspector General is also participating in the investigation.

According to a 75-page affidavit in support of the arrest, search, and seizure warrants, agents have interviewed several current and more than 25 former employees of Mobile Doctors, including some who reported allegedly fraudulent billing practices to Medicare before they were contacted by agents. Investigators have also reviewed e-mails and documents, claims data and patient files and have conducted interviews with patients of Mobile Doctors and their primary care physicians, whose statements contradict Mobile Doctors’ billing and patient records.

Mobile Doctors physicians do not perform tests such as echocardiograms but do order such tests, which are done on Mobile Doctors’ patients by employees of In Home Diagnostics, doing business as Ultrasound2You. According to Medicare records, Ajiri is a minority partner in In Home Diagnostics, which is located in the same building as Mobile Doctors, and Mobile Doctors bills the echocardiograms so that they appear to have been done by Mobile Doctors’ physicians.

The complaint affidavit states that Ajiri signed a personal financial statement on December 31, 2012, stating that he received $1.5 million in annual partnership income from a corporate entity, Mobile Doctors LLC, which has a complex ownership structure involving Ajiri and, over time, one or both of his parents. Between 2008 and January 2013, bank records show that approximately $4.365 million was transferred from Mobile Doctors to an account in the name of Ajiri and his wife.

Upcoding Patient Visits

According to interviews with former and current Mobile Doctors physicians, branch managers, clinical coordinators, employees, and patients, a typical visit that a Mobile Doctors physician has with an established patient lasts 10 to 30 minutes and is routine in nature. In contrast to those interviews, claims data shows that from 2006 through February 2013, approximately 99 percent of all established-patient visits by Mobile Doctors physicians were billed to Medicare using either of the two highest codes indicating the visits involved medical decision-making of moderate to high complexity, detailed or comprehensive interval histories or medical examinations, and/or visits that typically last at least 40 minutes.

In 2009 in Chicago, the local Medicare fee for a visit using the second-highest home visit code was approximately $122.82, while the fee for the highest code was approximately $171.25. According to a review of claims data for Railroad Retirement Board patients, every single established-patient visit Mobile Doctors billed to Medicare between January 2007 and June 2008 used the highest fee code. Between January 2007 and November 2012, approximately 93 percent of such visits were billed using the highest fee code.

The former manager of Mobile Doctors’ Chicago branch until she was terminated in 2008 told agents that Ajiri told her that the second-highest fee code was the default code for a patient visit so that it would be worth the gas and time spent. The manager said Ajiri told physicians, “I don’t pay for ones or twos,” referring to the two lower of the four applicable fee codes. At the end of one day, she said she saw Ajiri in his office “automatically” altering the billing codes and marking visits at the highest fee level on patient records submitted by physicians and assistants who accompanied them on home visits. A physician told agents that in late 2007, Ajiri did not respond to his concerns about Mobile Doctors’ billing practices and instead told the doctor that he could earn more money if he would order more tests such as electrocardiograms, according to the affidavit.

The complaint alleges that the vast majority of payments made on established-patient visit claims using the highest fee code were the result of fraudulent upcoding. From 2006 through 2012, Mobile Doctors received approximately $21.4 million in payments on claims using the second-highest code and approximately $12.6 million in Medicare payments on claims using the highest fee code.

Falsely Certifying Patients as Confined to Their Homes

The charges further allege that Mobile Doctors physicians, including Koroma, falsely certified patients as confined to their homes and requiring home health services when they were not home-bound and did not require such care. By referring patients to home health agencies that did not warrant Medicare payments, Mobile Doctors received more referrals from those agencies for services provided by its physicians. According to Medicare data, from August 2010 through July 2013, more than 200 home health agencies submitted Medicare claims for services allegedly rendered to patients for whom Koroma was identified as the referring physician. These home health agencies have been paid more than $10 million for services listing Koroma as the referring physician.

Between January 2006 and March 2013, Mobile Doctors physicians have certified or recertified for 60-day periods approximately 15,598 patients as confined to their homes and requiring home health services a total of approximately 83,133 times, many of which were allegedly false. Approximately 6,057 of these certifications were attributed since August 2007 to Koroma, with Mobile Doctors billing Medicare for approximately 17,439 patient visits he made during that time, more than any other Mobile Doctors physician.

The health care fraud count against Ajiri carries a maximum penalty of 10 years in prison and a $250,000 fine and restitution is mandatory. The false statements count against Koroma carries a maximum of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorney Stephen C. Lee and Catherine Dick, assistant chief in the Fraud Section of the Justice Department’s Criminal Division. The U.S. Attorney’s Offices in Detroit, Indianapolis, and Phoenix also have assisted in the investigation.

The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The Medicare Fraud Strike Force began operating in Chicago in February 2011 and consists of agents from the FBI and HHS-OIG working together with prosecutors from the U.S. Attorney’s Office and the Justice Department’s Fraud Section. The strike force is part of the Health Care Fraud Prevention and 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. Scores of defendants have been charged locally in health care fraud cases since the strike force began operating in Chicago.”

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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.


“Florida Health Care Medical Director and Six Therapists Arrested for Alleged Roles in $63 Million Fraud Scheme”

July 17, 2013

The U.S. Department of Justice’s Office of Public Affairs on July 16, 2013 released the following:

“The former medical director at defunct health provider Health Care Solutions Network (HCSN) and six therapists were arrested today, accused of conspiring to fraudulently bill Medicare and Florida Medicaid more than $63 million.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; 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 after the indictment was unsealed following the arrests.

The former HCSN medical director, Roger Rousseau, 71, of Miami, was indicted on July 11, 2013, and charged with conspiracy to commit health care fraud and two counts of health care fraud. In addition, six therapists from Miami – Doris Crabtree, 61; Angela Salafia, 65; Liliana Marks, 46; Ruben Busquets, 49; Alina Fonts, 47; and Blanca Ruiz, 59 – were also charged in the same indictment with conspiracy to commit health care fraud. Fonts was also charged with two counts of health care fraud, and Crabtree, Salafia, Marks and Busquets were each charged with two counts of making false statements related to health care matters. The indictment also seeks forfeiture of proceeds from the alleged healthcare fraud offenses.

According to the indictment, HCSN purported to provide intensive mental health treatment to Medicare and Medicaid beneficiaries in Miami and Hendersonville, N.C., from approximately 2004 through 2011 for purported mental health services that were not medically necessary and often never provided. The indictment also alleges that in Miami, HCSN paid kickbacks to assisted living facility owners and operators who, in exchange, referred beneficiaries to HCSN. In total, HCSN is alleged to have fraudulently billed Medicare and Medicaid approximately $63.7 million, from which HCSN allegedly received payments totaling approximately $28 million.

Rousseau served as the medical director for HCSN in Florida, and the indictment alleges that he routinely signed what he knew to be fabricated and altered medical records without ever reviewing the materials, and, in most instances, without ever meeting with the patient. The indictment also alleges that Crabtree, Salafia, Marks, Busquets, Fonts and Ruiz fabricated HCSN medical records to support false and fraudulent claims for partial hospitalization program services that were not medically necessary and were not provided.

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

The case is being 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. The case is being prosecuted by Fraud Section Trial Attorney Allan J. Medina.

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.”

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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 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.


“U.S. Postal Service Logging All Mail for Law Enforcement”

July 3, 2013

The New York Times on July 3, 2013 released the following:

“By RON NIXON

WASHINGTON — Leslie James Pickering noticed something odd in his mail last September: A handwritten card, apparently delivered by mistake, with instructions for postal workers to pay special attention to the letters and packages sent to his home.

“Show all mail to supv” — supervisor — “for copying prior to going out on the street,” read the card. It included Mr. Pickering’s name, address and the type of mail that needed to be monitored. The word “confidential” was highlighted in green.

“It was a bit of a shock to see it,” said Mr. Pickering, who owns a small bookstore in Buffalo. More than a decade ago, he was a spokesman for the Earth Liberation Front, a radical environmental group labeled eco-terrorists by the Federal Bureau of Investigation. Postal officials subsequently confirmed they were indeed tracking Mr. Pickering’s mail but told him nothing else.

As the world focuses on the high-tech spying of the National Security Agency, the misplaced card offers a rare glimpse inside the seemingly low-tech but prevalent snooping of the United States Postal Service.

Mr. Pickering was targeted by a longtime surveillance system called mail covers, but that is only a forerunner of a vastly more expansive effort, the Mail Isolation Control and Tracking program, in which Postal Service computers photograph the exterior of every piece of paper mail that is processed in the United States — about 160 billion pieces last year. It is not known how long the government saves the images.

Together, the two programs show that snail mail is subject to the same kind of scrutiny that the National Security Agency has given to telephone calls and e-mail.

The mail covers program, used to monitor Mr. Pickering, is more than a century old but is still considered a powerful tool. At the request of law enforcement officials, postal workers record information from the outside of letters and parcels before they are delivered. (Actually opening the mail requires a warrant.) The information is sent to whatever law enforcement agency asked for it. Tens of thousands of pieces of mail each year undergo this scrutiny.

The Mail Isolation Control and Tracking program was created after the anthrax attacks in late 2001 that killed five people, including two postal workers. Highly secret, it seeped into public view last month when the F.B.I. cited it in its investigation of ricin-laced letters sent to President Obama and Mayor Michael R. Bloomberg. It enables the Postal Service to retroactively track mail correspondence at the request of law enforcement. No one disputes that it is sweeping.

“In the past, mail covers were used when you had a reason to suspect someone of a crime,” said Mark D. Rasch, the former director of the Justice Department’s computer crime unit, who worked on several fraud cases using mail covers. “Now it seems to be ‘Let’s record everyone’s mail so in the future we might go back and see who you were communicating with.’ Essentially you’ve added mail covers on millions of Americans.”

Bruce Schneier, a computer security expert and an author, said whether it was a postal worker taking down information or a computer taking images, the program was still an invasion of privacy.

“Basically they are doing the same thing as the other programs, collecting the information on the outside of your mail, the metadata, if you will, of names, addresses, return addresses and postmark locations, which gives the government a pretty good map of your contacts, even if they aren’t reading the contents,” he said.

But law enforcement officials said mail covers and the automatic mail tracking program are invaluable, even in an era of smartphones and e-mail.

In a criminal complaint filed June 7 in Federal District Court in Eastern Texas, the F.B.I. said a postal investigator tracing the ricin letters was able to narrow the search to Shannon Guess Richardson, an actress in New Boston, Tex., by examining information from the front and back images of 60 pieces of mail scanned immediately before and after the tainted letters sent to Mr. Obama and Mr. Bloomberg showing return addresses near her home. Ms. Richardson had originally accused her husband of mailing the letters, but investigators determined that he was at work during the time they were mailed.

In 2007, the F.B.I., the Internal Revenue Service and the local police in Charlotte, N.C., used information gleaned from the mail cover program to arrest Sallie Wamsley-Saxon and her husband, Donald, charging both with running a prostitution ring that took in $3 million over six years. Prosecutors said it was one of the largest and most successful such operations in the country. Investigators also used mail covers to help track banking activity and other businesses the couple operated under different names.

Other agencies, including the Drug Enforcement Administration and the Department of Health and Human Services, have used mail covers to track drug smugglers and Medicare fraud.

“It’s a treasure trove of information,” said James J. Wedick, a former F.B.I. agent who spent 34 years at the agency and who said he used mail covers in a number of investigations, including one that led to the prosecution of several elected officials in California on corruption charges. “Looking at just the outside of letters and other mail, I can see who you bank with, who you communicate with — all kinds of useful information that gives investigators leads that they can then follow up on with a subpoena.”

But, he said: “It can be easily abused because it’s so easy to use and you don’t have to go through a judge to get the information. You just fill out a form.”

For mail cover requests, law enforcement agencies simply submit a letter to the Postal Service, which can grant or deny a request without judicial review. Law enforcement officials say the Postal Service rarely denies a request. In other government surveillance program, such as wiretaps, a federal judge must sign off on the requests.

The mail cover surveillance requests are granted for about 30 days, and can be extended for up to 120 days. There are two kinds of mail covers: those related to criminal activity and those requested to protect national security. The criminal activity requests average 15,000 to 20,000 per year, said law enforcement officials who spoke on the condition of anonymity because they are prohibited by law from discussing the requests. The number of requests for antiterrorism mail covers has not been made public.

Law enforcement officials need warrants to open the mail, although President George W. Bush asserted in a signing statement in 2007 that the federal government had the authority to open mail without warrants in emergencies or foreign intelligence cases.

Court challenges to mail covers have generally failed because judges have ruled that there is no reasonable expectation of privacy for information contained on the outside of a letter. Officials in both the George W. Bush and Obama administrations, in fact, have used the mail-cover court rulings to justify the N.S.A.’s surveillance programs, saying the electronic monitoring amounts to the same thing as a mail cover. Congress briefly conducted hearings on mail cover programs in 1976, but has not revisited the issue.

The program has led to sporadic reports of abuse. In May 2012, Mary Rose Wilcox, a Maricopa County supervisor, was awarded nearly $1 million by a federal judge after winning a lawsuit against Sheriff Joe Arpaio, known for his immigration raids in Arizona, who, among other things, obtained mail covers from the Postal Service to track her mail. The judge called the investigation into Ms. Wilcox politically motivated because she had been a frequent critic of Mr. Arpaio, objecting to what she considered the targeting of Hispanics in his immigration sweeps. The case is being appealed.

In the mid-1970s the Church Committee, a Senate panel that documented C.I.A. abuses, faulted a program created in the 1950s in New York that used mail covers to trace and sometimes open mail going to the Soviet Union from the United States.

A suit brought in 1973 by a high school student in New Jersey, whose letter to the Socialist Workers Party was traced by the F.B.I. as part of an investigation into the group, led to a rebuke from a federal judge.

Postal officials refused to discuss either mail covers or the Mail Isolation Control and Tracking program.

Mr. Pickering says he suspects that the F.B.I. requested the mail cover to monitor his mail because a former associate said the bureau had called with questions about him. Last month, he filed a lawsuit against the Postal Service, the F.B.I. and other agencies, saying they were improperly withholding information.

A spokeswoman for the F.B.I. in Buffalo declined to comment.

Mr. Pickering said that although he was arrested two dozen times for acts of civil disobedience and convicted of a handful of misdemeanors, he was never involved in the arson attacks the Earth Liberation Front carried out. He said he became tired of focusing only on environmental activism and moved back to Buffalo to finish college, open his bookstore, Burning Books, and start a family.

“I’m no terrorist,” he said. “I’m an activist.”

Mr. Pickering has written books sympathetic to the liberation front, but he said his political views and past association should not make him the target of a federal investigation. “I’m just a guy who runs a bookstore and has a wife and a kid,” he said.”

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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.


The Center for Public Integrity: “Medicare fraud outrunning enforcement efforts”

July 1, 2013

The Center for Public Integrity on July 1, 2013 released the following:

“Official: agency failed to investigate 1,200 complaints due to staff shortages, and more cuts coming

By Fred Schulte

Citing massive budget and staff cuts, federal officials are set to scale back or drop a host of investigations into Medicare and Medicaid fraud and abuse — even though cracking down on government waste and cutting health care costs have been top priorities for the Obama administration.

The Department of Health and Human Services Office of Inspector General is set to lose a total of 400 staffers that are deployed nationwide as a primary defense against health care fraud and abuse. Though agency officials have yet to decide which investigations will be shelved as staff dwindles, the existing staff is already stretched so thin that the agency has failed to act on 1,200 complaints over the past year alleging wrongdoing — and expects that number to rise. The OIG began shedding staff at the beginning of the year.

The budget crunch surfaced during questioning at a June 24 hearing of the Senate Committee on Homeland Security and Governmental Affairs. The hearing was called to examine prescription drug abuse in Medicare.

Gary Cantrell, Deputy Inspector General for the OIG Office of Investigations, said at the hearing that his unit “is shrinking” even as the federal Medicare and Medicaid programs grow in size and complexity. “We’re set to lose roughly 400 bodies out of a total of 1,800 at our peak in 2012. That’s really limiting our ability to expand our oversight in some of these areas,” he said.

Stuart Wright, Deputy Inspector General for the OIG Office of Evaluations and Inspections, added that 200 of those staffers will have departed by the end of this year and 200 more are out the door by the end of 2015.

Federal agencies employ inspectors general who work independently to ferret out fraud and abuse. The HHS unit has three branches that examine payment issues and investigate complaints of criminal wrongdoing lodged by whistleblowers and the public. Cantrell said that the HHS unit won’t be able to act on many complaints it logs in.

“We’re operating with a reduced budget in the face of the growing program. And just last year alone, our office closed down 1,200 complaints due to lack of resources. Those are complaints that came through the door that we didn’t have the resources to investigate further to determine whether it was a viable criminal case or not.”

Cantrell added: “And that number doesn’t appear to be going down.”

Predictions of disastrous service cuts have been common in Washington in the wake of the sequester— automatic spending reductions caused by Congress and the White House failing to reach a budget deal. For the most part, though, these predictions have elicited little more than a shrug from the general public.

The shortfall at the HHS office has deeper roots, however. Cantrell said sequestration hasn’t helped, but he blamed a mix of budgetary issues which he called “expiring funding streams.”

Nobody at the agency would agree to discuss the situation. However, in a statement released late Friday the agency said the OIG has “significantly reduced” [funds] due to the expiring of a $30 million per year appropriation from the Deficit Reduction Act of 2005 and the end of stimulus funding and other budget cuts.

The inspector general’s “greatest resource” is its staff of auditors, evaluators, investigators, and attorneys, the statement said, noting: “These funding reductions have fundamentally impacted the agency’s ability to conduct its mission. Reduction in staff and resources will result in decreases across all of OIG’s oversight activities.”

Though their findings can embarrass or infuriate agency brass, inspectors general more than pay for themselves by exposing waste and recommending fines or prosecution of wrongdoers, officials said.
Wright said that fraud investigations “returned $8 for every dollar invested in us.” Medicare, which serves the elderly, is paid for by federal tax dollars. Medicaid, for low-income people, is jointly funded by the federal and state governments. Medicaid is set to expand by as many as 20 million people starting next year under the Affordable Care Act.

In a statement, Sen. Tom Carper, D-Del., who chairs the homeland security committee, called the cuts “a penny-wise, pound foolish approach that will end up costing our country in the long run.”

Carper said the inspector generals’ work “helps us save money, reveals and prosecutes wrongdoing, and promotes the integrity of government.” The IG’s are being cut back “just when we need their skills to keep our federal programs as efficient and effective as possible,” Carper said.

The inspector general reported expected recoveries of about $5.2 billion from audits and investigations in fiscal year 2011. The office also identified about $19.8 billion in waste and launched more than 1,000 criminal and civil investigations of individuals or health care businesses accused of cheating Medicare or Medicaid.

Estimates of annual losses to fraud and waste in the health care industry run into the tens of billions of dollars annually. Federal agencies reported an estimated $115.3 billion in improper payments in fiscal year 2011, and more than half that figure was attributed to Medicare and Medicaid, according to the Government Accountability Office.

The cuts at HHS OIG are triggering a review of dozens of projects and audits which are spelled out in the agency’s 2013 “work plan.” But officials could not say at this point which ones would be scrapped or ratcheted back.

The OIG’s annual work plan serves as a kind of barometer of where government officials suspect fraud or billing abuse may be occurring and a warning to the industry to clean up its act. That’s often necessary because Medicare and Medicaid billing policies lack clarity on precisely what constitutes improper conduct.

One major project that’s likely to be scaled back is an ambitious plan to “identify fraud and abuse vulnerabilities” in electronic health records. The federal government is spending about $36 billion in economic stimulus funds to help doctors and hospitals purchase the digital technology in the hopes that it will ultimately reduce waste from duplicative tests and make health care more efficient and less costly.

Criticism from Republicans in Congress has mounted in the wake of the Center for Public Integrity’s “Cracking the Codes” series published last September. The investigative project documented that thousands of medical professionals have steadily billed Medicare for more complex and costly health care over the past decade — adding $11 billion or more to their fees — and strongly suggested that the rapid growth in the use of electronic health records and billing software has contributed to the higher charges.

The Obama administration has often touted its record for cracking down on health care fraud, pointing to recoveries of more than $10 billion since 2008, and pointed to criminal cases that busted major fraud rings.

For instance, one operation in October 2012 in seven cities led to charges against 91 individuals — including doctors, nurses, and other licensed medical professionals — for alleged fraud schemes that involved some $432 million in false billing.”

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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.


“Twelve Los Angeles-Area Residents Accused of Attempting to Bilk Medicare of $22 Million Arrested as Part of Nationwide Crackdown”

May 15, 2013

The Federal Bureau of Investigation (FBI) on May 14, 2013 released the following:

“LOS ANGELES— Twelve Los Angeles-area residents—including California’s second-largest biller for chiropractic services, a physician’s assistant, and owners of durable medical equipment (DME) and ambulance companies—were taken into custody today in relation to seven criminal cases that allege they cumulatively submitted more than $22 million in false billings to Medicare.

The charges filed in Los Angeles are part of a nationwide “takedown” by Medicare Fraud Strike Force operations in eight cities that led to charges against 89 individuals for their alleged participation in schemes to collectively submit about $223 million in fraudulent claims to Medicare.

The dozen defendants taken into custody are among 13 people charged in Los Angeles in cases that allege health care fraud. The 12 either were arrested this morning or self-surrendered to authorities after learning that they had been charged in federal court. All those defendants are scheduled to be arraigned this afternoon. A 13th defendant is a fugitive.

Dr. Houshang Pavehzadeh, of the Sylmar Physician Medical Group, allegedly billed Medicare more than $1.7 million for chiropractic treatments he never performed. During the scheme, which ran from 2005 through 2012, Dr. Pavehzadeh, 40, of Agoura Hills, became the second-largest Medicare biller in California for chiropractic services—even though he was not in the United States when some of the alleged services were performed. In addition to being charged with health care fraud, Pavehzadeh is charged with aggravated identity theft related to Medicare beneficiaries whose information he used to bill Medicare as a part of the scheme. When investigators tried to conduct an audit of Pavehzadeh’s claims, he falsely reported to the Los Angeles Police Department that he had been carjacked and that patient files requested by the auditors had been stolen from his car. Pavehzadeh surrendered this morning, and he is scheduled to be arraigned with other Los Angeles-area defendants this afternoon in the Roybal Federal Building.

Nine defendants affiliated with DME companies were also charged in five separate indictments.

Olufunke Fadojutimi, 41, of Carson, a registered nurse; Ayodeji Temitayo Fatunmbi, 41, formerly of Carson and now believed to be residing in Nigeria; and Maritza Velazquez, 40, of Las Vegas, were charged with health care fraud. The scheme allegedly revolved around Lutemi Medical Supplies, a DME company Fadojutimi owned and where Fatunmbi and Velazquez worked. According to the indictment in this case, Lutemi billed Medicare more than $8.3 million in claims, primarily for medically unnecessary power wheelchairs. Fadojutimi and Fatunmbi allegedly laundered Medicare funds in order to purchase fraudulent prescriptions for those power wheelchairs and pay illegal kickbacks to recruit Medicare beneficiaries. Fadojutimi was arrested this morning in Los Angeles, while Velazquez was arrested in Las Vegas. Fatunmbi is currently a fugitive being sought by federal authorities.

Susanna Artsruni, 45, of North Hollywood, and Erasmus Kotey, 76, of Montebello, a licensed physician’s assistant, allegedly worked together to commit health care fraud out of a medical clinic on Vermont Avenue where they both worked. Kotey allegedly prescribed medically unnecessary DME, including power wheelchairs, for Medicare beneficiaries. Many of those power wheelchair prescriptions were then used by Artsruni’s DME company, Midvalley Medical Supply, to support fraudulent claims to Medicare. In only four months, the clinic and Midvalley billed Medicare more than $525,000 for these fraudulent claims. Artsruni has previously been convicted of health care fraud and was on pre-trial supervision at the time she allegedly laundered some of the proceeds of this fraud. Artsruni was arrested this morning, while Kotey self-surrendered.

Three other DME cases were also charged, alleging fraudulent Medicare billing for medically unnecessary power wheelchairs that were sometimes never even delivered. In one case, Akinola Afolabi, 53, of Long Beach, the owner of Emmanuel Medical Supply, allegedly submitted more than $2.6 million in false and fraudulent billing to Medicare. In another case, Queen Anieze-Smith, 52, of Encino, and Abdul King-Garba, 47, of Westwood, the owners and operators of ITC Medical Supply, allegedly submitted more than $1.8 million in false and fraudulent billing to Medicare. In the third case, Clement Etim Aghedo, 53, of Fontana, the owner of Ace Medical Supply Company, allegedly submitted more than $1.8 in false and fraudulent claims to Medicare. Afolabi, Anieze-Smith, and King-Garba were all arrested this morning, while Aghedo self-surrendered.

In the seventh case brought as part of today’s takedown, three defendants affiliated with Gardena-based ProMed Medical Transportation, an ambulance company, were charged with submitting more than $5.9 million in false claims to Medicare between 2008 and 2011. ProMed’s owner, Yaroslav Proshak, 45, of Valley Village; general manager Sharetta Wallace, 35, of Inglewood; and office manager and biller Sergey Mumjian, 40, of West Hollywood, submitted claims for medically unnecessary transportation services and then created fake documentation purporting to support those claims. Proshak, Wallace, and Mumjian were arrested this morning.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and the Department of Health and Human Services to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

The Los Angeles cases announced today are being investigated by a Medicare Fraud Strike Force team, which is composed of agents and investigators with the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General; IRS-Criminal Investigation; and Medicaid Fraud Control Units, including the California Department of Justice. The cases are being prosecuted by attorneys from the United States Attorney’s Office and the Fraud Section of the Justice Department’s Criminal Division.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

The charge of health care fraud carries a statutory maximum penalty of 10 years in federal prison. Money laundering carries a potential penalty of 20 years in prison. Aggravated identity theft carries a mandatory two-year prison term.”

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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.


“Medicare Fraud Strike Force Charges 89 Individuals for Approximately $223 Million in False Billing”

May 14, 2013

The Federal Bureau of Investigation (FBI) on May 14, 2013 released the following:

“WASHINGTON— Attorney General Eric Holder and Department of 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 89 individuals, including doctors, nurses, and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billing.

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, FBI Assistant Director Ron Hosko, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG), and Deputy Administrator and Director of Centers for Medicare and Medicaid Services (CMS) Center for Program Integrity Peter Budetti.

This coordinated takedown was the sixth national Medicare fraud takedown in strike force history. In total, almost 600 individuals have been charged in connection with schemes involving almost $2 billion in fraudulent billings in these national takedown operations alone. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention and 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 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion. In addition, CMS, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The joint Department of Justice and 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. Approximately 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown.

“Today’s announcement marks the latest step forward in our comprehensive efforts to combat fraud and abuse in our health-care systems,” said Attorney General Holder. “These significant actions build on the remarkable progress that the HEAT has enabled us to make—alongside key federal, state, and local partners—in identifying and shutting down fraud schemes. They are helping to deter would-be criminals from engaging in fraudulent activities in the first place. And they underscore our ongoing commitment to protecting the American people from all forms of health care fraud, safeguarding taxpayer resources, and ensuring the integrity of essential health-care programs.”

“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius. “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars. Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: you will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit 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, primarily home health care, but also mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME), and ambulance services.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. In many cases, court documents 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 then submit fraudulent billing 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 $223 million in fraudulent billing.

“We have made it part of our core mission at the Department of Justice to hold accountable those who steal from the Medicare program to line their own pockets,” said Acting Assistant Attorney General Raman. “There are Medicare fraudsters in prisons across the country—some who will be there for decades—who can attest to our determination, and our effectiveness.”

“We all feel the effects of health care fraud,” said FBI Assistant Director Hosko. “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need. The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels. But we need the public’s help. Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers. We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”

“Taxpayers expect us to work harder and smarter, and that is exactly what happened across the nation today,” said HHS Inspector General Levinson. “In addition to the work of my agents and other federal, state, and local law enforcement officials, investigators from nine other IG offices joined us today. Working together we can break down silos, pool expertise, reduce costs, and the successful result speaks for itself.”

“Today’s takedown is the result of dedicated commitment to working with our law enforcement partners to root out fraud in the Medicare program,” said CMS Program Integrity Deputy Administrator Budetti. “This collaboration has been strengthened by the Affordable Care Act, which provided CMS with the tools it needs to stop the flow of money while working to rid our programs of fraud, waste, and abuse.”

In Miami, a total of 25 defendants, including two nurses, a paramedic, and a radiographer, were charged today and yesterday for their participation in various fraud schemes involving a total of $44 million in false billings for home health care, mental health services, occupational and physical therapy, DME, and HIV infusion. In one case, three defendants were charged for participating in a $20 million home health fraud scheme involving a home health agency, Trust Care Health Services. Court documents allege that the defendants bribed Medicare beneficiaries for their Medicare information, which was used to bill for home health services that were not rendered or that were not medically necessary. According to court documents, the lead defendant spent much of the money from the scheme and purchased multiple luxury vehicles, including two Lamborghinis, a Ferrari, and a Bentley.

Eleven individuals were charged by the Baton Rouge Strike Force. Five individuals were charged today, including two doctors, in New Orleans by the Baton Rouge Strike force for participating in a different $51 million home health fraud scheme. According to court documents, the defendants recruited beneficiaries, offering cash and other incentives in exchange for their Medicare information, which was used to bill medically unnecessary home health services. The Baton Rouge Strike Force also announced a superseding indictment and an information charging six individuals, including another doctor, with over $30 million in fraud in connection with a community mental health center called Shifa Texas. These charges come on top of charges brought against the owners and operators of Shifa Baton Rouge, a related community mental health center which is at the center of an alleged $225 million scheme charged in an earlier indictment.

In Houston, two individuals, a nurse and a social worker, were charged today with fraud schemes involving at total of $8.1 million in false billings for home health care. The defendants, who are brother and sister, allegedly used patient recruiters to obtain Medicare beneficiary information that they then used to bill for services that were not medically necessary and not provided.

Thirteen defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $23 million. In one case, three individuals allegedly billed Medicare for more than $8.7 million in fraudulent billing for DME. According to the indictment, the defendants allegedly paid illicit kickbacks to patient recruiters to bribe beneficiaries to participate in the scheme. Once the individuals provided their Medicare information to recruiters, doctors and medical clinics conspiring with the defendants allegedly wrote prescriptions for medically unnecessary power wheelchairs, which they sold to the defendants for illegal kickbacks.

In Detroit, 18 defendants, including two doctors, a physician’s assistant, and two therapists, were charged for their roles in fraud schemes involving approximately $49 million in false claims for medically unnecessary services, including home health, psychotherapy, and infusion therapy. In one case, three individuals were charged in a $12 million scheme where they allegedly held themselves out to be licensed physicians—which they were not—and signed prescriptions for drugs and documents about purported psychotherapy they provided.

In Tampa, nine individuals were charged in a variety of schemes, ranging from pharmacy fraud health care-related money laundering. In one case, four individuals were charged for their alleged roles in establishing and operating four supposed healthcare clinics in Tampa, Florida—Palmetto General Health Care Inc., United Healthcare Center Inc., New Imaging Center Inc., and Lord Physical Rehabilitation Center Inc.—which they allegedly used to steal more than $2.5 million from Medicare for surgical procedures that were never performed. The defendants allegedly billed Medicare for surgical procedures used to treat patients with high blood pressure by collapsing veins in the legs, but they did not actually perform the procedures.

In Chicago, seven individuals were charged, including two doctors, with a variety of health care fraud schemes.

In Brooklyn, New York, four individuals, including two doctors, were charged in fraud schemes involving $9.1 million in false claims. In one case, three additional individuals were allegedly involved in what is now alleged to be a $15 million scheme where massages by unlicensed therapists were billed to Medicare as physical therapy. Six defendants were previously charged in the scheme.

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 Middle District of Florida; 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 learn more about HEAT, go to http://www.stopmedicarefraud.gov.”

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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.


Thirteen Individuals Indicted in an Alleged Health Care Fraud and Drug Distribution Scheme

March 20, 2013

The Federal Bureau of Investigation (FBI) on March 19, 2013 released the following:

“Five Doctors, Four Pharmacists, and Home Health Agency Owner Among Those Indicted in Follow-Up to the Babubhai Patel Case

Thirteen individuals have been charged in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso of the Drug Enforcement Administration, Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation, and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.

The superseding indictment, unsealed yesterday, adds 13 new defendants and new charges to a 2011 indictment, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at more than 20 pharmacies that he owned and controlled in metro-Detroit.

The 13 new defendants named in the superseding indictment include five doctors, four pharmacists, and a home health agency owner:

  • pharmacist Mehul Patel, 34, of Canton
  • pharmacist Pradeep Pandya, 49, of Grand Blanc
  • pharmacist Vikas Sharma, 34, of Windsor
  • pharmacist Mukesh Khunt, 33, of Toronto
  • physicians Richard Utarnachitt, 71; of Clinton Township
  • physician Ruben Benito, 72, of Madison Heights
  • physician Javaid Bashir, 59, of Jackson
  • physician Carl Fowler, 60, of West Bloomfield
  • physician Rajat Daniel, 47, of West Bloomfield
  • home health agency owner Vinod Patel, 40, of Canton
  • business associate Atul Patel, 31, of Canton
  • marketer Anthony Macklin, a.k.a. “Jimbo,” of Detroit
  • marketer Michael Thoran, a.k.a. “Ace,” also of Detroit

The 21-count superseding indictment charges that Babubhai Patel was the owner and controller of approximately 26 Michigan pharmacies. The indictment alleges that Babubhai Patel would offer and provide kickbacks, bribes, and other illegal benefits to physicians to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance. Patel would also direct that those prescriptions be presented to one of the Patel Pharmacies for billing. In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients and bill the relevant insurers for services supposedly provided to the patients without regard to the medical necessity of those prescriptions and services. The physicians would direct the patients to fill their prescriptions at one of the Patel Pharmacies, where Babubhai Patel and his pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the Patel Pharmacies and the physicians associated with Patel to bill their insurance for medications and services that were medically unnecessary and/or never provided.

The indictment further alleges a conspiracy to distribute controlled substances at the Patel pharmacies to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers. According to the indictment, Babubhai Patel and his associates paid physicians kickbacks for prescriptions for controlled substances for their patients and directed those patients to fill the prescriptions at a Patel Pharmacy. The controlled substances included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab), the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice. Babubhai Patel and his pharmacists would then dispense the controlled drugs to patients without medical necessity. The distribution of controlled substances in this manner was intended, in part, as a kickback to the patients for agreeing to enable their insurance cards to be billed for medications purportedly dispensed at the Patel Pharmacies. The indictment also alleges that Babubhai Patel and his pharmacists dispensed controlled substances outside the scope of legitimate medical practice to patient recruiters or “marketers,” as a kickback for their efforts in to recruit patients into the scheme.

In addition to his pharmacies, the indictment alleges that Babubhai Patel had an ownership interest in a home health agency managed by his brother, Vinod Patel. The indictment alleges that Vinod Patel, Babubhai Patel, and others bribed physicians and other referral sources for referrals to that home health agency and then billed the Medicare program for home health services that were medically unnecessary and never provided.

Of the 26 defendants originally charged in the indictment, six, including Babubhai Patel and four pharmacists, were convicted at a trial last summer. Fifteen additional defendants, including six pharmacists and two doctors, have pleaded guilty in the case. The five remaining defendants whose charges were renewed in the superseding indictment are set for trial on June 10, 2013. On February 1, 2013, Babubhai Patel was sentenced to 17 years’ imprisonment by U.S. District Judge Arthur J. Tarnow.

“Taxpayers fund Medicare and Medicaid to provide health care for needy citizens,” McQuade said. “We hope that doctors and pharmacists will take note that if they exploit these programs for personal profit, they will face serious consequences.”

Robert L. Corso, Special Agent in Charge of DEA’s Detroit Field Division stated, “Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners. Today’s indictments, particularly of the medical professionals are significant. It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers and depressants throughout southeast Michigan. This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”

FBI Special Agent Robert Foley stated, “Dishonest health care providers and pharmacists who exploit Medicare and Medicaid through fraudulent billing and other schemes will be held accountable for their crimes. The FBI remains committed to investigating this type of fraud and bringing those who abuse the system to justice.”

“Schemes involving the illegal diversion and/or distribution of controlled substances go hand and hand with the fraudulent billing of Medicare and other health care programs,” said Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General—Chicago Regional Office. “The OIG and our law enforcement partners are acutely aware of the potential for those who commit health care fraud to utilize this blended approach when seeking to line their pockets with tax payer dollars. The indictments and arrests announced today illustrate our combined commitment and effort to protect the safety and well-being of the public and as well as the health care programs they rely upon.”

The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Department of Health and Human Services Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Wayne F. Pratt.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.”

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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 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.