Michigan

June 4, 2010

Patient Recruiter and Physical Therapist Sentenced in Connection with Detroit-Area Medicare Fraud Schemes (Criminal Division)

WASHINGTON – Miami resident Timothy Pierce was sentenced on June 4, 2010, to 48 months in prison for his participation in a fraudulent Medicare infusion scheme, and Troy, Mich., resident Jay Jha was sentenced to 27 months in prison for his participation in a separate fraudulent physical therapy scheme, announced the Departments of Justice and Health and Human Services (HHS).

U.S. District Court Judge Denise Page Hood in the Eastern District of Michigan sentenced Pierce to three years of supervised release following his prison term and ordered Pierce to pay $6.09 million in restitution, jointly with co-defendants.  U.S. District Court Judge Sean F. Cox in the Eastern District of Michigan sentenced Jha to three years of supervised release following his prison term and ordered Jha to pay $772,800 in restitution.

Pierce pleaded guilty on Nov. 18, 2009, to one count of conspiracy to commit health care fraud.  According to the plea documents, beginning in approximately March 2006, Pierce entered into an agreement with the owners of Dearborn Medical Rehabilitation Center (DMRC) to recruit patients for DMRC, a business that purported to provide infusion and injection therapy services to Medicare patients.  Specifically, Pierce admitted that he was hired to recruit, drive and pay kickbacks to Medicare beneficiaries to induce them to visit DMRC.  According to plea documents, Pierce paid the beneficiaries to sign paperwork indicating that they had received infusions and injections of specialty medications that they did not in fact receive.  Pierce, who is also a Medicare beneficiary, admitted that he signed paperwork indicating that he had received infusions and injections of specialty medications that he did not receive, enabling DMRC to falsely bill for services never rendered to him.  DMRC billed Medicare approximately $9.1 million while the conspiracy was in operation. 

Jha pleaded guilty on Aug. 26, 2009, to conspiracy to commit health care fraud.  According to information contained in plea documents, Jha, a licensed physical therapist, admitted that he began working in approximately February 2003 as a contract therapist for a co-conspirator who owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries.  According to his plea documents, Jha admitted that he, his co-conspirator and others created fictitious therapy files appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services had been provided.  According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by co-conspirators. 

Jha also admitted that during the course of the scheme he signed approximately 336 fictitious physical therapy files, indicating that he had provided physical therapy services to Medicare beneficiaries, when in fact he had not.  Jha admitted that he was paid between $90 and $110 for each file he falsified.  Jha also admitted that between approximately February 2003 and December 2005, he falsified physical therapy files that supported claims to the Medicare program totaling approximately $1.6 million.  Medicare paid approximately $772,800 on those claims.  Jha admitted that, throughout the conspiracy, he was fully aware that Medicare was being billed for physical therapy services that he falsely indicated he had performed.

These sentencings were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

The cases were prosecuted by Assistant Chief John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section as well as former Special Assistant U.S. Attorney Thomas W. Beimers.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. 

Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 560 individuals who collectively have falsely billed the Medicare program for approximately $1.2 billion.  In addition, HHS’s 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.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

May 13, 2010

Sixth Individual Pleads Guilty for Role in $14.5 Million Medicare Home Health Care Fraud Scheme (Criminal Division)

Detroit-area resident Christopher Collins pleaded guilty on May 13, 2010, for his participation in a $14.5 million fraudulent Medicare home health care scheme, the Departments of Justice and Health and Human Services (HHS) announced.

Collins, 39, pleaded guilty before U.S. District Court Judge Denise Page Hood in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Sept. 23, 2010, Collins faces a maximum penalty of 10 years in prison and a $250,000 fine. Collins was originally indicted on Jan. 14, 2010, with 12 other individuals in connection with the Medicare home health care scheme. Collins is the sixth individual charged in the scheme to plead guilty. 

Collins admitted in court documents that he was responsible for submitting or causing the submission of approximately $6.96 million in false or fraudulent claims to the Medicare program between August 2007 and October 2009.

According to the plea documents, in the late spring or early summer of 2007, Collins was hired by Muhammad Shahab as a nurse to work at Patient Choice Home Healthcare Inc.  Patient Choice purported to provide home health services, including physical and occupational therapy services, to Medicare beneficiaries, which were then billed to Medicare. Collins admitted that he offered to become a beneficiary recruiter for Shahab and Patient Choice. According to plea documents, Collins solicited Medicare beneficiaries for Shahab and Patient Choice and offered them cash kickbacks in exchange for their Medicare patient information and signatures on medical documents. Collins admitted that he knew the beneficiaries he recruited were not homebound nor did they need physical therapy services. Collins also admitted in court papers that he knew Patient Choice used the beneficiaries’ Medicare information to bill Medicare for unperformed or medically unnecessary physical therapy.

According to court documents, in June 2008, Shahab helped finance and establish All American Home Care Inc.  All American was owned at various times by Hassan Akhtar and Shahab.  Beginning in April 2009, All American was owned by Collins. Collins admitted that he became the exclusive beneficiary recruiter at All American, recruiting hundreds of patients to the home health agency through the payment of cash kickbacks in exchange for their Medicare information and signature on medical documents. Collins admitted that All American billed Medicare for physical therapy services that were either not rendered or not medically necessary. 

Shahab and Akhtar were originally charged with Collins in the January 2010 indictment.  Shahab and four other individuals have pleaded guilty for their participation in the Medicare home health scheme. An indictment is merely a charge and defendants are presumed innocent until proven guilty. 

The result was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

The case was prosecuted by Assistant Chief John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. 

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 560 individuals who collectively have falsely billed the Medicare program for approximately $1.2 billion.  In addition, HHS’s 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.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

April 15, 2010

Detroit Area Patient Recruiter Sentenced to 27 Months in Prison for Medicare Fraud Scheme (Criminal Division) 

Washington - A Michigan man was sentenced today in Detroit to 27 months in prison for his role in a wide-ranging conspiracy to defraud the Medicare program, announced the Departments of Justice and Health and Human Services (HHS).  U.S. District Court Chief Judge Gerald E. Rosen also ordered Wayne Smith, of Jackson, Mich., to pay $4.9 million in restitution, jointly with co-defendants, and to serve three years of supervised release following his prison term.

Smith, 47, pleaded guilty on Dec. 10, 2009, to one count of conspiracy to commit health care fraud.  Between approximately October 2006 and March 2007, Smith and his co-conspirators caused more than $6.5 million in false and fraudulent claims to be submitted to the Medicare program for services supposedly provided by Sacred Hope Center Inc., and Xpress Center Inc., purported infusion clinics.  Medicare actually paid more than $4.9 million of those claims.

Evidence presented during the sentencing hearing established that beginning in approximately October 2006 and continuing until March 2007, Smith recruited more than 40 patients to Sacred Hope and Xpress Center.  Both clinics existed for the purpose of causing fictitious claims for injection and infusion therapy services to be billed to Medicare.  According to court documents, owners of Sacred Hope and Xpress Center, including Miami residents Daisy Martinez and Jose Rosario, came to Detroit to start the clinics because of heavy law enforcement scrutiny in Florida of fraudulent infusion clinics.  Smith was hired to recruit and pay kickbacks to Medicare beneficiaries to come to the clinic.  Daisy Martinez, Jose Rosario and more than a dozen other defendants have previously pleaded guilty or been convicted at trial for their roles in the two fraudulent clinics.  Martinez was recently sentenced to 96 months in prison for her role in the scheme.

According to evidence presented in court, during the time that Sacred Hope and Xpress Center were open, the clinics routinely billed the Medicare program for services allegedly performed, but in reality the services were medically unnecessary and/or never provided.  Evidence presented at sentencing and during the trial of Dr. Toe Myint, the doctor at Sacred Hope, showed that the clinics’ owners purchased only a small fraction of the medications for which the clinic billed the Medicare program.  According to evidence presented at trial, medications at the clinic were prescribed based not on medical need, but based on what medications were likely to generate Medicare reimbursements.

Evidence presented at sentencing established that Medicare beneficiaries were not referred to Sacred Hope or Xpress Center by their primary care physicians, or for any other legitimate medical purpose, but were recruited by Smith to come to the clinic in exchange for the payment of kickbacks.  Smith recruited the beneficiaries in downtown Detroit and drove them to the Detroit suburbs of Southfield and Livonia, Mich., where the clinics were located.  Trial evidence showed that in exchange for the kickbacks Smith paid them, the Medicare beneficiaries visited the clinics and signed documents indicating that they had received the services billed to Medicare.  Kickbacks came in the form of cash and prescriptions for controlled substances.

Today’s sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

This case was prosecuted by Senior Trial Attorney John Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section.  The FBI and HHS Office of Inspector General (HHS-OIG) conducted the investigation.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since the inception of Strike Force operations in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for approximately $1.1 billion.  In addition, HHS’s 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.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

March 11, 2010

Detroit-Area Doctor Convicted in Medicare Fraud Scheme (Criminal Division)

WASHINGTON –  Farmington Hills, Mich., physician Jose Castro-Ramirez was convicted on March 11, 2010, by a Detroit federal jury on all 13 charged counts in connection with his role in an $18.3 million Medicare fraud scheme, announced Assistant Attorney General Lanny Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG), Chicago Regional Office.

After a three-week trial, the jury convicted Castro-Ramirez of one count of conspiracy to commit health care fraud, 11 substantive counts of health care fraud, and one count of conspiracy to launder the proceeds of the fraudulent scheme. 

Evidence at trial established that beginning in late 2003, the defendant, a physician licensed in the state of Michigan, entered into an agreement with co-conspirator Suresh Chand to defraud the Medicare program. Chand owned and controlled several companies operating in Warren, Mich., including Continental Rehab Services Inc. (CRS) and Pacific Management Services Inc. (PM), which purported to provide physical and occupational therapy services to Medicare beneficiaries.  In reality, as the evidence showed, Chand and his associates at CRS and PM created fictitious therapy files, appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services had taken place. The fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by Chand and his co-conspirators. 

Evidence introduced at trial established that in order to create the fictitious files, Chand and his co-conspirators paid cash kickbacks and other inducements to Medicare beneficiaries, in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had received therapy services.  Evidence also showed that Chand paid licensed physical and occupational therapists to sign fictitious “progress notes” and other documents that appeared to reflect that physical and occupational therapy services had been provided to the beneficiaries, when in fact they had not.  Castro-Ramirez signed therapy prescriptions and other documents in the files falsely indicating that he had evaluated the Medicare beneficiaries and certified the need for physical and occupational therapy services.  In fact, the evidence at trial established that Castro-Ramirez had not overseen any treatment provided to the patients and was fully aware that his signatures were part of a fraudulent scheme. According to evidence presented at trial, in many instances Castro-Ramirez had never seen the beneficiaries. One of the inducements that Chand and his co-conspirators used to recruit Medicare beneficiaries into the scheme was the provision of prescriptions for controlled substances and other drugs, including Vicodin and Xanax. Evidence presented at trial showed that Chand provided Castro-Ramirez with lists of the controlled substances or drugs the beneficiaries preferred, and that Castro-Ramirez wrote prescriptions for the substances without ever seeing the patients. The evidence established that between January 2003 and March 2007, Castro-Ramirez wrote thousands of prescriptions for a variety of drugs for patients that he had never seen. The evidence also showed that Castro-Ramirez was fully aware that the purpose of the prescriptions was to induce beneficiaries into the scheme.

Evidence introduced at trial demonstrated that Castro-Ramirez profited from his participation in the scheme in several ways.  Castro-Ramirez’s largest source of fraudulent proceeds came from his own billings to Medicare for “home visits” that he purportedly made to Medicare beneficiaries whom Chand recruited into the scheme.  In fact, Castro-Ramirez never conducted “home visits” with the vast majority of these patients, and never discussed or ordered therapy services for the few he did see. The evidence showed that Chand and other co-conspirators also distributed proceeds of the fraud directly to Castro-Ramirez on occasion, and did so through transactions designed to disguise the nature, source, ownership, control and location of the tainted funds. The evidence showed that Castro-Ramirez knew that the cash and checks he received from Chand were structured so as to conceal the fact that they were proceeds of Medicare fraud.

Between approximately January 2003 and June 2007, Chand and his co-conspirators submitted claims to the Medicare program totaling $18,379,300 for physical and occupational therapy services that were supposedly ordered and supervised by Castro-Ramirez, but were in fact never rendered. Medicare paid $8,562,688 on those claims.  In addition, Castro-Ramirez submitted approximately $1.4 million in claims to the Medicare program for “home visits” supposedly provided to beneficiaries recruited into the scheme by Chand and his co-conspirators. Medicare paid approximately $929,000 on those claims.

Chand pleaded guilty on Sept. 28, 2009, before U.S. District Judge Sean F. Cox to one count of conspiracy to commit health care fraud and one count of conspiracy to launder money.

At sentencing, scheduled for June 29, 2010, Castro-Ramirez faces a maximum penalty of 10 years in prison and a $250,000 fine on the health care fraud conspiracy and substantive health care fraud counts. He faces a maximum penalty of 20 years in prison and a $250,000 fine on the money laundering conspiracy count.

The case was prosecuted by Senior Trial Attorney John K. Neal of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Thomas W. Beimers of the U.S. Attorney’s Office for the Eastern District of Michigan. The case was investigated by the FBI and HHS-OIG.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1 billion.  In addition, HHS’s 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.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

January 14, 2010

Thirteen Detroit-Area Individuals Arrested and Charged for $14.5 Million Medicare Fraud (Criminal Division)

Thirteen 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 FBI in connection with an alleged home health care scheme to defraud the Medicare program of more than $14.5 million.

In a six-count indictment returned on Jan. 12, 2009, and unsealed today, the 13 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, Mich., home health agencies that purported to provide in-home health services. Muhammad Shahab, 50; Christopher Collins, 38; Hassan Akhtar, 26; Curtis Mallory, 35; Mohammed El-Fallal, 55; Jessica Vigil, 34; Tariq Chaudhary, 36; Faisal Chaudry, 31; and Visnhu Meda, 29, were all indicted for conspiracy to commit health care fraud. In addition, Shahab; Pramod Raval, M.D., 56; Guy Ross, 48; Lura Barrett, 61; and Stephen Cartier, 50, were charged with conspiracy to violate the Anti-Kickback Statute. Shahab and Akhtar were also each charged with two counts of money laundering. The indictment seeks the forfeiture of assets from all the defendants.

According to the indictment, Shahab, Akhtar and Collins owned and operated Patient Choice and All American. The home health agencies purported to provide home health therapy services to Medicare beneficiaries. The indictment alleges that Patient Choice and All American billed for home health therapy services that were unnecessary and were never performed. In addition, it alleges that Collins and Mallory recruited patients and paid them kickbacks for their Medicare information and signatures on documents. These false documents were then used to bill Medicare for home health services that were not rendered. The indictment also alleges that El-Fallal used the identity of a licensed physician to sign physician referrals for home health therapy services that were medically unnecessary and not performed. The indictment charges Vigil, Chaudhary, Chaudry and Meda with falsifying medical records to make it appear that home health therapy services were provided.

In addition, the indictment alleges that Shahab, Dr. Raval, Ross, Barrett and Cartier engaged in a conspiracy where Shahab would pay kickbacks to the others in exchange for patient referrals and access to Medicare beneficiaries under Dr. Raval, Ross, Barrett and Cartier’s care.

The indictment alleges that Medicare paid Patient Choice and All American more than $14.5 million for services that were medically unnecessary and 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 violating the Anti-Kickback Statute carries a maximum prison sentence of five years and a fine of up to $25,000. Each violation of 18 USC 1956 (money laundering) carries a maximum prison sentence of 20 years and a maximum fine of $500,000. Each violation of 18 USC 1957 (money laundering) carries a maximum prison sentence of 10 years in prison and a maximum fine of $250,000.

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

The case is being prosecuted by Deputy Chief Kirk Ogrosky, Senior Trial Attorney John Neal and Trial Attorney Gejaa Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG. This prosecution is the latest in the Medicare Fraud Strike Force’s efforts in the Detroit area. The Strike Force is supervised by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of Michigan.

Since the inception of Strike Force operations in March 2007 - Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four), Brooklyn (Phase Five), Tampa (Phase Six) and Baton Rouge (Phase Seven) - the Strike Force has obtained indictments of more than 475 individuals and organizations that collectively have billed the Medicare program for more than $1 billion. In addition, HHS’s 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.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

December 28, 2009

Michigan Health Care Provider To Pay United States $669,413 To Settle False Claims Allegations (Civil Division)

WASHINGTON – Genesys Health System has agreed to pay the United States $669,413 to settle a lawsuit alleging that the health care provider violated the False Claims Act by submitting false claims to Medicare, the Justice Department announced on Dec. 28, 2009. 

Genesys, a Grand Blanc, Mich.-based company, provides health care services through a network of medical facilities located in Michigan.  The government alleged that between 2001 and 2007, Genesys violated the False Claims Act by billing Medicare for higher levels of service than were actually rendered to patients.  Specifically, the government alleged that Genesys overbilled for evaluation and management services provided to cardiology patients.

“As this case demonstrates, we are committed to vigorously pursuing those who defraud Medicare,” said Tony West, Assistant Attorney General of the Justice Department’s Civil Division.  “Taxpayer dollars should be spent on health care services for patients, not wasted on fraud and abuse.”  Assistant Attorney General West praised the coordinated efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Michigan, and the Office of Investigations for the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General. 

The allegations resolved by today’s settlement were initiated by a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private citizens to sue for fraud on behalf of the United States and share in any recovery.  The whistleblower in this case will receive a $133,882 share of today’s settlement.

“With the rising cost of health care and the related pressure on the Medicare Trust Fund, the last thing our nation can afford are providers who are profiteering at the expense of patients,” said Terrence Berg, U.S. Attorney for the Eastern District of Michigan.  “The relator can be proud that she brought these serious allegations of Medicare fraud to our attention and paved the way for the government to uncover the false claims.  It is important that anyone who has information about alleged fraud on the federal government come forward so we can investigate.” 

The lawsuit was captioned as United Statesex rel. Wendy Buterakos v. Ascension Health and Genesys Health System, Civil Action No. 06-10550 (E.D. Mich.). 

December 21, 2009

U.S. Department of Justice
United States Attorney
Eastern District of Michigan
211 W. Fort Street
Suite 2001
Detroit, Michigan 48226
December 21, 2009
CONTACT: Gina Balaya - (313) 226-9758
FOR IMMEDIATE RELEASE
Detroit, Michigan

TRINITY HEALTH PAYS $205,000 TO SETTLE FALSE CLAIMS SUIT ALLEGING HEALTH CARE FRAUD

Trinity Health -- Michigan, St. Joseph Mercy Oakland Hospital ("Trinity") has paid $205,000, to settle allegations that it improperly billed Medicare for medical services performed by nurse practitioners, clinical nurse specialists, and physician assistants  during the period from January 1, 2001, through December 31, 2004, as though those services were performed by either a neonatologist or an oncologist, United States Attorney Terrence Berg announced today.

The settlement ends a civil lawsuit filed under the False Claims Act, which allows the government to recover three times the amount of fraud.

According to a sixteen page agreement, Trinity denies the allegations and agreed to the settlement "to avoid the delay, uncertainty, inconvenience and expense of protracted litigation."

U.S. Attorney Berg said: "Health care fraud contributes significantly to the high cost of delivering health care to the poor and to older Americans. Today's settlement demonstrates my office's determination to recover funds inappropriately billed to Medicare."

The civil settlement resolves allegations arising from a lawsuit filed under the qui tam or whistle blower provisions of the False Claims Act, a federal law that allows private individuals, known as relators, to sue on behalf of the government. The suit was filed under seal by Sandra Fillion, the former Director of Physician Billing at St. Joseph Hospital in Pontiac, a Trinity facility.

Under the False Claims Act, whistle blower lawsuits are filed under seal to allow the government an opportunity to investigate the allegations and decide whether to take an active role in the litigation. A False Claims Act "whistle blower" can receive between fifteen and twenty-five percent of the government's recovery in a case that the government joins. In the agreement announced today, relator Sandra Fillion, will receive $33,825 as her relator's share.

In a separate agreement with the Fillion, Trinity also agreed to pay $30, 000 in relator's attorneys fees and $60,000 in settlement of any personal causes of action Fillion may have had against Trinity.

Berg thanked the Department of Human Services, Office of Inspector General, Office of Investigations, for its investigation of the case. The United States was represented in the matter by Assistant United States Attorney Michael J. Riordan.

The lawsuit is filed as United States ex rel. Sandra Fillion v. Trinity Health, et al., CV-04-72635 (E.D. Mich.).

Copies of the settlement agreement may be obtained from the U.S. Attorney's Office.

December 16, 2009

Owner of Health Care Agency Sentenced to 18 Months Prison in Medicare Kickback Scheme (U.S. Attorney for the Eastern District of Michigan)

Rebecca Sharp, the former owner of a health care agency, and one of eight defendants charged in a scheme to solicit and pay kickbacks in exchange for Medicare patients, was sentenced on Dec. 16, 2009, to 18 months’ imprisonment on the charge of Conspiracy to Violate the Health Care Anti-Kickback Statute, United States Attorney Terrence Berg announced. U.S. Attorney Berg was joined in the announcement by Andrew G. Arena, Special Agent in Charge, Federal Bureau of Investigation.

Sharp, age 44, from Ypsilanti, was sentenced in United States District Court before Judge Avern Cohn. During the sentencing, Judge Cohn acknowledged the current national and Congressional debate over healthcare costs and reform and noted that health care fraud is one of the reasons that health care in this country is so expensive. Judge Cohn also commented that the victim in health care fraud cases is the American taxpayer.

Judge Cohn stated that the 18-month sentence was necessary to recognize the seriousness of the offense and to deter others from engaging in health care fraud schemes.

As part of her sentence, Sharp will serve 3 years of supervised release and will be required to pay $1,411,124.80 in restitution to the Medicare Trust Fund. Also, as part of her plea agreement, Sharp agreed to forfeit over $268,000 including funds seized from her business bank accounts and proceeds from the sale of one Corvette and two Lincoln Navigators.

United States Attorney Terrence Berg said, “Medicare is not intended to finance kickbacks to persons who refer seniors for treatment funded by medicare. Medicare is to assist older Americans to be able to afford the medical treatment and health care that they need. When Medicare funds are diverted to pay kickbacks, that conduct harms both legitimate Medicare recipients as well as the program itself.”

Special Agent in Charge of the FBI, Andrew Arena said, “Medicare is based on the honesty and integrity of the program participants. Those who cheat Medicare are cheating the American taxpayers who ultimately bear the financial loss. The FBI is committed to protecting our healthcare systems from fraud and abuse."

Information presented to the Court at the time of the plea showed that, between 2002 and 2005, Rebecca Sharp received over $1.1 million in kickbacks for referring Medicare beneficiaries to home health care agencies. Sharp obtained potential home health care patients by instructing her staff at Continuing Senior Care Co, Inc. and Marketing & Assessment to telephone senior citizens and offer medical services and chore workers. If senior citizens inquired how her staff obtained their names, Sharp’s employees told them the information came from Medicare. Once the Medicare information was acquired, a doctor, employed by Sharp, visited the senior citizen, measured vitals signs, and prescribed home health care. After obtaining patients with Medicare coverage, Sharp referred the individuals to home health care agencies in exchange for a fee. Sharp claimed she could refer 80 patient names and Medicare numbers per week to a home health agency and that she charged a $250 per-patient referral fee.

Berg commended the special agents of the FBI for their hard work in pursuing this case. The case is being prosecuted by Assistant U.S. Attorney Sarah Resnick Cohen and Assistant U.S. Attorney Philip Ross.

More information on the Office of the U.S. Attorney for the Eastern District of Michigan: http://www.usdoj.gov/usao/mie/

December 11, 2009

Physical Therapist, Money Launderer and Patient Recruiter Plead Guilty in Connection With Multiple Detroit Health Care Fraud Schemes

WASHINGTON – Detroit-area residents Baskaran Thangarasan, Sandeep Aggarwal and Wayne Smith pleaded guilty this week for their roles in connection with several Detroit-area health care fraud schemes, Assistant Attorney General Lanny Breuer of the Criminal Division, U.S. Attorney for the Eastern District of Michigan Terrence I. Berg, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office and Daniel Levinson, Inspector General for the U.S. Department of Health and Human Services (HHS) announced today.

Thangarasan, 37, pleaded guilty on Dec. 9, 2009, to one count of conspiracy to commit health care fraud before U.S. District Judge Sean F. Cox of the Eastern District of Michigan.  Aggarwal, 38, pleaded guilty Dec. 9, 2009, before Judge Cox to one count of conspiracy to launder money.  Smith, 47, pleaded guilty yesterday to one count of conspiracy to commit health care fraud before Chief U.S. District Judge Gerald E. Rosen.  At sentencing, Thangarasan and Smith face a maximum sentence of 10 years in prison and a $250,000 fine; Aggarwal faces a maximum sentence of 20 years in prison and a $500,000 fine.

According to information contained in plea documents, Thangarasan, a licensed physical therapist, admitted that he began working in approximately September 2003 as a contract therapist for a co-conspirator.  This co-conspirator owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries.  Thangarasan admitted that he, the co-conspirator and others created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided.  According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by Thangarasan’s co-conspirators. 

Thangarasan admitted that his role in creating the fictitious therapy files was to sign documents and progress notes indicating he had provided physical therapy services to particular Medicare beneficiaries, when in fact he had not. Thangarasan was paid approximately $50 by co-conspirators per file that he falsified in this manner.  Thangarasan also admitted that in the course of the scheme charged in the indictment, he signed approximately 1,011 fictitious physical therapy files, falsely indicating he had provided physical therapy services to Medicare beneficiaries.  Thangarasan admitted he knew that the files he helped falsify were used to justify fraudulent billings to Medicare.

In addition, Thangarasan admitted that between approximately September 2003 and May 2006, his co-conspirators submitted claims to the Medicare program totaling approximately $5,055,000 for files that were falsified by Thangarasan.  Medicare actually paid approximately $2,325,000 on those claims.  Thangarasan admitted that throughout the conspiracy, he was fully aware that Medicare was being billed for occupational therapy services he had falsely indicated he had performed.

In his plea in the same case, Aggarwal admitted to assisting co-conspirator Suresh Chand in laundering the proceeds of Chand’s Medicare fraud scheme.  Chand, who pleaded guilty in September 2009 to conspiracy to commit health care fraud and conspiracy to launder money, admitted to conspiring to submit approximately $18 million in fraudulent physical and occupational therapy claims to the Medicare program.  Aggarwal, who admitted working at Chand’s office, acknowledged that his role in the scheme was to set up sham entities at Chand’s direction, with the purpose of using those entities to distribute the proceeds of the fraud to the various co-conspirators.  According to plea documents, one such entity was called Global Health Care Management Services.  Aggarwal admitted that Global Health Care Management Services, which he helped create, provided no health or management services of any type, but existed solely as a mechanism to conceal the location of fraudulently obtained Medicare proceeds.  Aggarwal admitted in his plea that he and Chand laundered approximately $393,000 through this sham entity. 

Smith pleaded guilty to an indictment that charged he transported and paid Medicare beneficiaries to attend Sacred Hope Center, a Southfield, Mich.-infusion clinic.  According to the indictment, the beneficiaries he paid and transported were paid to sign paperwork indicating that they had received infusions and injections of specialty medications that they did not in fact receive. 

According to the indictment, Sacred Hope Center routinely billed the Medicare program for services that were medically unnecessary and/or never provided.   The primary owners and operators of Sacred Hope Center have pleaded guilty and admitted purchasing only a small fraction of the medications that the clinic billed the Medicare program for providing.  These co-conspirators have also stated that patients were prescribed medications at the clinic based not on medical need, but instead based on which medications were likely to generate Medicare reimbursements.

These cases are being prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan.   The cases are being investigated by the FBI and the HHS Office of the Inspector General.  Theses cases were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of Michigan. 

Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), and Houston (Phase Four) – the Strike Force has obtained indictments of more than 331 individuals and organizations that collectively have billed the Medicare program for more than $720 million.  In addition, HHS’s 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.

Each of the Strike Force teams across the separate phases are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office.  Each team has an agent from the FBI and HHS-OIG.

For more information, visit the Department of Justice website: http://www.justice.gov/opa/pr/2009/December/09-crm-1332.html

December 8, 2009

Meijer Resolves Voluntary Disclosure of Past Employment of Excluded Pharmacists (U.S. Attorney for the Western District of Michigan)

GRAND RAPIDS, Mich. - Meijer, Inc. has entered into a resolution with the government relating to Meijer’s voluntary disclosure that between 1997 and 2006, the company employed four pharmacists who were barred from participation in Medicaid, Medicare or TRICARE funding. The company received reimbursement from these programs for prescriptions that the excluded pharmacists processed.

Federal law restricts providers - including pharmacies - from employing individuals who have been excluded from federal health care programs for engaging in certain conduct that is prohibited by state or federal law or state licensing authorities. The U.S. Department of Health and Human Services Office of Inspector General maintains a database of excluded individuals and entities that can be accessed at http://exclusions.oig.hhs.gov.

Meijer brought the issue to the government’s attention, cooperated with the government’s investigation, and has agreed to pay $3,000,000 to resolve the matter. By coming forward and cooperating, Meijer was able to avoid the serious consequences, including treble damages and substantial penalties, that otherwise may result from the employment of excluded pharmacists.

U.S. Attorney Donald A. Davis said, “Vigorous enforcement of the exclusion law is vital to the integrity of the healthcare system, and the best way for companies to address their violations is through full disclosure to the government as soon as they discover the problem.”

The settlement with Meijer was negotiated by the U.S. Attorney’s Office for the Western District of Michigan, the U.S. Department of Health and Human Services Office of Inspector General, the TRICARE Management Activity, the Michigan Attorney General’s Office, and the Ohio Attorney General’s Office. The case was investigated by special agents of the U.S. Department of Health and Human Services Office of Inspector General and handled by Assistant U.S. Attorney Ryan D. Cobb for the U.S. Attorney’s Office.

For more information, visit the website of the United States Attorney's Office for the Western District of Michigan at: http://www.justice.gov/usao/miw/index.html 

December 1, 2009

Judge Fines Chiropractor $125,000 for Falsifying Records (U.S. Attorney for the Western District of Michigan)

GRAND RAPIDS, Mich. –– Danny N. Schultz, age 44, of Gasquet, California, was sentenced to three years of probation, $62,401.22 restitution, and $125,000 as a criminal fine for submitting false documents to a health care benefit program, U.S. Attorney Donald A. Davis announced on Dec. 3, 2009. U.S. District Judge Robert J. Jonker imposed the sentence. Schultz, a chiropractor, admitted to directing his staff to prepare false documents to submit to Blue Cross Blue Shield of Michigan (“BCBSM”) as part of an audit of his billing practices.

The investigation of Schultz, who previously owned several chiropractic offices in the Lansing area, commenced when former patients made complaints to BCBSM. In reviewing these complaints, BCBSM investigators discovered evidence of falsified records and referred their findings to the Federal Bureau of Investigation (FBI). At his plea hearing, Schultz admitted that instead of billing BCBSM for the services actually provided to patients, Schultz directed employees to randomly bill BCBSM for specific chiropractic services. Schultz admitted that this random billing resulted in the payment for chiropractic services that were never provided. Schultz further admitted that in response to a BCBSM audit in 2006, he directed employees to alter treatment records in an attempt to conceal the practice of randomly billing chiropractic services.

At the sentencing, Judge Jonker imposed both restitution for services not provided and a fine that was four times higher than recommended by the Federal Sentencing Guidelines. Judge Jonker emphasized that the large fine, which would accrue interest until paid, should deter other health care professionals who would consider defrauding private or public health care plans or attempting to obstruct audits.

U.S. Attorney Davis stated that, “Protecting the integrity of our private health care insurance system is of paramount importance to the United States Attorney’s Office. This sentence is another warning to health care professionals who abuse the trust that our health care system places on their professional conduct. Federal agencies will continue to pursue professionals who submit false claims and who obstruct either private or public audits of their conduct. Medical professionals who abuse this trust or obstruct investigations will face consequences that include incarceration, significant fines, and loss of the ability to participate with insurance providers in the future.”

Gregory W. Anderson, Vice President of the Corporate and Financial Investigations Department of Blue Cross and Blue Shield of Michigan, echoed the comments of U.S. Attorney Davis and urged anyone with a concern about health care claims or health care providers to contact the BCBSM toll free anti-fraud hotline at 1-800-482-3787.

The investigation team was led by FBI Special Agent Terrence Fox, and the case was prosecuted by Assistant U.S. Attorney Ray Beckering.

For more information, visit the website of the United States Attorney's Office for the Western District of Michigan at: http://www.justice.gov/usao/miw/index.html

September 2, 2009

Detroit Clinic Manager Pleads Guilty in Medicare Fraud Scheme (Criminal Division/U.S. Attorney for the Eastern District of Michigan)

WASHINGTON – Denver resident Lil Vargas-Arias pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program, Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Terrence Berg of the Eastern District of Michigan and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced. 

Vargas-Arias, 46, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald Rosen.  At her sentencing, which is scheduled for Feb. 11, 2010, Vargas-Arias faces a statutory maximum of 10 years in prison and a $250,000 fine.

In her guilty plea, Vargas-Arias admitted that in approximately September 2006, she was hired by the owners of Sacred Hope Medical Center Inc. (Sacred Hope), to manage the clinic on a day-to-day basis.  Sacred Hope was a Southfield, Mich., facility that purported to specialize in providing injection and infusion therapy services to Medicare patients.  Vargas-Arias admitted to helping to obtain a lease for the premises used by the clinic, and to hiring a co-conspirator physician, purportedly to treat patients at the clinic.

Vargas-Arias admitted in her guilty plea that during the time Sacred Hope was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided.  Vargas-Arias admitted she was aware that the clinic had purchased only a small fraction of the medications that the clinic billed the Medicare program for providing.  Vargas-Arias also admitted that patients were prescribed medications at the clinic based not on medical need, but on what medications were likely to generate Medicare reimbursements.  Vargas-Arias, along with clinic owner Jose Rosario, who pleaded guilty in the same case on Aug. 18, 2009, admitted to helping falsify medical files maintained by the clinic to make the treatments purportedly being given there appear legitimate, when in fact they were not. 

Vargas-Arias admitted that Medicare beneficiaries were not referred to Sacred Hope by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks.  In exchange for those kickbacks, Vargas-Arias admitted, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare.  Kickbacks came in the form of cash and prescriptions for narcotic drugs. Vargas-Arias admitted to knowing that co-conspirator Arnaldo Rosario, who also pleaded guilty in the same case on Aug. 18, 2009, oversaw and facilitated the payment of cash kickbacks to the Medicare beneficiaries. 

Vargas-Arias also admitted that beginning in approximately November 2006, she assisted the owners of another purported infusion clinic, Xpress Center Inc. (XPC), to defraud Medicare.  XPC was located in Livonia, Mich.  Vargas-Arias admitted to hiring the physician at XPC, and instructed the operators of XPC as to how best to create fictitious patient files to cover up fraudulent billings to Medicare.  As at Sacred Hope, Vargas-Arias admitted she was fully aware that the clinic routinely billed the Medicare program for services that were medically unnecessary and, in many instances were never provided.  As at Sacred Hope, Vargas-Arias admitted to being fully aware that the purpose of the clinic was not to provide legitimate health care to patients, but rather to defraud the Medicare program.

Vargas-Arias also admitted that between approximately September of 2006 and March 2007, she and her co-conspirators caused the submission of approximately $6,577,899 in false and fraudulent claims to the Medicare program for services purportedly provided at Sacred Hope and XPC.  Medicare paid approximately $4,931,428 on those claims.

The case is being prosecuted by Trial Attorneys John K. Neal and Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan.  The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), and Houston (Phase Four) – the Strike Force has obtained indictments of 300 individuals and organizations that collectively have billed the Medicare program for more than $680 million.  In addition, HHS’s 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.

Each of the Strike Force teams across the separate phases are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office.  Each team has an agent from the FBI and HHS-OIG.

More information on the Office of the U.S. Attorney for the Eastern District of Michigan: http://www.usdoj.gov/usao/mie/

August 19, 2009

Former Owners Of Metro-Detroit Health Care Agencies Plead Guilty To Making False Statements To The Medicare Program (U.S. Attorney for the Eastern District of Michigan)

Kevin Watson and Jaqueline Jackson, former owners of a health care agencies, and two of eight defendants charged in a scheme to solicit and pay kickbacks in exchange for Medicare patients, pleaded guilty on Aug. 19, 2009, United States Attorney Terrence Berg announced. U.S. Attorney Berg was joined in the announcement by Andrew G. Arena, Special Agent in Charge, Federal Bureau of Investigation.