U.S. JUSTICE DEPARTMENT DESCRIBES $205 MILLION MEDICARE FRAUD CASE

FROM: U.S. JUSTICE DEPARTMENT
Friday, January 25, 2013
Former Program Director and Marketers Sentenced to Prison in Florida in $205 Million Community Mental Health Fraud Scheme

The former program director and two former marketers for Miami-based mental health care company American Therapeutic Corporation (ATC) have been sentenced to prison for their roles in a $205 million Medicare fraud and kickback scheme in which patients were forced to attend inappropriate treatment programs.

The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent-in-Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the Health and Human Services’ Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

Miami-area residents Lydia Ward, 47, a former program director, and Hilario Morris, 47, a former marketer, were sentenced today by U.S. District Judge Patricia A. Seitz in Miami federal court to 99 months and 60 months in prison, respectively. In addition to the prison term, Judge Seitz sentenced Ward and Morris each to serve three years of supervised release and ordered them to pay more than $34.1 million and $82.2 million in restitution, respectively, jointly and severally with their co-defendants.

Ward was convicted on Nov. 15, 2012, by a federal jury of conspiracy to commit health care fraud. Morris was convicted on June 1, 2012, by a federal jury of conspiracy to pay illegal health care kickbacks. Ward and Morris have been in federal custody since their convictions.

Former marketer Sandra Jimenez, 39, also from the Miami area, was sentenced to 36 months in prison yesterday, Jan. 24, 2013. In addition to the prison term, Judge Seitz sentenced Jimenez to serve three years of supervised release and ordered her to pay $20.5 million in restitution, jointly and severally with her co-defendants.

On Jan. 17, 2012, Jimenez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to receive and pay health care kickbacks.

In pleading guilty, Jimenez admitted that she served as a marketer for ATC and American Sleep Institute (ASI). ATC, a Florida corporation headquartered in Miami, operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. Jimenez also admitted that she and co-conspirators used related company ASI to submit fraudulent Medicare claims.

Additionally, Jimenez admitted she participated in a separate Medicare fraud scheme through Priority Home Health, a Miami home health agency that submitted fraudulent claims to Medicare for home health services. Jimenez and her co-conspirators recruited Medicare beneficiaries to Priority Home Health who did not qualify for the services.

According to the plea agreement, Jimenez’s participation in the ATC fraud and the Priority Home Health fraud resulted in $46 million in fraudulent billings to Medicare.

Evidence at Ward’s and Morris’ trials demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC and ASI, and that ATC secured patients by paying kickbacks to assisted living facility owners and halfway house owners who would then steer patients to ATC.

According to the evidence, Morris was a marketer for ATC from September 2004 through October 2010, when ATC closed its doors due to the federal case. In that capacity, Morris acted as a liaison, maintaining relationships between ATC and those who were selling their patients to ATC. Morris would physically pay the kickbacks throughout North Miami and Florida’s Broward County. These patients, who attended ATC, were ineligible for the services billed to Medicare and did not receive them. After Medicare paid the claims, some of the co-conspirators then laundered the Medicare money in order to create cash to pay the kickbacks for patients.

Evidence at trial revealed that Ward was a program director at ATC’s Ft. Lauderdale, Fla., center from November 2008 until ATC’s closing in October 2010. The evidence showed Ward helped doctors at ATC sign patient files without reading them or seeing the patients, and that Ward and others would assist the owners of ATC in fabricating doctor notes, therapist notes and other documents to make it falsely appear in ATC’s patient files that patients were qualified for the individualized, specialized treatment. Included in these false and fraudulent submissions to Medicare were claims for patients who were in the late stages of diseases causing permanent cognitive memory loss and patients who had substance abuse issues and were living in halfway houses. These patients were ineligible for PHP treatments, and because they were forced by their assisted living facility owners and halfway house owners to attend ATC, they were not receiving treatment for the diseases they actually had.

ATC executives Lawrence Duran, Marianella Valera and Judith Negron were previously sentenced to 50 years, 35 years and 35 years in prison, respectively, for their roles in the fraud scheme. The 50- and 35-year sentences represent the longest federal sentences for health care fraud ordered to date in the United States.

ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010. Dozens of individuals have been convicted at trial or pleaded guilty for their participation in the scheme, including doctors Mark Willner and Alberto Ayala, who were each sentenced to 10 years in prison.

Evidence at trial showed that the ATC scheme resulted in a total of $205 million in fraudulent Medicare billings.

The cases were prosecuted by Senior Trial Attorney Jennifer L. Saulino and Trial Attorney Laura M.K. Cordova of the Justice Department Criminal Division’s Fraud Section and James V. Hayes, Assistant U.S. Attorney in the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

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

FLORIDA RESIDENT PLEADS GUILTY IN ROLE TO DEFRAUD MEDICARE OF $200 MILLION

The following excerpt is from the Department of Justice website:
Tuesday, March 13, 2012
Miami-Area Resident Pleads Guilty to Participating in $200 Million Medicare Fraud Scheme
WASHINGTON – A Miami-area resident pleaded guilty today for his role in a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

Mathis Moore, 56, pleaded guilty before U.S. Magistrate Judge Barry L. Garber in Miami to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.  Moore was charged in an indictment unsealed on Feb. 15, 2011, in the Southern District of Florida.

Moore admitted to participating in a fraud scheme that was orchestrated by the owners and operators of American Therapeutic Corporation (ATC); its management company, Medlink Professional Management Group Inc.; and the American Sleep Institute (ASI).  ATC, Medlink and ASI 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.  ASI purported to provide diagnostic sleep disorder testing.
 
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI.  In some cases, the patients received a portion of those kickbacks.  Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services to attend treatment programs that were not legitimate PHPs so that ATC and ASI 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.

Moore admitted to serving as a patient broker who provided patients for ATC and ASI in exchange for kickbacks in the form of checks and cash.  The amount of the kickback was based on the number of days each patient spent at ATC.  

According to his plea agreement, Moore’s participation in the ATC fraud resulted in $17 million in fraudulent billings to the Medicare program.
Sentencing for Moore is scheduled for May 29, 2012, at 9:30 a.m.  He faces a maximum penalty of 15 years in prison and a $250,000 fine.

ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011.  ATC, Medlink and 10 of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.  A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.

Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge 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.

The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino, Steven Kim and Robert Zink of the Criminal Division’s Fraud Section.  A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants that collectively have billed the Medicare program for more than $3.6 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.