Examples of Healthcare Fraud Investigations - Fiscal Year 2013
Former Nigerian Fugitive Sentenced for Health Care Fraud and Money Laundering
On May 10, 2013, in Houston, Texas, Godwin Chiedo Nzeocha, a naturalized United States citizen originally from the Federal Republic of Nigeria, was sentenced to 109 months in prison and ordered to pay more than $26 million in restitution to Medicare and Medicaid, jointly with his co-conspirators. In addition, Nzeocha agreed to forfeit $1,098,320 to the United States. Nzeocha pleaded guilty on October 19, 2012 to one count of conspiracy to commit health care fraud and one count of money laundering. According to court documents, Nzeocha left the United States in 2009 to avoid arrest after receiving a telephone call from a City Nursing co-conspirator the day Umawa Imo, owner of City Nursing Services of Texas Inc., was arrested. Nzeocha had an agreement with Imo to sign his name on City Nursing patient documents as the provider of physical therapy services that he knew he was not qualified to authorize. The documents included blank treatment data forms, progress notes and daily physical therapy records. Nzeocha further admitted to knowing Imo was buying Medicare beneficiary information from recruiters and paying Medicare beneficiaries cash in order to bill for physical therapy services that were not provided. Nzeocha received approximately $1,098,320 from City Nursing. Between December 3, 2007 and June 26, 2009, when Nzeocha worked at City Nursing, the company billed Medicare and Medicaid for approximately $35,819,508 worth of physical therapy services that were not provided and received approximately $26,233,122 as payment for those services from Medicare and Medicaid. Imo was sentenced in October 2011 to 327 months in prison.
Leader of Medicaid Fraud Conspiracy Sentenced for Fraud and Money Laundering
On May 6, 2013, in Statesville, N.C., Betty Ann Cook, of Sparta, N.C., was sentenced to 40 months in prison, two years of supervised release and ordered to pay $325,820 in restitution. On April 25, 2012, Cook pleaded guilty to one count of health care fraud conspiracy and one count of money laundering conspiracy. According to court documents, Cook was the owner of Families First Home Health Care, a home health care company located in Alleghany Co., N.C. Cook’s company was enrolled with Medicaid to provide personal care services to Medicaid recipients. These services are provided by a home health aide in the recipient’s home. From December 2006 to about October 2010, Cook participated in a scheme to defraud Medicaid by submitting false and fraudulent claims to Medicaid seeking reimbursement for patient care services that were either not provided, not authorized by a physician, or were not based upon a valid in-home eligibility assessment performed by a qualified registered nurse, as required by Medicaid policy.
Ohio Doctor Sentenced on Health Care Fraud and Tax Charges
On March 25, 2013, in Toledo, Ohio, Darrell A. Hall, a medical doctor, was sentenced to 60 months in prison. Hall pleaded guilty to conspiracy to distribute a controlled substance, health care fraud and a tax count. According to court documents, Hall was licensed to practice medicine and operated a practice under the name “EDM Health Services, LLC.” He was also a registered provider to Ohio Medicaid, which provides free health benefits to qualified low-income Ohio residents. Between August 2008 through May 2009, Hall conspired with others to distribute 1,300 pills of oxycodone for no legitimate medical purpose. In addition, between January 2007 and December 2009, he fraudulently billed Ohio Medicaid in the amount of $78,113. Hall also failed to pay $97,384 in taxes that he owed to the IRS on behalf of EDM Health Services, LLC, between 2007 and 2010.
Doctor Sentenced for Health Care Fraud and Tax Evasion
On March 1, 2013, in Wheeling, W.Va., Barton Joseph Adams, of Parkersburg, W.Va., was sentenced to 50 months in prison for health care fraud and tax evasion. Adams was also ordered to forfeit $3,724,721 to the federal government and to pay $3,136,293 in restitution to various healthcare providers, including Medicare and Medicaid. According to court documents, Adams, a doctor of osteopathic medicine, owned and operated “Interventional Pain Management” in Vienna, W.Va. Adams previously admitted to making fraudulent claims for health care proceeds and to willfully attempting to evade taxes. Josephine Adams, the wife of Dr. Adams, was convicted of assisting her husband in the laundering of nearly $4 million dollars of health care fraud proceeds. The evidence presented showed that the fraud proceeds were first deposited into accounts in West Virginia and then were moved into accounts around the United States before being placed into accounts in Canada, China and the Philippines.
Texas Podiatrist Sentenced for Health Care and Tax Fraud
On January 31, 2013, in Sherman, Texas, Shannon Gallentine, of Maypearl, Texas, was sentenced to 24 months in prison and ordered to pay restitution in the following amounts: $407,942 to the IRS, $254,377 to Medicare, $110,622 to Medicaid, and $26,628 to Blue Cross Blue Shield. Gallentine pleaded guilty on May 10, 2012, to one count of health care fraud and one count of failing to file an income tax return. According to court documents, from January 2004 through May 2007, Gallentine, a podiatrist, owned and operated Ambulatory Foot Care in Lancaster, Texas. During this time, Gallentine submitted false and fraudulent claims to Medicare seeking reimbursement for procedures he did not perform. As a result of these false claims, Gallentine received in excess of $365,000 to which he was not entitled. Additionally, Gallentine willfully failed to file federal income tax returns for calendar years 2004 and 2005.
Florida Chiropractor Sentenced for Conspiracy to Commit Mail Fraud in Connection with Staged Accident Scheme
On January 31, 2013, in Miami, Fla., Jennifer Adams, of Boca Raton, was sentenced to 54 months in prison, three years of supervised release and ordered to pay $1,920,424 in restitution. Adams, a chiropractic doctor, pleaded guilty to a one-count Information charging her with conspiring with others to commit mail fraud for her role in a staged accident fraud scheme. According to court documents, to execute the fraud scheme, recruiters sought out drivers and their friends and family members to participate in staged accidents. Accident participants were directed by the recruiters to chiropractic clinics that were controlled by co-defendants. Adams agreed to place her name on the corporate paperwork for two clinics, thus utilizing her status as a licensed chiropractic physician, to allow the clinics to bill insurance companies directly for claims without obtaining additional licensure from the State of Florida. Adams initially believed the clinics to be operating legitimately. Sometime thereafter, Adams became aware that her license and status as a chiropractor was being used to fraudulently submit claims to insurance companies. Adams realized these patients did not require the medical treatment they sought. Adams continued to work at both clinics signing prescriptions for plans of treatment that she knew were not medically necessary and that she knew were being submitted for reimbursement to numerous insurance companies. From the time that Adams was told about the fraud until the clinics were closed by law enforcement, the clinics submitted fraudulent claims that resulted in more than ten insurance companies making total payments of $1,920,424.
California Doctor Sentenced for Role in Medicare Scam
On December 17, 2012, in Los Angeles, Calif., Dr. Kenneth Thaler, of Westminster, was sentenced to 12 months in prison and ordered to pay approximately $11 million in restitution to the Medicare program. According to court documents, Thaler admitted homeless patients to the Tustin Hospital and Medical Center after they had been driven from “Skid Row” in downtown Los Angeles as part of a Medicare fraud scheme. Thaler admitted approximately 60 patients per month, including some who did not require hospitalization. The patients were recruited by marketers who were being paid kickbacks by recruiters such as Estill Mitts to refer homeless Medicare and Medi-Cal beneficiaries for in-patient hospital stays. After Thaler admitted these patients, he and the hospital billed Medicare and Medi-Cal for in-patient services, even if it was not medically necessary for the patient to be hospitalized. Mitts who operated a center that recruited homeless people to receive unnecessary health services pleaded guilty in September 2008 to conspiracy to commit health care fraud, money laundering and tax evasion. He is awaiting sentencing.
Defendant Sentenced in Multi-Million Dollar Health Care Fraud Case
On November 5, 2012, in Houston, Texas, Tony Nnonso Obi, a naturalized U.S. citizen from the Federal Republic of Nigeria, was sentenced to 41 months in prison for his role in a massive health care fraud that billed the Medicare and Medicaid programs for more than $45 million. Obi pleaded guilty in August 2012 to one count of conspiracy to commit health care fraud and one count of money laundering. As part of his plea, Obi admitted entering into an agreement with Umawa Imo, the owner of City Nursing, to receive 15 percent of the money City Nursing obtained from Medicare for services billed on individuals referred by Obi. Imo paid Obi $1,051,425. Imo is currently serving more than 27 years in prison for his role in the conspiracy.
Michigan Physical Therapist Sentenced on Health Care Fraud and Money Laundering Charges
On October 29, 2012, in Grand Rapids, Mich., Chyawan Bansil, a physical therapist from Farmington Hills, Michigan, was sentenced to 13 months prison, one year of supervised release, and ordered to pay almost $250,000 in back taxes. In addition, Bansil forfeited over $500,000 in assets which had been seized by the government and paid an additional $2.25 million dollars to resolve related civil claims under the False Claims Act. Bansil will also be excluded from participating with Medicare and Medicaid for a minimum of five years. According to court documents, between February 2007 and January 2012, Bansil defrauded Medicare, Medicaid, and Blue Cross Blue Shield of Michigan of more than $1 million by causing those programs to be billed for expensive nerve conduction studies and needle electromyography tests that Bansil did not perform. Bansil was also laundering the proceeds of his fraud scheme in order to avoid taxes.
Examples of Healthcare Fraud Investigations - Fiscal Year 2013
The following examples of healthcare fraud investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.Former Nigerian Fugitive Sentenced for Health Care Fraud and Money Laundering
On May 10, 2013, in Houston, Texas, Godwin Chiedo Nzeocha, a naturalized United States citizen originally from the Federal Republic of Nigeria, was sentenced to 109 months in prison and ordered to pay more than $26 million in restitution to Medicare and Medicaid, jointly with his co-conspirators. In addition, Nzeocha agreed to forfeit $1,098,320 to the United States. Nzeocha pleaded guilty on October 19, 2012 to one count of conspiracy to commit health care fraud and one count of money laundering. According to court documents, Nzeocha left the United States in 2009 to avoid arrest after receiving a telephone call from a City Nursing co-conspirator the day Umawa Imo, owner of City Nursing Services of Texas Inc., was arrested. Nzeocha had an agreement with Imo to sign his name on City Nursing patient documents as the provider of physical therapy services that he knew he was not qualified to authorize. The documents included blank treatment data forms, progress notes and daily physical therapy records. Nzeocha further admitted to knowing Imo was buying Medicare beneficiary information from recruiters and paying Medicare beneficiaries cash in order to bill for physical therapy services that were not provided. Nzeocha received approximately $1,098,320 from City Nursing. Between December 3, 2007 and June 26, 2009, when Nzeocha worked at City Nursing, the company billed Medicare and Medicaid for approximately $35,819,508 worth of physical therapy services that were not provided and received approximately $26,233,122 as payment for those services from Medicare and Medicaid. Imo was sentenced in October 2011 to 327 months in prison.
Leader of Medicaid Fraud Conspiracy Sentenced for Fraud and Money Laundering
On May 6, 2013, in Statesville, N.C., Betty Ann Cook, of Sparta, N.C., was sentenced to 40 months in prison, two years of supervised release and ordered to pay $325,820 in restitution. On April 25, 2012, Cook pleaded guilty to one count of health care fraud conspiracy and one count of money laundering conspiracy. According to court documents, Cook was the owner of Families First Home Health Care, a home health care company located in Alleghany Co., N.C. Cook’s company was enrolled with Medicaid to provide personal care services to Medicaid recipients. These services are provided by a home health aide in the recipient’s home. From December 2006 to about October 2010, Cook participated in a scheme to defraud Medicaid by submitting false and fraudulent claims to Medicaid seeking reimbursement for patient care services that were either not provided, not authorized by a physician, or were not based upon a valid in-home eligibility assessment performed by a qualified registered nurse, as required by Medicaid policy.
Ohio Doctor Sentenced on Health Care Fraud and Tax Charges
On March 25, 2013, in Toledo, Ohio, Darrell A. Hall, a medical doctor, was sentenced to 60 months in prison. Hall pleaded guilty to conspiracy to distribute a controlled substance, health care fraud and a tax count. According to court documents, Hall was licensed to practice medicine and operated a practice under the name “EDM Health Services, LLC.” He was also a registered provider to Ohio Medicaid, which provides free health benefits to qualified low-income Ohio residents. Between August 2008 through May 2009, Hall conspired with others to distribute 1,300 pills of oxycodone for no legitimate medical purpose. In addition, between January 2007 and December 2009, he fraudulently billed Ohio Medicaid in the amount of $78,113. Hall also failed to pay $97,384 in taxes that he owed to the IRS on behalf of EDM Health Services, LLC, between 2007 and 2010.
Doctor Sentenced for Health Care Fraud and Tax Evasion
On March 1, 2013, in Wheeling, W.Va., Barton Joseph Adams, of Parkersburg, W.Va., was sentenced to 50 months in prison for health care fraud and tax evasion. Adams was also ordered to forfeit $3,724,721 to the federal government and to pay $3,136,293 in restitution to various healthcare providers, including Medicare and Medicaid. According to court documents, Adams, a doctor of osteopathic medicine, owned and operated “Interventional Pain Management” in Vienna, W.Va. Adams previously admitted to making fraudulent claims for health care proceeds and to willfully attempting to evade taxes. Josephine Adams, the wife of Dr. Adams, was convicted of assisting her husband in the laundering of nearly $4 million dollars of health care fraud proceeds. The evidence presented showed that the fraud proceeds were first deposited into accounts in West Virginia and then were moved into accounts around the United States before being placed into accounts in Canada, China and the Philippines.
Texas Podiatrist Sentenced for Health Care and Tax Fraud
On January 31, 2013, in Sherman, Texas, Shannon Gallentine, of Maypearl, Texas, was sentenced to 24 months in prison and ordered to pay restitution in the following amounts: $407,942 to the IRS, $254,377 to Medicare, $110,622 to Medicaid, and $26,628 to Blue Cross Blue Shield. Gallentine pleaded guilty on May 10, 2012, to one count of health care fraud and one count of failing to file an income tax return. According to court documents, from January 2004 through May 2007, Gallentine, a podiatrist, owned and operated Ambulatory Foot Care in Lancaster, Texas. During this time, Gallentine submitted false and fraudulent claims to Medicare seeking reimbursement for procedures he did not perform. As a result of these false claims, Gallentine received in excess of $365,000 to which he was not entitled. Additionally, Gallentine willfully failed to file federal income tax returns for calendar years 2004 and 2005.
Florida Chiropractor Sentenced for Conspiracy to Commit Mail Fraud in Connection with Staged Accident Scheme
On January 31, 2013, in Miami, Fla., Jennifer Adams, of Boca Raton, was sentenced to 54 months in prison, three years of supervised release and ordered to pay $1,920,424 in restitution. Adams, a chiropractic doctor, pleaded guilty to a one-count Information charging her with conspiring with others to commit mail fraud for her role in a staged accident fraud scheme. According to court documents, to execute the fraud scheme, recruiters sought out drivers and their friends and family members to participate in staged accidents. Accident participants were directed by the recruiters to chiropractic clinics that were controlled by co-defendants. Adams agreed to place her name on the corporate paperwork for two clinics, thus utilizing her status as a licensed chiropractic physician, to allow the clinics to bill insurance companies directly for claims without obtaining additional licensure from the State of Florida. Adams initially believed the clinics to be operating legitimately. Sometime thereafter, Adams became aware that her license and status as a chiropractor was being used to fraudulently submit claims to insurance companies. Adams realized these patients did not require the medical treatment they sought. Adams continued to work at both clinics signing prescriptions for plans of treatment that she knew were not medically necessary and that she knew were being submitted for reimbursement to numerous insurance companies. From the time that Adams was told about the fraud until the clinics were closed by law enforcement, the clinics submitted fraudulent claims that resulted in more than ten insurance companies making total payments of $1,920,424.
California Doctor Sentenced for Role in Medicare Scam
On December 17, 2012, in Los Angeles, Calif., Dr. Kenneth Thaler, of Westminster, was sentenced to 12 months in prison and ordered to pay approximately $11 million in restitution to the Medicare program. According to court documents, Thaler admitted homeless patients to the Tustin Hospital and Medical Center after they had been driven from “Skid Row” in downtown Los Angeles as part of a Medicare fraud scheme. Thaler admitted approximately 60 patients per month, including some who did not require hospitalization. The patients were recruited by marketers who were being paid kickbacks by recruiters such as Estill Mitts to refer homeless Medicare and Medi-Cal beneficiaries for in-patient hospital stays. After Thaler admitted these patients, he and the hospital billed Medicare and Medi-Cal for in-patient services, even if it was not medically necessary for the patient to be hospitalized. Mitts who operated a center that recruited homeless people to receive unnecessary health services pleaded guilty in September 2008 to conspiracy to commit health care fraud, money laundering and tax evasion. He is awaiting sentencing.
Defendant Sentenced in Multi-Million Dollar Health Care Fraud Case
On November 5, 2012, in Houston, Texas, Tony Nnonso Obi, a naturalized U.S. citizen from the Federal Republic of Nigeria, was sentenced to 41 months in prison for his role in a massive health care fraud that billed the Medicare and Medicaid programs for more than $45 million. Obi pleaded guilty in August 2012 to one count of conspiracy to commit health care fraud and one count of money laundering. As part of his plea, Obi admitted entering into an agreement with Umawa Imo, the owner of City Nursing, to receive 15 percent of the money City Nursing obtained from Medicare for services billed on individuals referred by Obi. Imo paid Obi $1,051,425. Imo is currently serving more than 27 years in prison for his role in the conspiracy.
Michigan Physical Therapist Sentenced on Health Care Fraud and Money Laundering Charges
On October 29, 2012, in Grand Rapids, Mich., Chyawan Bansil, a physical therapist from Farmington Hills, Michigan, was sentenced to 13 months prison, one year of supervised release, and ordered to pay almost $250,000 in back taxes. In addition, Bansil forfeited over $500,000 in assets which had been seized by the government and paid an additional $2.25 million dollars to resolve related civil claims under the False Claims Act. Bansil will also be excluded from participating with Medicare and Medicaid for a minimum of five years. According to court documents, between February 2007 and January 2012, Bansil defrauded Medicare, Medicaid, and Blue Cross Blue Shield of Michigan of more than $1 million by causing those programs to be billed for expensive nerve conduction studies and needle electromyography tests that Bansil did not perform. Bansil was also laundering the proceeds of his fraud scheme in order to avoid taxes.
