Volume 28 | November 2022




N.J. Man Charged in $8 Million COVID-19 Relief Fraud Scheme

On November 9, the Department of Justice (DOJ) announced a federal grand jury in Newark, New Jersey, returned an indictment charging an Indian national for an $8 million Covid-19 relief fraud scheme. According to the indictment, Abhishek Krishnan fraudulently obtained millions of dollars in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Krishnan previously resided in Wake County, North Carolina, before returning to his home country of India. Following his return to India, Krishnan allegedly submitted several fraudulent PPP loan applications to banks in the United States. Some of the applications Krishan submitted were on behalf of purported companies that were not registered business entities. 

The fraudulent applications allegedly included false statements about the companies’ employees and payroll expenses fa. Additionally, Krishan purportedly falsified the accompanying tax filings, and used the name of another person without that person’s authority. Krishnan allegedly submitted at least 17 PPP loan applications seeking over $8.2 million and received more than $3.3 million in loan proceeds. Following receipt of the funds, Krishnan allegedly laundered the proceeds of the fraud.  

Krishnan is charged with two counts of wire fraud, two counts of money laundering, and two counts of aggravated identify theft. If convicted, Krishnan faces a maximum penalty of 84 years in prison. According to the DOJ, since the inception of the CARES Act, the Fraud Section has prosecuted over 150 defendants in more than ninety-five criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds.

Theranos’ Founder Requests 18 Months of House Arrest

Chilivis Grubman previously reported the conviction of Theranos’ Founder, Elizabeth Holmes. Holmes was found guilty of one count of conspiracy to defraud investors and three counts of wire fraud. Holmes is now asking the Court for leniency in light of her upcoming sentencing hearing scheduled for November 18th.

On November 10th, Holmes’ defense team submitted an 82-page document, accompanied by over 100 letters of support, requesting 18 months of house arrest. Holmes’ attorneys asked U.S. District Judge Edward Davila to “[…] consider, as it must, the real person, the real company and the complex circumstances surrounding the offense.” The Government responded with a 46-page brief asking the Court to sentence Holmes to 15 years in prison. Assistant U.S. Attorney Robert S. Leach specifically noted that “[Holmes] repeatedly chose lies, hype and the prospect of billions of dollars over patient safety and fair dealing with investors.”

Holmes founded Theranos in 2003 at the age of 19. Theranos was an American privately held corporation that claimed to have developed blood tests only requiring small amounts of blood. However, it was found that Theranos’ devices produced inaccurate results, and the company was actually running blood tests using competitor companies’ machines. At its peak, Theranos was valued at $9 billion dollars and, Forbes magazine estimated Holmes’ net worth at $4.5 billion in 2015. Holmes currently faces up to 80 years in prison, and she will learn her fate this week.

Physician and Medical Office Settle False Claims Act and Kickback Allegations for $2.6 Million

On November 10, the United States Attorney's Office for the District of Connecticut, in conjunction with the Connecticut Attorney General, announced a $2.6 million civil settlement with Kevin P. Greene, M.D. and Feel Well Health Center of Southington, P.C., to resolve allegations that they violated the federal and state False Claims ACt (FCA) by improperly billing federal and state healthcare programs, and that they received illegal kickbacks.

The government alleged that Greene and Feel Well Health Center violated the federal and state FCA by improperly billing federal and state Medicaid between April 2016 and January 2020. Greene and Feel Well Health Center allegedly submitted false claims for medical visits when, in fact, the patients received fitness-related services at a gym staffed by a coach and yoga instructor. Further, they allegedly submitted claims for services rendered by Greene when he was not physically present in the office, including claims during times when he was out of the country or on vacation. They also submitted improper claims for telemedicine services and claims for medically unnecessary testing or procedures. 

The government also alleged that Greene and Feel Well Health Center violated the AKS by receiving remuneration from Boston Heart Diagnostics Corp. in return for ordering from the company clinical laboratory services for Medicaid patients. Greene and Feel Well Health Center agreed to pay $2.6 million to settle the claims and to enter into a three year Integrity Agreement with the U.S. Department of Health and Human Services designed to ensure future compliance. 

The allegations resolved by the settlement stemmed from an investigation based on a critical analysis of Medicare claims data rather than a whistleblower.

Real Estate Investment Trust Pays $3 Million to Resolve False Claims Act Allegations

On November 9, the United States Attorney’s Office for the Western District of Texas (Austin) announced that Omega Healthcare Investors, Inc. had agreed to pay $3 million to resolve FCA allegations.

According to its website, Omega Healthcare Investors “is a triple-net, equity REIT [Real Estate Investment Trust] that supports the goals of Skilled Nursing Facility (SNF) and Assisting Living Facility (ALF) operators with financing and capital.”

The DOJ alleged that Omega’s predecessor-in-interest – MedEquities – paid kickbacks to physicians to induce them to refer patients to a hospital in which MedEquities had an interest. The government alleged that MedEquities “offered the physicians a low-risk, high-reward investment” in a joint venture formed by MedEquities and a real estate company to purchase the hospital. That real estate company — Lakeway Realty – was also a party to the settlement.

The allegations were originally brought by two whistleblowers under the qui tam provisions of the FCA. In September 2020, the hospital at issue – Lakeway Regional Medical Center – agreed to pay more than $13 million to resolve the same matter.

Former Georgia County Commissioner Convicted of Extortion

On November 2, the DOJ announced the conviction of Sharon Barnes Sutton, former commissioner of the DeKalb County Board of Commissioners. A federal jury convicted Barnes Sutton for two counts of extortion in connection with a $1.8 million contract.

Theft by extortion occurs when someone obtains money or property from another person using threatening or intimidating behavior. According to court documents and evidence presented at trial, Barnes Sutton demanded monthly payments of $500 from a DeKalb County subcontractor, later increasing her demand to $1,000 per month. Barnes Sutton accepted two payments before the FBI “disrupted her continued demands” in August 2014. The DOJ noted that separately, Barnes Sutton also accepted a $5,000 cash bribe from an FBI confidential source who had business before the DeKalb County Board of Commissioners.

Illegally obtaining property or money by using threats or intimidation is a crime that can be prosecuted by both federal and local agencies and can carry harsh penalties, including long prison sentences. Barnes Sutton is scheduled for sentencing on January 6, 2023, facing a maximum penalty of 20 years in prison.

Department Of Justice Announces $15 Million Default Judgment Against Medical Coding Consultant Related To P-Stim Devices

On November 3, the United States Attorney’s Office for the Eastern District of Pennsylvania (Philadelphia) announced a default judgment of over $15 million in an FCA action filed against billing and coding company Titan Medical Compliance, and its owner, Timothy Warren.  

According to the government’s press release, Warren—a Kansas-based chiropractor—violated the FCA by falsely promoting P-Stim electro-acupuncture devices as reimbursable by Medicare and other federal healthcare programs when, in fact, they are not reimbursable by those programs. According to the government’s complaint, various P-Stim marketers and distributors, as well as some providers, paid Warren a monthly fee to provide coding recommendations. Warren allegedly instructed his customers to use certain codes that were meant for legitimate, surgically implanted neurostimulators to manage chronic pain, as opposed to a P-Stim, which can be applied “in a few minutes in an office setting without anesthesia and by someone with minimal training.”  

The government described this matter as “the latest action in the national investigation into the scheme of improper billing involving P-Stim” devices, which are branded under the names ANSiStim, Stivax, Neurostim, and NSS-2 Bridge, among other names.

FCA Allegations Result in $720K Settlement and 15 Year Exclusion

The government has issued numerous warnings to healthcare providers over the years related to improper claim submissions and has shown that it is serious about pursuing enforcement actions using the various tools at its disposal, including the FCA. Recently, Michael A. Bennett, United States Attorney for the Western District of Kentucky, reiterated this sentiment in a recent press release: “[w]e will continue to vigorously pursue medical providers who violate federal law by engaging in illicit schemes which include the filing of false claims seeking Medicare reimbursement."

Mr. Bennett’s office announced that Dr. Mangesh Kanvinde agreed to pay $720,000 to settle FCA allegations. Dr. Kanvinde also agreed to exclusion from Federal Health Care Programs for fifteen years. According to the press release, Dr. Kanvinde was allegedly involved in a scheme to order medically unnecessary durable medical equipment and genetic tests for patients. The government alleged that Dr. Kanvinde violated the FCA through problematic actions and arrangements. First, the government alleges that Dr. Kanvinde had improper financial arrangements with telehealth companies and temporary physician staffing agencies where Dr. Kanvinde allegedly received kickbacks for DME and genetic testing orders. Second, the government alleged that Dr. Kanvinde did not have a physician-patient relationship with the patients that received the improper orders and knew the orders for DME and genetic testing were medically unnecessary. 

This case is an important reminder to healthcare providers that the government has the tools and resources to enforce the law and is actively pursuing those that submit fraudulent claims. This case also serves as reminder that the government’s agencies routinely collaborate in its investigations and this practice will continue. According to Special Agent in Charge Tamala E. Miles with the Department of Health and Human Services, Office of the Inspector General, “[o]ur agency is committed to working with our law enforcement partners to ensure that bad actors are held accountable for their actions.”

Doctor Faces Prison Time for $54 Million Medicare Fraud Involving DME and Testing

Less than a week after Dr. Kanvinde's settlement (discussed above), the DOJ announced yet another enforcement action involving telemarketing companies and medically unnecessary orders. 

According to the DOJ's press release, Dr. Daniel Canchola’s plead guilty to a fraud scheme that involved him electronically signing orders for DME and cancer genetic tests that were medically unnecessary. According to the government, between August 2018 and April 2019, Dr. Canchola received $30 in exchange for each order for DME and cancer genetic tests he signed. This arrangement allegedly netted Dr. Canchola more than $466,000, according to the DOJ. Like Dr. Kanvinde, Dr. Canchola wrote orders for individuals who likely were targeted by telemarketing companies and for individuals whom he had little-to-no contact, according to the DOJ. The government alleges that the Dr. Canchola’s orders were used to submit more than $54 million in fraudulent claims to Medicare. 

Dr. Canchola pled guilty to conspiracy to commit wire fraud and faces up to 20 years in prison. However, a federal district judge may consider the federal sentencing guidelines and other related factors determining sentencing. Dr. Canchola is scheduled to be sentenced in March 2023.

Columbus Pain Medicine Practice Agrees to Pay $1 Million to Resolve Violations Under the Controlled Substances Act and False Claims Act

On October 27, the DOJ announced Kenneth Barngrover, M.D., and his practice, Southeast Regional Pain Center (SRPC), in Columbus, Georgia, will pay $1,000,000 to resolve allegations brought under the FCA and the Controlled Substance Act (CSA). According to the government, Dr. Barngrover operated a worker’s compensation pharmacy out of SRPC offices and was authorized to dispense controlled substances from that pharmacy.

Barngrover and SRCP were accused of violating the FCA by billing Medicare and Tricare for medically unnecessary evaluation and management services, billing for evaluation and management services that were up-coded, and billing for psychological testing services that were inappropriately rendered.

Barngrover who was registered with the DEA as required, also allegedly violated the Controlled Substance Act. The CSA subjects registered handlers of controlled substances to strict requirements regarding the inventory control and recordkeeping of controlled substances. These requirements exist to ensure DEA registrants account for controlled substances from the time that they are purchased until the time that they are either delivered to other registrants, dispensed to patients, or discarded. 

At issue in the settlement were allegations that in the operation of his worker’s compensation pharmacy, Barngrover violated the CSA by failing to maintain a biennial inventory, failing to maintain a current, complete, and accurate record of controlled substances, and collecting medications without DEA authority or documentation of receipt. The claims resolved by this settlement are allegations only, and there has been no determination or admission of liability.

Carter Healthcare Agrees to Pay Millions to Resolve False Claims Act Allegations

On October 18, the DOJ announced that for-profit home health provider Carter Healthcare LLC, along with its affiliates CHC Holdings and Carter-Florida, their President Stanley Carter, and Chief Operations Officer Bradley Carter will pay $7.175 million to settle allegations that they violated the FCA by fraudulently billing the Medicare program. 

Between 2014 and 2016, Carter Healthcare allegedly billed the Medicare Program “knowingly and improperly” for medically unnecessary therapy provided to patients in Florida and overbilled for therapy by upcoding patients’ diagnoses. 

Bradley Carter will pay $175,000, Stanley Carter will pay $75,000, and Carter Healthcare will pay the remaining $6.925 million of the settlement. Also, as part of the settlement, both Stanley Carter and Bradley Carter are excluded from participation in all Federal health care programs for a statutory period of five years. Additionally, Carter Healthcare is now bound by the terms of a “corporate integrity agreement” that requires the company to implement compliance measures.

Former employees of Carter Healthcare, Mahaffey and Mark Brimer, brought the claims under the qui tam or whistleblower provisions of the False Claims Act which enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs. Together, Mahaffey and Brimer will receive $1.3 million of the settlement.

Contemporaneous with this settlement, Carter Healthcare has agreed to pay an additional $22,948,004.54 to resolve another qui tam action brought in the Western District of Oklahoma, which alleged that Carter Healthcare improperly paid remuneration to its home health medical directors in Oklahoma and Texas for the purpose of inducing referrals.

Chilivis Grubman News

Chilivis Grubman Partner Presents at Various Conferences

Over the last couple of months, Chilivis Grubman partner Scott Grubman has spoken at several conferences on the topics of healthcare fraud, government enforcement, and white collar crime. In August, Scott spoke at the Chicago and Kansas City Regional Meeting for the Health Care Compliance Association (HCCA). In September, he spoke on the topic of COVID-19 relief enforcement at the Georgia Society of CPAs' annual meeting. In October, he spoke on the topic of healthcare fraud and abuse enforcement at the American Medical Rehabilitation Association's annual meeting. Next month, Scott will serve as the keynote speaker for DecisionHealth's 2022 Billing & Compliance Summit in Dallas, Texas.

Pharmacist Faces up to 15 Years in Prison for Black-Market Prescription Drug Diversion Scheme

The DOJ recently announced that Irina Sadovsky, owner and pharmacist-in-charge of Five Start RX, was convicted of conspiracy to commit health care fraud and conspiracy to engage in the unlicensed wholesale distribution of prescription drugs. Sadovsky now faces up to 15 years in prison after a federal jury convicted her for engaging in a black-market prescription drug diversion scheme.

From approximately September 2016 to April 2017, Sadovsky submitted claims to Medicaid of California and Medicare for prescription drugs provided to co-conspirators to sell on the black market instead of the intended beneficiaries. According to court documents, Sadovsky checked the eligibility of patients for reimbursement and recommended combinations of prescription drugs to be written. In turn, Sadovsky’s co-conspirators created fraudulent prescriptions by paying kickbacks to marketers with access to patients and prescribers or writing prescriptions themselves. Ultimately, Sadovsky submitted those fraudulent claims to Medicaid of California and Medicare.

Sadovsky is scheduled to be sentenced on February 3, 2023 and faces up to 10 years in prison for health care fraud conspiracy and up to 5 years in prison for unlicensed distribution conspiracy.

Georgia Woman Charged With FEMA Hurricane Relief Fraud

On September 27, Georgia resident Tiffany Brown was indicted on 11 counts of major disaster fraud, 14 counts of wire fraud, one count of theft of government money, and three counts of money laundering. 

After Category 4 Hurricane Maria devastated Puerto Rico in September 2017, Brown allegedly submitted a proposal to FEMA claiming that her company, Tribute Contracting LLC, could deliver 30 million meals to Puerto Rico’s residents in 30 days. She allegedly stated that her core suppliers had confirmed as much, when in reality, no such supplier existed. In the coming days, Brown worked to secure a source for millions of self-heating meals but could not find one. 

As a result of her alleged misrepresentations, Tribute was awarded a $162 million contract with a scheduled delivery of 30 million meals in 30 days. After being awarded the contract, Brown allegedly continued to make misrepresentations to FEMA representatives, such as blaming a delay in delivering the first set of meals on the weather when in reality the meals were not ready. FEMA quickly terminated the contract with Brown on October 23, and thereafter Brown allegedly submitted false invoices for reimbursement. Brown was arraigned on October 13, 2002 in the Northern District of Georgia, and pleaded not guilty. She was released on a $10,000 bond.

Three Kentucky Correctional Officers Face Additional Civil Rights Charges for Assaulting Inmates

On October 10, the DOJ announced a federal grand jury in London, Kentucky, filed a superseding indictment against three federal correctional officers for their respective roles in assaults against three federal inmates and alleged subsequent “cover-ups.”

A superseding indictment is an additional charge that is filed against a defendant after the original indictment. This usually happens when new evidence or information arises that warrants an additional charge. In this case, officers Samuel Patrick, Clinton Pauley, and Lieutenant Kevin Pearce were previously indicted in connection with the assaults of two federal inmates. Now, this superseding indictment brings additional charges for their assault of a third federal inmate and for their attempts to conceal the alleged crimes. 

The superseding indictment alleges that on March 30, 2021, Patrick and Pauley, who were officers at the U.S. Penitentiary-Big Sandy, and Lieutenant Pearce, who was a supervisory officer, physically assaulted an inmate in violation of his constitutional rights. The indictment also alleges that the assault resulted in bodily injury and that the defendants attempted to conceal the assault by authoring fictitious reports of the incident. Additionally, Patrick and Pearse purportedly pressured a fellow correctional officer to draft an untruthful report and were subsequently charged with witness tampering. Lastly, Pauley is charged with making false statements to agents of the DOJ's Office of the Inspector General and the FBI.

The maximum penalties for the charged crimes are 10 years of imprisonment for the assault offenses and 20 years of imprisonment for each of the witness tampering and false report offenses. An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

"This nation will remain the land of the free

only so long as it is the home of the brave."

Elmer Davis

Federal Conviction & Prison for Former Uber CSO’s Data Breach Cover Up

On October 5, the DOJ announced that a federal jury convicted Joseph Sullivan, the former Chief Security Officer of Uber Technologies, of obstruction of FTC proceedings and misprision of felony, which is essentially knowing that a federal felony had occurred and affirmatively trying to conceal the felony. The charges stem from an attempted cover-up of a data breach Uber suffered in 2016. 

Uber hired Mr. Sullivan in 2015 as the company’s CSO. At that time, Uber had also recently revealed to the FTC that it suffered a data breach in 2014 that exposed the personal information of about 50,000 consumers. Following Uber’s disclosure, the FTC’s Division of Privacy and Identity Protection opened an investigation into Uber’s data security program and practices. 

In May 2015, the FTC served Uber with a Civil Investigative Demand (“CID”) seeking information about the instances of unauthorized access and Uber’s data security program and practices. According to the government, Mr. Sullivan learned that Uber was hacked again in 2016 when hackers contacted him via email. The hackers demanded a large ransom to delete data it allegedly exfiltrated, which included records of 57 million Uber users and 600,000 driver license numbers, according to the DOJ. Mr. Sullivan verified the hackers’ claims. And according to the government, Mr. Sullivan did not report the hack to authorities or Uber’s users. Instead, Mr. Sullivan prevented the breach from being reported to the government. According to the press release, Mr. Sullivan “told a subordinate that they ‘can’t let this get out,’ instructed them that the information needed to be ‘tightly controlled,’ and that the story outside of the security group was to be that “this investigation does not exist.’”

Mr. Sullivan then arranged to pay the hackers’ ransom in exchange for the execution of a non-disclosure agreement. Uber then paid the hackers $100,000 in bitcoin. About a month later, Uber identified the two hackers’ real names and required them to sign new non-disclosure agreements. According to the government, Mr. Sullivan also knew that the hackers were hacking and extorting other companies and did not divulge the hack to authorities or Uber’s lawyers and senior leadership. Despite his efforts, Uber’s new management learned of the breach and reported it to the FTC and the general public in 2017.

Mr. Sullivan faces up to five years in prison for obstruction of FTC proceedings and up to three years for the misprision conviction. The federal judge will impose a sentence after considering federal sentencing guidelines and other relevant factors. Separately, the two hackers were arrested, prosecuted, and both pled guilty to computer fraud conspiracy charges. The hackers are awaiting sentencing.

Nurse Arrested for Allegedly Recording and Sharing Patient’s Childbirth on Snapchat

On September 25, 2022, the Telegraph (a well-known digital and print news source that primarily reports on events in middle Georgia) reported that a Georgia nurse was arrested after allegedly videoing a patient giving birth and sharing the video on Snapchat.  

These are only allegations, and the specifics are limited. However, according to The Telegraph, the arrest warrant indicates that police at the medical center brought the charges against the 26-year-old nurse. On May 16, 2022, the nurse was allegedly observed by the patient and the child’s father entering the room with the flash of her phone on in the pocket of her scrubs while the patient was in labor. The mother was reportedly informed that a video of her in labor was circulating on Snapchat. The warrant did not indicate why the video was shared nor did it indicate who may have shared the video on social media. The alleged video has also not been released by authorities or private individuals.

The nurse was charged with eavesdropping, a felony punishable by up to five years in prison and a $10,000 fine. If the allegations are determined to be true, both the nurse and the employer could also face exposure to administrative and legal ramifications. These disputed allegations should remind medical facilities, administrators, and providers to perform routine training on privacy, HIPAA standards, and acceptable behavior in the heavily regulated healthcare industry. Social media has its benefits, but improper use by employees can have significant and lasting implications for every party involved – including unsuspecting third parties.

Biogen Inc. Agrees to Pay $900 Million to Settle Allegations Related to Improper Physician Payments

On September 26, the DOJ announced a Cambridge, MA pharmaceutical company Biogen Inc. has agreed to pay approximately $900 million to resolve allegations that the company violated the FCA by giving doctors kickbacks to encourage them to prescribe Biogen drugs.

A former Biogen employee turned whistleblower, Michael Bawduniak, sued Biogen in 2012 on behalf of the federal government under the FCA's qui tam provisions. In his lawsuit, Bawduniak alleged that Biogen paid kickbacks to physicians to induce them to prescribe the company’s multiple sclerosis drugs. According to his complaint, from 2009 until 2014, Biogen offered and paid remuneration, “in the form of speaker honoraria, speaker training fees, consulting fees and meals.” Biogen employees purportedly targeted health care professionals who attended Biogen’s speaker programs, speaker training meetings or consultant programs. The complaint alleged Biogen induced the health care professionals to prescribe the drugs Avonex, Tysabri, and Tecfidera. 

“The settlement announced today underscores the critical role that whistleblowers play in complementing the United States’ use of the False Claims Act to combat fraud affecting federal health care programs.” said Principal Deputy Assistant Attorney General Brian M. Boynton.

Biogen, in a statement, denied any wrongdoing in the case. Instead, it insisted it wanted to resolve the litigation to focus on other priorities. “Biogen believes its intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case,” the company said. Biogen further emphasized “the U.S. and the states did not intervene in the case and the settlement does not include any admission of liability by Biogen.”

Boeing Seeks Dismissal of Air Force One FCA Suit

Boeing has filed a motion to dismiss an FCA suit brought by Relator Ahmed Bashir, who alleges that Boeing used an unqualified subcontractor on a $3.9 billion contract to build Air Force One aircraft. Bashir originally filed suit in April 2019, with the case unsealed in July 2022 after the DOJ declined to intervene. 

Boeing hired subcontractor GDC Technics LLC in 2018 to design, build, and install interiors as part of a contract for two new Air Force One jets. Boeing cancelled the contract in April 2021 after GDC began falling behind on its contractual obligations, with GDC entering into Chapter 11 bankruptcy a few weeks later. 

Bashir alleges that Boeing knew GDC was insolvent and wouldn’t fully perform on the contract in 2018 but steered the subcontract to GDC anyway to try to increase its chances of partnering with the Saudi government—GDC’s then-majority owner—on a lucrative military joint venture.

Boeing argued in its motion to dismiss that the complaint lacks specificity; that there is no plausible allegation that Boeing made any specific false claims to the government, and “in fact, Bashir does not describe any of Boeing’s claims for payment at all,” Boeing said. Further, the complaint cites to certain laws that are allegedly inapplicable to Boeing. Boeing also claims that this lawsuit is motivated by personal disappointment, as Bashir is upset that his company, Emerald Aerospace, was passed over by Boeing for GDC.

The case is U.S. ex rel. Bashir v. The Boeing Co. et al. (No. 2:19-cv-00600) in the U.S. District Court for the Western District of Washington.

Illinois Home Health Care Owners Receive Prison Time for Fraud Scheme

The DOJ announced that the owners of three Illinois home health care companies will serve prison time for their roles in a $6.7 million health care fraud scheme. Patricia Omorogbe and Felix Omorogbe (the “Omorogbes”) were sentenced to two years and 18 months, respectively. They were also collectively ordered to pay over $8 million in restitution.

From January 2009 to June 2018, the Omorogbes paid bribes and kickbacks to patient marketers for referrals of Medicare beneficiaries to their three home health care companies, A&Z Home Health Care, Dominion Home Health Care, and Alliance Home Health Care, in violation of the Anti-Kickback Statute. According to court documents, Patricia Omorogbe, a registered nurse, signed fraudulent contracts with patient marketers on behalf of their health care companies. She also falsely represented that she performed assessments of patients while she was out of the country. Felix Omorogbe wrote checks to himself and agency companies, and the proceeds were used to pay kickbacks to marketers. The Omorogbes’ general practice was to admit, discharge, and re-certify patients, regardless of their medical conditions. The foregoing scheme caused fraudulent claims to be submitted to Medicare.

The FBI and HHS-OIG investigated this matter. The DOJ noted that the Health Care Fraud Strike Force, operating in 24 federal districts, has charged more than 4,200 defendants for health care fraud since March 2007.

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