DOJ Reports That Fraud Investigations Prove Fruitful

The Department of Justice (DOJ) has announced the sentencing and convictions of five people in connection with schemes to defraud the Medicaid and Medicare programs. Cumulatively, the fraudulent activity at issue resulted in $47 million of inappropriate billing to the federal health care programs. The legal actions reflect the DOJ’s commitment to prosecuting fraud on the nations’ health care system.

Medicaid Fraud Sentencing

On July 24, 2013, Cassandra Little and Susan Hill were sentenced to three years of supervised release and ordered to pay a combined $81,400 in restitution for their parts in a scheme to defraud the Nevada Medicaid program. Little received a prison sentence of 33 months, while Hill was sentenced to 18 months. Both are expected to self-report to federal prison no later than October 15, 2013.

Over the course of three years, Little and Hill defrauded the Nevada Medicaid program of $1 million through their company, Hill/Little LLC (Hill/Little). Hill/Little entered into a contract to provide health care services to Medicaid-eligible children. Hill, who served as president of Hill/Little, and Little, a Ph.D. and licensed social worker, created a program to obtain aid for the children’s parents; however, the program was neither authorized nor permitted by their Medicaid contract. Little provided minimal training to parents and guardians so that they could provide services to their children; however, the services amounted to little more than routine activities that parents and guardians normally provide. Hill/Little then billed Medicaid $8,000 per month per child, using a billing code for services provided by a licensed social worker. The company retained $5,000 each month and passed the remaining $3,000 on to parents and guardians.

California Medicare Fraud Conviction

On July 19, 2013, Obiageli Agbu was convicted of one count of conspiracy to commit health care fraud and eight counts of health care fraud. At sentencing, she faces a maximum penalty of ten years’ imprisonment for each count.

Agbu was the owner of Ibon, Inc. (Ibon), a fraudulent durable medical equipment (DME) supply company. Her father, Charles Agbu, a church pastor, operated another fraudulent DME supply company called Bonfee, Inc. (Bonfee) in the same building. The Agbus and their co-defendants submitted more than $11 million in fraudulent claims for expensive DME that was either unnecessary or never provided. For example, they purchased power wheelchairs for $900, but billed Medicare $4,000 to $5,000 for each wheelchair. The wheelchairs were DME “of last resort” that could harm to people without severe mobility limitations. They also paid kickbacks to patient recruiters who cajoled senior citizens into accepting unnecessary DME, and to doctors who wrote fraudulent prescriptions.

Agbu’s father and her other co-defendants have not yet been sentenced.

Pennsylvania/New York Medicare/Medicaid Fraud Plea

On July 24, 2013, Leonid Zalkind pled guilty to one count of conspiracy to commit money laundering for his role in a $13 million scheme to defraud Medicare. Zalkind faces a maximum penalty of 20 years’ imprisonment and a $500,000 fine.

Over the course of two years, Zalkind laundered the proceeds of health care fraud from a clinic in Brooklyn, New York called Cropsey Medical Care PLLC (Cropsey). Cropsey submitted more than $13 million in claims to both Medicare and Medicaid for fraudulent services and procedures over a three-year period. Zalkind accepted checks from Cropsey paid to various shell companies owned by Zalkind. The proceeds from checks were returned to Cropsey and used for illegal kickbacks to purported patients.

Eight individuals are awaiting trial in conjunction with the Cropsey scheme.

Michigan Medicare Fraud Plea

Syed Shah, a physical therapist assistant, pled guilty to one count of conspiracy to commit health care fraud on July 24, 2013 for his part in a home health fraud scheme. He faces a maximum penalty of 10 years in prison.

For four years, Shah received kickbacks for obtaining the information of Medicare beneficiaries and providing it to his co-conspirators, who billed the Medicare program for unnecessary and/or never provided services. He aided co-conspirators in creating fictitious therapy files by signing documents and progress notes stating that he had provided the false services. He began participating in the scheme while employed by Prestige Home Health Services, Inc. (Prestige), and later continued participating by becoming an owner of Royal Home Health Care, Inc. (Royal). While there, he and his co-conspirators billed Medicare for home health visits that were unnecessary and never occurred, paid kickbacks to patient recruiters, including Shah, for Medicare beneficiary information, and created fictitious therapy files. Combined with two other home health agencies involved in the conspiracy, Prestige and Royal received more than $22 million.

Investigations

The Nevada case was handled in relation to the President’s Financial Fraud Enforcement Task Force, which was established to prosecute financial crimes, in particular those connected with the last financial crisis and those persons who take advantage of economic recovery. It is considered the “broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. The investigations of the California, Pennsylvania/New York, and Michigan schemes were conducted be the Medicare Fraud Strike Force, part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), which operates in nine cities throughout the country to combat Medicare fraud.