Month: May 2022

Source: United States Department of Justice News

The Justice Department amended its complaint in a laboratory testing fraud case to add six physicians in Texas. The case alleges False Claims Act violations based on patient referrals in violation of the Anti-Kickback Statute and the Stark Law. The amended complaint further alleges that the six physicians caused claims to be improperly billed to federal health care programs for medically unnecessary laboratory testing. 

According to the United States’ complaint, the six physician defendants received thousands of dollars in kickbacks in return for their referrals of laboratory testing. The complaint alleges that laboratories True Health Diagnostics LLC (THD) and Boston Heart Diagnostics Corporation (BHD) conspired with small Texas hospitals, including Rockdale Hospital dba Little River Healthcare (LRH), to pay physicians to induce referrals to the hospitals for laboratory testing, which was then performed by THD or BHD. As alleged in the complaint, the hospitals paid a portion of their laboratory profits to recruiters, who in turn kicked back those funds to the referring physicians. The recruiters allegedly set up companies known as management service organizations (MSOs) to make payments to referring physicians that were disguised as investment returns but were actually based on, and offered in exchange for, the physicians’ referrals. The complaint alleges that laboratory tests resulting from this referral scheme were billed to various federal health care programs, and that the claims not only were tainted by improper inducements but, in many cases, also involved tests that were not reasonable and necessary.

“The Department of Justice is committed to holding accountable health care providers, including physicians, who commit fraud,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Improper financial arrangements involving physicians and laboratories can distort physicians’ medical judgments, waste taxpayer dollars and subject patients to unnecessary testing or other services.”

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally-funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law seek to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The United States’ amended complaint alleges that, in addition to the previously named defendants, the following six physicians received kickbacks from MSOs in return for their laboratory testing referrals:

• Doyce Cartrett, Jr., M.D., of Silsbee, Texas, allegedly received over $320,000 from LRH and two MSOs, Ascend MSO of TX LLC (Ascend) and Eridanus MG LLC (Eridanus), in return for his referrals.
• Elizabeth Seymour, M.D., of Corinth, Texas, allegedly received over $280,000 from two MSOs, Ascend and Eridanus, in return for her referrals.
• Emanuel Paul “E.P.” Descant, II, M.D., of Spring, Texas, allegedly received over $125,000 from two MSOs, North Houston MSO and Tomball Medical Management Inc., in return for his referrals.
• Frederick Brown, M.D., of Missouri City, Texas, allegedly received over $190,000 from two MSOs, Ascend and Indus MG LLC (Indus), in return for his referrals.
• Heriberto Salinas, M.D., of Cleburne, Texas, allegedly received over $75,000 from two MSOs, Ascend and Herculis MG LLC (Herculis), in return for his referrals.
• Hong Davis, M.D., of Lewisville, Texas, allegedly received over $70,000 from two MSOs, Ascend and Herculis, in return for her referrals.

“Schemes that funnel health care referrals do not work without the participation of physicians,” said U.S. Attorney Brit Featherston for the Eastern District of Texas. “They are not merely passive players in these elaborate schemes, but an integral part, without which the scheme could not exist. Our office is committed to rooting out health care fraud by pursuing all players involved the scheme, from the laboratories and their leaders to the marketers and the physicians who make it all possible. Naming these physicians in the complaint is evidence of that commitment.”

“Patients deserve reasonable and necessary care from providers without improper motivations,” said Special Agent in Charge Miranda L. Bennett of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Collaborating with our law enforcement partners, we will continue to investigate and hold accountable physicians accepting payments for referrals.”

“The Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DCIS) is committed to rooting out fraud schemes that waste taxpayer resources and impact mission readiness,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “DCIS will continue to work with our partners to hold those accountable who undermine the integrity of the health care system that supports our nation’s service members, retirees and their families.”

The United States’ amended complaint was filed in connection with a lawsuit originally filed under the qui tam or whistleblower provisions of the False Claims Act by STF LLC, whose members are Felice Gersh, M.D. and Chris Riedel. The United States intervened in the qui tam action in December 2021 and filed a complaint under the False Claims Act in January 2022 against former THD CEO Christopher Grottenthaler, former BHD CEO Susan Hertzberg, former LRH CEO Jeffrey Madison, and others. Under the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the recovery. The Act permits the United States to intervene in such lawsuits and add claims and defendants, as it has done here. The qui tam case is captioned United States, et al. ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.). If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.

This case is being handled by attorneys Christopher Terranova and Gavin Thole in the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorneys James Gillingham, Adrian Garcia and Betty Young in the U.S. Attorney’s Office for the Eastern District of Texas. Investigative support is being provided by HHS-OIG and DCIS. As a result of its efforts, the United States has already recovered more than $31 million relating to conduct involving BHD, THD and LRH, including False Claims Act settlements with 29 physicians, two health care executives and a laboratory company.

The United States’ pursuit of this lawsuit illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).   

The claims in the complaint are allegations only, and there has been no determination of liability.

Source: United States Department of Justice News

A fourth member of a network that operated and facilitated a large-scale “grandparent scam” pleaded guilty to racketeering conspiracy.

According to court documents, Joaquin Lopez, 46, of Hollywood, Florida, was a member of a network of individuals who, through extortion and fraud, induced elderly Americans across the United States to pay up to tens of thousands of dollars each to purportedly help their grandchild or other close family relative. Members of the network contacted elderly Americans by telephone and impersonated a grandchild, other close relative or friend of the victim. They falsely convinced the victims that their relatives were in legal trouble and needed money to pay for bail, for medical expenses for car accident victims or to prevent additional charges from being filed. The defendants and their co-conspirators then received money from victims via various means, including in-person pickup, mail and wire transfer, and then laundered the proceeds, including through the use of cryptocurrency.

“The Department of Justice’s Consumer Protection Branch will continue to investigate and prosecute criminals who target elderly Americans and take advantage of their concern for loved ones,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are grateful to our partners at the U.S. Attorney’s Office for the Southern District of California and the FBI in advancing the department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”

“These defendants were part of a sophisticated criminal organization that exploited the tremendous love a grandparent has for a grandchild,” said U.S. Attorney Randy Grossman for the Southern District of California. “The victims were financially and emotionally devastated by callous people who thought only of enriching themselves. Because of the diligence of our prosecution team and law enforcement partners, these defendants have been brought to justice.”

“These guilty pleas are a prime example of the collaboration and coordination among our local, state and federal partners who make up San Diego’s Elder Justice Task Force, and the great work being done to protect our elderly population,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The task force is committed to aggressively pursuing criminal organizations who prey on our senior citizens, and will utilize all available investigative means to bring them to justice. I would also like to thank the FBI’s Los Angeles Field Office for their continued support in this case.”   

Lopez pleaded guilty to conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act. He is scheduled to be sentenced on Aug. 19. He faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Two co-defendants remain pending for trial. Two additional defendants have been charged but remain at large.

The case was investigated by the FBI’s San Diego Field Office, North County Resident Agency, with critical assistance from investigators of the San Diego County District Attorney’s Office.

Trial Attorneys Lauren M. Elfner and Wei Xiang with the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Oleksandra Johnson for the Southern District of California are prosecuting the case.

The department’s extensive and broad-based efforts to combat elder fraud seeks to halt the widespread losses seniors suffer from fraud schemes. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors and other seniors who can use that information to protect themselves.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud, and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. ET. English, Spanish and other languages are available.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. Information about the Justice Department’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

Source: United States Department of Justice News

A Chicago-area man pleaded guilty yesterday to mail fraud and aggravated identity theft associated with his filing of false tax returns.

According to court documents, Wilmer Alexander Garcia Meza used the personal identifying information of others — including their names, dates of birth and identification documents such as foreign passports — to fraudulently obtain Individual Taxpayer Identification Numbers (ITINs) in their names from the IRS. An ITIN is a tax processing number issued by the IRS to individuals who do not have, and are not eligible to obtain, a Social Security number. From 2013 through 2017, Garcia used the ITINs to file tax returns in the names of these stolen identities, claiming thousands of dollars in fraudulent refunds. Garcia then used identification documents in those same names to cash these refund checks issued by the IRS. In total, Garcia caused a tax loss of approximately $222,000.

Garcia is scheduled to be sentenced on Aug. 17 and faces a mandatory minimum sentence of two years in prison for aggravated identity theft and a maximum sentence of 20 years in prison for mail fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Thomas Flynn and Jacob Green of the Tax Division are prosecuting the case. Former Trial Attorney Michael Landman also provided valuable assistance on the case.

Source: United States Department of Justice News

PORTLAND, Ore.—On May 25, 2022, a Hillsboro, Oregon man was sentenced to federal prison for leading a Hillsboro area methamphetamine distribution cell that was part of a conspiracy to traffic large quantities of methamphetamine, heroin, and fentanyl from Mexico for resale in Oregon and Washington State.

John Armas, 44, was sentenced to 90 months in federal prison and five years’ supervised release.

According to court documents, Armas’ Hillsboro methamphetamine distribution cell was part of a larger drug trafficking network led by Victor Alvarez Farfan, 50, of Oregon City, Oregon. Armas would receive pounds of methamphetamine at his residence from Farfan or associates of Farfan and, in turn, transfer it to various co-conspirators for storage or further distribution. From May 2018 through October 2018, Armas planned and coordinated the transfer and distribution of more than 5 kilograms of methamphetamine.

On October 17, 2018, a federal grand jury in Portland returned a nine-count indictment charging Armas, Farfan, and 20 co-defendants with conspiracy to possess with the intent to distribute and distribute controlled substances; use of a communication facility, including cellular telephones, in the commission of a controlled substances felony; maintaining drug-involved premises to manufacture and distribute controlled substances; interstate distribution of drug proceeds and money laundering.

On October 24, 2018, a coordinated law enforcement operation led by the FBI with assistance from Homeland Security Investigations (HSI), the Westside Interagency Narcotics (WIN) Task Force and the Clackamas County Interagency Task Force (CCITF) resulted in the arrest of Armas, Farfan and many of their co-defendants. As part of the operation, investigators searched Armas’ Hillsboro residence and seized a  handgun and drug packaging material.

On January 13, 2020, Armas pleaded guilty to conspiracy to possess with the intent to distribute methamphetamine. On November 23, 2021, Farfan became the last of 23 co-defendants charged in the conspiracy to plead guilty. On March 4, 2022, Farfan was sentenced to 180 months in federal prison and five years’ supervised release.

This case was prosecuted by the U.S. Attorney’s Office for the District of Oregon and is the result of a joint investigation by FBI, HSI, WIN, and CCITF. Forfeiture was litigated by the U.S. Attorney’s Office Asset Recovery and Money Laundering Division.

WIN includes representatives from the Washington County Sheriff’s Office, Beaverton Police Department, Hillsboro Police Department, Tigard Police Department, Oregon National Guard Counterdrug Program, and FBI. CCITF includes representatives from Clackamas County Sheriff’s Office, Canby Police Department, Oregon State Police, HSI, and FBI.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.