Ex-Controller Of California Court Services Firm With Gambling Addiction Admits Embezzling $3.3 Million And Pleads Guilty In Federal Court

I receive many calls from businesses and individuals where the government - federal, state, or administrative boards - or insurance companies are requesting records.  Some records are requested for an audit.  Other records are requested by a subpoena or grand jury subpoena. 

One of the keys in responding is not to panic. Obtain sage advice and proceed intelligently so you do not make matters worse. Even if there are some issues with the records, it may be a damage control case and you may not be objective or thinking clearly when receiving this request for records. 

One of the first things I tell clients is NOT to destroy records. Why? Destroying records does a number of things. First, it helps show intent to defraud. Second, it also provides a basis for an obstruction of justice charge. So even if the government decides not to charge health care fraud, it can charge obstruction of justice. Third, it also means you will not be able to use those records in your defense at any time and you do not know where the investigation is going at an early stage.  

A recent case shows what can happen when records are destroyed. On June 11, 2014, a New Jersey chiropractor, Mary Jean Negri, DC, RN, admitted destroying patient appointment records sought by federal agents investigating potential billing fraud at her medical office. Dr. Degri DC pleaded guilty in federal court to an information charging her with one count of obstructing an investigation of a health care offense. Dr. Negri DC had been practicing for 24 years and now this will cause her to lose her license and have a federal criminal conviction. 

According to documents filed in this case and her own statements made in court, Dr. Degri DC discovered in May 2012 that the FBI and the U.S. Attorney’s Office were investigating her chiropractic corporation for potentially fraudulent billing practices. Dr. Negri DC  suspected that investigators were interested in obtaining the clinic's patient appointment books as evidence of potential fraud. In an effort to obstruct the government’s investigation, she discarded those patient appointment books.

Dr. Negri DC's sentencing is scheduled for September 29, 2014. The maximum sentence on this charge is 5 years, a $250,000 fine, or twice the gain or loss caused by the offense. It is doubtful that she will receive the maximum but the sentence will depend on the judge and the facts and circumstances.  There will be significant collateral consequences to Dr. Negri DC as well such as being excluded as a Medicare provider by OIG and discipline to her license including revocation.  

Do not let your office respond to subpoenas or request for records in a manner that exposes you to greater problems. Seek advice and handle these requests in a professional manner. Even if you need to assert the 5th Amendment or are concerned about billing exposure, remember that not every case investigated is charged but it makes the government's job easier to prove fraudulent intent if there are records destroyed or "lost" in a flood or disaster.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Phone: 213-233-2260

Email: tgreen@greensasoc.com