Increased Use of Nonprofits in Fraud Cases: Utah CEO of a "Charity" That Distributed Medical Supplies Sentenced for Tax Evasion

 

In our practice we have seen an increase in the number of charities or nonprofits in the health care or government contracts field. Often the problem is that the parties to not know how to run the charity according the federal and state tax rules. In addition, they often do not realize that both the federal agencies and states are able to use significant powers over non-profits.

In two recent related cases two men were involved in a federal tax fraud case involing a health care business charity.  What happened here? The CEO of a medical supply charity business, Ashley James Robinson, entered into a secret arrangement with a purported donor, Gurcharan “Jazzy” Singh. Mr. Singh provided medical supplies to the charity, making it appear as if these supplies had been donated to the charity thereby getting his company a deduction. 

Mr. Robinson then arranged for the charity to sell the goods to a third-party, passing most of the sale proceeds back to Mr. Singh. As compensation, Mr. Singh then paid Mr. Robinson, not the charity, up to 10% of the total proceeds. Mr. Robinson did not declare the income from Mr. Singh as income. 

As is common in these cases, over years the money adds up. According to court documents, from 2016 through 2019 Mr. Robinson that did not report a total of approximately $1,163,818 in income. As a result, Mr. Robinson caused a tax loss to the IRS of approximately $427,145. That is the loss amount. That will also be the restitution amount to be repaid. The more that can be repaid prior to sentencing, the better it will be obtaining a favorable sentence. 

The government also likes to allege facts showing that the person charged used the money to live lavishly or high on the hog as might be said in the South. Here the government alleged that Mr. Robinson used the funds to pay off the mortgage on his principal residence and to buy multiple luxury vehicles, including a Maserati, a Mercedes Benz and an Audi for a co-worker.

Mr. Robinson and his counsel must have decided that the defense was not strong and he pleaded guilty today to willfully evading the proper assessment of income tax. At sentencing, he was sentenced to federal prison for 1 year and one day (an excellent sentence since it allows him to serve just half the time.) The sentence implies that Mr. Robinson plead early, had mitigating circumstances in his background, and did not have any prior felonies. In addition to his prison sentence, U.S. District Judge Jill N. Parish for the District of Utah ordered Robinson to pay approximately $485,982 in restitution to the United States.

Mr. Singh has already been sentenced in the Central District of California to the same sentence of one year and one day.  These are relatively short sentences and hopefully these men can put this behind them, learn the lessons needed, and get on with their lives and back to their family.  We have seen so many clients get through these issues, and they do make it through the other side. 

Owner of Los Angeles Compounding Pharmacy Sentenced to 30 Months in Federal Health Care Fraud Case

Compounding pharmacies have been under intense scrutiny by Medicare, private third-party insurance and workers’ compensation insurance carriers for almost ten years. The criminal cases take so long to investigate and prosecute that there is a significant lag time between the time of operations and prosecution.

Compounding cases that proceed criminally usually involve aggressive and illegal marketing, medical necessity issues, and violation of pharmacy compounding laws and regulations. A recent case gives insight into a case involving compounding pharmacies where preprinted physician prescription pads, waiving of patients’ copays, and attempts to hide the waiving of copays caused criminal problems. 

According to court documents, Fusion Rx Compounding Pharmacy was a provider of compounded drugs. What are compounded drugs? They are non-FDA approved medications that are supposed to be tailored to the needs of a specific patient when FDA-approved medications do not meet the health needs of patient. The pharmacy obtains a compounding license and combines, mixes or alters two or more drugs. The physician is supposed to prescribe and order the compounded medication and indicate what drugs are to be compounded to make it for that particular patient. Fusion RX was owned by Navid Vahedi, a Los Angeles pharmacist. 

The prosecution alleged in its charging documents and there were admissions in the plea agreements that pharmacist Mr. Vahedi and Fusion Rx paid millions of dollars in kickback payments through the businesses of two marketers to send prescriptions for compounded drugs to Fusion Rx. It was also alleged that Mr. Vahedi and the of his two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to at least February 2016, it was alleged that Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions. 

Sacramento Man Pleads Guilty to Medicare Kickback Scheme Involving Hospices and Home Health Agencies

Home health agencies are routinely investigated for kickbacks and a recent case involves cash kickbacks by an insider who was discharging patients. What providers fail to remember is that if there is an illegal kickback, that the entire claim is treated as a false claim even if it was performed and was medically necessary. 

On February 6, 2020, Jai Vijay of Sacramento, pleaded guilty to conspiring with the owners of home health care agencies and a hospice agency to pay and receive illegal kickbacks in exchange for Medicare beneficiary referrals.

According to court documents, Jai Vijay’s wife, Anita Vijay, worked as the social services director at a skilled nursing and assisted living facility in Sacramento. In her role, Anita Vijay assisted Medicare beneficiaries in selecting home health care and hospice agencies following their discharge from the facility. 

Anita Vijay used her position to steer Medicare beneficiaries to home health agencies in Folsom and El Dorado Hills and a hospice agency in Folsom. In exchange for the beneficiary referrals, the agencies’ owners paid Jai Vijay and Anita Vijay illegal cash kickbacks.

Four Indicted in California for Billing Compound Cream Prescriptions to TRICARE and Labor Union Health Plans

The government has been investigating pharmacies that dispense and bill compound creams for the past 5 years as well as the marketing companies that work with them. Much of the focus has been on billings to workers' compensation carriers or billing to TRICARE, military health insurance, and billing to union health plans.

On February 4, 2020, a 48-count grand jury indictment was unsealed naming four  defendants relating to an Orange County compound pharmacy, Professional Compounding Pharmacy (PCP), that allegedly submitted fraudulent bills to the military’s TRICARE health plan and a labor union health plan for medically unnecessary compound cream prescriptions in which there was alleged illegal marketing. An indictment is not evidence and all defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt. 

The indictment – which contains charges of health care fraud, mail fraud, illegal kickbacks and money laundering – alleges that PCP, its marketers and a physician fraudulently generated prescriptions for custom-made compound cream medications. The indictment alleges that some bills charged as $15,000 per tube.

The indictment alleges that two “pain clinics” in Lawndale and National City recruited beneficiaries of TRICARE and the International Longshore and Warehouse Union’s (ILWU) Pacific Maritime Association Welfare Plan. 

California Doctor Who Bought Pacific Hospital in Long Beach Sentenced to 15 Months in Prison for Allowing Continuance of Kickback Arrangements

On January 17, 2020, Dr. Faustino Bernadett, a physician who is also the former owner of Pacific Hospital in Long Beach hospital was sentenced to 15 months in federal prison for "misprision of a felony." That is a fancy word for saying that he knew of an illegal act and did not stop it.

Dr. Bernadett's case arose out of him continuing the kickback arrangements in existence when he bought Pacific Hospital. He was ordered him to pay a $60,000 fine on top of $1 million he has already forfeited to the United States.

Dr. Bernadett, a board-certified anesthesiologist and pain management physician who retired his license last year, pleaded guilty last year to a one-count criminal information charging him with misprision of a felony.

In 2005, Dr. Bernadett purchased Pacific Hospital from Michael D. Drobot. Under the terms of the sale, Mr. Drobot guaranteed to Dr. Bernadett that 75 spinal surgeries per month would be performed at Pacific Hospital or else Mr. Drobot’s payout would be reduced by $25,000 for each surgery below that requirement.

Former California Physician Sentenced to 2 Years in Federal Prison for Defrauding Medicare by Prescribing Unnecessary Home Health Services for Kickbacks and Illegally Prescribing Opioid Drugs

Physicians who order home health where it is not medically necessary can be charged with Medicare fraud. If that same physician orders medications, especially controlled substances, without seeing the patient on a regular basis, that can be another ground for a fraud charge. 

The loss amounts can be huge since the physician will be held responsible for the total amount of billings by the home health agency and the pharmacy's prescriptions. A recent case illustrates a physician who ordered home health in exchange for payments and then also prescribed some pain medications that were medically unnecessary.  

On January 6, 2020, Kain Kumar, a former doctor, was sentenced to 24 months in federal prison after having pleaded guilty in April 2019 to one count of health care fraud and one count of distribution of hydrocodone. Mr. Kumar practiced internal medicine, maintained medical offices in Palmdale, Rosamond, and Ridgecrest, California and surrendered his medical license last year.

He was sentenced by U.S. District Judge Philip S. Gutierrez. Mr. Kumar was also ordered to pay financial penalties totaling more than $1 million, consisting of $509,365 in restitution, $494,900 in asset forfeiture, and a $72,000 fine.

San Francisco Acupuncturist Pleads Guilty To Health Care Fraud In False Billing for Union Members for Services Not Performed or Inaccurately Billed.

Federal prosecutors have focused investigations on the billing of labor union members’ health benefit plans especially in places like San Francisco where workers have generous union contracts. A recent case illustrates the types of cases that are being prosecuted.

December 6, 2019, acupuncturist Haichao Huang pleaded guilty to health care fraud, in violation of 18 U.S.C. § 1347, and making false statements relating to health care matters, in violation of 18 U.S.C. § 1035(a)(2), in the Northern District of California. The guilty plea was accepted by the Honorable Susan Illston, U.S. District Judge. 

According to the plea agreement, Mr. Huang was a health care provider who offered acupuncture, physical therapy, massage, and other services to patients in and around San Francisco. From February 2013 through June 2018, Mr. Huang admitted that he submitted and caused to be submitted false claims for reimbursement from health care benefit programs that he knew were not properly payable, including from programs provided through federal government and labor union healthcare plans. 

Mr. Huang's plea admits that he included false and inaccurate billing codes that artificially inflated both the type of service the patient received and the time he spent with the patient. The plea agreement gives examples of the ways in which Mr. Huang submitted false and inaccurate billings for reimbursement. For example, Mr. Huang submitted requests for reimbursement for acupuncture treatment when, in fact, the patient had received much shorter periods of treatment, no acupuncture treatment, or no care of any kind at all. 

Pittsburgh-area Lab Owner Charged with Paying Kickbacks in Connection with Medicare Claims for Genetic Testing Based on Telemedicine Visits

Genetic testing billed to Medicare, especially where telemedicine is used to generate the lab orders, has been a hot area of investigation by the U.S. Justice Department. A recent case illustrates the type of cases that are being targeted.

On November 26, 2019, Ravitej Reddy, the alleged owner of two testing laboratories—Personalized Genetics, LLC, d/b/a Personalized Genomics (PGL) and Med Health Services Management, LP (MHS) in Pennsylvania, was charged in federal court by criminal Information with 2 counts of conspiracy to pay and receive kickbacks, 1 count of conspiracy to pay kickbacks, and 1 count of offering and paying kickbacks. A criminal Information is not evidence and a defendant is presumed innocent.

According to the Information's allegations, Mr. Reddy's companies billed Medicare for 2 types of genetic testing: cancer genomic testing (CGx) and pharmacogenetic testing (PGx). CGx testing used DNA sequencing to detect mutations in genes that could indicate a higher risk of developing certain types of cancers in the future. CGx testing, however, was not a method of diagnosing whether an individual presently had cancer. PGx testing detected specific genetic variations in genes that impacted the metabolism of certain medications. In other words, PGx testing helped determine, among other things, whether certain medications would be effective if used by a particular patient. 

The Information alleges that from approximately May 2018 to April 2019, Mr. Reddy and a group of business consultants, marketers, operator of a telemedicine entity and others  acquired thousands of testing samples from Medicare beneficiaries located throughout the United States, as well as the corresponding prescriptions that PGL and MHS needed to bill Medicare for CGx and PGx testing. 

Former Merced Health Care Provider CEO Sentenced to 5 Years in Prison for Medi-Cal and Health Care Fraud

Health care fraud prosecutions continue to focus on nonprofit and community health clinics. At times, the community health centers are not run as rigorously as hospitals or larger entities but they are held to the same standard. Non-profits have special rules and founders or executives cannot run them for their own benefit. A recent case shows an aggressive prosecution against the founder and CEO of a nonprofit in California.

Photo: mvelez@mercedsunstar.com

On November 5, 2019, Sandra Haar, 59, of Merced, was sentenced in Fresno by U.S. District Judge O’Neil to five years in prison and ordered to pay $6,107,846 in restitution for health care fraud and conspiracy to receive kickbacks. Ms. Haar was ordered to self-surrender on Jan. 15, 2020, to begin serving her sentence. 

This sentence came after a guilty plea as there was no trial.  She had plead guilty in 2018 and as part of the plea agreement her daughter and husband would not be prosecuted. This is often an important part of the plea where other family members have been involved in a business.

Director of California Cosmetic Surgery Center Who Fled Pending Trial Is Returned to U.S. to Face Federal Charges in Health Care Fraud Case For Billing Cosmetic Procedures to Insurance as "Medically Necessary"

Extraditions for health care fraud cases are more common now especially where the loss amounts are high. In a recent case, Linda Morrow, a Rancho Mirage woman married to a plastic surgeon, David Morrow, who had fled the United States after being named in a 31-count federal grand jury indictment in 2016, arrived in Southern California on July 1 after being deported by Israel, which had determined that she had entered that nation on a fraudulent Mexican passport. Ms. Morrow faces federal charges related to allegations that she fraudulently billed insurance companies $50 million for “medically necessary” cosmetic surgeries has been returned the United States after fleeing to Israel two years ago.

          

Ms. Morrow appeared in U.S. District Court in Santa Ana on July 2, 2019 and entered a not guilty plea to a separate grand jury indictment that charges her with contempt of court for fleeing while free on bond. During that hearing, she was ordered detained and a trial date in the contempt case was scheduled for August 27. She will make another court appearance later this month to discuss the status of the pending health care fraud case.

Ms. Morrow and her husband, David Morrow, were arrested in Israel on June 16. David Morrow, who pleaded guilty in 2016 in the health care fraud case and was sentenced in absentia to 20 years in federal prison, is pending extradition proceedings in Israel. David Morrow also faces contempt of court charges for fleeing while he was pending sentencing.

West Hollywood Doctor Charged With Health Care Fraud, False Statements and Witness Tampering Relating to Billing Medicare for Human Growth Hormone Serostim and Alleged Buybacks From Patients for Resale

On July 2, 2019, a doctor James T. Lee, who operated a medical clinic in West Hollywood where he specialized in treating HIV patients was taken into custody in Vienna, Austria after waiving extradition pursuant to federal charges that allege he defrauded health insurance companies in connection with the brand-name human growth hormone Serostim.

After a federal grand jury returned a 10-count indictment on June 6, Dr. Lee was arrested in Vienna at the request of the United States. Dr. Lee subsequently waived extradition and agreed to return to the United States. The indictment against Dr. Lee charges him with one count of conspiracy to commit health care fraud, six counts of health care fraud, one count of making false statements relating to health care matters, and two counts of witness tampering. Dr. Lee is presumed innocent and charges are not evidence.

The indictment has been unsealed and the arraignment was scheduled in downtown Los Angeles. The government claims that Dr. Lee allegedly engaged in a scheme to divert Serostim – an injectable human growth hormone that is FDA-approved for HIV-positive patients – from legitimate HIV patients to other people who purchased the drug for its purported anti-aging properties. The Food and Drug Administration has approved Serostim for use only by HIV patients with wasting or cachexia who are also receiving antiretroviral therapy. 

According to the Indictment, from at least May 2011 until February 2019, Dr. Lee wrote prescriptions for Serostim to HIV patients, who obtained the drugs and used their Medicare Part D benefits to pay for the drugs. Dr. Lee or those associated with him then illegally purchased the Sersotim back from patients, so that he could re-sell the Serostim. Dr. Lee allegedly re-sold the Serostim to other patients who were not HIV-positive, and who used the human growth hormone to build muscle and for other cosmetic purposes.

Podiatrist Sentenced in Upcoding Medicare Fraud Case for Patients Seen at Assisted Living Facilities

Years ago, health care fraud cases would generally only be brought for outright fraud where there was ghost billing for patients not seen or other type of fraud. However, upcoded billing is now being charged more often when there is a significant pattern. A recent case involving a podiatrist illustrates this.

On May 17, 2019, podiatrist Loren Wessel of Tucson, Arizona was sentenced by U.S. District Judge James Soto for his role in a Medicare fraud scheme to serving a 24-month term of imprisonment. Mr. Wessel had previously pleaded guilty to Health Care Fraud. The Court also ordered Wessel to pay $965,985 in restitution to the Centers for Medicare and Medicaid Services.

In the plea agreement, Mr. Wessel admitted that from 2008 through June 2016 that he as a licensed podiatrist defrauded Medicare out of hundreds of thousands of dollars. In his plea agreement, Mr. Wessel admitted he submitted false claims to Medicare. As part of his practice, Mr. Wessel conceded that he regularly provided routine podiatry care for patients at assisted living facilities in and around Tucson, but fraudulently billed Medicare for more complex and significantly more expensive services that he had not performed. To further this upcoding, Mr. Wessel admitted that he falsely documented patients’ medical records with alleged ailments they did not have and with care Mr. Wessel did not provide.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Ten Individuals Affiliated With Compounding Pharmacy, Including Owners, Pharmacist, Billing Manager, Sales Reps and Nurse Practitioner, Charged in Compounding Prescription Drug Case

In compounding cases, it is usually some very high billed creams that get attention. In a recent case, the government alleges that the defendants’ fraudulent conduct caused a prescription plan administrator to pay over $29,000 for one tube of a cream advertised as treating “general wounds.”
Another red flag in compounding cases are call centers with marketers. A recent case in Alabama has both. This case is also significant since it targeted many people who worked at the compounding pharmacy including sales representatives, billers, managers in addition to the owners and pharmacist.

On May 6, 2019, ten defendants were charged in a 103-count indictment, including a nurse practitioner, owners, a pharmacist, managers, sales representatives and billers, of an Alabama based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy. 

The indictment charges them with fraudulently billing health care insurers and prescription drug administrators for over $200 million in prescription drugs.  An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.  The charges stem from a larger investigation that has to date resulted in 18 additional individuals being charged and signing plea agreements. 

According to the indictment, Global which allegedly described itself as “one of the top three largest compounding pharmacies in the United States,” primarily shipped compounded and other drugs from its Alabama facility, but did most of its prescription processing, billing and customer service at its “call center” in Clearwater, Florida. The company hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers.  The company also worked with affiliated pharmacies.

The indictment describes a multi-faceted operation in which the defendants billed for medically unnecessary drugs.  The indictment alleges that the wrongdoing included:  

• paying prescribers to issue prescriptions; 
• directing employees to get medically unnecessary drugs for themselves, family members, and friends, to be filled and billed by Global and other related pharmacies; 
• altering prescriptions to add non-prescribed drugs including controlled substances such as Tramadol and Ketamine; 
• automatically refilling prescriptions—often as many as 12 times—regardless of patient need; 
• routinely waiving and discounting co-pays to induce patients to obtain and retain medically unnecessary drugs; and 
• billing for drugs without patients’ knowledge and hiding that conduct from patients by mailing the drugs to the home of Global's owner and president.  

According to the indictment, the defendants evaded and obstructed audits and questions about billings through various efforts, including by providing false information in response to audits and diverting their billing through affiliated pharmacies.  The defendants allegedly billed health insurance plans and their prescription plan administrators over $200 million and were paid over $50 million.

Kentucky Cardiologist Sentenced to 60 Months for Health Care Fraud and False Statements Relating to Implanting Medically Unnecessary Stents and Falsifying Degree of Stenosis in Medical Records

Credit: The Daily Independent

On May 2, 2019, well-known Kentucky cardiologist Dr. Richard E. Paulus was sentenced, by U.S. District Court Judge David L. Bunning, to serve 60 months in federal prison for health care fraud and false statements almost three years after his trial and an acquittal by the court that got reversed on appeal. 

In October 2016, a federal jury convicted Dr. Paulus of one count of health care fraud and ten counts of making false statements relating to health care matters, after hearing evidence that he exaggerated what he saw on patients' angiograms and then defrauded Medicare, Medicaid, and private insurers, by implanting medically unnecessary stents in his patients and falsifying the degree of stenosis in their medical records. The case was started by a complaint to the Board about the number of stent surgeries performed and their medical necessity.

After the trial, the district court granted Dr. Paulus’s motion for an acquittal.  The Sixth Circuit Court of Appeals later reversed that decision, on June 25, 2018, and reinstated Dr. Paulus’s conviction, resulting in his formal sentencing. This is very unusual that a district court grants the motion for acquittal and also unusual that the conviction was reversed on appeal.

After 6 Week Trial, New York Doctor And Physical Therapist Found Guilty Of Health Care Fraud, Conspiracy to Make False Statements Relating to Health Care Programs Medicare And Medicaid and Other Counts With Allegations of Sham Owner, Falsified Medical Records, Kickbacks.

A recent health care fraud case involved the alleged unlicensed practice of medicine and a  physician allegedly posing as the owner of medical clinics in order to satisfy New York  law that medical clinics be owned and operated by a medical professional. When that occurs the loss amounts can be large since the entire clinic can be viewed as a fraud with all billings suspect. 

On May 9, 2019, after a six-week federal jury trial, doctor Paul J. Mathieu and physical therapist Hatem Behiry were each convicted of one count each of conspiracy to commit health care fraud, mail fraud, and wire fraud; and conspiracy to make false statements relating to a health care program; as well as the substantive offenses of health care fraud, mail fraud, and wire fraud.  This trial was held in the Southern District of New York. 

Between 2007 and 2013, the government alleged that Dr. Mathieu fraudulently posed as the owner of three of six medical clinics in Brooklyn (the “Clinics”), which were all in fact owned by a non-physician and alleged co-conspirator Alexksandr Burman. Mr. Burman has already been sentenced in a related case to 120 months in prison. 

The government alleged that from 2009 to 2013, Dr. Mathieu also directly participated in the fraudulent billing practices of the clinics, by visiting several of the clinics on a weekly basis, where he would sign stacks of false and fraudulent medical charts, and issue referrals for expensive additional testing, occupational therapy, and physical therapy, including for physical therapy purportedly provided by Mr. Behiry. It was alleged at trial that during this time period, Dr. Mathieu did not see any patients and simply fabricated medical records falsely stating that he had seen and treated such patients. 

Pennsylvania Operating Officer Charged Along With Her Husband With Mail Fraud, Embezzlement from Healthcare Benefit Program for Alleged False Reimbursement Expenses

Given that hospital employees are paid essentially out of government healthcare and insurance funds, cases involving hospital officers and key employees are often prosecuted in a higher profile and federal manner than other types of businesses. In addition, government employees - especially those in law enforcement - can also be charged more harshly due to their position of authority and special skills. 

A recent Indictment shows how this played out for one couple where the wife worked as an executive at a hospital and the husband worked as a detective with the local district attorney's office. 

On April 19, 2019, Stephanie J. Roskovski and her husband, Scott A. Roskovski, were indicted by a federal grand jury in Pittsburgh on charges of mail fraud, conspiracy to commit mail fraud, embezzlement from a healthcare benefit program, conspiracy to commit money laundering, money laundering and false statement in a loan application. An Indictment is an accusation and is not evidence. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The Indictment alleges that the Roskovskis, during the years 2011 through December 2017, perpetrated a fraud totaling more than $1.3 million on Butler Healthcare Providers, d/b/a Butler Memorial Hospital, where Stephanie Roskovski was employed and, for much of that time, served as the hospital’s Chief Operating Officer. 

During the time, Scott Roskovski was employed as a detective with the Butler County District Attorney’s Office where he conducted investigations involving fraud and other financial crimes. Counts One through 23 of the Indictment allege that the defendants conspired to and did defraud Butler Healthcare Providers by submitting requests to Butler Hospital for alleged business-related expenses that were used, or intended to be used, for personal expenditures. 

California Business Partners in Home Health and Hospice Businesses Sentenced To 33 Months In Federal Health Care Fraud Case. One Partner Was Previously Excluded From Medicare By OIG.

Home health and hospice fraud cases are still priorities in the Justice Department. On April 18, 2019, a former California medical doctor Camilo Q. Primero, age 76, and his business partner Aurora S. Beltran, age 63,were sentenced to 33 months in prison for their individual roles in an alleged Medicare health care fraud case involving three Las Vegas hospice and home healthcare agencies. Both individuals plead guilty and were sentenced following their pleas to conspiracy to commit health care fraud and money laundering.

One of the allegations was that Mr. Primero was excluded from Medicare by the Office of Inspector General and should not have been an owner of any of these health care businesses which were billing the Medicare program. When an excluded individual owns the business all monies billed to the program are potentially recoverable. If the government alleges a "sham" owner, there is the potential of alleging the entire business is a fraud since the government would not have approved the application if it knew that one of the "real" owners was excluded by OIG.

In the plea agreement, they admitted that they filed false enrollment documents with Medicare to enable Mr. Primero to operate hospice and home care agencies through nominees despite his prior exclusion from all federal health care programs. Furthermore, they admitted they submitted fraudulent hospice care claims for people who were not terminally ill and did not require hospice care.

Louisiana Neurologist Who Allegedly Pre-Signed Prescriptions for Controlled Substances Is Charged With Conspiracy to Unlawfully Dispense Controlled Substances and Health Care Fraud

A pain management neurologist has been charged with unlawful prescribing and health care fraud conspiracy relating to Medicare billings for the prescriptions billed to Medicare. This is an extension of government theories since as the prescribing physician, the pharmacy would have received the payments and and not the neurologist. The pharmacy has its own corresponding duties to Medicare. 

However, the twist here is that the government alleges that the prescriptions were pre-signed by the neurologist and that he did not see the patients. However, it is not clear if any other providers saw the patients or who else completed the prescriptions. One would assume there must be other facts relating to this pain management clinic that are not alleged in the charging documents.

On April 18, 2019, a two-count bill of information was filed against neurologist Anil Prasad, M.D., charging him with conspiracy to unlawfully dispense controlled substances and conspiracy to commit health care fraud. If Dr. Prasad does not waive Indictment or reach a plea agreement, there will probably be an Indictment arising from the information. An information is a charging document and is not evidence and Dr. Prasad is presumed innocent of all charges. 

Specifically, Dr. Prasad was charged with one count of prescribing controlled substances outside the course of professional practice and for no legitimate purpose and one count of conspiracy to commit health care fraud.  According to court documents, between November 2016 and July 2018, Dr. Prasad worked at a pain management clinic in Slidell, and during the course of his employment he pre-signed prescriptions for controlled substances, including oxycodone and hydrocodone, without performing patient examinations to determine medical necessity.

Colorado Doctor Convicted Of Health Care Fraud and Obstruction of Justice. Admitted Shredding Patient Charts During the Investigation.

A recent health care fraud trial focused on patients' insurance being billed for procedures not performed or with extensive patterns of upcoding as well as obstruction of justice for shredding charts during the investigation. On April 18, 2019, Dr. John Van Wu of Golden, Colorado was found guilty of mail fraud and obstruction of justice charges by a jury. The federal jury trial lasted one week before U.S. District Court Judge R. Brooke Jackson.  

According to court records and argument at trial, Dr. Wu operated a medical clinic at locations in west Denver between January 2011 and March 2015.  During that time period the government alleged that he billed employee benefit programs and insurers for services that were never actually rendered and not medically necessary.  

The obstruction charge arose from when he responded to a grand jury subpoena asking for patient files.  During the trial, over a dozen of the doctor’s former patients testified that they did not have many of the ailments described in those files and did not get the expensive procedures billed to insurance.  For example, the patient files described days-long nosebleeds followed by nasal cauterization procedures, but patients testified that neither happened.  Other files described diagnoses related to migraine headaches and frequent administrations of injections to treat those agents.  Patients testified that those, too, did not occur.  The government alleged that the patient files were fabricated.

Testimony at trial also supported the government's theory that Dr. Wu billed approximately 95% of his office visits as the longest, most complex, and highest-reimbursing type of office visit, despite the fact that his patients had relatively simple and routine ailments that did not need that level of service.  During his testimony, Dr. Wu admitted that he shredded patient files while the investigation was ongoing.

This is not the end of Dr. Wu's legal issues. He is separately charged with distributing oxycodone outside the usual course of medical practice and for no legitimate reason and for obstruction by falsifying patient charts related to those prescriptions.  Trial on those counts is scheduled to begin on July 8, 2019.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law

Two California Brothers Plead Guilty in Conspiracy to Distribute Prescription Drugs Through Sham Medical Clinics That Hired Allegedly Corrupt Doctors

Physicians and other health care providers  should always be careful when answering advertisements for clinics, especially when run by non-physicians. One recent case shows what happens when physicians' identities were stolen for prescribing purposes. In addition, other physicians were hired and are facing their own issues.

On April 16, 2019, two Los Angeles area brothers Minas Matosyan (age 38) and Hayk Matosyan (age 32) pleaded guilty to federal criminal charges, admitting that they conspired to distribute controlled substances, such as hydrocodone and oxycodone via sham medical clinics that hired doctors who wrote fraudulent prescriptions to black market customers. 

According to the plea agreement, in May 2016, Minas Matosyan spoke with a doctor and offered him a “very lucrative position” where the doctor would “sit home making $20,000 a month doing nothing,” according to the plea agreement. After the doctor declined the offer, Minas stole the doctor’s identity, sending a co-conspirator a text message containing the doctor’s full name, medical license number and national provider identifier number that the co-conspirator used to order prescription pads in the doctor’s name.