107 People Charged With $452 Million in Medicare Fraud

Photographer: John Moore/Getty Images

A registered nurse discusses medication with a patient during a house call on March 26, 2012 in Denver. Close

A registered nurse discusses medication with a patient during a house call on March 26, 2012 in Denver.

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Photographer: John Moore/Getty Images

A registered nurse discusses medication with a patient during a house call on March 26, 2012 in Denver.

Federal authorities charged 107 people with Medicare fraud in a multistate operation, alleging schemes involving about $452 million in false billing, officials in Washington announced.

The U.S. charged doctors, nurses and other licensed medical professionals with schemes including submitting bills to Medicare for unnecessary services and providing and paying kickbacks to acquire patient information for fraudulent bills.

The indictments were the result of an investigation by the Medicare Fraud Strike Force in seven U.S. cities including Miami, Detroit, Chicago, Houston, Los Angeles, Tampa, Florida, and Baton Rouge, Louisiana, prosecutors said.

“Today’s arrests send a strong message to criminals that the consequences of committing Medicare fraud are serious,” Health and Human Services Secretary Kathleen Sebelius said in a statement. “In addition to these arrests, we used new authority from the health-care law to stop all future payments to 52 health-care providers suspected of fraud.”

Those charged include 59 defendants in Miami, accused of bilking the Medicare program of $137 million in false billings for home health care, mental health and other services.

Seven individuals in Baton Rouge, Louisiana, were accused of submitting $225 million in false claims through two community mental health centers, about half the total alleged fraudulent billings.

Largest Operation

“This coordinated takedown involved the highest amount of false Medicare billings in a single takedown in strike force history,” the Justice Department said in a statement today. The operation was the fourth in a series of such operations in the past two years, Assistant Attorney General Lanny A. Breuer said.

“These fraud schemes were committed by people up and down the chain of health-care providers -- from doctors, nurses and licensed clinical social workers to office managers and patient recruiters,” Breuer said today at a press conference.

The Baton Rouge case is the largest-ever prosecution of a community mental health care-related scheme, the U.S. said.

The Baton Rouge defendants “allegedly recruited elderly, drug-addicted and mentally ill patients from nursing homes and homeless shelters in order to submit false claims on their behalf,” Breuer said.

“They also allegedly falsified patient notes and attendance records, and forged the signatures of medical professionals -- all to make it appear as though their patients were receiving medical services when, in fact, they were not,” he said.

Clinic Owners

Those indicted in Baton Rouge included Hoor Naz Jafri and Roslyn F. Dogan, owners of two community mental-health clinics in that city.

“Jafri and Dogan directed and facilitated a large-scale scheme to bilk Medicare of hundreds of millions of dollars by taking advantage of the most vulnerable,” U.S. Attorney Donald J. Cazayoux Jr. in Baton Rouge said in court papers.

The women admitted the patients without regard to eligibility and continued treating them even after therapists complained it was inappropriate to do so, Cazayouz alleged.

“After the entities through which they operated their fraudulent scheme were placed on suspension by Medicare in September 2011, they reconstituted their fraudulent enterprise by purchasing another company,” Cazayoux said in court papers.

“Finally, Dogan participated in and encouraged the destruction of possibly incriminating files, and she personally even stole evidence from the U.S. Attorney’s Office in order to obstruct the investigation and conceal fraudulent activity,” Cazayoux said in court papers.

Guilty Pleas

The indictment against the seven Baton Rouge defendants was filed under seal the day before four therapists at the centers pleaded guilty to one count each of conspiracy to commit health- care fraud.

The Miami defendants include clinic and pharmacy owners, three nurses, two therapists, four patients and one accountant, U.S. Attorney Wifredo Ferrer said. Federal officials arrested 57 of those indicted and two are fugitives, Ferrer said.

“They each tried to use the Medicare program as their own personal ATMs to steal precious health-care dollars,” Ferrer said today at a press conference.

In Detroit, 22 defendants, including four licensed social workers were charged with cheating Medicare of $58 million in false claims for medically unnecessary services.

Clinic Staffers

In one Detroit indictment, Sanyani Edwards, controller of Funderburg Clinical and Community Services Inc., and Angel Williams, an office manager there, were charged with one count each of conspiracy to commit health-care fraud and five counts of health-care fraud.

Edwards and Williams would bill Medicare using provider numbers for licensed social workers without the workers’ knowledge or authorization “for services that were medically unnecessary and not provided,” the U.S. said in the indictment.

The government charged Raymond Arias, the owner of another Michigan clinic, with six counts of health-care fraud. Medicare paid Arias’s business, Elite Wellness LLC, of Westland, Michigan, about $3.8 million “on false and fraudulent claims,” the U.S. said. About $2.6 million of this was transferred to bank accounts in Mexico and Panama, according to an indictment.

Nine Houston-area residents were charged with participating in schemes involving $16.4 million in false billings for home health-care and ambulance services, the U.S. Attorney’s Office in Houston said.

Among those charged were Nick Patzakis and Jarvis Thomas, a doctor and nurse, respectively, who allegedly submitted $9.7 million in false Medicare billings through two home health agencies, with the help of two other co-conspirators. Four owners of Houston-area ambulance services were also charged in separate indictments with filing $6.7 million in bogus Medicare claims for ambulance rides that were either medically unnecessary or never provided.

The U.S. also charged eight Los Angeles-area residents with allegedly participating in schemes to submit more than $14 million in false bills to Medicare. The charges include an indictment handed down April 24 against two officials with Latay Medical Services, which provides health-care equipment to patients.

Latay owner Bolademi Adetola, of Harbor City, and employee Yuri Martin Lopez, of Lawndale, allegedly obtained fraudulent prescriptions for power wheelchairs, orthotics and hospital beds that were either not provided or weren’t medically necessary, U.S. Attorney Andre Birotte Jr. said today in a statement.

To contact the reporters on this story: Seth Stern in Washington at sstern14@bloomberg.net; Laurel Brubaker Calkins in Houston at of laurel@calkins.us.com; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.

To contact the editors responsible for this story: Steven Komarow at skomarow1@bloomberg.net; Michael Hytha at mhytha@bloomberg.net.

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