Checking in on Criminal Healthcare Fraud Prosecutions

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The Volkov Law Group

For criminal defense practitioners, it is easy to lose perspective when focused on FCPA, export control/sanctions and AML prosecutions.  In the healthcare fraud area, prosecutors continue to aggressively enforce anti-kickback and fraud statutes through criminal prosecutions.

The Justice Department has made its priority in this area clear – by dedicating law enforcement resources and prosecutors to investigating and prosecuting healthcare fraud schemes.  As government participation in the healthcare industry grows, DOJ, HHS and others will continue their focus on healthcare fraud schemes for criminal and civil enforcement.

Here are some recent examples of the types of cases prosecuted under the healthcare fraud program:

US v. John Davis, a former CEO of Comprehensive Pain Specialists, a pain management company, was recently convicted by a federal jury for his role in an illegal kickback scheme involving $4 million in tainted durable medical equipment claims to Medicare.

David arranged for referrals of Medicare DME orders to his co-conspirator Barbara Montgomery and her company, CCC Medical.  Davis operated a shell company, ProMed Solutions, in the name of his wife.  Davois’ wife had no involvement in ProMed and the company received over $770,000 in illegal kickbacks.  Davis and Montgomery earned over $2.4 million in improper reimbursement from Medicare and Davis paid bonuses to Comprehensive Pain Specialists providers who ordered DME for Medicare beneficiaries and referred those orders to Montgomery’s company.  Davis received 60 percent of the Medicare profits from those referrals.

To disguise the ongoing fraud scheme, Davis and Montgomery later concocted a sham sale of ProMed, which had no assets, employees, equipment, office space or customers other than CPS.  The sales price was based on average monthly kickbacks paid to Davis.  (Montgomery has plead guilty earlier to the charges). 

US v. Evelyn Mokwuah, a former director of nursing and administration of two Houston, Texas-based businesses was sentenced to 10 years in prison for her role in a $20 million Medicare fraud scheme involving false and fraudulent claims for home health services.

Mokwuah was the director for Beechwood Home Health and Criseven Health Management.  Mokwuah had been convicted of one count of healthcare fraud conspiracy and four counts of healthcare fraud after a four-day jury trial.

From 2008 to 2016, Mokwuah and others submitted false Medicare claims for home health services that were not provided, not medically necessary or both.  Mokwuah falsely certified and billed patients who were not homebound or did not qualify for home health services.  She also falsified patient records to show that patients were homebound when they were not; paid patient recruiters to enlist Medicare beneficiaries and paid doctors to falsely certify plans of care for patients so that she could bill Medicare for those services.

US v. Paul Emordi, from Colin County, Texas, was sentenced to 60 months in prison for his role in a $3.7 million healthcare fraud scheme.  Emordi and three co-defendants were convicted after a six-day jury trial.

Emordi and a co-defendant owned and operated Elder Care, a Medicare and Medicaid provider in Garland, Texas.  They were eventually excluded from participating in any federal healthcare program.  Two co-defendants concealed the ownership and involvement of Emordi and a co-defendant in Elder Care to avoid detection that they were previously excluded individuals.  The co-defendants also signed bank documents and wrote employee paychecks to conceal Emordi’s involvement in Elder Care.  Emordi and the co-defendants also submitted false and fraudulent bills to Medicare for services that were not needed.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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