Investigations Newsletter: Texas Man Sentenced to More Than Nine Years in Prison for COVID-19 Fraud Scheme

Arent Fox
Contact

Arent Fox

Headlines that Matter for Companies and Executives in Regulated Industries

Texas Man Sentenced to More Than Nine Years in Prison for COVID-19 Fraud Scheme

After pleading guilty to two charges of wire fraud and money laundering, a Texas man was sentenced to 110 months in prison for his scheme to fraudulently receive more than $1.6 million in Paycheck Protection Program (PPP) loans pursuant to the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The defendant allegedly submitted fraudulent PPP loan applications on behalf of three entities, 713 Construction LLC, Price Enterprises Holdings LLC, and Price Logistic Services LLC, seeking more than $2.6 million in PPP loan funds. To support the request for PPP funds, the defendant falsely represented the number of employees and payroll expenses and submitted fraudulent tax records and other false information to the lenders. The defendant allegedly used the PPP loan money on luxury goods, including a Lamborghini, a Ford F-350 truck, and a Rolex watch. The government ultimately seized over $700,000 of the funds the defendant obtained.

Since the CARES Act was promulgated in March 2020, the federal government has prosecuted over 150 defendants in more than 95 criminal cases, and has seized over $75 million in fraudulently obtained PPP funds, in addition to real estate properties and luxury items purchased with those funds. 

Read the press release here.

Louisiana Marketer Sentenced to 30 Months in $180 Million TRICARE Fraud Scheme

A Louisiana marketer was sentenced to 30 months in prison for his role in a large-scale scheme to defraud TRICARE and commercial insurance companies by paying kickbacks for the referral of medically unnecessary prescriptions. The fraud scheme resulted in more than $180 million in fraudulent billings, of which federal health care programs paid more than $50 million. 

The alleged fraud scheme involved the defendant acting as a marketer for a network of pharmacies owned and operated by two co-conspirators. In addition to procuring fraudulent prescriptions using personal information of acquaintances in the military, the defendant used his TRICARE insurance to adjust prescription formulas to ensure the highest reimbursement without regard to whether the formulas were medically necessary. The defendant also recruited doctors to obtain prescriptions for expensive compounded medications. 

The prison sentence follows the defendant’s earlier guilty plea to conspiracy to defraud the United States and solicit, receive, offer, and pay illegal kickbacks. The defendant was ordered to pay restitution and forfeit all assets that flowed from the illicit proceeds.

Read the press release here.

Home Health Employee Sentenced to 56 Months in Prison for Health Care and Wire Fraud

After a jury trial, a Chicago-based woman was sentenced to 56 months in prison and ordered to pay $6.3 million in restitution for her role in a scheme to commit health care and wire fraud.

According to court documents, the defendant’s employer, home health care company Care Specialists, fraudulently billed Medicare at least $6.3 million between 2011 and 2017. The evidence presented at trial demonstrated that approximately 90% of Care Specialists’ patients did not qualify for the home health services for which Care Specialists billed Medicare. The company also bribed patients to receive home health “visits” in order to bill Medicare; in some instances, these visits were performed in the nurse’s car rather than in a patient’s home. The government established that the defendant perpetuated the conspiracy by fabricating patient visit records.

Judge Virginia Kendall, of the Northern District of Illinois, previously sentenced three other co-conspirators for their roles in the scheme. The two owners of Care Specialists received prison sentences of 60 and 84 months, respectively. A third defendant involved in the conspiracy, who pled guilty and cooperated with the government’s investigation, was sentenced to three years’ probation.

Read the press release here.

Written by:

Arent Fox
Contact
more
less

Arent Fox on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.