Federal Criminal Defense Blog : Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

George Houser of Atlanta was found guilty by Judge Harold Murphy following a month long trial in federal court in Rome, Georgia. Houser was found guilty of health care fraud for billing Medicare and Medicaid more than $32 million related worthless services in the operation of three nursing homes he ran in Rome and Brunswick, Georgia. He was also found guilty of several tax offenses. U.S. Attorney Sally Yates said that, “It almost defies the imagination to believe that someone would use millions of dollars in Medicare and Medicaid money to buy real estate for hotels and a house while his elderly and defenseless nursing home residents went hungry and lived in filth and mold.” Houser opted for a trial in front of Judge Murphy, rather than a jury. Houser’s wife had previously plead guilty to misprision of a felony.

Interestingly, Houser, a Harvard Law School graduate and attorney, was hit with a $43.5 million verdict 18 months ago in a civil case handled in part by attorney Stephen Lowry of Savannah. At the trial of the wrongful death case in Superior Court in Rome, Georgia, Lowry said the evidence showed that the 80 year old father of his client was “severely neglected at the time of his death, malnourished and severely dehydrated.”

Sentencing for Houser and his wife is set for June 29.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, a jury in the U.S. District Court for the Southern District of Florida returned not guilty verdicts against 78 year-old Francisco H. Gonzalez, M.D., on charges that Dr. Gonzalez allegedly took thousands in kickbacks from two Miami-area home healthcare agencies, ABC Home Health Care and Florida Home Health Providers (FHHP), according to the Miami Herald. Also acquitted was Odalys Alvarez-Medina,who was charged with recruiting patients for the agencies.

ABC and FHHP, operated by husband and wife Enrique Perez and Gladys Zambrana, were shut down for submitting $25 million in false claims to Medicare from 2006 though 2009 for services which were either never provided, or which patients did not need. Perez and Zambrana pled guilty, and the government's investigation and prosecution of the ABC/FHHP cases has resulted in the convictions of than 50 convictions of healthcare operators, nurses, physicians and patient recruiters.

The prosecution alleged that Dr. Gonzalez recruited patients for ABC/FHHP, and referred 26 patients to ABC/FHHP for home health care, causing $720,000 in false claims to Medicare. A critical piece of evidence was Zambrana's "kickback ledger," which prosecutors claimed showed payments to Dr. Gonzalez and other recruiters. Zambrana also testified at trial that she paid Dr. Gonzalez tens of thousands of dollars in kickbacks for referring patients who did not need home health care services, such as insulin injections. Dr. Gonzalez defended that the government's case consisted of false testimony of witnesses who were cooperating with the government. The defense also called elderly patients of Dr. Gonzalez as witnesses, including one 90 years-old.

Image source: http://www.coconutcreekrealestateagents.com/coconut-creek-real-estate-market/broward-county-real-estate-thriving-foreclosure-market-and-other-facts

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Department of Justice and the Department of Health and Human Services announced Tuesday that the government's health care fraud prevention and enforcement efforts recovered more than $4.1 billion in FY 2011. Attorney General Holder in making the announcement emphasized that health care fraud remains one of the Department's priorties.

Also released were some interesting statistics regarding health care prosecutions in 2011. A total of 1,340 defendants were charged with health care offenses, the highest number of health care fraud defendants ever charged in a single year in Department history. A total of 743 defendants were convicted of health care related crimes last year.

In criminal matters related to the pharmaceutical and device manufacturing industry, DOJ reported 21 criminal convictions and $1.3 billion in fines, forfeitures, restitution and disgorgement.

Astonishingly, DOJ reported that approximately $2.4 billion was recovered through False Claims Act cases last year. That is the second consecutive year that more than $2 billion has been recovered in False Claims cases related to health care fraud.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last month FOB (friends of blog) Roy Black and Richard Strafer had another win in the Eleventh Circuit in U.S. v. Ignasiak. (Opinion here). Although the case was reversed on Confrontation Clause grounds, the case is of greater interest to me because the Court ordered the unsealing of records regarding the government’s sole expert witness, Dr. Arthur Jordan of Myrtle Beach, S.C. Dr. Jordan testified in the prosecution of Dr. Ignasiak, a retired physician, in a case alleging violations of the controlled substances act, that Dr. Ignasiak was writing prescriptions without legitimate medical purpose.

Now, Dr. Jordan, apparently, is a frequent flyer as an expert witness for the government having been paid around $30,000 for his expert witness services. But here is where the case takes a bizarre twist. Judge Martin writing for the Eleventh Circuit noted that after the verdict, the government disclosed for the first time that Dr. Jordan “engaged in criminal conduct . . . on nine separate occasions, [and] used a counterfeit badge and his United States Marshal credentials to pose as an on-duty U.S. Marshal in order to carry firearms on commercial airplanes while on personal travel.” Amazingly, this series of federal offenses, which the opinion notes resulted in “multiple violations of 18 U.S.C. §§ 912 and 1001 and 49 U.S.C. § 46505,” resulted in pretrial diversion for the good doctor – the federal equivalent of super secret probation.

The question that arises in my mind – what’s the deal? Why would the government permit Dr. Jordan to get off, literally, scot free for having committed, as the Eleventh Circuit notes, multiple violations of federal law – guns on the plane, no less, in the post 9/11 world? Perhaps to preserve the integrity of earlier prosecutions? Dr. Jordan is scheduled to testify in a case that starts here in Georgia later this month. We’ll let you know how that develops.

I’ve found only one other reported case where Dr. Jordan testified, U.S. v. Alerre, 430 F.3d 681 (4^th Cir. 2005). If you know of any other cases where Dr. Jordan has testified for the government, send me a post, or an email, and I’ll see if I can obtain the post trial motions that Mr. Black and Mr. Strafer successfully argued on appeal in order to bring the sanitizing light of the courtroom on Dr. Jordan’s practices.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Matthew Paul Brown, of Nashville, Tennessee, was indicted late last week in the U.S. District Court for the Northern District of Georgia for allegedly persuading Atlanta area physicians to submit claims to Medicare, Medicaid and private insurers, according to an article in the Atlanta Journal-Constitution. Brown, who is not licensed as a physician in Georgia, is alleged to have impersonated a doctor and to have purportedly treated patients between November of 2009 and April 2011. Brown allegedly agreed to pay the doctors from 50 to 85 percent of his reimbursements from Federal healthcare programs and private insurers. A total of $1.2 million in claims were billed.

The U.S. Attorney's Office for the Northern District of Georgia stated that investigators are contacting patients whom Brown allegedly treated. He is also charged with disclosing patient information under false pretenses. The identities of the physicians whom Brown allegedly conspired with were not reported.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Ernesto Angel Montaner, aged 70, a member of a prominent Miami Cuban family, is facing healthcare fraud charges for the second time, according to the South Florida Sun Sentinel. Montaner was the sole defendant acquitted in a vast healthcare fraud prosecution in the 1990s for an alleged $15 million in false claims to Medicare. 

The government alleges that, from 2006 to 2008, Montaner submitted approximately $6.2 million in false claims to Medicare at rehabilitation clinics which he operated, including Infinity Therapy and Miami Dade Medical Group. Montaner and others are alleged to have bribed or paid kickbacks to assisted-living facilities, home health care agencies, patient recruiters and patients in exchange for referrals. Many of the patients referred to Montaner did not require physical therapy/occupational therapy services.

Montaner fled to Costa Rica in early 2009 after government agents raided his offices, where he lived on a farm worth $1 million. However, the government successfully extradited Montaner back to the U.S. in February. The current set of charges against Montaner arose out a sting operation by the FBI using a registered nurse and convicted felon posing as a patient recruiter, as well as a physician convicted of Medicare fraud and other ex-felons and recruits posing as patients with ailments. Montaner allegedly paid the informants cash to refer Medicare patients to him. The informants also signed off on claims for 17 rehabilitation sessions which were never given.

The government has also charged Montaner's business partner and his son, Ernesto Montaner Jr., 45, who entered a guilty plea to manipulating Medicare billing codes to maximize patient visits, was sentenced to four years in prison and is cooperating with authorities. Montaner's partner, Jose A. Varona, 39, a patient recruiter, has been sentenced to three years imprisonment and has also given information to the FBI.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

The U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ) released  their annual Health Care Fraud and Abuse Control Program (HCFAC) Report for fiscal year 2009 earlier this month, available in full here. DOJ and HHS jointly run HCFAC through the Inspector General of HCFAC.

The Report provides a clear overview of the government's efforts to combat fraud in the healthcare industry, and demonstrates that it has increased its efforts at detection and enforcement. Some highlights of the Report:

• During 2009, the government opened 1,014 new criminal healthcare fraud investigations concerning 1,786 potential defendants. The government obtained 583 convictions for healthcare fraud. It also commenced 886 civil healthcare fraud investigations. During the year, the government won or negotiated approximately $1.63 billion in judgments or settlements.
• To fund these efforts, the government allocated some $465 million in funds to HHS and DOJ, with the Office of the Inspector General receiving approximately $196 million.
• Last year, HHS and DOJ created the Health Care Fraud Prevention and Enforcement Action Team, or "HEAT," a joint enforcement initiative designed to combat Medicare fraud.
• HEAT has "Medicare Strike Forces" in four U.S. cities--Miami, Los Angeles, Detroit and Houston. These Strike Forces analyze billing information submitted to Medicare for irregularities.
• The government has forced large pharmaceutical manufacturers into civil and criminal settlements for alleged unlawful promotion or marketing of drugs. Notable settlements in this area include Pfizer, Inc., which, at $2.3 billion, constitutes the largest healthcare fraud settlement in U.S. history, Eli Lilly Company; Abbott Laboratories, Inc.; and Bayer Healthcare, LLC.
• The Report details substantial prosecutions of physicians and other providers, hospitals, clinics, nursing homes, medical equipment manufacturers and other prosecutions.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Ortho-McNeil, a unit of Johnson and Johnson, entered a guilty plea on Tuesday in the U.S. District Court for the District of Massachusetts to a misdemeanor for alleged illegal promoting of Topamax, a drug designed to treat epilepsy, for uses not approved by the Food and Drug Administration, according to PR Newswire. The government alleged that Ortho-McNeil used a promotional program called the "Doctor for a Day Program" to promote Topamax for psychiatric uses, allegedly paying physicians, including psychiatrists, to accompany sales representatives on sales calls. The government claimed that Ortho-McNeil never applied for approval to use Topamax to treat psychiatric conditions and that there were no reliable clinical trials demonstrating that Topamax is safe and effective to treat psychiatric conditons.

The Court imposed a $6.14 million criminal fine on Ortho-McNeil. An affiliate of Ortho-McNeil, Janssen Pharmaceuticals, has agreed to pay $75 million to settle claims under the False Claims Act that it illegally promoted Topamax for psychiatric purposes and submitted alleged false claims to Medicare. Ortho-McNeil and Jassen also entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.

"Promotion" of drugs by manufacturers for off-label uses is prohibited by the Food Drug and Cosmetic Act, 21 U.S.C. 331, 333. Physicians can, and frequently do, prescribe drugs for unapproved uses. In addition to epilepsy, Topamax has been prescribed for uses such as the treatment of headaches and for weight loss.

• Email This
• Print
• Comments (4)
• Trackbacks
• Share Link

On Monday, Jose Garcia-Iglesias was sentenced to 41 months imprisonment in the U.S. District Court for the Southern District of Georgia as a result of a scheme to bill Medicare for $8 million in phantom infusion therapy services and cancer and AIDS medications, according to a press release. Garcia-Iglesias, who is from Miami, billed the false claims from two clinics which he established in South Georgia. He also stole information on Medicare beneficiaries and from a physician in order to submit the false claims. Garcia-Iglesias was ordered to pay restitution in the amount of $423,951.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In another sign that nothing is sacred and no area safe from crime, even the adult undergarment industry has now been marred by fraud. Benjamin Essien, 34, owner and operator of Logic World Medical, a Houston-based durable medical equipment (DME) company, pled guilty to conspiracy to commit healthcare fraud, five counts of healthcare fraud and two counts of aggravated identity theft in the U.S. District Court for the Southern District of Texas, according to a press release by the FBI. Essein was charged with a scheme which began in 2004 of using names, addresses and account numbers of Medicaid beneficiaries to file false claims for adult urinary incontinence supplies many of which were never delivered to the beneficiaries, some of which were never purchased from suppliers, and which were not needed or were never prescribed by a physician. Essein continued to bill Medicaid for the supplies--which included adult diapers, underpads, wipes, and pull-up briefs--even after his delivery contractors were informed by the beneficiaries that they did not need or want the supplies. Essien billed Medicaid for the maximum amount allowable for supplies each month per beneficiary including extra large size diaper briefs, which apparently have the highest Medicaid reimbursement rate, regardless of the actual size needed by the beneficiary. it is alleged that Essein received payments from Medicaid for claims totaling approximately $1,101,865.37. he will be sentenced in May.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A jury in the U.S. District Court for the Northern District of Georgia convicted Varian Scott of healthcare fraud on Monday, as stated in a press release by the U.S. Attorney's Office.

Between September 2005 and April 2006, Scott and his cousin, Hezron Collie, purchased physicians' prescription pads from individuals at the Winship Cancer Institute at Emory University in Atlanta, and at doctors' offices in Atlanta and in Florida. Scott and Collie then purchased the names, birth dates and Medicaid numbers for dozens of Georgia Medicaid patients. The defendants then forged approximately 164 prescriptions for Neupogen, a chemotherapy drug, and several medications used to treat HIV.

Scott and Collins presented the forged prescriptions toCVS, Publix, Walgreens, Kroger, and Eckerd pharmacies, which billed the medications to the Georgia Medicaid program. The defendants then transported the medications to South Florida, removed the labels, and sold them to a contact for 30% of their wholesale cost. A one month supply of Neupogen costs $10,000.

A pharmacist and a technician with Kroger aided the defendants. A total of $1.1 million in medications were fraudulently billed to Georgia Medicaid. Expert testimony was presented at Scott's trial regarding a multi-billion dollar "gray" market for the stolen drugs.

Acting U.S. Attorney Sally Quillian Yates stated that Scott's case was the first conviction in Georgia for defrauding Medicaid through stolen and forged prescriptions and theft of patient information. Collie pled guilty to one count of conspiracy in June. Scott faces up to 10 years in prison. His sentnecing hearing is scheduled for December.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

We at FCDB read H.R.3200, “America's Affordable Health Choices Act of 2009,” earlier this year (well okay, perhaps we didn’t “read” it all, maybe skimmed is a better description) and were surprised to find that it appeared to add nothing to our nation’s ever-growing corpus of criminal provisions. Well, yesterday, Montana Senator Max Baucus released the long-awaited America’s Healthy Future Act, better known as the “Baucus Bill,” the text of which can be read here, which does contain an alteration of note to existing criminal law . We’ll leave it to others to outline all the proposed changes to the nation’s healthcare industry.
 

The most notable change by the Baucus Bill is amends the Medicare Anti-Kickback statute, 42 U.S.C. § 1320a-7b(b), which makes it illegal to “knowingly and willfully” solicit or receive any remuneration for referring an individual to a person for the purpose of furnishing any item or service for which payment may be made in whole or in part under a Federal health care program; or in return for purchasing, leasing or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program; or to “knowingly and willfully” refer an individual to a person for the furnishing any item or service for which payment may be made in whole or in part under a Federal health care program; or purchase, lease or order any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program. The Bill proposes to “amend the Anti-kickback statute to add language defining “willfully” as “a person acted voluntarily and purposefully to do what the law forbids and the person need not have actual knowledge of the law or specific intent to violate that law.” The Bill does not give the reason for the change, but it is undoubtedly to foreclose some defense or close some loophole which has arisen in practice or actual cases.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Pharmaceutical giant Pfizer, inc., will pay $2.3 billion to the Federal government and 49 States to settle allegations that it violated federal regulations in promoting several drugs, as reported by the Atlanta Journal-Constitution. The settlement is the largest in U.S. history to date in a healthcare fraud case. 

Georgia will receive $21.7 million as part of the settlement. A spokesperson for the Georgia Attorney General's office told the media that Georgia's portion of the settlement funds would be earmarked for Georgia's Medicaid program.

The U.S. Department of Justice had accused the New York-based pharmaceutical company and its subsidiaries of conducting marketing campaigns to promote drugs including Geodon, Lyrica, Zyvox, and no longer marketed Bextra, for uses not approved by the U.S. Food and Drug Administration. The government also alleged that Pfizer gave kickbacks such as cash, travel and entertainment to members of the healthcare industry in order to persuade them to prescribe these drugs and others, including Lipitor, Zyrtec and Viagra. The only State which did not join in the suit was South Carolina.

Pharmacia & Upjohn Co., a subsidiary of Pfizer, has pled guilty to a felony charge of violating the Food, Drug and Cosmetic Act, and will pay a fine of $1.3 billion.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

     Alain Amador was sentenced yesterday in the U.S. District Court for the Northern District of Georgia for a Medicare fraud ring, as reported by the Atlanta Business Chronicle. Amador pled guilty on March 3 to charges relating to a scheme using fake medical clinics in the Atlanta area. Amador, who had a nursing degree, and his co-conspirators were based in Miami. The conspirators set up corporations and filed corporate documents, leased space in the names of the companies and applied for Medicare billing numbers. However, the entities existed only in name, and conducted no business and had no employees or equipment. Amador and his co-conspirators would obtain information regarding physicians and Medicare recipients and used this information to file $12 million worth of fraudulent Medicare claims for phony services.

      Medicare paid $3 million in claims before it detected the scheme, and investigators managed to seize $2 million in payments. Most of the remaining funds had been transferred to foreign bank accounts. Amador was sentenced to 4 years imprisonment and ordered to pay restitution.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Two National Century Financial Enterprises (NCFE) executives were sentenced to 30 and 25 years in district court in Columbus, Ohio on Friday for their roles in the failed healthcare finance company’s failure. NCFE was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

Lance K. Poulsen, 65, former president, owner and chief executive officer of NCFE was sentenced to 30 years in prison and three years of supervised release following the prison term. A federal jury convicted Poulsen on Oct. 31, 2008, of conspiracy, securities fraud, wire fraud and money laundering. Poulsen was also found guilty by a federal jury on March 26, 2008, of conspiring to interfere with a witness who was preparing to testify in the fraud trial against Poulsen and other NCFE executives. He is currently serving a 10-year prison sentence for that conviction. The court ordered Poulsen’s 30-year sentence to be served concurrently with the 10-year sentence for witness tampering.

Rebecca S. Parrett, 60, former vice chairman, secretary, treasurer, director and owner of NCFE was sentenced to 25 years in prison and three years of supervised release following the prison term. A federal jury convicted Parrett on March 13, 2008, of conspiracy, securities fraud, wire fraud and money laundering. Parrett fled after the conviction and remains at large.

U.S. District Court Judge Algenon Marbley ordered Poulsen and Parrett to forfeit $1.7 billion of property representing the proceeds of the conspiracy and to pay restitution of $2.3 billion.

Gillen, Withers & Lake, LLC, partner, Craig A. Gillen, was lead trial counsel for James K Happ, who was the seventh former NCFE executive to go to trial, and the only defendant found not guilty. Four other NCFE executives entered guilty pleas.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

• Email This
• Print
• Comments
• Trackbacks
• Share Link