WASHINGTON – Suresh Chand pleaded guilty today in U.S. District Court in Detroit to participating in multiple conspiracies to defraud the Medicare program and to launder the proceeds of the fraud, Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Eastern District of Michigan Terrence Berg and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced.
Chand, 44, pleaded guilty before U.S. District Judge Sean F. Cox to one count of conspiracy to commit health care fraud and one count of conspiracy to launder money. At his sentencing, which is scheduled for Jan. 13, 2010, Chand faces a statutory maximum of 30 years in prison and a $750,000 fine.
Chand admitted that in 2003 he owned and controlled a company operating in Warren, Mich., called Continental Rehab Services Inc. (CRS), which purported to provide physical and occupational therapy services to Medicare patients. Chand also admitted that in 2004 he incorporated another physical and occupational therapy services company at the same Warren, Mich., address called Pacific Management Services Inc. (PMS). That company also purported to provide such services to Medicare patients.
Chand acknowledged in his guilty plea that he and his associates at CRS and PMS created false physical and occupational therapy files for Medicare patients when the purported services had not in fact been provided. The false services reflected in the files were billed to Medicare through sham Medicare providers controlled by Chand and others. These sham Medicare providers included multiple Detroit companies including Tri-Star Rehab Services Inc., Manage Care Physical Therapy & Rehab Services Inc., and S.U.B. Rehabilitation and Physical Therapy Center Inc.
In his plea, Chand admitted that in order to create the false therapy files, he and his co-conspirators paid cash kickbacks and other inducements to Medicare patients in exchange for their Medicare numbers and signatures. Chand acknowledged recruiting hundreds of Medicare patients, and paying them with cash and prescriptions for Vicodin and Xanax. Chand admitted that he obtained the prescriptions for these drugs from a physician who had never seen the patients. Chand also admitted that he prepared false prescriptions and files for the physician’s signature. To complete these bogus files, Chand admitted that he and others would obtain signatures from licensed therapists on false progress notes indicating that the therapists had provided therapy, when they had not. Chand admitted that the licensed therapists were paid to help falsify the files.
Chand also admitted that between January 2003 and March 2007, he and his co-conspirators submitted claims to the Medicare program totaling approximately $18,379,300 for unnecessary therapy services that were never rendered. After the proceeds of the fraud were obtained from Medicare, Chand acknowledged that he laundered the funds through a series of transactions using shell companies designed to conceal the nature, source, location, ownership and control of the tainted funds.
The case is being prosecuted by Trial Attorneys John K. Neal and Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation.
The case was brought as part of the Medicare Fraud Strike Force, supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and U.S. Attorney Terrence Berg of the Eastern District of Michigan. Since their inception in March 2007, Strike Force operations in four districts have obtained indictments of 300 individuals who collectively have falsely billed the Medicare program for more than $680 million. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov