Clinic Owners and Patient Recruiters Plead Guilty in Detroit-area Diagnostic Testing Fraud Scheme

WASHINGTON – Miami-area residents Emilio and Maria Haber and Detroit-area residents Genna Yates and Darryl Nichols pleaded guilty yesterday for their roles in a Detroit-area diagnostic testing fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced

Emilio Haber, 51; Maria Haber, 44; Genna Yates, 30; and Darryl Nichols, 51, each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Patrick J. Duggan of the Eastern District of Michigan.  At sentencing, the defendants each face a maximum penalty of 10 years in prison and a $250,000 fine.

According to plea documents, Emilio Haber conceived and oversaw fraud schemes at two clinics, Ritecare LLC and CompleteHealth LLC. Emilio Haber incorporated and opened Ritecare and CompleteHealth in the state of Michigan in 2007. CompleteHealth merged into Ritecare in July 2008. According to court documents, while operating CompleteHealth and Ritecare, Emilio Haber and his co-conspirators billed Medicare for medically unnecessary tests and services, including, but not limited to, nerve conduction studies. Emilio Haber obtained patients for the clinics through the payment of kickbacks to Medicare beneficiaries and patient recruiters. Emilio Haber admitted that he and other co-conspirators paid patient recruiters $100-$150 per patient obtained, with $50-$75 to go to the patient in exchange for visiting Ritecare and subjecting themselves to medically unnecessary tests.

To justify the medically unnecessary tests, Emilio Haber admitted that he and other co-conspirators told patient recruiters to instruct the patients to feign certain symptoms. Emilio Haber and other co-conspirators also directly instructed patients to feign symptoms. The kickbacks paid to the recruiters and the patients were contingent upon the Medicare beneficiaries identifying the symptoms necessary to justify medically unnecessary tests. Consequently, the patients’ medical records contained false or fabricated symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed.

Between approximately August 2007 and approximately October 2009, Haber and his co-conspirators at CompleteHealth and Ritecare submitted and/or caused to be submitted approximately $8.5 million in fraudulent claims to the Medicare program for medical and testing services that were medically unnecessary and procured through the payment of kickbacks. Medicare paid approximately $6.3 million of those claims.

According to plea documents, Maria Haber, Emilio’s wife, admitted that she incorporated CompleteHealth on Sept. 20, 2007. Maria Haber further admitted that she and her co-conspirators, including her husband, billed Medicare for medically unnecessary tests and services at CompleteHealth. Maria Haber also admitted that she obtained patients for the CompleteHealth scheme through the payment of kickbacks to recruiters.

Darryl Nichols and Genna Yates, both patient recruiters, admitted in plea documents to recruiting Medicare beneficiaries to Ritecare and CompleteHealth by paying kickbacks to the beneficiaries. Nichols and Yates also admitted that they received from the owners and employees of Ritecare $75 to $150 per patient they recruited; that they paid the beneficiaries a portion of the kickbacks and kept the rest for themselves; and that they coached patients to feign symptoms at the direction of the owners and employees of Ritecare and CompleteHealth.

Yates caused the submission of approximately $840,565 in fraudulent billings by Ritecare, as well as several other health care companies. Medicare paid approximately $630,506 of those claims. Nichols caused the submission of approximately $581,211 in fraudulent billings by Ritecare, as well as several other clinics. Medicare paid approximately $383,610 of those claims.

The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

This case was prosecuted by Assistant Chief John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and HHS-OIG.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for more than $2 billion. 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.