WASHINGTON – Detroit-area residents Zahir Yousafzai and Dr. Dwight Smith pleaded guilty yesterday for their roles in a $13.8 million home health care fraud and money laundering scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Yousafzai, 42, pleaded guilty before U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan to one count of conspiracy to commit health care fraud and one count of money laundering. Smith, 59, pleaded guilty before Judge Rosen to one count of conspiracy to commit health care fraud.
According to information contained in plea documents, in 2009, Yousafzai and his co-conspirators acquired beneficial ownership and control over two home health companies, First Care Home Health Care LLC and Moonlite Home Care Inc. Yousafzai also assisted in the operation of two home health care companies owned by co-conspirators, Physicians Choice Home Health Care LLC and Quantum Home Care Inc. Yousafzai admitted that these home health agencies billed Medicare for home health visits that never occurred. Between July 2008 and September 2011, Yousafzai and his co-conspirators submitted or caused the submission of approximately $13.8 million in fraudulent home health claims to the Medicare program by the four home health agencies. Medicare paid more than $4 million to First Care and Moonlite, the companies that Yousafzai beneficially owned in whole or in part.
Yousafzai admitted to paying and directing the payment of various medical professionals, including doctors, nurses, physical therapists and physical therapy assistants, to create fictitious patient files to document purported home health services that were never provided. Yousafzai, a physical therapy assistant, also signed fictitious patient files in which physical therapy services were documented, but never actually provided.
Yousafzai also admitted that he paid and directed the payment of kickbacks to recruiters who obtained beneficiaries’ information and used the information to submit claims for home health services that were never provided. The beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they received home health services that were never provided. Other times, the beneficiaries’ signatures were forged on forms and visit sheets.
Additionally, Yousafzai admitted that he incorporated a shell company known as A-1 Nursing and Rehab Inc. for the purpose of laundering the proceeds of health care fraud, which were obtained through the submission of false and fraudulent claims to Medicare.
According to plea documents, beginning in or around September 2009, Smith began referring Medicare beneficiaries for home health care services to Physicians Choice Home Health Care LLC and Quantum Home Care Inc. During that time, Smith owned and controlled Supreme Medical Associates PLLC, a Michigan corporation doing business in Detroit under the assumed name of Smith Medical Center. In May 2010, Smith incorporated Phoenix Visiting Physicians PLLC.
Smith Medical Center and Phoenix employed individuals who claimed to be doctors, but, in fact, were not licensed in the state of Michigan to perform any medical services. The unlicensed doctors met with and purported to examine Medicare beneficiaries for home health care services. Smith did not meet or examine these beneficiaries and they were not homebound. Many of the beneficiaries were paid to pre-sign patient visit forms and did not receive home health services from Physicians Choice, First Care and Quantum. From in or around September 2009 through in or around September 2011, Medicare paid approximately $6.5 million for fraudulent home health care claims submitted by Physicians Choice, First Care and Quantum based on Smith’s referrals.
The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; 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 (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG, and 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, Medicare Fraud Strike Force operations in nine locations have charged more than 1,300 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS 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.