WASHINGTON – A Miami-area resident pleaded guilty today in U.S. District Court in Miami for his role in two separate fraud schemes that resulted in the submission of more than $200 million in fraudulent claims to Medicare, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Nelson Fernandez, 42, admitted to participating in a fraud scheme that was orchestrated by the owners and operators of American Therapeutic Corporation (ATC); its management company, Medlink Professional Management Group Inc.; and the American Sleep Institute (ASI). ATC, Medlink and ASI were all Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. ASI purported to provide diagnostic sleep disorder testing.
Fernandez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. Fernandez was charged in an indictment unsealed on Feb. 15, 2011, in the Southern District of Florida.
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services to attend treatment programs that were not legitimate PHPs so that ATC and ASI could bill Medicare for the medically unnecessary services. According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare.
In pleading guilty, Fernandez admitted to serving as a patient broker and providing patients to ATC and ASI in exchange for kickbacks in the form of checks and cash. The amount of the kickback was based on the number of days each patient spent at ATC.
According to court documents, Fernandez also conspired to commit health care fraud through Priority Home Health. Fernandez admitted that Priority Home Health submitted more than $14.7 million in fraudulent billings to Medicare. Fernandez and his co-conspirators recruited Medicare beneficiaries to Priority Home Health who did not qualify for home health services. According to court documents, Fernandez recruited some of the same beneficiaries to attend ATC.
According to the plea agreement, Fernandez’s participation in the ATC fraud resulted in $8 million in fraudulent billings to the Medicare program. His participation in the Priority Home Health fraud resulted in $14.7 million in fraudulent billings to the Medicare program.
Sentencing for Fernandez is scheduled for Jan. 17, 2012, at 8:30 a.m. Fernandez faces a maximum penalty of 15 years in prison and a $250,000 fine.
ATC, Medlink and the owners and the lead manager of ATC, Medlink and ASI were each charged with multiple health care fraud-related and money laundering counts in a superseding indictment unsealed on Feb. 15, 2011. Lawrence Duran and Marianella Valera, two of the three owners, and Margarita Acevedo, the lead manager of ATC and Medlink, have pleaded guilty for their roles in the scheme, admitting that more than $200 million in billings were submitted to the Medicare program as a part of the scheme. They are scheduled to be sentenced on Sept. 14, 2011, by U.S. District Judge James Lawrence King in the Southern District of Florida. In addition, Medlink and ATC have pleaded guilty. Trial against the third owner charged in the superseding indictment, Judith Negron, is scheduled to begin Aug. 15, 2011. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The indictment charging Fernandez also charges 17 other individuals for their roles in the fraud scheme. Co-defendants Dr. Alan Gumer, Joseph Valdes, James Edwards and Adrianna Mejia have all pleaded guilty for their roles in the scheme. Trial against the remaining 13 co-defendants is scheduled to begin on Nov. 7, 2011, before U.S. District Judge Judge Patricia A. Seitz.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorney Jennifer L. Saulino of the Criminal Division's Fraud Section. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case 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 Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants that collectively have billed the Medicare program for more than $2.3 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.