FOR IMMEDIATE RELEASE
October 31, 2002
LAS VEGAS MAN SENTENCED TO FEDERAL PRISON FOR DEFRAUDING PORTER HOSPITAL
DENVER – John W. Suthers, United States Attorney for the District of Colorado, Philip B. J. Reid, Special Agent in Charge of the Federal Bureau of Investigation’s Denver office, James D. Vickery, Special Agent-in-Charge, IRS_Criminal Investigation, Denver Field Office, and Martin Campbell, Health and Human Services Regional Inspector General for Investigations, today announced that JOHN KENNETH HAMILTON, age 52, of Las Vegas, Nevada, was sentenced to 24 months in federal prison for health care fraud and failure to file an income tax return. He was also ordered to pay restitution in the amount of $867,263 to Centura Health. Today’s sentence was handed down by U.S. District Court Judge Walker D. Miller.
HAMILTON was indicted by a federal grand jury in Denver, Colorado on February 14, 2002. He pled guilty in U.S. District Court in Denver on June 28, 2002.
According to the indictment and plea agreement, HAMILTON ran a business called “Health Research and Drug Testing,” which was responsible for conducting drug and alcohol tests at certain emergency rooms for employees injured while working. The tests, which were part of a program called “Workwise,” were designed to reduce workers compensation insurance and health care insurance costs by determining if drugs or alcohol played a factor in the employees’ injury.
Beginning in May 1998 and continuing through February 2000 HAMILTON, on numerous occasions, executed a scheme to defraud Centura Health in connection with “Workwise.” Centura Health operated two hospitals in the Denver area – Littleton Porter Hospital and Porter Hospital. HAMILTON executed his scheme by falsely claiming to Centura that he had performed fluid specimen collection services when he had not. In order to obtain payment, HAMILTON would submit false invoices to Centura. In some cases he would falsely state to the reviewer of the invoice that he had backup documentation for the invoice, when in fact he had none and had never performed the services. In other cases, he would actually forge an approval on the invoice and deliver it to Centura’s accounts payable staff for payment. HAMILTON obtained approximately $917,000 from Centura over the period of time covered by the scheme. During that time, he performed no more than $50,000 in services. Accordingly, the loss to Centura exceeded $800,000. The funds he acquired from this scheme were deposited into his personal bank accounts and spent on personal items including his personal hobby of motorized cart racing.
In addition, HAMILTON willfully failed to file a tax return for 1999 at the time required by law and regulation. His gross receipts which should have been included in his calculation of his gross income for 1999 were approximately $585,321.75 which would have required that he make a return and pay federal taxes in excess of $200,000.
The case was investigated by the Federal Bureau of Investigation (FBI), the Department of Health and Human Services Office of Inspector General for Investigations, and the Internal Revenue Service (IRS). HAMILTON was prosecuted by First Assistant United States Attorney William J. Leone.
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