OFFICE OF THE UNITED STATES ATTORNEY
WESTERN DISTRICT OF MISSOURI
BRADLEY J. SCHLOZMAN
Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106
MARCH 30, 2007
FOR IMMEDIATE RELEASE
INDEPENDENCE WOMAN SENTENCED
FOR HEALTH CARE FRAUD
KANSAS CITY, Mo. – Bradley J. Schlozman, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., woman was sentenced in federal court today for participating in a conspiracy to defraud Health Midwest’s employee health care plan administrator of more than $120,000.
Cheri Smith, 37, of Independence, was sentenced by U.S. District Judge Howard F. Sachs this morning to three years and four months in federal prison without parole. The court also ordered Smith to pay $121,284 in restitution.
On Oct. 10, 2006, Smith pleaded guilty to health care fraud. Smith, who organized the fraud scheme, was employed by the claims department at Health Midwest Comprehensive Care (HMCC) as a senior team leader and was responsible for data entry of all pharmacy claims; she was also authorized to enter pharmacy claims data, to change or modify account information and to pay pharmacy claims. Health Midwest Comprehensive Care (HMCC) is a third-party administrator for the employee health care plan maintained by Health Midwest.
Smith accessed the computer database containing the names of employees covered by the pharmacy benefits program, and changed valid member names to those of her own family members, friends, and other persons who were not Health Midwest employees and not entitled to receive benefits. Smith then entered false pharmacy claims for those bogus employees and caused checks to be issued to them. After cashing the checks, the persons in whose names they were fraudulently issued typically provided a portion of the proceeds back to Smith.
Smith admitted that she made at least 36 fraudulent entries in the computer system responsible for paying pharmacy claims for Health Midwest employees. Twelve co-defendants have pleaded guilty to participating in the health care fraud by receiving and cashing fraudulent HMCC checks.
This case is being prosecuted by Assistant U.S. Attorney Roseann Ketchmark. It was investigated by the Federal Bureau of Investigation.
This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at