FOR IMMEDIATE RELEASE:
TUESDAY - April 26, 2011
WOMAN GETS 12 YEARS FOR CONSPIRING TO DEFRAUD MEDICAID
AND STATE UNEMPLOYMENT PROGRAM
RALEIGH - United States Attorney George E.B. Holding announced today that SHIRLENE REESE BOONE of Murfreesboro, North Carolina, was sentenced to 12 years’ imprisonment followed by three years’ supervised release, and was ordered to pay restitution in the amount of $3,550,840.30 to the Medicaid Investigations Unit, $1,061,820.00 to the Internal Revenue Service, and $46,059.00 to the North Carolina Employment Security Commission. The sentence arises from BOONE’s prior plea of guilty to one count of Conspiracy to Commit Health Care Fraud and Mail Fraud, in violation of Title 18, United States Code, Section 371, one count of Aggravated Identity Theft and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1028A and 2, and one count of Failure to Collect and Pay Over Payroll Taxes and Aiding and Abetting, in violation of Title 26, United States Code, Section 7202 and Title 18, United States Code, Section 2.
According to the Criminal Information filed in the case, BOONE was the principal owner, manager, and registered agent for Metropolitan Counseling Services, Inc. (MCS), Metropolitan Counseling Services, LLC Community Support Services, Metropolitan Counseling Services, LLC Case Management Services, and Mass Home Care Services, LLC. MCS was a registered non-profit North Carolina corporation that provides community support services and HIV case management.
From 1997, to May, 2010, BOONE, through MCS, Inc., routinely submitted claims for reimbursement to the Medicaid program for Community Support Services and HIV Case Management. Community Support and HIV Case Management Services were designed to assist the state’s disabled and economially disadvantaged individuals diagnosed with certain medical conditions. Many of the claims submitted to Medicaid by BOONE through MCS, were false in that they demanded payment for services that never happened. BOONE instructed employees to fabricate medical records to support 37.5 hours per week of Community Support or HIV services or they would not be paid. In several instances, BOONE directed MCS employees to fabricate progress notes for community support services allegedly performed by other MCS employees or former employees. In other instances, BOONE directed low-level employees to fabricate notes associated with certain dates of service for Community Support Services which had already been billed to the Medicaid program. The low-level employees were not sufficiently qualified or licensed to lawfully perform the billed services.
BOONE routinely utilized the name and Medicaid identification number of MCS’s alleged customers to bill the Medicaid program for the services MCS, Inc. allegedly rendered, and to fabricate notes associated with these billings. Multiple Medicaid recipients reported that they had contacted MCS to request services. They met with an MCS employee, who took the Medicaid Identification Number of the recipient. These individuals were told that they would be contacted if they were “approved.” The recipients were not called again, however, and their Medicaid Identification Numbers were used for months to bill the Government. In some instances, the alleged Medicaid recipients were not in the state on the date of the alleged and billed services.
BOONE also conspired with her employees to defraud the North Carolina Employment Security Commission (NCESC). In some instances, BOONE instructed her employees to apply for unemployment benefits despite the fact that the employees continued to work for her and be paid by her. BOONE paid the employees the difference between their existing wages and the unemployment benefits they received from the NCESC. BOONE represented to the NCESC that the employees were not working for her, when in fact they were. Likewise, the employees represented weekly via the internet that they had not worked or received payment for services rendered when, in fact, they had.
As the president of MCS, BOONE also held back federal Withholding Taxes and FICA taxes from employee wages. BOONE was obligated to pay over to the IRS these payroll tax amounts. While BOONE filed quarterly payroll tax reports for all of the quarters during the period July 1, 2005, through September 30, 2006, she did not pay any of these taxes.
During the investigation of this case the Government executed a search warrant at BOONE’S offices in Murfreesboro. In connection with the search, law enforcement seized multiple boxes of fabricated medical records and other evidence. At the time of the search, BOONE’s supervisors of Community Support Services and HIV Case Management were questioned and they admitted to falsifying medical records for BOONE. DARICK LAMONT BRYANT and LEMUEL COBB both pleaded guilty to separate conspiracy charges and cooperated with the Government’s investigation of MCS and BOONE. On March 24, 2011, Senior United States District Judge James C. Fox ordered BRYANT to serve five years’ probation and make mandatory restitution in the amount of $3,402,040.32. COBB was also ordered to serve five years’ probation and make restitution of $148,800.00.Investigation of this case was conducted by the Internal Revenue Service - Criminal Investigations Division, and the Medicaid Investigation Unit of the North Carolina Department of Justice, with the assistance of the Murfreesboro Police Department. The prosecution was handled by the Economic Crimes Section of the United States Attorney’s Office, with Assistant United States Attorney William M. Gilmore representing the government.
News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.