News and Press Releases


MONDAY - August 8, 2011


WILMINGTON - United States Attorney Thomas G. Walker announced that in federal court on August 5, 2011, a Criminal Indictment was unsealed that charges MICHAEL SHAWN BROWN with 20 counts of wire fraud, in violation of Title 18, United States Code, Section 1343; 2 counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028(A); 2 counts of arson – one in violation of Title 18, United State Code, Section 844(I) – and the other that involves commission of a federal felony in violation of Title 18, United State Code, Section 844(h); and 1 count of making material false statements, in violation of Title 18, United States Code, Section 1001. A Federal Grand Jury returned the Criminal Indictment on August 2, 2011.

According to the Indictment, BROWN, 45, was a Licensed Professional Counselor employed at the Chadbourne Elementary School, in Chadbourne, North Carolina, while operating a separate counseling business allegedly providing “free” teacher-supervised tutoring services, snacks, transportation services, and youth activities and games to lower income individuals. As part of the process for registering each new participant at BROWN’s separate business, BROWN required his employees to obtain a copy of the participant’s Medicaid card. After the initial meeting during which the Medicaid participants gave over their Medicaid card, however, some participants had no further contact with BROWN. BROWN routinely billed Medicaid as though he had performed “individual psychotherapy” or “group” behavioral health counseling and therapy sessions on the children for as long as two hours on a single day. On March 21, 2011, BROWN transmitted false billing sheets by fax from Chadbourn Elementary School to his billing agent in Florida, in which 16 different alleged 120-minute therapy sessions involving one individual were billed to Medicaid. On April 13, 2011, BROWN again faxed billing sheets to his Florida billing agent in which Medicaid was falsely billed for 26 120-minute therapy sessions involving a second individual.

The Indictment further states that on April 14, 2011, investigators requesting access to BROWN’s records. BROWN refused, however, did agree to meet with investigators on April 18, 2011. During an interview, BROWN told investigators that the last time he was in his business was at 2:30 pm on the day before the records inspection. The Indictment alleges that, in fact, BROWN had a relative drive him to the business on the night before the records inspection. The business burned that night. The Indictment further alleges that as a result of the fire investigators were unable to examine whatever records, if any, were located in the business. An indictment contains allegations that a defendant has committed a crime. Under the United States Constitution, every defendant is presumed innocent until and unless proven guilty in court.

The maximum penalty for each count of wire fraud is up to 20 years’ imprisonment. For aggravated identity theft, the penalty is a mandatory 2-year term of imprisonment consecutive to any convictions under wire fraud counts 19 and 20. For the first count of arson, the maximum penalty is up to 20 years’ imprisonment; for the second count of arson, which includes commission of a federal felony, the maximum charge is up to 10 years consecutive to any other term of imprisonment imposed. For making material false statements, the maximum penalty is up to five years imprisonment.

Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the North Carolina State Bureau of Investigation; the Medicaid Investigation Unit of the North Carolina Department of Justice; and the Columbus County Sheriff’s Office. Assistant United States Attorney William Gilmore is representing the government.


News releases are available on the U. S. Attorney’s web page at within 48 hours of release.

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