United States Attorney Anne M. Tompkins
Western District of North Carolina
TWO WOMEN FACE FEDERAL CHARGES FOR HEALTH CARE FRAUD CONSPIRACY, ILLEGAL KICKBACKS, AND A SCHEME INVOLVING FORGED PRESCRIPTIONS FOR CONTROLLED SUBSTANCES CHARLOTTE, N.C. – A federal bill of indictment unsealed today charged two women with healthcare fraud conspiracy, participating in an illegal kickback scheme, and conspiracy to distribute controlled substances announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. Attorney Tompkins is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; Chris Briese, Special Agent in Charge of the Federal Bureau of Investigations (FBI), Charlotte Division; Russell F. Nelson, Special Agent in Charge of the United States Secret Service (USSS), Charlotte Field Division; Donnie Varnell, Special Agent in Charge of the Diversion and Environmental Crimes Unit of the North Carolina State Bureau of Investigation (NC SBI); Robin Pendergraft, Senior Deputy Attorney General of the North Carolina Attorney General’s Medicaid Investigations Unit (MIU); Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD); and Sheriff Kevin L. Auten of the Rowan County Sheriff’s Office.
On August 17, 2011, a federal grand jury sitting in Charlotte indicted Karen Wills (a/k/a Karen Boykin and Karen Jackson), 42, of Salisbury, and Wendy Gibson (a/k/a Wendy Fitzgerald), 39, of Charlotte on one count of health care fraud conspiracy, one count of paying and receiving illegal kickbacks, and one count of conspiracy to distribute controlled substances. Wills faces an additional count of health care fraud conspiracy.
According to the indictment, from in or about 2008 to in or about January 2011, Wills and others participated in a scheme to defraud Medicare and Medicaid by submitting false and fraudulent claims for medical services which were medically unnecessary, not provided, or both, including but not limited to, electromyography (“EMG”) and anorectal manometry (“AM”) procedures. The scheme caused Medicare and Medicaid to pay over $400,000 in reimbursement payments for the fraudulent claims. The indictment alleges that in or about August 2008, Wills and others became aware of the investigation into the fraudulent billing scheme, and in an attempt to cover the fraudulent scheme, Wills created several false EMG and AM reports and placed those fictitious reports in patient files.
The indictment also alleges that from in or about January 2008 to in or about 2009, Wills, her co-defendant, Gibson, and others engaged in an illegal kickbacks scheme involving power wheelchairs. According to information contained in the indictment, Wills used her position with her employer to submit fictitious referrals for patients to receive medically unnecessary power wheelchairs from Gibson’s employer. In some instances, Wills forged a physician’s signature on required qualification documents, while Gibson tracked and directed payment for those referrals. The indictment also alleges that the defendants and others attempted to conceal the illegal kickback payments by falsely representing on invoices and checks that the payments were for nursing and billing services. This scheme resulted in payments for the medically unnecessary equipment from Medicare and Medicaid in excess of $300,000.
The indictment also alleges that from in or about 2008 to in or about January 2011, Wills and Gibson engaged in a conspiracy to distribute controlled substances. The indictment alleges that Wills forged a physician’s signature on prescription pads she misappropriated from her employer, and issued fraudulent prescriptions in Gibson’s name. The prescriptions were written for controlled substances including oxycodone and hydrocodone/acetaminophen pills. According to the indictment, Gibson then used her health insurance prescription benefit program to pay for the fraudulent prescriptions resulting in payments of over $30,000 for these fraudulent prescriptions. Wills and Gibson obtained and illegally distributed approximately 3,000 oxycodone pills, and approximately 5,000 hydrocodone/acetaminophen pills.
Gibson was arrested today on the indictment and is currently held in local federal custody. Wills was arrested yesterday in Rowan County on unrelated charges and is currently detained in Rowan County. If convicted, Gibson and Wills face a maximum statutory sentence of ten years in prison on the healthcare fraud conspiracy and a $250,000 fine; five years in prison and a $25,000 fine for the illegal kickbacks charge; and ten years in prison and a $1 million fine for the conspiracy to distribute controlled substances. Wills also faces a penalty of 10 years of imprisonment and a $250,000 fine for the additional charge of healthcare fraud conspiracy.
The investigation into Wills and Gibson was handled by HHS-OIG, FBI, USSS, NC SBI, MIU, CPMD, and Rowan County Sheriff’s Office. The prosecution is being handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte. An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is a multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.