Indiana Man Charged in Las Vegas Fraud Scheme Involving Doctors and Lawyers
Las Vegas, Nev. – A former Las Vegas resident who assisted attorneys in personal injury claims and held himself out to be a "medical consultant," has been indicted by the Federal Grand Jury on charges that he conspired with Las Vegas personal injury attorneys and healthcare providers to artificially inflate the value of personal injury settlements and judgments to the detriment of the interests of the clients they were hired to represent and serve, announced Steven W. Myhre, Acting United States Attorney for the District of Nevada.
Howard Awand, age 62, of Vevay, Indiana, is charged with Conspiracy, Mail and Honest Services Fraud, Money Laundering, and Witness Tampering. He was indicted on February 28, 2007, and surrendered himself to the United States Marshals Service in Las Vegas, Nevada, on March 2, 2007. Mr. Awand appeared before United States Magistrate Judge Leen this afternoon and was released pending trial. An Arraignment and Plea is scheduled for Friday, March 9, 2007, at 9:00 a.m. before Magistrate Judge Leen.
The Indictment states that Howard Awand purported to provide "medical consulting services" to attorneys in Nevada. Awand owned and operated Nevada Medical Consultants and Nevada Medical Investments, both Nevada corporations. The indictment alleges that from about September 2001 to December 2003, Awand and his co-schemers artificially and fraudulently inflated settlements or judgments in personal injury cases by:
- performing excessive and aggressive medical procedures at inflated costs without the fully informed consent of the client and patient;
- by improperly influencing the sworn testimony of healthcare providers through promises and payments of kickbacks, protection from medical malpractice suits, and payments for services on medical liens without regard to whether the procedures were covered by insurance; and
- by concealing from clients, the courts, defendants and others the undisclosed agreements between the co-schemers.
The scheme was carried out as follows:
Awand and his co-schemers referred an injured person to a personal injury attorney who agreed to represent the injured person for a contingency fee of between 33% and 40% of the final settlement or judgment. The attorney advised the client that Awand, a non-attorney, was retained to assist the attorney with the client's personal injury claim, when in fact, Awand was retained for the purpose of executing a fraudulent scheme which was concealed from the client.
Co-schemer attorneys had injured clients sign "medical liens," agreements by which the clients assigned the future proceeds of any settlement or judgment in their case to the healthcare providers. The medical liens allowed the healthcare providers to bill for whatever services they wished without regard to medical necessity and without approval from insurance companies. Co-schemer attorneys ensured that the health care providers would be paid the full amounts they billed, typically far in excess of the compensation the healthcare provider could receive for the same services reimbursed by insurance. After the clients signed the medical liens, Awand directed the medical care of the client by referring patients to co-scheming providers and directing those providers to perform invasive and aggressive medical procedures.
Co-schemer attorneys permitted Awand to purchase the medical liens from the providers at a discount. Upon settlement or judgment in the case, the co-schemer attorneys paid Awand the full value of the lien and agreed not to negotiate, question or reduce the liens purchased by Awand. The co-schemer attorneys also agreed to pay Awand a percentage of the settlement or judgment as a "kickback," and to conceal the kickback from the client and others. Awand and the co-schemer attorneys agreed to protect the healthcare providers from medical malpractice claims by refraining from filing medical malpractice suits.
The co-schemer providers agreed to give co-schemer attorneys preferred access and information for Awand-referred clients; agreed to make misleading statements and/or provide misleading testimony in court; and agreed not to disclose their agreements with Awand and the co-schemer attorneys . Awand agreed to prepare and rehearse scripted testimony for the co-schemer providers before they testified.
The Indictment discusses specifically a case in which Awand, without the knowledge of "Client 1," allegedly received approximately $780,000 in fraudulent kickbacks from one of the co-schemer attorneys.
The Indictment also states that in March 2006, Awand's former bookkeeper was subpoenaed to testify before the Federal Grand Jury investigating the matter. On May 19, 2006, Awand allegedly sent an email to the bookkeeper which was intended to intimidate and frighten her and make her question whether she wished to further cooperate with the Grand Jury.
If convicted, Mr. Awand is facing up to five years in prison and a $250,000 fine on the Conspiracy charge; up to 20 years in prison and a $250,000 fine on each Mail Fraud/Honest Services Fraud count; and up to 10 years in prison and a $250,000 fine on each of the Money Laundering and Witness Tampering counts.
The Government will also seek forfeiture of any properties owned by Mr. Awand, up to approximately $7 million, including but not limited to real property at 94 Tabor Hill Road, Stowe, Vermont.
The case is being investigated by the FBI and IRS Criminal Investigation and prosecuted by Assistant United States Attorneys Steven W. Myhre, Crane M. Pomerantz, Roger W. Wenthe, and Paul S. Padda
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.