North Texas Men, Who Owned Hyperbaric Oxygen Therapy Companies, Plead Guilty to Conspiracy to Commit Health Care Fraud; Third Defendant Admits Conspiring to Make False Statements to a Financial Institution
DALLAS — This morning, two businessmen, Stanley Thaw, of Frisco, Texas, and Michael Kincaid, of Plano, Texas, who owned and operated hyperbaric oxygen therapy companies located in Plano, Denton, Hurst, Houston, and San Antonio, Texas, appeared before U.S. District Judge Jorge A. Solis and pleaded guilty to their roles in a conspiracy to commit health care fraud. Kernell Thaw also appeared in court this morning and pleaded guilty to one count of conspiracy to make false statements to a financial institution regarding properties in Dallas that she purchased from a local home builder. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, from January 2008 through June 2011, Stanley Thaw, 71, and Kincaid, 56, conspired together, and with others, to defraud Medicare by making false and fraudulent representations and promises in connection with payments of hyperbaric oxygen therapy (HBOT) services and items. HBOT is a therapy used to assist in healing diabetic sores or amputations in an outpatient setting. HBOT is administered by placing the patient in a hyperbaric oxygen chamber to receive increased levels of oxygen; each session of HBOT is commonly referred to as a “dive,” and generally lasted between ninety minutes and two hours.
The HBOT companies employed physicians to attend and supervise HBOT sessions to ensure that a patient was medically appropriate for the HBOT on that particular day and also to treat any medical emergency that may occur. Stanley Thaw and Kincaid admitted that they defrauded Medicare by billing multiple times for the physician supervision and attendance of HBOT-related services, when, in fact, the physician only supervised and attended one session/dive that day.
Stanley Thaw and his co-conspirators were advised on multiple occasions that billing for multiple dive sessions was improper and that they had overbilled Medicare. They continued to direct fraudulent claims to Medicare and other health care programs through at least June 2011.
Kernell Thaw, 50, admitted that from July 2010 through April 2011, she and a co-conspirator, knowingly made false statements to influence a local bank and its mortgage division, in connection with obtaining a residential loan on a property in north Dallas. Had the financial institution known these false statements and representations were false, it would have rejected their loan.
Each of the three defendants faces a statutory maximum penalty of five years in federal prison, a $250,000 fine or twice the pecuniary gain to the defendant or loss to the victim, and restitution. Each of the defendants is scheduled to be sentenced on November 13, 2013, by Judge Solis. The plea agreement also includes a forfeiture allegation, which would require Stanley Thaw and Kernell Thaw to forfeit all proceeds traceable to their offenses.
The case is being investigated by the FBI, the U.S. Department of Health and Human Services - Office of Inspector General, the Office of Personnel Management - Office of Inspector General and the Texas Department of Public Safety. To learn more about health care fraud, please visit: http://www.stopmedicarefraud.gov/
Assistant U.S. Attorneys Sean McKenna, Glenn Harrison and P.J. Meitl are in charge of the prosecution.
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