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Thursday, April 8, 2010

Clinic Manager and Patient Recruiter Plead Guilty for Roles in $2 Million Medicare Fraud Scheme

Detroit-area residents Carlos Grana and Dwight Armstrong pleaded guilty today to engaging in a fraudulent medical testing scheme, announced the Departments of Justice and Health and Human Services (HHS).

Grana, 36, and Armstrong, 32, each pleaded guilty today to one count of conspiracy to commit health care fraud before U.S. District Court Judge Lawrence P. Zatkoff in the Eastern District of Michigan. At sentencing, scheduled for July 13, 2010, each defendant faces a maximum penalty of 10 years in prison and a $250,000 fine. Grana and Armstrong were indicted in December 2009, along with Price Marshall, who pleaded guilty on Feb. 23, 2010, for his role in the scheme.

According to the plea documents, Grana managed the day-to-day operations of Careplus LLC, a medical clinic in Livonia, Mich. Grana admitted he that while he managed Careplus, he paid patient recruiters for Medicare beneficiary referrals. According to court documents, the recruiters were expected to find and transport Medicare beneficiaries to Careplus. Grana admitted he paid the recruiters between $100 and $150 per patient referral, and instructed the recruiters to pay the patients $50 from that amount. According to court documents, nearly all of the patients treated at Careplus were secured through the payment of kickbacks.

Grana also admitted that in exchange for the payments, he and his co-conspirators expected the Medicare beneficiaries who received kickbacks to subject themselves to a medical examination and to medically unnecessary tests. Grana told the recruiters to instruct the patients to feign certain symptoms when they arrived at Careplus, which ultimately led to the patients’ medical records containing information about false symptoms. The falsified records then helped Careplus deceive Medicare about the legitimacy and medical necessity of the tests it performed. Between approximately February 2008 and October 2009, Grana and his co-conspirators at Careplus submitted approximately $2.2 million in claims to the Medicare program for unnecessary medical and testing services that were procured through the payment of kickbacks. Medicare paid approximately $2 million of those claims.

According to the plea documents, Armstrong was one of the patient recruiters for Careplus. Armstrong admitted that beginning in approximately June 2008 he began recruiting patients for the owners and/or operators of Careplus and that he paid kickbacks to the Medicare beneficiaries he recruited and later transported to Careplus using money provided by the owners/operators. Armstrong admitted he kept part of the funds he received as a kickback for referring the Medicare beneficiaries he recruited. According to court documents, the owners and operators of Careplus typically paid $100-$150 per patient Armstrong recruited, with Armstrong retaining $50-$75 of that amount as a kickback for the referral.

Armstrong admitted he instructed the beneficiaries he recruited, based on instructions from the owners and operators of Careplus, to claim they had certain symptoms to trigger medically unnecessary tests. The patients Armstrong recruited generated approximately 12 percent of the total amount fraudulently billed by Careplus to the Medicare program, or approximately $342,000 in claims. Medicare paid approximately $250,000 on those claims.

Today’s result was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

The case was prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for approximately $1.1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Press Release Number: 
Updated September 15, 2014