Former Executive of Tenet Healthcare Corporation Charged for Alleged Role in $400 Million Scheme to Defraud
A former senior executive of Tenet Healthcare Corporation, was indicted for his alleged role in an over $400 million scheme to defraud. The indictment alleges that the scheme to defraud victimized the U.S. government, the Georgia and South Carolina Medicaid Programs, and prospective patients of Tenet hospitals.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge David J. LeValley of the FBI’s Atlanta Division and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Atlanta Field Office made the announcement.
John Holland, 60, of Dallas, was charged in an indictment filed on Jan. 24 in the Southern District of Florida with one count of mail fraud, one count of health care fraud and two counts of major fraud against the United States. Holland made an initial appearance today, Feb. 1, at 2:00 p.m. EST before U.S. Magistrate Judge Edwin G. Torres of the Southern District of Florida.
According to the indictment, Holland formerly served as a senior vice president of operations for Tenet Healthcare Corporation’s Southern States Region and as chief executive officer of North Fulton Medical Center Inc. in Roswell, Georgia. The indictment alleges that from approximately 2000 through 2013, Holland engaged in a scheme to defraud the United States, and the Georgia and South Carolina Medicaid Programs, by causing the payment of bribes and kickbacks in return for the referral of patients to North Fulton Medical Center Inc. and other Tenet hospitals in the Southern States Region, including Atlanta Medical Center Inc., Spalding Regional Medical Center Inc. and Hilton Head Hospital. From approximately 2007 through 2013, Tenet maintained and operated an affiliated billing center located in Boca Raton, Florida, that assisted in processing, for payment, Medicaid billings for these hospitals. Holland took affirmative steps to conceal the scheme including by circumventing internal accounting controls and falsifying Tenet’s books, records and reports. These kickbacks and bribes helped Tenet bill the Georgia and South Carolina Medicaid Programs over $400 million, and Tenet obtained more than $149 million in Medicaid and Medicare funds based on the resulting patient referrals, the indictment alleges.
According to the allegations, to effectuate the scheme, Holland, among other things, made false and fraudulent statements to HHS-OIG in connection with Tenet’s 2006 Corporate Integrity Agreement (the CIA), in which he falsely certified to HHS-OIG that Tenet was in compliance with the terms of participation in the Medicare and Medicaid Programs, and the terms of the CIA, when in fact he knew that Tenet was paying for illegal patient referrals. Holland’s certifications were included as part of Tenet’s yearly annual reports that were mailed to the HHS-OIG monitor located in Miami Lakes, Florida. During the duration of the CIA from 2007 through 2011, Tenet received over $10 billion in payments from federal health care programs – monies that Tenet would not have received had the company been excluded from participation in federal health care programs, the indictment alleges.
“These charges underscore our continued commitment to holding both individuals and corporations accountable for their fraudulent conduct,” said Acting Assistant Attorney General Blanco. “We will follow the evidence where it takes us, including to the corporate executive ranks.”
“Medicaid patients have the right to seek healthcare without fearing that care is tainted by bribes and illegal kickbacks,” said Special Agent in Charge for FBI’s Atlanta Division LeValley. “Not only did patients suffer because of these alleged actions, but this kind of alleged abuse threatens to drive up the cost of healthcare for everyone. The FBI is committed to ensuring that federal laws related to the healthcare industry are enforced, and this case is an example of that commitment.”
“Health care companies and their executives must bill taxpayer-funded health programs honestly,” Special Agent in Charge Jackson of the HHS Office of Inspector General. “Working with our law enforcement partners, our office will continue to pursue those who attempt to defraud Medicare and Medicaid, as alleged in this indictment.”
On Oct. 19, 2016, North Fulton Medical Center Inc. and Atlanta Medical Center Inc. pleaded guilty to conspiring to defraud the United States and to violate the Anti-Kickback Statute. Tenet subsidiary Tenet HealthSystem Medical Inc. and its subsidiaries (THSM) also entered into a non-prosecution agreement (NPA) with the government at that time. Under the terms of the NPA, THSM and Tenet will avoid prosecution if they, among other requirements, cooperate with the government’s ongoing investigation and enhance their compliance and ethics program and internal controls. Tenet also agreed to retain an independent compliance monitor to address and reduce the risk of any recurrence of violations of the AKS by any entity owned in whole, or in part, by Tenet. Tenet and its subsidiaries also agreed to pay over $513 million to resolve the criminal charges and civil claims arising from the matter.
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Atlanta Field Office, HHS-OIG and the FBI Healthcare Fraud Unit Major Provider Reponse Team are conducting the investigation. Deputy Chief Joseph S. Beemsterboer, Assistant Chiefs Robert A. Zink and Sally B. Molloy and Trial Attorney Antonio M. Pozos of the Criminal Division’s Fraud Section are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine locations across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS 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.
If you believe you are a victim of this offense, please visit this website or call (888) 549-3945.