North Carolina Mental Health Company Owner Sentenced to 60 Months in Prison on Health Care Fraud and Tax Evasion Charges
The owner of a North Carolina mental health company was sentenced to prison today for the submission of false claims to Medicaid and tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew G.T. Martin for the Middle District of North Carolina.
Catinia Denise Farrington, a resident of Cypress, Texas, was sentenced to 60 months in prison on each count to run concurrently by U.S. District Court Judge N. Carlton Tilley Jr. of the Middle District of North Carolina. On Sept. 4, 2018, Farrington pleaded guilty to one count of health care fraud conspiracy and one count of tax evasion for the tax year 2014.
According to the documents filed with the court, Farrington owned Durham County Mental Health and Behavioral Health Services LLC (DCMBHS) in Durham, North Carolina. From 2011 through 2015, Farrington submitted thousands of false claims to Medicaid for services that were not performed, resulting in approximately $4 million in wrongful payments to DCMBHS. During the relevant period, Haydn Thomas worked as an office manager for an oral surgeon and provided Farrington with the names and Medicaid identification numbers of dental patients. The patient information was used to submit the false claims to Medicaid.
In addition, Farrington earned more than $1.1 million from DCMBHS and evaded income taxes on this money by transferring funds to various business bank accounts and paying personal expenses from the business bank accounts while failing to file tax returns. The resulting tax loss is approximately $391,747.
In addition to the term of imprisonment imposed, Farrington was ordered to serve three years of supervised release and to pay restitution in the amount of $3,950,656 to NC Fund for Medical Assistance and $391,747 to the Internal Revenue Service.
Co-defendant Thomas previously pleaded guilty to making a false statement related to a health care matter and tax evasion. His sentencing hearing is set for March 27, 2019.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Martin commended special agents of the Internal Revenue Service and the U.S. Department of Health and Human Service, Office of Inspector General, who conducted the investigation, and Assistant United States Attorney Robert Hamilton, Trial Attorney Mara Strier of the Tax Division and Special Assistant U.S. Attorney Michael Heavner of the Medicaid Investigations Division of the North Carolina Attorney General’s Office, who prosecuted the case.