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Press Release

Twenty People Indicted in Florida for Health Care Fraud Scheme Involving Approximately $200 Million in Medicare Billing

For Immediate Release
Office of Public Affairs
Related Action Charges Four Other Defendants with Additional Offenses

WASHINGTON – Twenty individuals, including three doctors, were charged today in the Southern District of Florida for various health care fraud, kickback and money laundering charges related to their alleged participation in a fraud scheme involving approximately $200 million in Medicare billing for purported mental health services, announced the Departments of Justice and Health and Human Services (HHS). 

The 38-count indictment unsealed today in U.S. District Court in the Southern District of Florida alleges that the defendants worked with and for American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc.  According to court documents, the defendants participated in a scheme to defraud Medicare by submitting false claims for mental health services administered at ATC facilities that were medically unnecessary or not provided at all.  The indictment alleges that various defendants paid kickbacks to patient brokers and owners and operators of halfway houses and assisted living facilities (ALFs), in exchange for delivering patients to ATC facilities.  Various defendants are charged with participating in an extensive and complicated money laundering scheme related to the cash for kickback payments.  Sixteen defendants were arrested this morning in the Southern District of Florida and are expected to appear in U.S. District Court in Miami later today. Arrests are expected to continue in the coming days.

ATC’s and Medlink’s owners and managers, Lawrence S. Duran, Marianella Valera, Judith Negron and Margarita Acevedo, were originally indicted along with the corporate entities, ATC and Medlink, in October 2010.  A superseding 38-count indictment unsealed today in the Southern District of Florida charges them with additional offenses.

“As today’s charges reflect, defrauding the Medicare system was not an aberration at ATC, but instead part and parcel of its business operations,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division.  “The alleged scheme was brazen in scope, and carried out by the company’s owners, doctors, marketers and others.  By exploiting positions of trust, these defendants masked their fraudulent operation as a legitimate mental health business.  These charges are evidence that we will pursue Medicare cheats no matter their position.”

“Community mental health centers are an essential element of the nation’s health care system and serve vulnerable populations,” said Daniel R. Levinson, HHS Inspector General.  “Today’s arrests by OIG agents and our law enforcement partners show that we will not tolerate criminals who pay kickbacks for referrals of Medicare business or who bill for services that were either medically unnecessary or never provided.”

“Community Mental Health Centers can no longer use phantom medical care as a front to bilk Medicare for unnecessary or nonexistent medical services,” said FBI Special Agent in Charge John V. Gillies of the Miami Field Office. “The FBI and our law enforcement partners will investigate and criminally prosecute such fraud to the fullest extent of the law.”

U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida stated, “Health care fraud has evolved from DME fraud, to infusion fraud, to home health care fraud, and now, as this case shows, to community mental health treatment fraud. Worse yet, health care fraud has come to permeate every level of the health care industry, from the owners and managers of dirty clinics, to complicit doctors, program directors, therapists, marketers, and patient recruiters.  Today’s prosecution confirms that we are well-equipped and primed to fight the changing face of Medicare fraud in the Southern District of Florida, and that we will prosecute every link in the fraud chain.” 

According to court documents, ATC, headquartered in Miami, operated purported partial hospitalization programs (PHPs) in seven different locations throughout Florida, from Homestead to Orlando.  A PHP is a form of intensive treatment for mental illness.  Court documents allege that Duran and Valera orchestrated the fraud, kickback and money laundering schemes.  Negron assisted Duran and Valera in operating the schemes.  Acevedo operated the kickback scheme.   

According to court documents, doctors Mark Willner, Alan Gumer and Alberta Ayala were medical directors for ATC, and Vanja Abreu (Ph.D.), Nancy Merced-Sola and Lydia Ward (Ph.D.) served as program directors who managed ATC facilities.  Nichole Eckert was a therapist at ATC.  Court documents allege that Duran, Negron and Valera, along with the program directors and Eckert, regularly altered and instructed others to alter patient charts and notes from therapy sessions at ATC in order to make it appear that the patients being treated qualified for PHP treatments, when, in fact, they did not.  According to the indictment, Willner, Gumer and Ayala then signed the false patient charts authorizing unnecessary treatment or continued treatment for patients who were not eligible for PHP treatment, without examining the patients or the charts.  Duran and Valera also allegedly instructed employees and doctors at ATC, including Willner, Gumer and Ayala, to alter diagnoses and medication types and levels to falsely make it appear that the patients qualified for PHP treatments.

According to court documents, Valera, Willner, Gumer and Ayala manipulated the length of patients’ stays in order to maximize the number of days Medicare would pay for the PHP services.  According to a civil complaint filed in the Southern District of Florida, ATC routinely admitted patients to the PHP program who suffered from Alzheimer’s and severe dementia and therefore were not eligible for the PHP program because their mental capacity did not allow them to benefit from group therapy.

The indictment also alleges that Sandra Jimenez, Hilario Morris and Joseph Valdes were marketers for ATC and participated in the kickback operation.  These marketers, along with Duran, Valera, Negron and Acevedo, allegedly paid kickbacks to patient brokers and owners and operators of ALFs and halfway houses in exchange for delivering patients from their facilities to ATC.  The indictment alleges that defendants Mathis Moore, Nelson Fernandez, Leyanes Placeres, James Edwards, Frank Criado and Curtis Gates were patient brokers and, in exchange for kickbacks, provided patients to ATC every month from ALFs and halfway houses with which they had relationships.  The indictment alleges that the kickback payments totaled millions of dollars.

The indictments allege that the kickback scheme was supported by a money laundering scheme whereby individuals received checks in their own names or in the names of shell corporations they created, cashed the checks and returned the cash to Duran and Valera, which Duran and Valera then used to pay the kickbacks.  Defendants Adriana Mejia, Pedro Sosa, Yoisel Cancio and an unnamed coconspirator, along with Moore, Fernandez, Placeres, Edwards, Criado and Gates, allegedly participated with Duran, Valera, Negron and Acevedo in the charged money laundering conspiracy.  According to the indictment, Mejia, Sosa and Cancio received monthly, bi-weekly and weekly payments from Medlink despite the fact that they had no job functions at Medlink or ATC, other than laundering money.  The indictments also charge that Duran, Valera, Negron, Mejia, Sosa and Cancio engaged in transactions designed to conceal proceeds of unlawful activity and structured their transactions to avoid reporting requirements that require banks to report certain transactions.  According to the indictments, these defendants together laundered millions of dollars over several years.

The alleged scheme also involved a company called American Sleep Institute (ASI), which purportedly provided sleep study services.  The defendants paid additional kickbacks for some patients to also visit ASI.  Court documents allege that Willner, Gumer and Ayala furthered the health care fraud conspiracy by referring patients to ASI. 

In a separate action in October 2010, a civil complaint for injunctive relief was filed in U.S. District Court in the Southern District of Florida and a preliminary injunction was obtained to freeze the assets of Duran, Valera, Negron, Acevedo, ATC and Medlink as well as ASI and D&V Development Inc., as participants in the health care fraud.  Civil court documents allege that D&V Development was owned and operated by Valera and Duran and was established in an effort to divert funds received by ATC and ASI.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

Today’s actions were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida; Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office; and Daniel R. Levinson, Inspector General of HHS.

The criminal cases are being prosecuted by Trial Attorneys Jennifer L. Saulino, Maria Gonzalez Calvet and Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.  The related civil action is being prosecuted by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The cases are being investigated by the FBI and HHS Office of Inspector General (OIG). The cases were 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 Southern District of Florida.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for approximately $2.1 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:

Updated September 15, 2014

Press Release Number: 11-186