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Thursday, October 21, 2010

Two Miami Corporations and Four Individuals Indicted for Health Care Fraud Scheme Involving Approximately $200 Million in Medicare Billing

Separate Civil Action Freezes Assets of Corporations and Individuals

WASHINGTON – Two Miami health care companies and four owners and senior managers of the companies were indicted today for 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). In a related civil action, a temporary restraining order was obtained to freeze the assets of the indicted companies and individuals.

A 13-count indictment unsealed today in U.S. District Court in the Southern District of Florida, charges American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc. (Medlink), as well as Lawrence S. Duran, Marianella Valera, Judith Negron and Margarita Acevedo, aka Margarita De La Cruz, with one count of conspiracy to commit health care fraud. ATC, Duran and Valera were also charged with 11 counts of health care fraud. ATC, Duran, Valera and Acevedo are charged with one count of conspiracy to defraud the United States, to receive health care kickbacks and to pay health care kickbacks. The individuals were all arrested this morning in Miami and will make initial appearances in U.S. District Court later today. Federal agents are conducting search warrants today at six ATC and Medlink locations.

In a separate action, a civil complaint for injunctive relief was unsealed today in U.S. District Court in the Southern District of Florida and a temporary restraining order was obtained to freeze the assets of Duran, Valera, Negron, Acevedo, ATC and Medlink.

"Since the Strike Force began operation, we have rarely seen anything like the illegal conduct charged in this indictment, both in terms of the nature and size of the scheme," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "The Strike Force is committed to finding and prosecuting individuals and companies who aim to cheat the American taxpayer in this way."

"The alleged fraud in this case was undermining a Medicare health care program that provides an important benefit for beneficiaries who need outpatient psychiatric services," said Assistant Attorney General Tony West of the Civil Division. "Today’s coordinated criminal and civil action has moved in a targeted manner to assure that vital resources meant for beneficiaries are protected, that fraud and abuse in this program are eliminated, and at the same time, that defendants are stripped of their ill-gotten gains."

According to the criminal and civil court documents, the defendants allegedly participated in a scheme to defraud the Medicare program by submitting false claims for mental health services administered at ATC facilities that were medically unnecessary or were not provided. 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, Valera, Acevedo and ATC paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses in exchange for the ALFs and halfway houses delivering patients from their facilities to ATC. According to the indictment, in many instances, the patients received a portion of the kickbacks from the owners and operators of the ALFs and halfway houses. ATC allegedly billed Medicare for services purportedly provided to these recruited patients. According the indictment, the services were not medically necessary or were not provided at all. According to the civil complaint, 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.

Court documents allege that patient charts and notes from therapy sessions were routinely altered at ATC in order to make it appear that the patients being treated at ATC qualified for PHP treatments when, in fact, they did not. According to the indictment, Duran and Valera allegedly instructed employees and doctors at ATC to alter diagnoses and medication types and levels to falsely make it appear that the patients qualified for PHP treatments. Court documents also allege that Valera manipulated the length of patients’ stays in order to maximize the number of days Medicare would pay for the PHP services.

The civil complaint and temporary restraining order also name American Sleep Institute Inc. (ASI) and D&V Development Inc., as participants in the health care fraud. Civil court documents allege that ASI was owned and operated by Valera and Duran and that ASI submitted false claims to the Medicare program for sleep studies. According to the civil complaint, 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.

"Today’s announcement exemplifies the cooperation between the Department of Justice’s Criminal and Civil Divisions, the U.S. Attorney’s Office in South Florida, HHS-OIG and the FBI," said U.S. Attorney Wifredo A. Ferrer. "Through the HEAT Strike Force, we have pooled our resources and sharpened our efforts to combat the latest health care fraud du jour:  fraud involving community mental health programs.  As this case demonstrates, we have the expertise, the commitment and the resources to tackle these emerging fraudulent schemes."      

"Community mental health centers across the country serve a uniquely vulnerable population," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services.  "Those attempting to defraud this critically important program – as we are charging here today – should expect to pay a heavy price."

"Today’s arrests and search warrants give notice to anyone involved in fraudulent health care practices that there are no ‘safe havens’ for their businesses in South Florida," said Acting Special Agent in Charge William Maddalena.  "The FBI in Miami will continue to make this type of crime a top priority."

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; Assistant Attorney General Tony West of the Civil 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 case is being prosecuted by Trial Attorneys Jennifer L. Saulino and Joseph S. Beemsterboer of the Criminal Division’s Fraud Section, 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 case is being investigated by the FBI and HHS Office of Inspector General (OIG). The case 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 Southern District of Florida.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for approximately $2 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