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Assistant Attorney General for the Civil Division Tony West Speaks at the Medicare Fraud Strike Force Press Conference


Miami, FL
United States

Thank you all for being here. My name is Tony West, and I’m the Assistant Attorney General for the Civil Division of the Department of Justice. In that capacity, I oversee much of the federal government’s civil litigation across the country, including the Justice Department’s efforts to recapture billions of taxpayers’ dollars lost to fraud, including health care fraud.

Today’s announcement signals the Department’s crackdown on an increasing area of fraud and abuse in Florida – the delivery of important mental health services provided under Medicare’s Partial Hospitalization Program at Community Mental Health Centers. In addition to the arrests and criminal charges that Assistant Attorney General Breuer announced, we are also announcing that we have obtained a Temporary Restraining Order, or "TRO," freezing the assets of four corporate entities: American Therapeutic Corporation, American Sleep Institute, D & V Development, and MedLink Professional Management Group. As well as four individuals: Lawrence Duran, Marianella Valera, Judith Negron, and Margarita Acevedo.

Now, we have sought to freeze the assets of these individual and corporate defendants because we have alleged that they are involved in a scheme to seek Medicare reimbursements for mental health services that were never provided to people who needed them and for sleep studies that were never conducted. And to the extent that these defendants profited from this alleged fraud, the TRO seeks to keep them from transferring, hiding, or otherwise disposing of their assets.

The alleged fraud here involves the Partial Hospitalization Program, a Medicare program that provides mental health patients with much-needed services in an outpatient setting. The defendants, we allege, did not offer the services they were required to provide – including care to the elderly and the severely mentally ill – but instead, they billed Medicare – that is, billed the American taxpayers – for services that were not covered or that they failed to provide at all. To the extent that the defendants did offer services to this vulnerable population, those services were worthless, resulting in a failure of care. In fact, we allege that ATC routinely admitted people suffering from Alzheimer’s or dementia into their Partial Hospitalization Program just to get Medicare reimbursements even though they knew these services would not meet the needs of these patients. But the defendants’ unlawful conduct did not end there. We allege that they engaged in an illegal kickback scheme whereby they paid individuals to find potentially eligible Medicare beneficiaries and bring them to American Therapeutic or to ASI, the American Sleep Institute, regardless of whether the people who were referred needed health services or not.

Often, these "patient recruiters" would find individuals who were in need of a place to stay overnight and offer them free temporary housing, cash, or other bribes in exchange for agreeing to pose as patients of ATC and ASI. The defendants would then seek reimbursement from Medicare and line their own pockets with the profits. Led by Larry Duran, the alleged mastermind of these schemes, we believe that the defendants engaged in a concerted effort to cover up their crimes by altering medical records and forging physician signatures to make it appear as if a physician authorized or requested these services.

Finally, and most critical to obtaining the TRO we announce today, the defendants allegedly made fraudulent transfers of money to bank accounts or walked away with cash to hide their ill-gotten personal gains.

Today’s enforcement action reaffirms that health care fraud is a top priority for Attorney General Eric Holder, the Department of Justice, and for those of us at this podium. This case is just one example of the efforts of HEAT to crack down on health care fraud. And these efforts have paid off. Since January 2009, the Civil Division has recovered $4.2 billion in health care fraud cases through use of the False Claims Act, nearly $2 billion more than recoveries in the prior two years.

Before I conclude, I’d like to acknowledge the dedicated attorneys in the Civil Frauds section of the Civil Division’s Commercial Litigation Branch who worked very hard on this case and for whom I have the greatest respect; the United States Attorney of the Southern District of Florida, Willy Ferrer, and his great office, which has been instrumental in our efforts to obtain this TRO; and our law enforcement partners gathered here today for their tireless work. Together, we will continue our mission to protect taxpayers and consumers against fraud, waste, and abuse.

Now, it’s my pleasure to introduce Gary Cantrell, HHS-OIG Acting Assistant Inspector General for Investigations.

Updated September 17, 2014