Dunn Couple Sentenced For Health Care Fraud

GREENVILLE - United States Attorney Thomas G. Walker announced that in federal court yesterday, Senior United States District Judge Malcolm J. Howard, sentenced JOHN CURTIS ALSPAUGH, 67, and HELEN BLUE ALSPAUGH, 59, of Dunn, North Carolina. JOHN ALSPAUGH was sentenced to 40 months imprisonment followed by three years supervised release and ordered to pay restitution in the amount of $1,614,003.26. HELEN ALSPAUGH was sentenced to 18 months imprisonment followed by three years supervised release and ordered to pay restitution in the amount of $1,392,115.21.

On January 8, 2013, the ALSPAUGH’S pled guilty to one count of Tax Fraud conspiracy in violation of Title 18, United States Code, Section 371, and JOHN ALSPAUGH also pled guilty to one count of Health Care Fraud in violation of Title 18, United States Code, Sections 1347 and 2.

Mr. Walker stated, “These crimes committed in this case defraud the IRS and taxpayers of valuable resources and shake the confidence in the system designed to provide medical care for people already in distress and in financial difficulties.” According to the investigation, JOHN AND HELEN ALSPAUGH formed Basic Home Health Care, Inc., a home health care business located in Dunn, North Carolina. Basic Home Health Care, Inc. provided personal care services to people who were homebound and needed assistance with their Activities of Daily Living (ADL) and Instrumental Activities of Daily Living (IADL).

The investigation by the Internal Revenue Service revealed that the Alspaughs collected employment taxes from employees and failed to pay over the taxes to the IRS, resulting in a tax liability in excess of one million dollars for the tax periods beginning in March of 2003 and ending in December of 2010. The investigation by the North Carolina Department of Justice’s Medicaid Investigations Division revealed that, from 2006 through 2011, John Alspaugh submitted bills in excess of $200,000.00 claiming to have provided for services to former clients who were deceased, incarcerated or otherwise not receiving personal care services from Basic Home Health Care, Inc.

“Employees have a right to expect their withheld employment taxes, which fund future benefits will be paid by their employer, “ said Jeannine A. Hammett, Special Agent in Charge of the Charlotte Field Office. “The IRS-Criminal Investigation takes this type of offense seriously and will continue its efforts to protect employees by rooting out employers who violate the tax laws.”

Investigation of this case was conducted by Special Agent Diane Taggart of the Internal Revenue Service-Criminal Investigation, and by Financial Investigator James G. Bryan of the Medicaid Investigations Division of the North Carolina Department of Justice. Assistant United States Attorney J. Gaston B. Williams and Special Assistant United States Attorneys Jacqueline Pérez and Michael Heavner prosecuted the case.