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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of North Carolina

FOR IMMEDIATE RELEASE
Tuesday, December 13, 2016

Pitt County Medicaid Biller Sentenced to 9 Years in Federal Prison for Participation in Medicaid Fraud Conspiracy

WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday in federal court, DONNIE LEE PHILLIPS, II, 37, of Greenville, North Carolina, was sentenced to 108 months in federal prison and 3 years of supervised release following his prior guilty plea to Health Care Fraud Conspiracy and Aggravated Identity Theft.  PHILLIPS was also ordered to make restitution of $5,722,364.09 to the victims of the offense, which included the North Carolina Medicaid program and a physician, whose name and identification number PHILLIPS and other conspirators used to commit the fraud.  PHILLIPS was further ordered to forfeit certain proceeds of the fraud, including a truck, boat, and boat trailer.

PHILLIPS’s case is related to a prior health care fraud and money laundering case against Terry Lamont Speller, of Greenville.  Speller was previously sentenced in March of this year to 20 years in federal prison for his role in the conspiracy.

According to the Criminal Information to which PHILLIPS pleaded guilty, as well as information provided at the sentencing hearing, between 2013 and 2015, PHILLIPS fraudulently billed the Medicaid program and Medicaid Managed Care Organizations for services that were not, in fact, provided by various outpatient behavioral health providers.  PHILLIPS transmitted false billings on behalf of various individuals in the scheme and, in the process, fraudulently utilized the identities of more than 2000 minor children.   Before being caught carrying out the fraud on  audiotape by a confidential informant, PHILLIPS assisted participating providers to fraudulently acquire more than $5 Million.  For his role in the scheme, PHILLIPS received around $300,000.

PHILLIPS was arrested on a warrant after investigators captured PHILLIPS on audiotape coordinating the billing fraud with another Medicaid provider.  PHILLIPS later pleaded guilty to the charges of Conspiracy to Commit Health Care Fraud and Aggravated Identity Theft contained in the Criminal Information.

“When fraudsters like Donnie Lee Phillips bill Medicare and Medicaid for services never provided just to enrich themselves, the integrity of these taxpayer-funded health care programs is at risk," said Special Agent in Charge Derrick L. Jackson of the Department of Health and Human Services Office of Inspector General.  "The sentence handed down in this case is a warning that health care fraud will not be tolerated.” 

The investigation of this case was conducted by agents of the North Carolina State Bureau of Investigation assigned to the Medicaid Investigations Division of the North Carolina Attorney General’s Office; The Internal Revenue Service - Criminal Investigation; and the United States Department of Health and Human Services Office of the Inspector General.  The investigation and prosecution of this matter is being handled in a partnership between the United States Attorney’s Office for the Eastern District of North Carolina and the Medicaid Investigations Division of the North Carolina Attorney General’s Office.  Assistant United States Attorney William M. Gilmore of the Economic Crimes Division, and Special Assistant United States Attorney Daniel Spillman of the Medicaid Investigations Division of the North Carolina Attorney General’s Office, each represented the United States.

If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS- TIPS), or E-Mail at HHSTips@oig.hhs.gov.  To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

Updated December 13, 2016