Charles Turner and Donald Kevin Collins Sentenced for Mail Fraud Conspiracy to Defraud Mountain Empire Surgery Center
GREENEVILLE, Tenn. – On May 23, 2018, two individuals were sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, for their roles in a conspiracy to commit mail fraud. Donald Kevin Collins, 41, of Elizabethton, Tennessee, was sentenced to serve 51 months in federal prison. Upon his release, he will be supervised by U.S. Probation for three years. He was also ordered to pay $1,381,552 in restitution. Charles Turner, 43, of Chattanooga, Tennessee, was sentenced to serve six months in prison, followed by six months home detention with electronic monitoring. Turner must also perform 150 hours of community service, be supervised by U.S. Probation for three years and pay $1,381,552 in restitution.
Turner pleaded guilty in October 2017, to one count of a 16-count indictment charging him and Collins with conspiracy to commit mail fraud. The indictment also charged Collins with 15 counts of mail fraud. Collins also pleaded guilty in January 2018 to one count of conspiracy to commit mail fraud and 15 counts of mail fraud. Details of the scheme are outlined in their plea agreements on file with U.S. District Court. According to these documents, Turner became involved in a conspiracy with Collins to defraud Mountain Empire Surgery Center (MESC) in Johnson City, Tennessee. Beginning in mid-2009, Collins, who was the materials manager for MESC, devised a scheme to defraud MESC by submitting false invoices to MESC purporting to show that MESC had purchased and received supplies from a vendor called Turner Distributors, LLC (Turner Distributors). In fact, MESC never received any supplies from Turner Distributors. Instead, at the instruction of Collins, Turner established Turner Distributors as a shell company. When MESC received legitimate medical supplies from companies like Cardinal Health, Collins falsified invoices and packing slips to make it appear as though the supplies originated from Turner Distributors. Collins then submitted these falsified invoices and packing slips to the accounts payable personnel at MESC.
Beginning in July 2009 and continuing through March 2016, MESC paid Turner Distributors after receiving the falsified invoices and packing slips submitted by Collins. To make payment, MESC mailed checks to the mailing address for Turner Distributors in east Tennessee. Upon receipt, Turner deposited the checks into a Carter County Bank account he opened in the name of Turner Distributors, withdrew cash, and split the proceeds with Collins. Collins was then supposed to pay Cardinal Health for the cost of the supplies; however, since there was never any real agreement with Cardinal Health, the money was retained by Turner and Collins.
Although Turner initially believed that the business relationship was legitimate, he realized around April 2010 that he was involved in a criminal conspiracy with Collins after receiving a 1099 (an IRS form used to report miscellaneous payments made to nonemployee individuals during the calendar year) from MESC. By this time, Turner, through Turner Distributors, had deposited 19 fraudulently obtained checks from MESC totaling approximately $74,146. Although now aware of the conspiracy, Turner continued to participate in the conspiracy by depositing or cashing an estimated 161 additional MESC checks, totaling approximately $1,307,406, from April 2010 through March 2016. In total, Turner and Collins fraudulently obtained 180 MESC checks amounting to $1,381,552.
“The U.S. Attorney’s Office will continue to work with our federal and state partners to prosecute those who conspire to use the U.S. Mail to commit fraud against legitimate businesses,” said U.S. Attorney J. Douglas Overbey.
FBI Special Agent in Charge, Renae McDermott said, “This investigation is but another example of our commitment to investigating fraud and rooting out those who willfully commit such crimes. We will continue working with our law enforcement partners to identify and stop those who defrauded their employer at the expense of others.”
Agencies participating in this investigation included the FBI and Tennessee Bureau of Investigation-Medicaid Fraud Control Unit. Assistant U.S. Attorney TJ Harker represented the United States in court proceedings.