Employee of Medical Equipment Provider Pleads Guilty To Health Care Fraud, Aggravated Identity Theft and Defrauding the IRS
Used Patients’ Personal Information to Fraudulently Bill Medicaid Resulting in Losses Over $1.2 Million
Baltimore, Maryland – Elma Myles, age 52, of Baltimore pleaded guilty to health care fraud in connection with schemes to defraud Medicaid and other health benefit programs; aggravated identity theft; and conspiracy to defraud the IRS by not reporting income from the health care fraud scheme. The guilty plea was entered on December 19, 2016.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Acting Special Agent in Charge Thomas J. Holloman of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Chief James W. Johnson of the Baltimore County Police Department.
According to Myles’ plea agreement, co-defendant Harry Crawford owned, and was President and CEO of RX Resources and Solutions (RXRS), a durable medical equipment provider located in Randallstown, Maryland. Myles worked at RXRS as a biller. Beginning in 2012, co-defendant Matthew Hightower worked as a delivery driver for RXRS.
Myles admitted that from 2010 through May 2014, she conspired with Crawford, and others to defraud Medicaid and other health benefit programs by having RXRS bill for supplies that were never provided, overcharge for materials actually delivered, and bill for supplies that were unneeded and had not been prescribed by a physician.
According to Myles’ plea agreement, Myles and Crawford worked closely together, lived together and were once domestic partners. Both were the managers/supervisors of all business activities at RXRS. Myles and her co-conspirators used the personal identity information of clients to submit fraudulent claims to Medicaid and other health care benefits programs for disposable medical supplies that were not delivered to the beneficiary. In addition, Crawford and his co-conspirators delivered medical supplies to beneficiaries who did not need the supplies and whose physicians had not prescribed the supplies, even after the beneficiaries reported that they did not want or need the supplies. According to the plea agreement, a co-conspirator would sign or have someone else sign delivery tickets when deliveries had not actually taken place so that the records of RXRS would falsely document the delivery.
On February 4, 2014, federal agents executed a search warrant at RXRS and Myles and Crawford’s home. Agents recovered almost $60,000 in cash from a clothes bin beside the bed in Crawford’s room. In addition, Myles had made a makeshift closet containing tens of thousands of dollars’ worth of clothing and designer shoes, including apparel for her then three-year-old granddaughter who competed in beauty pageants. Agents also recovered boxes of patient files from the house. From RXRS agents recovered emails documenting a criminal plan at the inception of RXRS, and fraudulent delivery tickets from December 2013 and January 2014. For example, there were delivery tickets for a patient who died in November 12, but the bills continued through 2014, including after the search warrant was executed.
An analysis of RXRS billing of Medicaid from 2007 through 2014 establishes that the loss to Medicaid just for incontinence supplies billed but not provided is approximately $1.2 million.
Finally, Myles admitted that she conspired to defraud the United States by not reporting or paying taxes on the proceeds of the fraud. A review of bank records shows that Myles and Crawford used the proceeds of the fraud directly for the accounts of RXRS, using a significant portion of the proceeds for their personal benefit, including mortgage payments, payments to Myles’ daughter and to a business entity set up for the benefit of Myles’ daughter, to a private school for their granddaughter, personal travel, restaurants, and hosting social events. The IRS determined that Myles owes $40,194.36 in federal taxes and $13,000 for state taxes for tax years 2010 through 2013.
The total amount of restitution owed by Myles to Medicaid is $1,207,585.38.
Myles faces a maximum penalty of 10 years in prison for health care fraud; a mandatory sentence of two years in prison, consecutive to any other sentence imposed, for aggravated identity theft; and a maximum of five years in prison for conspiracy to defraud the United States. U.S. District Judge Marvin J. Garbis has scheduled sentencing for Myles on February 22, 2017, at 9:30 a.m.
Harry Crawford, age 56, of Baltimore, Maryland, pleaded guilty to collection of a debt by extortionate means from victim David Wutoh; to health care fraud conspiracy; and to conspiracy to defraud the United States. Judge Garbis scheduled sentencing for Crawford on March 28, 2016, at 11:30 a.m. Crawford is released under the supervision of U.S. Pretrial Services.
Co-defendant Matthew Hightower, age 34, also of Baltimore, was convicted of extortion and the murder of David Wutoh on September 22, 2016, after a seven-day trial.
Hightower is scheduled to go to trial on charges related to the health care fraud scheme on January 23, 2017.
United States Attorney Rod J. Rosenstein commended the HHS-OIG, IRS-CI, and Baltimore County Police Department for their work in the investigation, and thanked the Maryland Attorney General’s Office Medicaid Fraud Control Unit for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Aaron S.J. Zelinsky and Sandra Wilkinson, who are prosecuting the case.