Maryland Man Facing Federal Charges For Fraudulently Obtaining Covid-19 Cares Act Paycheck Protection Program Loan
Baltimore, Maryland – U.S. District Judge James K. Bredar today sentenced Lyneth Nyabiosi, age 50, to 48 months in prison, and her husband, Willie Evans III, a/k/a “James Davies” and “James Davis,” age 54, both of Bear, Delaware, to 41 months in prison, both followed by three years of supervised release. The defendants had previously pleaded guilty to conspiring to commit mail fraud arising from a scheme to falsely bill Nyabiosi’s employer, Sheppard Pratt Health Systems, for approximately $2.7 million for work purportedly performed by a company that the defendants secretly controlled. Judge Bredar also ordered the defendants to forfeit and pay restitution of $2,742,791, and to forfeit two residences located in Bear and Newark, Delaware and three vehicles.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
Sheppard Pratt Health System is a private, non-profit health system in Maryland which offers mental health, substance use and special education services. Sheppard Pratt’s main campus is located in Towson, Maryland. From November 2005 to September 2014, Nyabiosi was the director of the Health Information Management Department (HIM Department) of Sheppard Pratt. The department was responsible for maintaining patient medical records. As the director, Nyabsiosi was the highest ranking employee in the HIM Department.
According to their plea agreements, Nyabiosi and Evans controlled and operated an entity named Information Management Solutions Technology (IMST), which was designed to appear as an independent third party contractor, but was in fact created by the defendants to execute the fraud scheme. On March 7, 2007, Nyabiosi, on behalf of Sheppard Pratt, entered into a contract with IMST to manage medical records for Sheppard Pratt. Nyabiosi never informed Sheppard Pratt that she and her husband were affiliated with IMST, in violation of Sheppard Pratt’s conflict of interest policy. To further hide their affiliation with IMST, Evans signed the contract on behalf of IMST as “James Davies,” a purported regional account representative at IMST. Thereafter, Evans continued to represent himself to Sheppard Pratt staff as “James Davis,” an account representative, even though no such person was ever affiliated with IMST.
From 2007 to 2014, the defendants submitted over 180 false invoices requesting that Sheppard Pratt pay IMST for work which was never performed, or for excessively inflated amounts for the work that was actually performed. For example, IMST picked up approximately 2,863 boxes of patient records from Sheppard Pratt for short-term storage, yet the invoices falsely represented that IMST had picked up over 500,000 boxes of patient records. Other invoices and documents provided to Sheppard Pratt falsely represented that IMST had picked up and was storing 20,270 boxes of records from the company Iron Mountain, when in fact, IMST never picked up a single box. And on two separate occasions in 2009, the defendants sent invoices to Sheppard Pratt for purported work on a project to digitize older patient records. The defendants paid a third party company $26,395 to complete the work, but they billed Sheppard Pratt $546,510.
Nyabiosi personally approved all of the false invoices, causing Sheppard Pratt to mail checks to IMST totaling $2,742,791. The defendants deposited the money in their bank account for their personal use.
In September 2014, the law firm representing Sheppard Pratt contacted “James Davis” using IMST contact information provided by the defendants. On September 4, 2014 and September 14, 2014, counsel for Sheppard Pratt met with Evans, who falsely represented himself to be “James Davis” and never revealed himself to be Nyabiosi’s husband. Evans falsely told the law firm that he, “James Davis,” alone owned IMST and was in charge of running the business.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation. Mr. Rosenstein also commended Sheppard Pratt for its internal investigation and for bringing the matter to the attention of law enforcement. Mr. Rosenstein thanked Assistant United States Attorney Rachel M. Yasser, who prosecuted the case.