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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Illinois

FOR IMMEDIATE RELEASE
Thursday, June 18, 2015

12 Charged In Chicago As Part Of Largest National Medicare Fraud Takedown In History

CHICAGO – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today a nationwide takedown by Medicare Fraud Strike Force operations in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings.  In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act.   This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.  Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced thirteen defendants who were charged in four local cases as part of the national package.

“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch.  “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others.  They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.  In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.  We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”

“Health care fraud extracts a huge toll on our nation’s health care system,” stated U.S. Attorney Fardon in announcing the cases charged in the Northern District of Illinois.  “We will continue to aggressively pursue those health care providers that take advantage of not only the system, but the patients they are entrusted to care for.”

Three of the cases and nine of the defendants in the Northern District of Illinois involve home health services, an area which is “vulnerable to fraud, waste and abuse,” according to the Department of Health and Human Services Office of Inspector General in a 2012 report, “Inappropriate and Questionable Billing by Medicare Home Health Agencies.”  In 2013, citing factors that strongly indicated fraudulent activity in the metropolitan Chicago area compared to other areas, the Centers for Medicare & Medicaid Services imposed the first-ever moratorium authorized by the Affordable Care Act to halt the enrollment of new home health providers in the metropolitan Chicago area.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.

Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings.  Today’s announcement marks the first time that districts outside of Strike Force locations have participated in a national takedown; those districts account for 82 defendants charged in the takedown.     

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

In addition to the Strike Force, today’s enforcement actions include cases brought by the U.S. Attorney’s Offices for the Northern District of Illinois, Southern District of Illinois, Northern District of Ohio, Western District of Pennsylvania, Western District of Kentucky, Southern District of New York, Alaska, and the Southern District of Georgia.  The following cases are being prosecuted by the Northern District of Illinois:

United States vs. Janet Guerrero, et.al
Seven individuals who worked at three related home health care companies – Donnarich Home Health Care, Inc., Josdan Home Health Care Inc., and Pathways Home Health Services LLC – were charged by superseding indictment yesterday with conspiracy to commit health care fraud, health care fraud, false statements, and money laundering. The indictment alleges a $45 million fraud at the three home health care companies, starting as early as 2008 and continuing into 2014.  The fraud as alleged included paying illegal bribes and kickbacks to obtain Medicare beneficiaries; ignoring doctors who refused to certify beneficiaries as “homebound” and eligible for care; enrolling patients who did not need or want the care; subjecting patients to pre-planned cycles of discharges and re-enrollments, regardless of their medical needs; and falsifying medical records to make patients appear to be homebound or sicker than they actually were.

The newly-charged defendants include Josephine Tinimbang, an owner and operator of the companies; Dr. Jose Calub, the medical director; Sharon Gulla, a registered nurse and a former supervisor; and Marilou Lozano, Ronald Malalis, Mary Pilar Mendoza, and Isabelita Sabejon, registered nurses who enrolled non-homebound beneficiaries and fabricated medical records. Two defendants were charged in an earlier indictment:  Sherwin Cubelo, a patient recruiter who received illegal kickbacks; and Janet Guerrero, an office manager who administered the kickbacks.  The government is represented in this case by Trial Attorney Brooke Harper.

United States vs. Barry Fischer
Barry Fischer, 70, of River Forest, was indicted for health care fraud on Wednesday in a 20-count federal indictment for allegedly billing Medicare for unnecessary home visits, for falsely certifying patients for home health services, and for putting false information in patient charts.  Fischer allegedly signed orders in which he falsely certified patients as “confined to the home,” under his care, and requiring skilled nursing services.  According to the indictment, as a result of Fischer’s false certifications, Medicare suffered losses in the form of payments to the company Fischer worked for and various home health agencies.  The government is represented in this case by Assistant U.S. Attorney Stephen Chahn Lee.

United States vs. Zenaida Dimailig
Zenaida Dimailig, 78, of Bensenville, was charged by complaint with health care fraud for allegedly causing Medicare to be billed for home health services for patients who were not home bound and for services that were not rendered. Dimailig allegedly paid cash kickbacks to Medicare-covered patients who, in turn, allowed their Medicare information to be used to bill Medicare for home-health services that these individuals did not need.  Dimailig then passed on this Medicare information and records that falsely suggested that certain services were provided to Medicare beneficiaries to home health care agencies for the purpose of billing Medicare. The government is represented in this case by Assistant U.S. Attorney Timothy Storino.

United States vs. Omeed Memar
Omeed Memar, 46 of Chicago, a dermatologist, was indicted for health care fraud last week in a 16-count federal indictment for allegedly billing cosmetic treatments fraudulently as the destruction of large numbers of pre-cancerous lesions. According to the indictment, the defendant falsely diagnosed patients with actinic keratosis, or precancerous lesions that are typically rough, dry or scaly, and then billed public and private health insurers for medically unnecessary treatments. According to the indictment, between 2007 and January 2013, Memar falsely diagnosed patients with actinic keratosis, ordered his staff to provide intense-pulsed light treatments for his patients, and instructed his staff to document the procedures falsely as the destruction of 15 or more precancerous lesions. The government is represented in this case by Assistant U.S. Attorney Stephen Chahn Lee.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the U.S. Department of Health and Human Services Office of Inspector General in Chicago; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago; Martin J. Dickman, Inspector General, U.S. Railroad Retirement Board; and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service, Criminal Investigation,  Chicago Field Office.

Money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine.  Health care fraud and conspiracy to commit health care fraud carry a maximum penalty of 10 years in prison and a $250,000 fine and restitution is mandatory.  Making a false statement in a health care matter carries a maximum penalty of 5 years in prison and a $250,000 fine.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The public is reminded that indictments and complaints are not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Fischer Indictment
Dimailig Complaint
Guerrero Superseding Indictment
Memar Indictment

Updated July 24, 2015