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Press Release

U.S. and State of Illinois File Suit Against Owners of Suburban Youth Counseling Center for Allegedly Defrauding Medicaid out of Millions

For Immediate Release
U.S. Attorney's Office, Northern District of Illinois

CHICAGO — The United States and the State of Illinois have jointly filed a civil lawsuit accusing the owners of a Chicago-area youth counseling center of defrauding Medicaid out of millions of dollars through a fraudulent billing scheme.

The suit alleges that LAYNIE FOUNDATION INC. and its owners, SUMMER MATHESON and TERRENCE EWING, violated the federal False Claims Act by fraudulently billing Medicaid for more mental health counseling services than the foundation actually provided.   The suit further alleges that Matheson and Ewing directed the Matteson-based foundation to seek payment from Medicaid for non-reimbursable activities such as internal case reviews, staff training, clinical supervision, and recordkeeping.

The government’s suit was filed Tuesday in U.S. District Court in Chicago.  The government is intervening in a lawsuit that a private citizen initially filed under seal in 2014 pursuant to the qui tam, or whistleblower, provisions of the False Claims Act.

The lawsuit was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Lisa Madigan, Illinois Attorney General; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General.  The Illinois State Police assisted in the investigation.

According to the suit, Matheson and Ewing instructed Laynie Foundation employees to fraudulently inflate the mental health services they provided to youths.  Matheson and Ewing exploited the fact that most of the foundation’s counselors and social workers were new to the profession, and for many, working at Laynie Foundation was their first job in the mental health field, the suit alleges.  When multiple employees questioned Matheson about billing practices, Matheson warned that Laynie Foundation would lose its eligibility and funding from Medicaid if the employees did not bill as instructed.  If employees did not comply, the suit alleges, Matheson and Ewing would tell them “not to mess with [Matheson’s and Ewing’s] money.”

From January 2012 through February 2016, Laynie Foundation submitted approximately $8.2 million in claims for purported mental health services.  The foundation received approximately $6.3 million for these claims, the suit states.

In addition to the fraudulent billing scheme, the suit contends that Laynie Foundation violated state clinical supervision requirements by failing to have a licensed mental health professional certify that the services Laynie Foundation provided were medically necessary and met professional standards of care.

The False Claims Act permits private individuals to sue for false claims on behalf of the government and to share in any recovery.  The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted by the defendants. 

Medicaid is a state-administered program, and each state sets its own guidelines regarding eligibility and services.  Funding for Medicaid is shared between the federal government and the State of Illinois for Illinois Medicaid recipients.

The public is reminded that civil allegations are accusations only, and there has been no determination of liability.  The government is represented by Assistant U.S. Attorney Prashant Kolluri of the U.S. Attorney’s Office, and Assistant Attorneys General Elisa C. Hamilton and Robert A. Barba of the Illinois Attorney General’s Office.

Updated November 1, 2017

False Claims Act
Health Care Fraud