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Justice News

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

Wednesday, May 18, 2016

Licensed Professional Counselors Sentenced for Roles in $9.5 Million Fraudulent Billing Health Care Fraud Scheme to Siphon and Steal Money from Workers’ Compensation Program

Nearly 30 Defendants – Including Claimants, Doctors/Medical Providers, Claims Examiners/Representatives and Medical Providers’ Employees Convicted in Scheme

DALLAS — Two licensed professional counselors from the Dallas-Fort Worth metroplex who pleaded guilty to their respective roles in a massive health care fraud scheme that involved bribes, unnecessary medical treatment, fraudulent billing, and the falsification of medical documents to fraudulently bill the federal government, through the Department of Labor’s (DOL) Office of Worker Compensation Programs (OWCP), more than $9.5 million, were sentenced this week, announced U.S. Attorney John Parker of the Northern District of Texas.

The lead defendant charged in the case, licensed professional counselor Larry Washington, 63, of Desoto, Texas, was sentenced on Monday to 78 months in federal prison and ordered to pay approximately $7.7 million in restitution.  He pleaded guilty in January 2016 to one count of conspiracy to commit health care fraud and must surrender to the Bureau of Prisons on July 19, 2016.  Washington ran businesses known as AAA Mental Health, LLC, Mind Spa, Inc., Solutions Health and Rehabilitation, and Convergence Emergence Diversion. 

Another licensed professional counselor, Henrietta Price, 51, of Cedar Hill, Texas, was sentenced on Monday to six months home confinement, three years of probation and was ordered to pay $199,796.93 in restitution.  She, too, pleaded guilty to one count of conspiracy to commit health care fraud.  Price provided counseling services at Mind Spa, Inc. and also treated patients at her own company, Lifeline Counseling.

Through his businesses, Washington provided patients with counseling, pain management, chiropractic services, physical therapy and massage services.  He sought out and recruited his patients who were former postal and VA employees who had suffered on-the-job injuries that prevented them from returning to work.  Washington knew that even though these individuals had once suffered a work-related injury, their injuries were not severe enough to warrant continued OWCP payments.

Twenty-one claimants, four doctors or medical providers, a senior claims examiner at DOL, a claims representative, and a medical provider’s employee were charged in the scheme.  All but two defendants have pleaded guilty to their respective roles in the scheme.          

In total, the defendants were able to collectively fraudulently bill the federal government through the OWCP for more than $9.5 million and receive more than $8.7 million in government payments based on their fraudulent billing.  The DOL made approximately $11.4 million in payments to these claimants for their compensation and medical services.  The government anticipates that as a result of the convictions, it will also prevent the payment of an estimated $11 million in future payments to the claimant defendants.

The scheme began with former or current government employees – U.S. postal employees or Veterans Affairs (VA) employees – who claimed that they had been injured during the course of their work duties.   Each of these claimants claimed they had suffered an on-the-job injury, ranging from strains to trigeminal neuralgia, which prevented them from returning from work.

Under OWCP, these “claimants” could receive workers’ compensation payments (typically between 66% and 75% of pre-disability wages, tax free) and paid medical treatment, if a qualified doctor deemed the medical services necessary to treat the injury and if the injury prevented the claimant from working. 

A DOL claims examiner would review the claim and its documentation, and either approve or reject the claim.  In certain circumstances, if an on-the-job injury caused permanent damage, a claimant could have received a “scheduled award” – that is, a lump sum payment meant to compensate that individual for their injury.  These awards often amounted to several hundred thousand dollars.  Claimants often sought the help of professionals, typically former DOL claims examiners in filing their claims and in getting their claims approved.  These “claims representatives” either charged claimants a percentage of any paid claim or a flat rate fee.  When doctors or other medical providers treated the claimants, they could bill OWCP for their work if they submitted the proper documentation and certification.

The investigation was led by the U.S. Postal Service Office of Inspector General, and the Department of Labor Office of Inspector General, with assistance from Internal Revenue Service Criminal Investigation, U.S. Treasury Office of Inspector General, Social Security Administration Office of Inspector General/Cooperative Disability Investigations Unit, and the U.S. Department of Veterans Affairs Office of Inspector General.

Assistant U.S. Attorney P.J. Meitl and Special Assistant U.S. Attorneys Jennifer Bray and Nicola Dana are in charge of the prosecution.

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Health Care Fraud
Updated May 18, 2016