Ocean County, New Jersey, Woman Admits Role In $1 Million Medicare Fraud That Deceived Seniors Into Unnessesary DNA Tests
TRENTON, N.J. – A Point Pleasant, New Jersey, woman today admitted that she wrongfully accessed protected health information and paid kickbacks to healthcare professionals on behalf of a $1 million Medicare fraud scheme involving the purported non-profit The Good Samaritans of America, U.S. Attorney Paul J. Fishman announced.
Sheila Kahl, 44, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging her with one count of conspiring to commit health care fraud and one count of conspiring to wrongfully access individually identifiable health information and pay illegal remunerations to health care professionals.
“Instead of helping seniors navigate federal benefit programs, The Good Samaritans of America was merely a front for an elaborate Medicare scheme that subjected elderly victims to unnecessary genetic testing, all in an effort to score commission payments from clinical labs,” U.S. Attorney Fishman said. “In addition to wrongfully accessing the victims’ private medical information for personal gain, Kahl helped pay healthcare professionals thousands of dollars in kickbacks to fraudulently authorize the tests.”
“This conspiracy involved stealing private medical information and used particularly callous scare tactics to convince elderly and vulnerable Medicare beneficiaries to submit to medically unnecessary DNA testing,” said Special Agent in Charge Scott J. Lampert, U.S. Department of Health and Human Services – Office of Inspector General. “Today’s plea resulted from joint law enforcement action to detect and block a planned multi-state expansion of this deplorable scam against the program and its enrollees.”
According to documents filed in the case and statements made in court:
From July 2014 through December 2015, Seth Rehfuss, 42, of Somerset, New Jersey, Kahl, and others used The Good Samaritans of America to gain access to low-income senior housing complexes. Rehfuss and others claimed that The Good Samaritans of America was a “trusted non-profit” that assisted senior citizens in navigating federal benefit programs. In reality, The Good Samaritans of America was a front to present information about genetic testing. Kahl, Rehfuss and others even used advertisements for free ice cream to ensure attendance at the presentations.
In order to convince senior citizens to submit to genetic testing, Rehfuss used fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. In addition, Rehfuss claimed that the genetic testing allowed for “personalized medicine.”
As part of the scheme, Seth Rehfuss and others frequently took DNA swabs in the community rooms where the presentations took place or made arrangements to visit the senior citizen’s apartment on another day to take the DNA swab. Regardless of the timing or location of the swabbing, the DNA swab was collected without the involvement of any healthcare provider and without any determination by a healthcare provider that such testing was medically necessary or appropriate.
In order to get the tests authorized, Rehfuss used advertisements on Craigslist to recruit healthcare providers for the scheme. After entering into contractual relationships with The Good Samaritans of America, the healthcare providers received requisition forms that often included a patient’s personal information, Medicare information, medication lists and diagnosis codes.
The healthcare providers were paid thousands of dollars per month by Kahl and Rehfuss to sign their names to requisition forms authorizing testing for patients they never examined and were in no way involved in the patients’ care or treatment. In order to keep the scheme going, Kahl used fraudulent email accounts to access the individually identifiable health information of the senior citizens, specifically the results of the DNA analysis.
Kahl, Rehfuss and others caused the Medicare program to pay more than $1 million to two clinical laboratories. Rehfuss obtained over a hundred thousand dollars and distributed commissions to Kahl of tens of thousands of dollars.
The investigation revealed that Rehfuss and others were actively working towards expanding the scheme outside of New Jersey into other states, including: Georgia, Delaware, Virginia, Maryland, Pennsylvania, South Carolina, Michigan, Mississippi, Florida, Tennessee and Arizona.
The healthcare fraud conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy to wrongfully access individually identifiable health information and to pay kickbacks charge carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 14, 2017.
Rehfuss was originally charged for his role in the scheme on Dec. 2, 2015. The pending charges against Rehfuss are merely allegations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Lampert, as well as investigators from the U.S. Attorney’s Office for the District of New Jersey, the U.S. Marshals Service Asset Forfeiture Program, the Cape May County Department of Consumer Affairs, and the Cape May County Office of Aging with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Stacy A. Biancamano, Esq.