Two Women Admit Roles in Multi-State Recovery Home Patient Brokering Scheme
NEWARK, N.J. – A woman from California and a woman from Arkansas today admitted their roles in a multi-state patient brokering scheme in which they paid referral fees from their rehabilitation centers in exchange for patient referrals, Attorney for the United States Vikas Khanna announced.
Lauren B. Philhower, 33, of Los Angeles, California, and Anastasia A. Passas, 33, of Bentonville, Arkansas, each pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an information charging them each with one count of conspiracy to violate the Travel Act.
Five other individuals have previously pleaded guilty for their roles in the scheme. Peter Costas, of Red Bank, New Jersey, pleaded guilty in May 2020 to conspiracy to commit health care fraud; Seth Logan Welsh, of Forest Hill, Maryland, and John C. Devlin, of Baltimore, Maryland, pleaded guilty in September 2020 to the same charge; Kevin M. Dickau, of Georgtown, Texas, pleaded guilty in September 2020 to the same charge; and Dr. Akikur Mohammad, of West Hills, California, pleaded guilty in September 2020 to conspiracy to violate the Eliminating Kickbacks in Recovery Act (EKRA).
According to documents filed in the case and statements made in court:
Dickau, Welsh, Devlin, and their conspirators owned and operated a marketing company in California. They used the marketing company to help orchestrate a scheme in New Jersey, Maryland, California, and other states that involved bribing individuals addicted to heroin and other drugs to enter into drug rehabilitation centers so Welsh, Devlin, and their conspirators could generate referral fees from those facilities. Two such facilities in California that paid such referral fees were operated by Philhower and Passas.
The marketing company run by Dickau, Welsh, and Devlin maintained contractual relationships with drug treatment facilities around the country, including the ones run by Philhower and Passas. The marketing company also engaged a nationwide network of recruiters – including Costas in New Jersey – to identify and recruit potential patients, from New Jersey and other states, who were addicted to heroin or other drugs and who had robust private health insurance.
To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas and other recruiters offered to bribe them—often as much as several thousand dollars—with the approval of Dickau, Welsh, and Devlin. Once the patients agreed to enroll in drug rehabilitation in exchange for the offered bribe, Dickau, Welsh, Devlin, and Costas would arrange and pay for cross-country travel to the drug treatment centers in California and other states, in concert with the owners of the facilities themselves, including Philhower and Passas. Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments, and he would pass along information to Dickau, Welsh, and Devlin about the patients’ status at the facilities. Dickau, Welsh, and Devlin would monitor the other patients they brokered by speaking to other recruiters or to the owners and employees of the drug treatment facilities themselves.
Philhower and Passas’s drug treatment facilities had a contract with the marketing company run by Dickau, Welsh, and Devlin. Their facilities and other facilities typically paid the marketing company run by Dickau, Welsh, and Devlin a fee of $5,000 to $10,000 per patient referral. Dickau, Welsh, Devlin, and their conspirators shared that money among themselves. Costas and other recruiters received approximately half that amount for each patient they brokered. Dickau, Welsh, Devlin, and their conspirators brokered scores of patients to drug treatment facilities around the country, including the ones run by Philhower and Passas, and the conspiracy caused millions of dollars of losses for health insurers.
Philhower and Passas each face a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for Philhower is scheduled for Sept. 13, 2022, and for Passas, Sept. 14, 2022.
Attorney for the United States Khanna credited special agents of the FBI, under the direction of Acting Special Agent in Charge Michael Messenger in Newark, with the investigation leading to today’s guilty pleas. He also thanked the FBI, under the direction of Assistant Director in Charge Kristi Koons Johnson in Los Angeles, and the District Attorney’s Office in Orange County, California, for their assistance.
The government is represented by Jason S. Gould, Chief of the Health Care Fraud Unit in Newark.