CEOs and Owner Plead Guilty To Facilitating Substance Abuse Treatment Fraud Scheme Involving Kickbacks
This week, two CEOs and the owner of Zenith Health Services Inc., Monty Health Care Services, Inc., Peaceful Encounters, LLC, National Diagnostic Testing Inc., and Paramount Health Solutions Inc., pled guilty for their roles in a health care fraud scheme.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida; Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); Jimmy Patronis, Florida Chief Financial Officer; Michael J. Waters, Special Agent in Charge, Amtrak Office of Inspector General (Amtrak-OIG); Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA); and Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB), made the announcement.
John Michael Skeffington, 52, of Boca Raton, pled guilty to participating in a health care fraud conspiracy, in violation of Title 18, United States Code, Section 1349, and obstructing a criminal health care investigation, in violation of Title 18, United States Code, Sections 1518(a) and 2. Co-defendant Babette Hayes, 58, of Sarasota, pled guilty to obstructing a criminal heath care investigation. Co-defendant Mona Montanino, 56, of Boca Raton, also pled guilty to obstructing a criminal health care investigation
According to court documents, Skeffington, Hayes and Montanino established five shell companies, disguised as “laboratory marketing companies,” in order to unlawfully refer medically unnecessary and excessive bodily fluid tests for residents and patients of sober homes and substance abuse treatment facilities to various clinical laboratories and rural hospitals. Hayes and Montanino purported to be the chief executive officers of some of the companies, but it was Skeffington who actually operated and controlled the companies and directed the co-defendants’ actions. In exchange for patient referrals, the laboratories and hospitals would provide a pre-set percentage of insurance payments (“kickbacks”) to the defendants, which they would then share with the sober homes and substance abuse treatment facilities.
The fraud scheme took advantage of higher insurance reimbursement rates for testing conducted by hospitals. In some cases, the hospitals would submit claim forms as if the patients submitted samples in person when, in reality, the patients were hundreds of miles away, were never treated at the hospitals, and were unaware that their insurance plans were billed for the services. During the course of the scheme, Skeffington increased his use of rural hospitals for the fraudulent testing, after insurance companies began to scrutinize claims from clinical laboratories for bodily fluid tests.
The kickback amounts, often disguised as payments for sales commissions to Skeffington’s companies, were based on written and unwritten agreements between Skeffington and the laboratories and hospitals. Upon receiving the payments, Skeffington would directly or indirectly provide kickback payments to the sober homes and substance abuse treatment center owners who were accomplices in the scheme.
Once Skeffington, Montanino and Hayes became aware of the FBI investigation into fraudulent medical claims, they created dozens of fake documents meant to obstruct the investigation and disguise the kickbacks as hourly payments for marketing services. They asked, both those from whom they had received kickbacks and those to whom they provided kickbacks, to sign the documents to further conceal their illegal activities. Signed documents and invoices were back-dated to make it appear as though they had been signed and submitted before the kickback payments were made.
The defendants are scheduled to be sentenced by Senior United States District Judge Kenneth A. Marra on July 6, 2018 at 1:30 p.m.
These cases are the result of the work of the Greater Palm Beach Health Care Fraud Task Force. The Task Force’s ongoing investigation into substance abuse treatment fraud in the Southern District of Florida has resulted in 18 convictions to date. Agencies of the Task Force include the FBI, IRS-CI, the Florida Division of Investigative and Forensic Services, Amtrak OIG, DOL-EBSA, and NICB.
Mr. Greenberg commended the investigative efforts of all law enforcement agencies connected with the Task Force, as they continue to combat sober home abuses and health care fraud.
These cases are being prosecuted by Assistant U.S. Attorneys A. Marie Villafaña and Alexandra Chase.