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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of Iowa

FOR IMMEDIATE RELEASE
Thursday, February 15, 2018

Bettendorf Woman Sentenced to 72 Months in Prison for Wire Fraud and Benefits Fraud

DAVENPORT, Iowa - On February 14, 2018, Chief United States District Court Judge John A. Jarvey sentenced Michele Lynn McGee, 45, of Bettendorf, Iowa, to 72 months in prison for five counts of wire fraud and one count of benefits fraud, announced United States Attorney Marc Krickbaum. McGee was also ordered to serve 3 years of supervised release following her imprisonment, and pay $600 to the Crime Victims’ Fund. McGee was also ordered to self-surrender to the designated prison.

On August 28, 2017, McGee pled guilty to the charges, which arose from an investigation initiated by the Bettendorf Police Department and further pursued by the Federal Bureau of Investigations. As stated in the plea agreement, McGee defrauded UbiCare, a healthcare solutions company out of Boston, Massachusetts, that markets interactive mobile messaging to healthcare providers throughout the country. They hired McGee as the director of sales attempting to expand into the Midwest market. McGee was employed from May 12, 2014, through February 12, 2015. Between those dates, McGee purportedly signed five new clients (hospitals) to contracts with UbiCare totaling $1,896,375, all of which were fraudulent, in that all of the contracts contained a forged signature placed there by McGee. McGee was paid a salary, commission, and bonuses totaling $115,973. During the execution of a search warrant at McGee’s residence, McGee admitted that she drafted the five fraudulent contracts. McGee was ordered to pay $115,973 in restitution to UbiCare.

Further investigation revealed that beginning in February 2012, McGee received Supplemental Nutrition Assistance Program (SNAP) benefits and received Title XIX Medicaid benefits through the Iowa Department of Human Services (DHS). These benefits continued monthly until July 2014. During that time period, McGee received over $11,000 in fraudulent food stamps and Medicaid benefits by not reporting her household earnings. McGee admitted that she knowingly withheld household income information from DHS because she believed her public aid would be cancelled if DHS was aware of it. McGee was ordered to pay the State of Iowa $11,514.91.

From February 2012 until August 2012, McGee worked from home for RXS Group, LLC, a company located in Utah. McGee represented to RXS that she obtained a contract with the Nevada prisons for RXS to provide pharmaceutical medications for a five-year period. The contract was fraudulent and contained a forged signature placed there by McGee. Based on the contract, RXS drew up a business plan for expanded operations in Nevada which included entering into purchase agreements for a pharmacy and equipment needed to package the medications, suffering a substantial loss. McGee was ordered to pay restitution to RXS in the amount of $384,869.57.

This matter was investigated by Bettendorf Police Department, and the Federal Bureau of Investigations. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.

Topic(s): 
Financial Fraud
Health Care Fraud
Contact: 
Rachel J. Scherle 515-473-9300 Rachel.Scherle@usdoj.gov
Updated February 15, 2018