Home Health Care Company Owner Pleads Guilty to Income Tax Fraud, Health Care Fraud & Money Laundering Charges

COLUMBUS, Ohio – JoAnna M. Ochieng, 67, of Columbus, Ohio, pleaded guilty in U.S. District court today to one count each of income tax evasion, conspiracy to commit health care fraud and money laundering relative to a scheme to defraud Medicaid of $436,305.69.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Lamont Pugh, Special Agent in Charge, Department of Health and Human Services Office of Inspector General, Ohio Attorney General Mike DeWine and Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), announced the plea entered today before U.S. District Court Judge Gregory L. Frost.

According to court documents, beginning in 2003, Ochieng owned Healthy Solutions Home Health Services (Healthy Solutions) which provided nursing and home health services to Medicaid recipients and their families. Since 2003, Healthy Solutions has operated out of six locations, including Columbus, Bexley, Washington Courthouse and Hillsboro, Ohio.

Between November 2011 and March 2013, Ochieng conspired with others employed at Healthy Solution to defraud the Ohio Medicaid program by making false statements in connection with the delivery of, and payment for, health care benefits by means of fraudulent representations.

Specifically, Healthy Solutions employees, under the direction of Ochieng, instructed parents who were providing home health care services to their children to “swap” time sheets with other parents who were also providing home health care services to their children. This would give the false appearance that parents were providing home health services to children other than their own. Under the Medicaid Program, a home health aide cannot be the parent, foster parent, or legal guardian of a patient who is under 18 years of age.

In addition, in order to maximize the amount of reimbursement paid by the Medicaid Program, Ochieng and other co-conspirators working at Healthy Solutions instructed Healthy Solution nurses to submit Skilled Nursing Visit Notes that falsely reflected the hours nurses were providing home health services. Specifically, the nurses were instructed to “split shifts” on their time sheets to make it appear that they made three or more separate home visits, when in fact they made no more than two. By falsely representing the hours of service, Healthy Solutions received inflated payments from the Medicaid Program.

The fraudulent claims submitted by Healthy Solutions, under the direction of Ochieng, resulted in a loss to the Medicaid Program of $436,305.69.

During 2012 and 2013, Healthy Solutions received payments from the Medicaid Program for nursing and home health services totaling $6,037,659.76 and $3,056,866.23, respectively. Knowing that taxes were due and owing to the IRS for the proceeds from her business operations at Healthy Solutions, Ochieng willfully failed to file income tax returns and pay taxes on those proceeds for the 2012 and 2013 income tax years, resulting in a tax loss of $274,205.55.

Funds received by Ochieng and Healthy Solutions as part of the health care fraud scheme were deposited into a local bank account and comingled with other income from Medicaid. In February 2013 and March 2013, as part of her plan to evade the payment of income taxes, Ochieng electronically transferred $600,000 and $410,000, respectively, to an account in a nominee name in the Turks and Caicos Islands. Each transaction involved at least $10,000 of funds derived from the health care fraud scheme.

Conspiracy to commit health care fraud and money laundering are crimes punishable by up to 10 years in prison. Income tax evasion is a crime punishable by up to five years imprisonment.

In addition, Ochieng agreed to forfeit $1 million held in a trust account in the Turks and Caicos Islands.

“The Medicaid Fraud Control Unit within my office is dedicated to working with federal authorities to investigate and prosecute those who manipulate the health care system to collect money that they are not entitled to,” said Attorney General DeWine.  “Those who believe that they can outsmart the investigators trained to identify this type of fraud should think again.”

"Ochieng’s attempt to evade taxes by hiding income and failing to file income tax returns was a theft from the American public," said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The conduct detailed in this case is egregious. Health care fraud affects every American and contributes to the rising cost of health care and degrades the integrity of our health care system and legitimate patient care.”

U.S. Attorney Stewart commended the cooperative law enforcement investigation, as well as Assistant U.S. Attorneys Kenneth F. Affeldt and Daniel A. Brown and Maritsa Flaherty with the Ohio Attorney General’s Office, who are prosecuting the case.