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Press Release

Texas hospice CEO sentenced for $150M health care fraud and money laundering scheme

For Immediate Release
U.S. Attorney's Office, Southern District of Texas

McALLEN, Texas – A 50-year-old executive is headed to prison for falsely telling patients they had mere months to live and increasing revenue by enrolling them in hospice programs for which they were not qualified nor needed.

A federal jury in Brownsville convicted Henry McInnis, 50, Harlingen, in November 2019 of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering, obstruction of justice as well as six counts of health care fraud.

Today, U.S. District Judge Rolanda Olvera ordered him to serve a total of 15 years in federal prison.

McInnis’s co-conspirator and owner of the hospice and home health entities, Rodney Mesquias, 50, San Antonio, was also convicted following the November 2019 trial. He was later sentenced to 240 months imprisonment. Two others have pleaded guilty and are awaiting sentencing.

“McInnis, as CEO of the company, directly oversaw a reprehensible criminal scheme that involved the submission of over $150 million in fraudulent bills, the falsification of patients’ medical records, and the payment of unlawful kickbacks,” said Acting Assistant Attorney General Nicholas L. McQuaid, of the Justice Department’s Criminal Division. “The defendant preyed upon some of the most vulnerable members of our society, including many who suffered from diminished mental capacity and who were falsely and cruelly told by co-conspirators that they had only months to live. Today’s significant sentence demonstrates the department’s continued commitment to pursuing individuals, at all levels of corporate management, who engage in criminal schemes that prioritize profits over patient care.”  

“Families seek to give comfort and support to their ailing loved ones when all other medical options are gone,” said Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office. “It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs. The FBI is committed to protecting our communities from those who may not have the strength to protect themselves.”

From 2009 to 2018, McInnis, Mesquias and others orchestrated a scheme that involved the submission of over $150 million in false and fraudulent claims for hospice and other health care services. McInnis served as the top corporate officer and administrator and oversaw the day-to-day operations of the Merida Group, a large health care company that operated dozens of locations throughout Texas. 

According to evidence presented at trial, McInnis, Mesquias and Merida Group adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They aggressively enrolled patients with long-term incurable diseases, such as Alzheimers and dementia, as well as patients with limited mental capacity who lived at group homes, nursing homes and in housing projects. In some instances, Merida Group marketers falsely told patients they had less than six months to live. They even sent chaplains to the patients based on the false pretense they were near death. The chaplains would discuss last rites and other preparations for imminent death with the patients.

In order to receive reimbursement for hospice services, Medicare requires patients to be suffering from a terminal illness expected to result in death within six months. Not only were some of the patients not expected to die within that timeframe, they were walking, driving, working and, in some instances, even coaching athletic sporting events. However, McInnis and his co-conspirators kept patients on hospice services for multiple years in order to increase revenue from Medicare. Placing patients on such palliative hospice care meant the patients were unable to obtain medical coverage for curative medical services.

In addition to placing unqualified patients on hospice care, McInnis and his co-conspirators also endeavored to keep patients who did qualify for hospice care alive for as long as possible for their own monetary gain. At trial, a co-conspirator testified and explained “the way you make money is by keeping them alive as long as possible.” The jury heard that this included engaging in surgical and other medical interventions designed to extend life through the use of medical technologies, even when such interventions were not consistent with the goals of hospice care. 

McInnis had no medical training and worked previously as an electrician. However, he acted as the de facto director of nursing for the Merida Group. Witnesses at trial testified McInnis directed employees to admit unqualified patients to hospice and home health, keep unqualified patients on services for long periods of time and fired and reprimanded employees who refused to participate in the scheme.

McInnis also oversaw and enforced a company-wide practice of falsifying medical records to conceal the scheme. Multiple witnesses testified McInnis ordered employees to alter medical records to make it appear patients were terminally ill. In reality, some were employed or even participating in sporting events. The jury also heard that McInnis explained the purpose of the falsified records was to allow the Merida Group to pass insurance company audits.

As CEO, McInnis also adopted a policy that paid illegal kickbacks. They directed bribes to physicians under the guise of medical director fees to certify unqualified patients for hospice and home health. In some cases, they improperly offered payoffs to marketers in exchange for recruitment of patients who could be placed on extremely expensive hospice services. 

The evidence further established McInnis and Mesquias obstructed justice by causing the creation of false and fictitious medical records that allegedly showed patients needed the hospice services. McInnis and others tried to provide these to a federal grand jury in a failed attempt to avoid indictment. The records added false diagnostic information, making it appear patients were dying and eligible for hospice services when, in fact, they were not.

The Department of Health and Human Service – Office of Inspector General (DHHS-OIG); FBI and Texas Health and Human Services Commission conducted the investigation. Assistant Chief Jacob Foster and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case. 

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, DHHS Centers for Medicare & Medicaid Services, working in conjunction with the DHHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Updated February 3, 2021

Health Care Fraud