Jury Convicts Former Dental Clinic Owners of $1 Million Health Care, Payroll Tax Fraud
SPRINGFIELD, Mo. – U.S. Attorney Tim Garrison and Missouri Attorney General Eric Schmitt announced today that a Marshfield, Mo., couple has been convicted by a federal trial jury of multiple fraud schemes totaling more than $1 million that involved Medicaid payments to their dental clinics, failing to pay over payroll taxes and collecting unemployment benefits they were not entitled to receive.
Pamela M. Van Drie, 59, and her husband, Lorin G. Van Drie, 60, were found guilty on Wednesday, Feb. 20, 2019, of all 40 counts contained in a Nov. 2, 2016, federal indictment.
“When criminals cheat federal programs like Medicaid, they are stealing from the pockets of honest tax-paying citizens,” said Garrison. “This multi-faceted investigation exposed hundreds of fraudulent Medicaid claims and a payroll tax fraud conspiracy that totaled more than $1 million. We are pleased to partner with the Missouri Attorney General’s Office to combat health care fraud and hold accountable those who abuse the system for their own benefit.”
“Those who rig the Medicaid system for unlawful personal gain will be held accountable, and my office’s dedication to this case illustrates how we’re continually working towards bringing fraudsters and scammers to justice,” said Schmitt, “I’m thankful to have such a talented team fighting tirelessly to protect all 6 million Missourians, and I’m grateful to have worked alongside U.S. Attorney Garrison and his talented team.”
Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Kansas City, Mo., said, “Our office will continue to pursue those individuals who bill HHS-funded programs for services that were never rendered or for services provided to ineligible beneficiaries, as such actions place an unnecessary financial burden on both our programs and the American taxpayer.”
“Withholding and properly remitting employment taxes is the responsibility of all business owners,” said Karl Stiften, Special Agent in Charge of IRS Criminal Investigation. “As demonstrated by these guilty verdicts, choosing to spend withheld employment taxes on a luxurious lifestyle will not be tolerated. IRS Criminal Investigation and the Department of Justice will vigorously investigate and prosecute those who commit employment tax fraud.”
Pamela and Lorin Van Drie were the owners of All About Smiles, LLC, a Springfield company that provided dental services at clinics in Springfield (until it closed in November 2015), Mountain Grove, Mo., (until it closed in October 2014) and Bolivar, Mo. (until it closed in March 2014). They also owned PL Family Management Company, LLC, which managed the staff for those clinics.
$885,748 Health Care Fraud Conspiracy
Pamela Van Drie participated in a conspiracy to commit health care fraud from Oct. 6, 2010, to Aug. 19, 2015. This conspiracy consisted of a fraud scheme related to dentures and other dental services and a fraud scheme related to orthodontic appliances. Both fraud schemes involved fraudulent Medicaid claims and payments.
Pamela Van Drie and Dr. James R. Dye, a dentist at the clinics, arranged for All About Smiles to provide dentures and other dental services to adults who did not qualify for Medicaid reimbursement. They submitted claims to Medicaid for those dentures and other dental services, knowing that Medicaid’s requirements were not met.
Pamela Van Drie, through All About Smiles, submitted and received $720,048 on numerous claims for dentures and other dental services that lacked the required written referral from a physician.
Additionally, Pamela Van Drie and Dye purchased Ortho-Tain orthodontic appliances (designed to straighten teeth without braces) for approximately $50 each, provided them to Medicaid pediatric beneficiaries and billed each such appliance to Medicaid as a speech aid prosthesis for approximately $695. They knew the Ortho-Tain appliances should have been billed to Medicaid as orthodontic services; they also knew Medicaid did not cover orthodontic services unless the Medicaid program’s requirements were met and they received precertification, which required review by a dentist/orthodontist employed by Medicaid. They billed the Ortho-Tain appliances as speech aid prostheses in order to bypass the precertification requirement.
Between Oct. 6, 2010, and Aug. 19, 2015, Pamela Van Drie submitted and received payment for approximately 241 claims submitted for speech aid prosthesis. On each claim, All About Smiles (or its predecessor company) was paid between $675 to $695, for an approximate total amount of $165,700.
Dye pleaded guilty on Feb. 11, 2016, to health care fraud in a separate but related case.
$194,751 Payroll Tax Fraud Conspiracy
Pamela and Lorin Van Drie participated in a conspiracy to defraud the government by failing to pay over the IRS payroll taxes from Jan. 31, 2013, to Jan. 31, 2015. Although payroll taxes were withheld from the paychecks of employees at All About Smiles and PL Family Management Company, the Van Dries failed to pay over to the IRS approximately $194,751 in payroll taxes.
The Van Dries diverted a substantial amount of money from their businesses during this period. They caused All About Smiles and PL Family Management Company to make thousands of dollars for their personal benefit while failing to pay over to the IRS payroll taxes withheld from their employees’ paychecks.
Rather than paying the payroll taxes due and owing, the Van Dries purchased and made payments on a 2013 Tracker boat and trailer, a recreational vehicle, multiple vehicles (including a 2010 Hummer and a 2009 Mercedes), several utility trailers, two golf carts, a motorcycle, expenses associated with two homes and family vacations in Florida, and a pulling truck called “Momma’s Money,” which Pamela Van Drie’s son used in pulling competitions throughout Missouri.
In addition to these two criminal conspiracies, Pamela Van Drie was found guilty of eight counts of health care fraud related to fraudulent claims for speech aid prosetheses, 10 counts of health care fraud related to fraudulent claims for dentures and other dental services and one count of theft of public money related to $3,520 in unemployment benefits that she was not entitled to receive while working full-time at All About Smiles.
In addition to the payroll tax conspiracy, Lorin Van Drie also was found guilty of 18 counts of failure to pay over employment tax and one count of theft of public money related to $11,840 in unemployment benefits that he was not entitled to receive while working at his own construction company and doing maintenance work at All About Smiles.
Following the presentation of evidence, the jury in the U.S. District Court in Springfield, Mo., deliberated for about one and half hours before returning the guilty verdicts to U.S. District Judge M. Douglas Harpool, ending a six-day trial that began Monday, Feb. 11, 2019.
Under federal statutes, Pamela Van Drie is subject to a sentence of up to 10 years in federal prison without parole on each count of conviction except the payroll tax conspiracy, which carries a maximum penalty of five years in federal prison without parole. Lorin Van Drie is subject to a sentence of up to 10 years in federal prison without parole for theft of unemployment benefits and five years in federal prison without parole on each additional count of conviction. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Cindi S. Woolery and Steve Mohlhenrich and Special Assistant U.S. Attorney Shannon Kempf of the Missouri Attorney General’s Office. It was investigated by Health and Human Services – Office of Inspector General, the Missouri Attorney General’s Office Medicaid Fraud Control Unit and IRS-Criminal Investigation.