Charlotte Man Pleads Guilty To $2 Million Health Care Fraud Scheme

CHARLOTTE, N.C. – The former co-owner and operator of a Charlotte-area company providing services to Medicaid beneficiaries with intellectual/developmental disabilities has admitted to defrauding the government program of over $2 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Eric Bernard Mitchell, 43, of Charlotte, appeared before U.S. Magistrate Judge David S. Cayer and pleaded guilty to health care fraud and money laundering charges.

U.S. Attorney Rose is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to filed court documents and today’s plea hearing, from about 2007 to about 2009, Mitchell co-owned and operated Angelic Community and Family Services, L.P. (Angelic), which provided alternative care to Medicaid recipients with intellectual/developmental disabilities in a non-institutional setting.  Angelic later became defunct, and in 2009, Mitchell assisted in the creation of another company, identified in court documents as “Company #1,” which provided the same type of services as Angelic.  Mitchell operated significant portions of Company #1’s business and had exclusive control of the company’s bank accounts.  Both Angelic and Company #1 were approved by Medicaid to provide such services to beneficiaries and to receive reimbursement from the government program.

According to court records, in or about 2006, Mitchell created an unincorporated company, Mitchell Connor & Associates (MCA), which provided operational services to Company #1, including the submission of reimbursement claims to Medicaid.  Mitchell admitted in court today that from about October 2009 to about June 2014, he submitted through MCA fraudulent claims to Medicaid on behalf of Company #1, seeking reimbursement for services which were never provided to beneficiaries with developmental disabilities.  Mitchell also admitted that he submitted the fraudulent claims using the Medicaid beneficiary information of former clients of Angelic, who Mitchell knew were approved to receive such services.  Over the course of the scheme, Mitchell admitted to submitting at least $2.5 million in fraudulent claims using the beneficiaries’ stolen information and to receiving over $2 million in payments from Medicaid.

According to court records, Medicaid directed payments for Company #1’s reimbursement claims, including the fraudulent ones, to multiple bank accounts exclusively controlled by Mitchell.  Over the course of the conspiracy, Mitchell used portions of the Medicaid funds to cover personal expenses, including to make multiple car payments to a Mercedes dealer and to pay for various car repair services. 

Mitchell was released on bond after the plea hearing.  The health care fraud charge and the money laundering charge each carry a maximum prison term of 10 years.  A sentencing date for Mitchell has not been set yet.

The investigation was handled by HHS-OIG and IRS-CI.   U.S. Attorney Rose also thanked the North Carolina Medicaid Investigations Division for their assistance.  Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing  of  all  whistle  blower  complaints,  and  the  creation  of  investigative  teams  so  that individual agencies may focus their unique areas of expertise on investigations.  The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at HHSTips@oig.hhs.gov.  To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.