Charlotte Woman Pleads Guilty To $4.8 Million Medicaid Scheme, Aggravated Identity Theft And Other Charges
United States Attorney Anne M. Tompkins Western District Of North Carolina
Woman Steals Identity of Therapist to Submit False Claims to Medicaid and Attempts to Sell Mercedes-Benz to Prevent Law Enforcement Officers from Seizing Vehicle
CHARLOTTE, N.C. – A Charlotte woman pleaded guilty today in U.S. District Court for her involvement in a health care fraud scheme that attempted to defraud Medicaid of $4.8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Rodnisha Sade Cannon, 26, of Charlotte, also pleaded guilty to stealing a therapist’s identity to commit the fraud, money laundering conspiracy and attempting to sell her Mercedes-Benz in order to prevent law enforcement agents from seizing the vehicle.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Cannon appeared this morning before U.S. Magistrate Judge David Cayer and pleaded guilty to one count of health care fraud conspiracy, one count of aggravated identity theft, and one count of money laundering conspiracy. Cannon also pleaded guilty to a single count of attempting to remove property subject to seizure, namely a 2010 Mercedes-Benz CLS550, in a related case. At today’s plea hearing, Cannon admitted that from 2010 to 2012, she and others submitted in excess of $4.8 million in false claims to Medicaid. According to filed court documents and statements made in court, Cannon and her co-conspirators operated after-school and summer childcare programs in Gastonia and Shelby, N.C. Although therapists initially performed some services at these programs, Cannon and others devised a scheme to defraud Medicaid by using the Medicaid provider numbers assigned to other companies and individual therapists for all therapy services supposedly provided at their programs regardless of whether those companies and individuals actually provided the claimed services. In many instances, the claimed mental and behavioral health services were never provided at all. Cannon and others accomplished this scheme by re-directing Medicaid payments away from the Medicaid providers’ bank accounts and to bank accounts controlled by Cannon and her co-conspirators.
According to the criminal bill of information and court documents, Cannon was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Cannon and others stole the identity of Medicaid-approved providers who had some relationship with the programs in order to accomplish the fraud. For example, court documents indicate that Cannon hired M.B. to work for her company in or about May 2012 and M.B. worked there for a single day. Cannon stole M.B.’s Medicaid provider information and redirected all Medicaid payments to M.B. be deposited into a bank account controlled by Cannon and others. Cannon and others then billed claims to Medicaid in excess of $800,000 for services that M.B. never provided, including claims for dates of service before M.B. worked for Cannon and her co-conspirators. In total, from 2010 to 2012, pursuant to the scheme to defraud, Cannon and her co-conspirators submitted approximately $4.8 million in false and fraudulent claims to Medicaid, resulting in payments of over $2.5 million to Cannon and her co-conspirators.
According to documents filed in court, Cannon also worked with Victoria Brewton, who pleaded guilty in January 2013 to carrying out a similar $8 million Medicaid fraud scheme in Shelby. Cannon assisted Brewton by providing and selling Medicaid beneficiary identification numbers and information to be used in Brewton’s fraud scheme. Brewton’s sentencing date has not been set yet.
As part of her plea, Cannon also admitted that she used the proceeds of her scheme to defraud Medicaid to purchase a 2010 Mercedes-Benz CLS550 for the purchase price of $59,500. In September 2012, law enforcement agents sought and obtained a warrant to seize this vehicle as the proceeds of Cannon’s health care fraud scheme. According to court documents, when Cannon learned that agents had a seizure warrant for the vehicle, she attempted to sell the Mercedes-Benz in order to avoid seizure of the vehicle. Cannon has agreed to forfeit the Mercedes-Benz as part of her plea today.
“Stealing money from Medicaid degrades the integrity of our health care system and victimizes those who rely on this important health care program for legitimate patient care,” said U.S. Attorney Tompkins. “The money that Cannon stole through her health care fraud scheme was intended to cover patient needs, not to purchase luxury items. Cannon will be held accountable for her actions,” Tompkins added.
Attorney General Roy Cooper stated, “Cheating Medicaid hurts needy patients, wastes taxpayer money, and drives up health care costs. Our Medicaid Investigations Division attorneys and investigators will continue to work closely with federal officials to root out fraud in North Carolina and make wrongdoers pay.”
“Money gained through illegal sources, such as healthcare fraud, is part of the untaxed, underground economy. This untaxed underground economy poses a threat to our voluntary tax compliance system and undermines the overall public confidence in our American system of taxation,” stated Charlotte Field Office Special Agent in Charge Jeannine A. Hammett, IRS Criminal Investigation.
At sentencing, Cannon faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charge, a maximum term of ten years in prison and a $250,000 for the money laundering conspiracy charge and maximum term of imprisonment of five years and a $250,000 fine for the attempted removal of property to prevent seizure. In her plea agreement, Cannon has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Cannon’s sentencing hearing, which has not been scheduled yet.
Cannon has been in local federal custody since her arrest on the attempted removal of property to prevent seizure charge on September 28, 2012.
The investigation into Cannon was handled by the FBI, MID, IRS, and HHS-OIG. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.
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 whistleblower 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 or Medicaid 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.