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Press Release

Huntersville Physician Pleads Guilty To Health Care Fraud And Tax Fraud And Agrees To Pay $6.2 Million To Settle Civil Fraud Claims

For Immediate Release
U.S. Attorney's Office, Western District of North Carolina
United States Attorney Anne M. Tompkins Western District Of North Carolina

Former Owner Of Northcross Medical Center Hid $2.4 Million In Income Used To Build 8,000-Square Foot Home On Lake Norman

CHARLOTTE, N.C. – Mark Tuan Le, an internal medicine physician and former owner of Northcross Medical Center, pleaded guilty today to federal criminal charges in connection with a healthcare fraud scheme that billed health insurers for services that were not performed and for evading over $800,000 in taxes in 2009 and 2010, announced Anne M. Tompkins U.S. Attorney for the Western District of North Carolina.

Earlier this month, Le, 55 of Huntersville, N.C., also agreed to pay $6.2 million to the United States to settle civil fraud allegations that Le and his medical center defrauded Medicare and Medicaid by submitting claims for medically unnecessary diagnostic test and procedures. The $6.2 million settlement is the Western District’s largest ever against a single physician.

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); 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).

In making today’s announcement U.S. Attorney Tompkins stated, “Dr. Le exploited his medical license to carry out a criminal scheme involving fraudulent billings for services that were not needed or not given. Then, Dr. Le took his criminal conduct a step further and covered up the additional income to avoid the tax liability. As this case shows, we will use all of the tools and resources in our disposal to prosecute fraud, including pursuing parallel criminal and civil proceedings.” U.S. Attorney Tompkins further urged anyone with information of instances involving fraudulent medical billing or other practices involving health care fraud to report them to law enforcement.

“Illegal schemes like this one waste tax dollars and divert funds that are supposed to go toward needed medical care. Our investigators and attorneys will continue to work closely with federal officials to fight health care fraud and recover the public’s money,” said North Carolina Attorney General Roy Cooper.

“Le cheated Americans twice. First by settling health fraud charges to the tune of $6.2 million, and then through $800,000 in tax evasion, said Derrick L. Jackson, Special Agent in Charge for Office of Inspector General of the U.S. Department of Health and Human Services Atlanta region including North Carolina. “Working shoulder to shoulder with our law enforcement partners, we will pursue and prosecute criminals like Dr. Mark Tuan Le.”

“Dr. Le’s exploitation of Medicare and Medicaid, in concert with his tax evasion, made the burden heavier for every American taxpayer” said Thomas J. Holloman, Special Agent in Charge, IRS Criminal Investigation. “This type of criminal activity carries with it serious consequences. IRS Criminal Investigation and our law enforcement partners are committed to the pursuit of those that would engage in this type of fraud.”

Criminal Case

According to filed documents and statements made in court, from at least 2009 to 2013, Le and others defrauded Medicare, Medicaid and private health insurers by submitting false claims for certain procedures – namely hemorrhoidectomies and Enhanced External Counterpulsation (EECP) therapy – when those services were never actually provided. Le owned and operated Northcross Medical Center and employed numerous family members at that practice and related businesses. Le and others conspired to defraud health insurers by billing for EECP treatments that were never performed and, if performed, were not medically necessary. Court documents explain that EECP treatments are recommended for patients with chronic disabling angina and insurance companies typically require that diagnosis as a condition of reimbursing claims for EECP treatments.

Court records indicate that after Le and his practice obtained an EECP machine in or about late 2008, Northcross Medical Center’s claims for EECP treatment skyrocketed. According to court documents, most patients did not qualify for EECP treatment and Le falsified the diagnosis code in order to obtain reimbursement. Information contained in filed court documents indicates that Le most frequently claimed to have performed these treatments upon his or his employees’ relatives when the procedures were not actually performed. Court documents also indicate that Le further defrauded insurance programs, including Medicare and a private insurer, by submitting false and fraudulent claims for hemorrhoidectomies (the removal of hemorrhoids) which did not occur.

According to court documents, in or about 2009 and 2010, Le committed tax evasion by hiding approximately $2.4 million in personal income from the IRS by falsely claiming that certain payments were Northcross Medical Center’s business expenses. In reality, court records indicate, Le used these funds to purchase and construct a $2.4 million, 8000-square foot residence on Lake Norman in Cornelius. Plea documents indicate that Le reported to IRS that his taxable income for 2010 was $40,142, resulting in a tax liability of $832.00. Le significantly underreported his income also in 2009, by fraudulently misclassifying personal income as business expenses. In reality, Le had an additional income of approximately $1.2 million in 2010 and another $1.2 million in 2009 and, as a result of his tax scheme, Le evaded a total of $844,367 of personal income taxes, court records show.

Le pleaded guilty today before U.S. Magistrate Judge David S. Cayer to one count of conspiracy to commit health care fraud, seven counts of health care fraud and one count of tax evasion. At sentencing, Le faces a maximum prison term of 10 years and a $250,000 fine for the health care fraud charges and a maximum prison term of five years and a $250,000 fine for the tax evasion charge. As part of his plea agreement, Le has agreed to pay full restitution to Medicare, Medicaid, private insurers and to IRS for any losses. The final restitution amount will be determined by the court at Le’s sentencing hearing. Le is currently released on bond. A sentencing date has been set yet.

Civil Settlement

In addition to criminal charges to which Le pleaded guilty today, Le and Northcross Medical Center have agreed to a $6.2 million settlement to resolve allegations stemming from a federal civil complaint filed on June 4, 2014 by the United States, pursuant to the False Claims Act. According to the civil complaint, from December 2007 through March 2013, Le and his practice billed Medicare and Medicaid for services that were not medically necessary, not provided, and/or provided to immediate family members, and otherwise failed to comply with Medicare and Medicaid rules and regulations. A final judgment in favor of the United States was entered on June 9, 2014. Le and Northcross Medical Center have paid $2.1 million already to resolve these claims and must pay the remainder within 18 months.

The investigation into Le was handled by HHS-OIG, IRS and MID. The criminal prosecution is handled by Assistant U.S. Attorney Kelli Ferry. Assistant U.S. Attorney Jonathan Ferry handled the civil settlement. U.S. Attorney Tompkins also thanked the North Carolina Medical Board for their assistance in the investigation.

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.

Updated March 19, 2015