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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of North Carolina

FOR IMMEDIATE RELEASE
Thursday, December 1, 2016

Leader Of $11 Million Healthcare Fraud Scheme Sentenced To 16 Years

CHARLOTTE, N.C. – Cynthia Teresa Harlan, 49, of Charlotte, was sentenced yesterday to 192 months in prison for orchestrating a health care fraud scheme that fraudulently billed Medicaid for more than $11 million in false claims and stealing the identity of others to accomplish the fraud, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Chief U.S. District Judge Frank D. Whitney ordered Harlan to serve three years of supervised release and to pay $3,100,249 as restitution to Medicaid.

 

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in North Carolina joins U.S. Attorney Rose in making todays announcement.

 

A federal jury convicted Harlan in July 2016, of one count of health care fraud conspiracy, three counts of making false statements relating to health care matters, three counts of aggravated identity theft and one count of obstruction of a health care fraud investigation.

 

Harlan’s co-defendant, Claude Bernard McRae, who was convicted by the same jury of one count of health care fraud conspiracy, was also sentenced yesterday to 88 months in prison. McRae, 38, of Hamlet, N.C., was also ordered to serve three years under court supervision and to pay $1,615,499.22 as restitution.

 

According to trial evidence, filed documents and the sentencing hearing, between October 2012 and August 2013, Harlan used a network of accomplices to carry out an extensive health care fraud scheme involving the fraudulent submission of fake reimbursement claims to Medicaid for services that were never actually provided to beneficiaries. Harlan owned and operated Heartland Consulting and Marketing, Inc., a Charlotte-area company, purportedly specializing in the operation of mental health companies and Medicaid reimbursement. Harlan recruited a team of individuals that included the owners of outpatient mental and behavioral health services companies, mental health practitioners, note writers, patient recruiters, mental and behavioral health services providers and medical billers, and directed them to fabricate the necessary paperwork used to support the fraudulent claims billed to Medicaid.

 

The fabricated paperwork included the names and beneficiary information of Medicaid recipients, fabricated intake packets, non-existent mental health diagnoses and made-up treatment plans and fake dates of service. It also included fake notes describing therapy services that never occurred. All of this information was organized in a manner to make it appear that the companies and clinicians involved in the scheme had provided legitimate therapy beneficiaries, contrary to the truth. The patient files were intended to deceive Medicaid auditors in case there was an inquiry about the accuracy of the fake claims.

 

McCrae and his business partner and indicted co-conspirator, Tyree Craig Jones, were the co-owners of two outpatient mental and behavioral health services companies, Kings of Carolina Care 1, Inc. (Carolina Care 1), and Esteem Family Life Center, LLC (Esteem), both located in Rockingham, N.C. The two men partnered with Harlan and others to submit false reimbursement claims to Medicaid, claiming that the two entities provided mental and behavioral health services to the Medicaid recipients, when, in reality no services were provided at all. According to court records, Jones and McCrae, through Carolina Care 1, attempted to obtain from Medicaid over $5 million in fraudulent reimbursement claims and received over $1.3 million from Medicaid for the fraudulent claims.

 

Evidence at trial demonstrated that Harlan, Jones and McRae accomplished some of the fraud by misappropriating the Medicaid identification number of doctor. This doctor had never agreed to be part of Carolina Care 1, yet the group claimed that this doctor had provided over $2.3 million in therapy services to Medicaid recipients in just one year. Additionally, evidence presented at trial demonstrated that the false claims submitted by Carolina Care 1 indicated that Carolina Care 1 allegedly serviced over 500 clients in a single day.

 

According to court records, Harlan misused the names and Medicaid identification numbers of hundreds of Medicaid beneficiaries, including A.H., B.H. and M.H., in order to accomplish the scheme. According to the mothers of A.H. and M.H., who testified at trial, their children did not have mental health issues and never received any therapy services from any company. Harlan received over $400,000 for her role in the scheme.

 

When Harlan became aware that she was being investigated for Medicaid fraud, Harlan directed some of her co-conspirators to destroy records as well as incriminating emails and text messages relevant to the scheme for the purpose of obstructing the investigation.

 

Co-defendant Jones pled guilty on the last day of trial and, earlier this month, was sentenced to 85 months in prison and three years of supervised release. Jones was also ordered to pay $1,615,499 as restitution Additionally, to date, the following individuals have been prosecuted federally in connection with this health care fraud conspiracy:

 

  • Aliya Boss was previously sentenced to 44 months in prison, three years supervised release and was ordered to pay $1,135,302 in restitution.  Boss filed reimbursement claims to Medicaid fraudulently cliaming that she had provided mental health services to beneficiaries.

  • Alexander Bass and Torrey Darnell Moton were previously sentenced to 32 and 25 months in prison, respectively, three years of supervised release and were ordered to pay $370,372 as restitution. Bass and Moton owned United Rehabilitation Services (URS), in Erwin, N.C., and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.

  • Sakeenah Davis and Kino Williams were previously sentenced to 42 and 35 months in prison, respectively, three years supervised release and were ordered to pay $ 506,124 in restitution. Davis and Williams owned New Choices Youth and Family Services, in Charlotte, North Carolina, and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.

  • Jacqueline Ford was previously sentenced to 21 months in prison and three years of supervised release and was ordered to pay $442,679 restitution. Ford fabricated notes to support the false claims submitted by Carolina Care 1, URS and other companies.

  • Zaria Humphries was previously sentenced to 24 months in prison and three years of supervised release and was ordered to pay $222,037 in restitution. Humphries submitted false claims through her company Life Impact Solutions.

  • Tanisha Melvin was sentenced to 33 months in prison, three years of supervised release and was ordered to pay $392,159.81 in restitution. Melvin was responsible for creating fake patient records for the conspiracy.

  • LaChanda Clotiel Parks, also responsible for generating fake patient paperwork, was sentenced to 28 months in prison followed by three years of supervised release, and was ordered to pay $352,565 in restitution for her role in the conspiracy.

  • Dr. Wanda Webb was sentenced two years’ probation and ordered to pay $79,338.74 in restitution. Webb also submitted fraudulent claims through her company, Cornerstone Counseling and Consulting.

  • D’Marcus White, also responsible for generating fake patient paperwork, was previously sentenced to two years’ probation.

  • Jason Adam Townsend is also facing health care fraud conspiracy and aggravated identity theft charges, for submitting fraudulent claims through his medical billing services company, Townhall Enterprises, LLC, located in Raeford, N.C. His trial is currently scheduled to begin in January 2017.

Harlan is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. McRae will be ordered to self-report at a later date. All federal sentences are served without the possibility of parole.

 

The investigation was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. In making today’s announcement, U.S. Attorney Rose also thanked the Rockingham Police Department and the Richmond County Sheriff’s Office for their assistance at trial. The United States is being represented by Assistant U.S. Attorneys Kelli Ferry and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte.

 

The investigation is 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 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.

Updated February 1, 2017