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CHARLOTTE, N.C. – A Charlotte grand jury has indicted Jason Adam Townsend, 39, of Raeford, N.C., on health care fraud and aggravated identity theft charges, in connection with a scheme that defrauded Medicaid of millions of dollars, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The 10-count indictment was unsealed today, following Townsend’s appearance in court.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to allegations contained in the indictment, in or about 2011, Townsend and another unindicted individual created Townhall Enterprises, LLC (Townhall), located in Raeford. Townhall provided billing services and credentialing services to mental health companies and other health providers. The indictment alleges that as third-party billing provider, Townhall received information from its clients detailing claim information to be submitted to insurance companies and health care benefit programs, including Medicaid.
The indictment alleges that from in or about 2011 to in or about 2013, and at the direction of Cynthia Harlan, Townhall entered into contractor agreements with client agencies to provide billing services, including submitting claims to Medicaid, and in return receiving 5-7% of the reimbursed claims. According to court records, Harlan owned and operated Heartland Consulting and Marketing, LLC (“Heartland”) in Charlotte, and held herself out as a consultant specializing in the operation of mental health companies and Medicaid reimbursement. Harlan was indicted on health care fraud conspiracy and related charges in September 2015. Townhall’s other client agencies included New Choices Youth and Family Services, operated by Sakeenah Davis and Kino Williams, Life Impact Solutions, LLC, owned and operated by Zaria Humphries, and Aliya Boss, all of whom have pleaded guilty federal charges in connection with the scheme.
According to allegations contained in the indictment, Townsend and Townhall received billing instructions for clients, such as Boss, Life Impact Solutions, LLC and others, directly from Harlan or others acting on Harlan’s behalf. The indictment alleges that these instructions generally were contained in billing spreadsheets, which Harlan provided, containing relevant claim information, such as the Medicaid beneficiary name, date of birth, Medicaid ID number, the alleged dates of services, the alleged types of services and company that allegedly provided the services. The indictment alleges that Townsend generally did not follow the instructions provided by Harlan and the client agencies, and instead he frequently billed two or three times the amount of services he was instructed to submit to Medicaid. For example, the indictment alleges that instead of submitting claims to Medicaid requesting reimbursement for approximately 268 dates of therapy allegedly provided to 14 Medicaid beneficiaries, Townsend made up different claims, and increased the number of dates of service to over 400.
The indictment alleges that Townsend submitted millions of dollars in false claims, for which Medicaid reimbursed the providers. Townsend and Townhall were compensated by the client agencies for submitting the fraudulent claims. The indictment also alleges that during the same time period, Townhall’s primary source of income was the fees it charged to clients obtained through Harlan.
Townsend is charged with five counts of health care fraud conspiracy and five counts of aggravated identity theft and had his initial appeared today before U.S. Magistrate Judge David S. Cayer. He was released on conditions from the court. His detention hearing will be scheduled by the court in the coming days. The health care fraud conspiracy charge carries a maximum prison term of 10 years and a $250,000 fine per count. The aggravated identity theft charge carries a mandatory prison term of two years, consecutive to any other term of imprisonment.
An indictment is merely an allegation and Townsend is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The FBI conducted the investigation. In making today’s announcement, U.S. Attorney Rose also thanked the North Carolina Medicaid Investigations Division for their assistance in this case.
The prosecution of the cases is handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Charlotte Office.
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 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.