Jury Convicts Owner of DTS Medical Supply Company in Devine, TX, and Office Manager in Connection with $3.5 Million Health Care Fraud Scheme
In Waco, a jury returned guilty verdicts against 55–year-old DTS Medical Supply Company owner Daniel Thomason Smith and 45-year-old DTS office manager Kathleen Marina Kelly-Tuorila in connection with an estimated $3.5 million Health Care Fraud scheme announced United States Attorney Richard L. Durbin, Jr., FBI Special Agent in Charge Christopher Combs and Texas Attorney General Ken Paxton.
The jury convicted both defendants of one count of conspiracy to commit Health Care Fraud, one count of aiding and abetting Health Care Fraud, eleven counts of aiding and abetting aggravated identity theft and eight counts of aiding and abetting false statements related to a Health Care matter. A third defendant in this case, 60–year-old Robin Renee Haigler of Waco, TX, pleaded guilty to the conspiracy charge on August 17, 2015.
Both Medicare and Medicaid provide qualified beneficiaries with financial remuneration for the purchase of prescribed and necessary medical equipment. Such medical equipment would include powered wheelchairs, powered scooters and accessories related to those two devices. Medicare and Medicaid set a rate of compensation for each of these devices and the rate of compensation differed between devices and was to be based on the type of device that was prescribed for the beneficiary and delivered to the beneficiary.
Evidence presented during trial revealed that that between May 2006 and January 2010, the defendants conspired to submit numerous false and fraudulent benefit claims to Medicaid and Medicare seeking compensation for powered wheelchairs. Smith employed Haigler on a commission basis to recruit customers primarily in the Waco area. Kelly-Tuorila used the collected customer information from Haigler to generate and submit fraudulent claims for reimbursement to Medicaid and Medicare for powered wheelchairs. According to court testimony regarding the aggravated identity counts, names of physicians were used to support claims for reimbursement when the named physician never prescribed a powered wheelchair for the customer and, in some instances, didn’t even know the customer and had never had them as a patient. Evidence also revealed that even though DTS billed for powered wheelchairs, they delivered less-expensive powered scooters to customers, which resulted in a larger payment from Medicaid/Medicare and a larger percentage of profit for DTS and Smith.
Following the reading of the verdict yesterday afternoon, U.S. District Judge Alia Moses remanded Smith and Kelly-Tuorila into federal custody. Both face up to ten years imprisonment on the conspiracy count; up to ten years imprisonment on the aiding and abetting Health Care Fraud count; up to two years in federal prison for each aggravated identity theft count; and, up to five years in federal prison for each false statement count. Sentencing for Smith and Kelly-Tuorila has yet to be scheduled. Haigler, who remains on bond pending sentencing in September, faces up to ten years in federal prison.
This investigation was conducted by the agents with the Federal Bureau of Investigation together with investigators from the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney Greg Surovic and Special Assistant United States Attorney Rex Beasley are prosecuting this case on behalf of the Government.