DOJ Fraud Takedown – No North Carolina Physicians Among Named Defendants

On Monday, June 30, the U.S. Department of Justice (DOJ) held a press conference and issued a press release to announce the results of its largest-ever national health care fraud takedown. The operation resulted in charges against 324 individuals with fraud allegations exceeding $14.6 billion. Charges stemmed from schemes that defrauded Medicare and Medicaid.

DOJ published a list of the 324 defendants who have been charged with Medicare and Medicaid fraud, 25 (8%) of which are physicians. Of the 14 from North Carolina or associated with illegal activity in North Carolina, none are physicians.

Below is an excerpt from the DOJ’s announcement listing North Carolina defendants and summarizing the charges against each.

Criminal Division | Case Summaries

Federal Court Eastern District of North Carolina

 Kimberly Mable Sims (a lab company owner), Francine Sims Super (an office manager), and Keke Komeko Johnson (a compliance officer), were charged by information in connection with the payment of more than $1 million in illegal remunerations in the form of gift cards to patients of Life Touch, LLC (“Life Touch”), a North Carolina substance abuse treatment company, and in connection with false statements to Medicaid auditors regarding the same. The inducements resulted in more than $25 million in payments from Medicaid to Life Touch. As alleged, over four years, Life Touch, through its compliance officer and managers, routinely paid patients based upon the number of days per week that they received services. Life Touch staff also received kickbacks from a lab company that it utilized for drug testing services. The charging documents further allege that Medicaid auditors were deceived regarding these ongoing practices at Life Touch and the lab company. In addition, Super and Johnson were each charged with failure to file a tax return. Life Touch and Brandon Eugene Sims were previously charged in this case. More than $6 million in assets in the form of cash, real estate and other assets have been seized. The cases are being prosecuted by Special Assistant U.S. Attorney Tasha Gardner, and Assistant U.S. Attorney William M. Gilmore of the U.S. Attorney’s Office for the Eastern District of North Carolina.

Randal Fenton Wood, 56, of Flagler Beach, Florida, was charged by information with conspiracy to commit health care fraud in connection with a scheme to bill Medicare, the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), and other insurance programs for medically unnecessary durable medical equipment (“DME”). As alleged in the information, Wood and others partnered with purported marketing entities which solicited Medicare beneficiaries to accept durable medical equipment, such as braces and pneumatic compression devices, by illegally waiving copays and pressuring beneficiaries to accept the equipment without verifying that the equipment was medically necessary. The marketing entities sold the beneficiary information and the prefilled orders to Wood and other DME supply companies, who developed and implemented a “doctor chase” model to pressure physicians into signing or altering orders so that they could be billed in full. The DME supply companies owned by or affiliated with Wood received over $39 million in reimbursement from Medicare for DME ordered through this scheme. The case is being prosecuted by Assistant U.S. Attorney David G. Beraka of the U.S. Attorney’s Office for the Eastern District of North Carolina.

Federal Court Western District of North Carolina

Crystal Sherrell Jackson, 39, of Charlotte, North Carolina, was charged by information with health care fraud and money laundering in connection with a scheme to defraud North Carolina Medicaid by submitting fraudulent claims for drug testing and psychotherapy. Jackson, a licensed clinical addiction specialist at the time of her offenses, and the owner of Jackson Consulting Services, LLC, was an enrolled provider with North Carolina Medicaid. Jackson used her company to submit $1.9 million of false and fraudulent claims in the names of North Carolina Medicaid beneficiaries for drug tests that were not performed or were medically unnecessary, of which $1.6 million were paid. The case is being prosecuted by Assistant U.S. Attorney Michael Savage and Special Assistant U.S. Attorney Kristina Fleisch of the U.S. Attorney’s Office for the Western District of North Carolina.

Donald Calvin Saunders, 62, of Charlotte, North Carolina; Vanessa Ragin Boatright, 59, of Manning, South Carolina; Latarsa Hitchcock, 56, of Raleigh, North Carolina; Dajuan Strickland, 46, of Buffalo, New York; Cynthia Jenkins Harris, 60, of Elgin, South Carolina; Stephanie Corbett, 59, of Jonesboro, Georgia, and Karen McClary, 51, of Kingstree, South Carolina, were charged by indictment with conspiracy to defraud the United States. Additionally, Saunders, Boatright, Strickland, and Jenkins were charged with health care fraud; Saunders, Boatright, and Strickland were charged with purchasing and selling Medicaid numbers without lawful authority; Saunders, Boatright, Strickland, and Jenkins were charged with conspiracy to commit money laundering; and Saunders and Strickland were charged with money laundering, all in connection with a $21 million scheme in which behavioral health providers in North Carolina submitted false and fraudulent claims to the South Carolina Medicaid program for services that were not performed. David Cory Hill, 54, of Charlotte, NC, was charged separately in an information with conspiracy to defraud the United States and commit offenses against the United States and money laundering. As alleged in the indictment, Saunders, Boatright, Hitchcock, Strickland, and Hill would set up or acquire behavioral health care companies and enroll them with South Carolina Medicaid under a program in which beneficiaries could select providers within 25 miles of South Carolina. Saunders and his conspirators used companies under their control to submit thousands of claims for behavioral services that were not provided. Jenkins, a former state of South Carolina employee, used her consulting firm to obtain the credentials of licensed professionals needed to bill South Carolina Medicaid and to create false clinical notes in the event of an audit. Corbett, who operated a third-party medical billing service, submitted false claims to South Carolina Medicaid, for which she was paid for each successful claim. McClary, a social worker with access to Medicaid beneficiary information, sold Medicaid beneficiary names and numbers to the conspirators, for which she was paid $200 to $300 for each eligible beneficiary. The case is being prosecuted by Assistant U.S. Attorneys Michael Savage and Graham Billings of the U.S. Attorney’s Office for the Western District of North Carolina, with substantial assistance from the South Carolina Attorney General’s Office, Medicaid Fraud Control Unit.

Federal Court Eastern District of Virginia

Lori Adcock, 54, of Hampstead, North Carolina, was charged by complaint with conspiracy to commit health care fraud in connection with a scheme to overcharge Medicaid for environmental modifications to homes or vehicles such as installing wheelchair ramps or grab bars in showers, which scheme cost Medicaid approximately $213,210.69 attributable to Adcock. As alleged in the complaint, Adcock was the operations manager of Ability Unlimited, a Medicaid provider whose business centered on facilitating but not performing environmental modifications, and Medicaid did not allow facilitators that performed no actual labor to charge a separate profit margin. Adcock was the manager of the fraudulent scheme to hide Ability Unlimited’s arbitrary and often exorbitant profit margins in the subcontractor costs. For example, Ability Unlimited purchased a generator from Amazon.com for less than $1000 and had it shipped directly to the Medicaid recipient, but charged Medicaid $3,395.16, listing the generator cost in an altered invoice as $2,610.16, and including an additional labor cost of $785 despite the direct shipment of the generator. The case is being prosecuted by Assistant U.S. Attorney Shea Gibbons of the U.S. Attorney’s Office for the Eastern District of Virginia.