Health Care Fraud Indictments

Tariq Hafeez, Esq.

Thirteen individuals from the metro Detroit area have been charged in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.

The superseding indictment, adds 13 new defendants and new charges to a 2011 indictment, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at more than 20 pharmacies that he owned and controlled in metro Detroit.

The 21-count superseding indictment charges with prescription fraud involving 26 Michigan pharmacies. The indictment alleges that the defendants participated in a scheme whereby the owners/controllers of the pharmacies provided kickbacks, bribes, and other illegal benefits to physicians to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance. The prescriptions be presented to one of the defendants’ pharmacies for billing. In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients and bill the relevant insurers for services supposedly provided to the patients without regard to the medical necessity of those prescriptions and services. The physicians would direct the patients to fill their prescriptions at one of the defendant owned pharmacies, where defendants would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the defendants’ pharmacies and the defendant physicians to bill their insurance for medications and services that were medically unnecessary and/or never provided.

The indictment further alleges a conspiracy to distribute controlled substances at the defendants’  pharmacies to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers. According to the indictment, defendants paid physicians kickbacks for prescriptions for controlled substances for their patients and directed those patients to fill the prescriptions at defendants owned/controlled pharmacies. The controlled substances included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab), the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice. 

This most recent indictment falls in line with the federal government’s increased investigation and prosecution of health care fraud across the country.  In May 2009, the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) created the Health Care Fraud Prevention and Enforcement Action Team (HEAT), making the fight against health care fraud a Cabinet-level position. The Heat task force is focused on nine cities including Detroit.

If you have questions about health care fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.

 

Penalties Severe for Pharmacy and Medicare Fraud

In Detroit on Wednesday, 43 individuals were indicted by the Federal government on allegations of a widespread conspiracy of pharmacy and Medicare fraud.  The indictment alleges that conspiring doctors, pharmacists, and health care workers wrote fraudulent prescriptions for pills such as OxyContin, Vicodin, and Xanax.  These pills were then sold on the streets of Detroit and elsewhere at a significant profit.

This conspiracy is believed to have defrauded Medicare for more than $21.5 million.

Defendants were charged with a variety of crimes, the main charges including Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances; and Health Care Fraud Conspiracy.  Also charged were various unlawful monetary transactions and weapons-related offenses.

If convicted of conspiracy to distribute a Schedule II controlled substance, such as OxyContin, Defendants are looking at up to 20 years in prison and more if death or injury resulted from the use of the controlled substances.  This is on top of fines up to $1 million for individual defendants.  If a convicted Defendant has any prior felony drug convictions, the minimum term of imprisonment and fines are increased.

If convicted of a Health Care Fraud Conspiracy, Defendants are looking at up to 10 years in prison, more if injury or death occurs as a result of the fraud.

These fines and imprisonment are in addition to restitution that Defendants may be required to pay to the Medicare System for the fraud.

With the Federal government’s crackdown on all types of health care fraud, these indictments are becoming more and more common.  If you are caught up in fraud or other criminal charges, having experienced and knowledgeable defense attorneys isn’t just helpful – it’s imperative.  Mark Mandell and the fraud team at Fausone Bohn, LLP, have years of experience and are especially suited to negotiate charges with prosecutors and, if necessary, take these cases to trial.

If you need a top-notch legal defense, contact Mark Mandell at 248-380-0000 or online at www.MichiganFraudLawyer.com. 

43 Indicted in Michigan on Federal Prescription Drug Fraud Charges

Yesterday, the Federal government indicted 43 people on charges of running a massive prescription drug scheme.  Those charged include doctors, pharmacists, and home health care workers.

According to the indictment, five of the doctors charged prescribed more than half a million doses of OxyContin – pills with a street value of $10 million.  In addition, those doctors are alleged to have prescribed 2 million doses of Vicodin, 2 million doses of Xanax, and more than 1,000 liters of cough syrup.  All of this occurred over a 21-month period, the indictment said.

The indictment alleges that the defendants held “patient parties” and hired recruiters to obtain new beneficiaries for the scheme.

It is believed that the fraud bilked Medicare for more than $21.5 million.  Also included in the indictment are charges for bribery, money laundering, kickbacks, and weapons-related offenses.

If you have questions regarding fraud or any other legal issues, contact Mark Mandell at 248.380.0000 or online at www.MichiganFraudLawyer.com.

To read the original Free Press article detailing the indictment, please visit:  http://www.freep.com/apps/pbcs.dll/article?AID=2013303210180

Worry over Healthcare Leaves Elderly Vulnerable to Medicare Scam

Mark Mandell, Esq.           

Scammers are now targeting the elderly, a population who are increasingly concerned over their health care, especially in light of the Affordable Care Act’s ensuing changes. A Medicare-card related scam has left a trail of elderly victims across at least 15 states, including Michigan, West Virginia, Tennessee, Illinois, New Jersey and California.

Individuals fall prey to such a scam after receiving a phone call informing them of the need to verify information in order to receive a new Medicare card. Despite being warned to never give out personal information over the phone, when the caller on the other end of the line seems legitimate, it is hard to pick out a fraudulent call.

"Medicare is my lifeline,” says Bessie Bell, 72, just one of many senior citizens who has received a fraudulent call within the last year.

When fraudulent callers pick up on these worries and focus on current issues such as Medicare changes and the cost of prescription drugs, it is easy for concerned individuals to believe the newest pitch. Lately, Medicare beneficiaries are being told they must verify their account information by giving out their bank account or Social Security numbers in order to receive a new Medicare card. Others have been lured into believing in a new, “Preferred Medicare” card that would somehow be used alongside the current card.

The public is concerned with how to spot the scammers as they grow more convincing. Before giving out any personal information, individuals are warned to stop and think: would the government call each individual if changes were made to the Medicare program? Senior citizens have been advised to first call their doctor, the drugstore, or the AARP before taking any action. While a call may seem legitimate, it is important to remember that bank routing numbers are public information, and while a caller’s knowledge of such information may make the call seem more legitimate, it is better to be safe than sorry.

While this Medicare-card related scam may be one of the newer fraudulent schemes occurring across the nation, these scammers are not alone. Just last year, millions were called to verify their personal information in order to receive diabetic test strips; fraudulent online pharmacies lure in many each year by offering prescription drugs at prices too good to be true.

If you have questions about criminal matters, fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.

To learn more and visit the original article, please visit: http://www.livingstondaily.com/article/20130210/OPINION01/302100310/Susan-Tompor-Scammers-target-seniors-fake-Medicare-card

Debate Over Penalties Facing Fraudulent Bottle Returners

Mark Mandell, Esq.

 

The House Regulatory Reform Committee debated bills relating to the fraudulent return of out-of-state cans and bottles for refunds in Michigan. If passed, an individual attempting to return between 100 and 10,000 non-returnable containers could face up to 93 days in jail along with a $1,000 fine. Currently, the law only penalizes those who have actually returned fraudulent containers.

Angela Madden of Michigan Beer and Wine Wholesalers emphasized how this practice hurts businesses. Many Michigan businesses lack the proper machines to read the special mark or code on containers that is meant to prevent this type of fraud.

The committee has yet to vote on the legislation, and while only a dime per returned container does not seem like much, thousands of these returns could be costing the state a pretty penny.

If you have questions about criminal matters, fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com

To learn more and read the original article, please visit: http://www.myfoxdetroit.com/story/21243521/michigan-lawmakers-debate-bottle-return-fraud-penalties

Auto Industry Looking to Create Insurance Fraud Authority

Mark Mandell, Esq

Michigan’s auto insurance industry is looking to tackle the issue of fake medical claims relating to auto accidents and scams that involve the billing of insurance companies for procedures more expensive than those actually performed. There has been a recent increase in such questionable claims, and Michigan now ranks third in the nation in such claims. Even Gov. Rick Snyder is onboard, addressing both the issue of auto insurance fraud and no-fault insurance in general during his State of the State address last month.

The robust no-fault insurance provision can be a “magnet for unscrupulous and fraudulent claims activity,” says Meghan Cass, an Allstate Insurance spokeswoman. Under Michigan’s no-fault law, it is required of motorists to purchase unlimited, lifetime medical benefits. While the concept has worked well, it has resulted in steady premium increases.

The proposed Fraud Authority would involve the ferreting out of what scams are taking place while providing financial support to law enforcement, prosecutors, and insurance associations. While insurers may have to dedicate up to $15 million per year towards such an authority; it would save millions more. It is estimated that 10% of all claims in Michigan are fraudulent. The result: the opportunity to save at least $40 million per year.

The high fraud rate in Michigan may be the result of other states cracking down, driving con artists to find new stomping grounds. While Florida and New York grew more stringent, questionable auto insurance claims related to medical issues rose 70% in Michigan from 2010 to 2011.

If the issue of a fraud authority does not get too tied up in the more controversial debate over no-fault insurance in general, some say the creation of such an authority may stand a chance this year.

If you have questions about criminal matters, fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.

To learn more and read the original article, please visit: http://www.freep.com/apps/pbcs.dll/article?AID=2013302170152

 

$350,000 Whistleblower Verdict Reinstated

Mark Mandell, Esq.

The Michigan Supreme Court has recently reinstated a $350,000 verdict in a whistle-blower lawsuit brought against Lake County by a former employee.

Former Lake County 911 department director Cheryl Debano-Griffin sued the county in 2005 under the Whistleblowers Protection Act. Cheryl complained about the handling of emergency funds when property tax money for ambulance services was being funneled into another county account. As a result, Cheryl lost her job.

While Cheryl originally won her case at trial in Lake County Circuit Court, the case has been sent to the state Court of Appeals twice, as well as to the Supreme Court. Most recently however, in a 4-0 opinion authored by Justice Michael Cavanagh, the court did in fact find a causal link between Cheryl’s termination and the complaints she made to the county board.

Cheryl’s objections included opposition towards the use of a Lake County EMS ambulance for the transportation of residents from other counties in non-emergency situations, as well as the county board’s authorization to transfer $50,000 from the ambulance account to a “mapping project account.” However, the board voted to return the funds to the ambulance account two days after voting to merge two county positions, which eliminated Cheryl’s job due to “budgetary problems.”

The court determined that although there may have been financial issues at the time, it did not appear that these difficulties were the board’s motivating factor when it eliminated Cheryl’s position. As a result, the original $350,000 verdict to Cheryl was reinstated.

If you have questions about criminal matters, fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com

To learn more and read the original article, please visit: http://www.mlive.com/news/index.ssf/2013/02/former_911_directors_350000_wh.html?utm_source=WhatCounts+Publicaster+Edition&utm_medium=email&utm_campaign=MiLW+Daily+Alert%3a+Lawyering%2c+24-7%3a+Setting+degree+of+access+by+clients+a+personal+choice&utm_content=Lake+Co.+whistleblower%e2%80%99s+%24350%2c000+verdict+reinstated+%0dby+MSC

Pell Jumpers Cost Taxpayers Millions

Mark Mandell, Esq.

Pell Grants, maxing out around $5,500 per year, are available to college students for tuition payment, as well as living costs such as rent, groceries, and transportation. However, when a student who receives a Pell Grant never shows up to class and disappears with the money, the college is left high and dry.

Because of their lower tuition rates, community colleges are victimized more so than costly universities. When a student signs up for a full semester of classes for $700 to $900, he can choose to pocket the leftover cash, received as a check from the school. While a thousand dollars may not seem like much for a college collecting thousands in tuition money from students every semester, the money lost to these Pell Jumpers adds up. Mark Kantrowitz, a leading expert on financial aid issues, estimates that 3.6 percent of Pell Grant recipients collect the money fraudulently. As a result, taxpayers lose $1.2 billion per school year. In context, it seems, Pell Grant fraud can be incredibly costly.

While colleges can attempt to go after these scammers, it’s an uphill battle to track down students after they leave the school with their check in hand. As a result, the U.S. Department of Education has proposed ways to put a stop to the fraud before it begins: by delaying payments to students until a few weeks into the semester and requiring professors to take attendance, schools hope to differentiate the students who are committed to their education from those who are interested in the money but not necessarily an education. Other suggestions include requiring financial-aid recipients to put a bank account or credit card on file in order to make them more easily traceable if they disappear with their Pell Grant check. However, such tactics may be potentially harmful for those who truly need the money – the delay in receiving a necessary check may prevent students from purchasing text books or paying rent.

One such college, Kellogg Community College in Battle Creek, has implemented such procedures and, and a result, cut its financial-aid losses in half in recent years. While Kellogg Community College represents one success story, there is yet to be an ideal remedy for preventing Pell Jumpers from running away with taxpayer dollars.

If you have questions about criminal matters, fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.

To learn more and read the original article, please visit: http://www.livingstondaily.com/article/20130218/NEWS01/302180313/Pell-Grant-scammers-cheating-Michigan-colleges-out-millions?odyssey=tab%7Ctopnews%7Ctext%7CFrontpage