New Michigan Anti-Fraud Taskforce

Matthew Worley, Esq.

Michigan Secretary of State Ruth Johnson, in coordination with police, prosecutors, state officials, and industry leaders has launched a new anti-fraud task force.  Fighting Auto Insurance Rip-offs, referred to simply as FAIR, is aimed at combatting a growing trend in Michigan – auto insurance fraud.

The scam involves individuals selling fake auto insurance policies.  The perpetrators then set up fake help desks so when a call is made to verify a policy, a real person answers and vouches for the non-existent policy.  However, as soon as the motorist is in an accident or tries to make a claim, they realize that there is no policy and their premiums having been lining someone’s pocket.

In July, Secretary of State Johnson’s office conducted a one-day review of the 15,000 registration renewals submitted in all the branches.  Of the insurance policies verified that day, an astonishing 16% were found to be invalid or fraudulent.  These fakes turned up in more than half of Michigan’s 83 counties.

The burden of these uninsured motorists is felt by every law-abiding Michigan motorist who follows the law and carries a no-fault policy.  The costs of having these uninsured motorists on the road rise into the hundreds of millions of dollars – which translates to higher insurance premiums.

The FAIR task force will explore new means to combat insurance fraud through procedural changes, new investigative efforts, and potentially new legislation.  It will include representatives from the Secretary of State’s office, the Michigan State Police, Michigan prosecutors, and several insurance industry organizations.

If you have questions about auto insurance fraud, or any other legal matters, contact the experts at Fausone Bohn, LLP at (248) 380-0000 or online at www.fb-firm.com.

 

To learn more about the new fraud task force, visit: http://www.insurancejournal.com/news/midwest/2013/09/19/305718.htm.

Eastern Market Businesses Investigated and Charged With Food-Stamp Fraud

Breeda O’Leary, Esq.

 

A recent sweep of numerous establishments located within the Eastern Market shows that the U.S. Attorney’s Office continues to investigate and pursue fraud throughout the metro Detroit area.

The U.S. Attorney’s Office, together with the U.S. Department of Agriculture Office of Inspector General, Internal Revenue Service, Michigan State Police, and the U.S. Immigration and Customs Enforcement’s Home Security Investigations, executed a search warrant against several businesses suspected of participating in food stamp fraud. 

The alleged fraud included the sale of food stamps for as low as fifty cents on the dollar.  An individual who receives food stamp benefits is provided an EBT card and a pin number for the EBT card.  At a retailer, the recipient scans its EBT Card and enters its four-digit pin at checkout in order to pay for its food-product purchase.  Here, it is alleged that retailers were purchasing a recipient’s EBT Card and pin number, providing fifty cents for every dollar the business charged to the EBT card in food-stamp benefits.  As a result of this fraud, the retailer would be reimbursed $1.00 in cash from the government for a food product it never provided to the EBT Card recipient.  In exchange, the retailer would only provide fifty cents in cash to the EBT Card recipient.

Nearly 47 million people nationwide receive food assistance, making food-stamp fraud a serious concern for the government.  The sale and purchase of food-stamp benefits, also known as “trafficking” is a common form of fraud within the program.

  
If you are a business or individual that has been charged with fraud, or if you think you may be the target of an investigation concerning fraud, contact the experienced and professional fraud team at Fausone Bohn, LLP for sound legal advice.  Contact Breeda O’Leary-Holder at (248) 380-0000 or online at www.MichiganFraudLawyer.com.

To read the article about the recent food-stamp fraud sweep of businesses in Eastern Market, please visit:

 http://www.detroitnews.com/article/20130919/METRO08/309190087/1361/9-accused-of-food-stamp-fraud-after-feds-sweep-Eastern-Market-businesses

 

Scheme to Defraud the W.K. Kellogg Foundation

Mark Mandell, Esq.

 

In 2008 an $800,000 scheme targeting funds from a children’s charity was unearthed. The charity was an organization that is devoted to helping children in Africa.

Nehemiah Muzamhindo, a 48-year-old political refugee from Zimbabwe, was sentenced to six years in federal prison for his role in the scheme targeting funds from the foundation. In addition to his sentence Muzamhindo was also ordered to pay $709,000 in restitution fees.

Muzamhindo had taken $629,000 from the foundation before he was cut out of the scheme. In order to claim funds from the children’s charity Muzamhindo set up bank accounts and shell companies to accept fraudulent claims. Then, he would go on to send half of the money he collected to foundation worker, Sabina Brand, in South Africa. Sabina Brand is currently serving 15 years in a South African prison for her role in the scheme.

During the trial Assistant U.S. Attorney Timothy VerHey attacked the “bad character” of Muzamhindo. VerHey wrote in court documents that; “…His crime had a far-reaching impact, because it led the WKKF to withdraw from its charitable activities in Africa.”

Scott Mertens, Muzamhindo’s defense attorney, argued for Muzamhindo’s character saying that, “Mr. Muzamhindo had been involved in charitable works and has assisted others who have emigrated from Zimbabwe.”

To learn more or to see the original article, please visit: http://www.mlive.com/news/grand-rapids/index.ssf/2013/09/kentwood_man_sent_to_prison_in.html

If you or someone you know is the target of a fraud investigation, or if you have already been indicted, contact the experienced team of fraud attorneys at Fausone Bohn, LLP, at (248) 380-0000 or online at www.MichiganFraudLawyer.com. 

Embezzlement Law in Michigan

Mark Mandell, Esq.

Recently, a Portage, Michigan man was sentenced to 87 months in prison for embezzling $6.5 million from the company where he worked as a comptroller.  In addition to his prison time and supervised release thereafter, he is required to pay restitution of $6.5 million to his former employer.  This shows just how serious the consequences of an embezzlement conviction can be.

Embezzlement in Michigan is governed by statute – MCL §750.174.  In essence, a person is guilty of embezzlement when they are in a relationship of trust to the principal (generally an employer-employee situation); in lawful possession or control of the funds of the principal; and wrongfully take or convert those funds to his own use, with the intent to defraud.

The key element to a charge of embezzlement is that the person takes the money, which belongs to the principal, with the intent to convert it to his own use.  In other words, the person has the fraudulent intent to deprive the owner of his property and take it for himself.  Without this intent to defraud, a taking cannot be embezzlement (though it may constitute another offense.)

The severity of an embezzlement charge depends on the amount of money or personal property taken by the agent or employee.  The charges include the following: 

·        If the money or property taken is valued at less than $200, the charge is a 93-day misdemeanor with a possible fine up to $500; 

·        If the value is up to $1,000, the crime is a 1-year misdemeanor subject to a fine of up to $2,000.

·         $1,000 to $20,000 is a 5-year felony with a fine of up to $10,000. 

·         $20,000 to $50,000 is a 10-year felony with a fine up to $15,000. 

·         $50,000 to $100,000 is a 15-year felony with a fine up to $25,000. 

·         $100,000 and above is a 20-year felony with a fine up to $50,000.

 

Additionally, a person convicted of embezzlement will likely be required to pay restitution to the owner of the amount illegally taken, in addition to the statutory fines and jail time.  Charges may also be enhanced if the defendant has any prior embezzlement convictions on his record.

 

If you are facing embezzlement charges, or if you need more information about this area of the law, contact Michigan Fraud Lawyer Mark Mandell at (248) 380-0000 or online at www.MichiganFraudLawyer.com.  Mr. Mandell can provide you the experienced and knowledgeable legal counsel that is absolutely imperative when facing all manners of criminal charges.

$4.15M Settlement Evidences Benefit of Reporting

Breeda O’Leary, Esq.

The U.S. Government (“Government”) and the State of Michigan (“State”) have reached an agreement in a False Claims Act case wherein the Defendants have agreed to pay $4.15M to the Government and State for fraudulent billings to Medicare and Medicaid.

   
The qui tam provisions of the False Claims Act allows an individual with knowledge of Medicare or Medicaid Fraud, referred to as the “relator,” to file a lawsuit on behalf of the Government against those committing the fraud.  The Government is then provided notice of the lawsuit and is given the option to intervene as Plaintiff in the suit.  If the Government obtains a judgment or settlement in the suit, the relator is provided a percentage of the amount collected.
      
In the instant case, it was alleged that the Defendants, Dr. Jashu R. Patel and other Jackson Cardiology Associates physicians, performed unnecessary cardiac procedures at Allegiance Health’s W.A. Foote Hospital in Jackson, also a Defendant in the case.  Medicare and Medicaid were billed for these procedures.  Dr. Julie A. Kovich, a former independent contractor at Jackson Cardiology Associates, filed suit as the relator in this case.  While Dr. Kovich faces the possibility of being ostracized by her peers, she will receive approximately $764,700.00 as the relator. 
 
If you or anyone you know has specific knowledge of fraudulent billing to Medicare or Medicaid, or is facing criminal or civil liability concerning an alleged fraud, contact the experienced and professional fraud team at Fausone Bohn, LLP for sound legal advice.  Contact us at (248) 380-0000 or online at www.MichiganFraudLawyer.com.

To read the article about the deficiencies in Medicare’s new accounting system, please visit:  http://www.justice.gov/usao/mie/news/2013/2013_7_10_jpatel_HCF.html

Local Oncologist Charged with Medicare Fraud

Mark Mandell, Esq.

Yet another Michigan doctor has been brought up by the FBI on charges of Medicare fraud this past Tuesday. Although this seems like an unfortunate regular occurrence nowadays, this specific case is one of the worst our state has seen.

Dr. Farid Fata, a 48-year-old oncologist from Oakland Township, was arrested Tuesday morning for submitting over $35 million worth of false claims to Medicare. Despite this large fraud, however, the FBI are alleging even worse crimes than cheating Medicare.  In their criminal complaint against Fata, the FBI states he “administered unnecessary chemotherapy to patients in remission.” As shocking as it sounds, not only was Fata fraudulently billing Medicare for his own benefit, but he was abusing the trust and confidence of his cancer patients.

The FBI said that Fata deliberately misdiagnosed patients with cancer so he could bill them for chemotherapy and that he told cancer-free patients who had entered remission that they were still in need of chemotherapy medications. While it is unclear whether Fata’s actions resulted in any severe medical issues or deaths at this point, the FBI is not ruling out the possibilities.

With over $14 million in liquid assets and a house in Lebanon, the FBI considers Fata a flight risk and are holding him until his hearing date arrives. For his current charges he faces up to 20 years behind bars if he is convicted.

If you or someone you know is the target of a fraud investigation, or if you have already been indicted, contact the experienced team of fraud attorneys at Fausone Bohn, LLP, at (248) 380-0000 or online at www.MichiganFraudLawyer.com. 

To learn more or see the original article, please visit: http://www.wxyz.com/dpp/news/region/oakland_county/doctor-arrested-offices-raided-by-fbi-in-connection-to-healthcare-fraud-charges

 

Detroit Area Man Pleads Guilty to Health Care Fraud

Mark Mandell, Esq.

According to the U.S. Justice Department, a Detroit-area Physical Therapist Assistant, Syed Shah, has pleaded guilty to participating in a $22 million home health care fraud.

Prosecutors say that the 51 year old West Bloomfield man acknowledged that he conspired to bill Medicare for home health services that weren’t performed or were not medically necessary.  These actions occurred between 2008 and 2012.

Mr. Shah will be sentenced on November 19th and he faces a maximum penalty of 10 years in prison. 

Long prison sentences such as this are further evidence of the Federal government’s crackdown on health care fraud.  The Federal government is ramping up its investigation and prosecution efforts in an effort to combat the billions of dollars lost annually to Medicare and Medicaid fraud.

If you or someone you know is the target of a fraud investigation, or if you have already been indicted, contact the experienced team of fraud attorneys at Fausone Bohn, LLP, at (248) 380-0000 or online at www.MichiganFraudLawyer.com.