More Than 20 People Arrested in Widespread Medicaid Fraud Scheme in Washington, D.C.

Thursday, February 20, 2014
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Press release from the U.S. Attorney's Office, District of Columbia, here

WASHINGTON - More than 20 people, including operators of home care agencies and nurse staffing agencies, office workers, and personal care assistants, were arrested today following investigations into fraudulent billing practices in the home health care industry.

The arrests -- marking the largest health care fraud takedown in the history of the District of Columbia -- followed a multi-year effort by federal and local law enforcement agencies to target widespread fraud in the District of Columbia Medicaid program. More than 200 law enforcement agents fanned out across the region early today to make arrests, execute search warrants at 10 locations, and seize dozens of bank accounts and property.

The charges were announced by U.S. Attorney Ronald C. Machen Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C.; Kathy A. Michalko, Special Agent in Charge, Washington Field Office, U.S. Secret Service; Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Charles J. Willoughby, Inspector General for the District of Columbia.

The investigation uncovered numerous, separate schemes involving fraud, kickbacks, and false billings in the growing field of home care services for D.C. Medicaid patients. Medicaid provides for such services to be performed by personal care aides, working for home care agencies. The aides assist Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, keeping track of medication, and so forth. In order to be covered for such benefits, the beneficiaries must get a doctor’s prescription.

In one alleged scheme, the owner of three home care agencies, who was barred from participating in federal health care programs after her nursing license was revoked, is accused of collecting more than $75 million through the District of Columbia and Maryland Medicaid programs. In other alleged schemes, individuals are accused of recruiting and teaming up with Medicaid beneficiaries, who faked or exaggerated symptoms so they could sign up for home health care and then received cash payments of approximately $200 every two weeks to sign timesheets falsely stating that they received home care services when they did not. Bills were submitted on behalf of these individuals for services that never were provided, costing D.C. Medicaid hundreds of thousands of dollars. Finally, one scheme involves a woman accused of selling counterfeit home health care aide certificates.

“This investigation has revealed that Medicaid fraud in the District of Columbia is at epidemic levels,” said U.S. Attorney Machen.  “This fraud diverts precious taxpayer dollars, drives up the cost of health care, and jeopardizes the strength of a program that serves the most vulnerable members of our society.  However, as today’s arrests, searches, and seizures demonstrate, we are aggressively fighting back to protect the U.S. taxpayer and the integrity of our federal health care programs.”

“Medicaid fraud rings are criminal enterprises that threaten our health care system and our public safety, and they will not be tolerated,” said Assistant Director in Charge Parlave. “Today’s arrests are part of a well-coordinated action with our law enforcement partners that puts criminals on notice that we are actively working to identify, arrest and prosecute anyone who participates in defrauding government programs designed to assist truly deserving patients.”

“Criminal organizations that steal from the District of Columbia Medicaid program are robbing the bank of health care money and cheating honest citizens of resources needed for their care,” said Special Agent in Charge DiGiulio. “We will work tenaciously with our law enforcement partners to fully investigate these disturbing allegations.”

“While it cannot be overly emphasized that this is an announcement of the charging of individuals for alleged criminal conduct with respect to the Medicaid program, the bringing of the charges demonstrates how the District of Columbia Office of the Inspector General continues to work with its law enforcement partners and District agencies to safeguard the District’s residents and treasury, collaborations that I continue to be proud of,” said Inspector General Willoughby.

The various investigations were conducted by the FBI’s Washington Field Office; the U.S. Department of Health and Human Services, Office of Inspector General; the U.S. Secret Service; the Medicaid Fraud Control Unit of the District of Columbia’s Office of the Inspector General; the Internal Revenue Service-Criminal Investigation; the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI); the Office of Labor Racketeering and Fraud Investigations, Office of Inspector General, Department of Labor; the Social Security Administration, Office of Inspector General, and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office. Assistance was provided by the District of Columbia’s Department of Health Care Finance and other agencies.

Twelve defendants were named in a total of five indictments that were unsealed today in the U.S. District Court for the District of Columbia. Each of the indictments includes a forfeiture allegation seeking a money judgment representing the proceeds of the alleged scheme.

An additional 13 defendants were charged in the Superior Court of the District of Columbia with first-degree fraud.

An indictment is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until, and unless, proven guilty.