Recently in Healthcare Fraud Category

Owner of Health Care Clinic Pleads Guilty to $71 Million Medicare Fraud Scam

November 27, 2013, by The McKellar Law Firm, PLLC

After two years on the run from authorities, health care clinic owner Irina Shelikhova has been apprehended and subsequently sentenced for her role in an elaborate Medicare fraud scheme.


Shelikhova was the owner of a Brooklyn, New York medical clinic. The clinic was billing Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC, and SZS Medical Care PLLC. All of these entities were known collectively as Bay Medical Clinic. As owner of these clinics, Shelikhova masterminded a scheme from 2005 to 2010 to pay kickbacks to her "patients" in order to bill Medicare approximately $77 million in medical services that were either never provided or unnecessary. According to testimony, the owner went so far as to hire a medically unlicensed person to act as a doctor to provide medical care to her patients. She also directed her staff to make fake notations in patients' medical files and charts to assist with the bogus billing.

In order to facilitate the large amount of cash needed to pay her patients kickbacks, Shelikhova employed a gaggle of money launderers. She would write checks drawn on the medical clinic to several shell companies that were controlled by her network of money launderers. In turn, the launderers would cash the checks and give the cash back to the clinic. Patients were paid $50 or more to allow the clinic to bill Medicare for bogus medical services. From April to June 2010, approximately $500,000 was paid in kickbacks by Shelikhova to patients.

Shelikhova was originally indicted in July 2010. However, she fled the country and hid out in the Ukraine for two years. Upon her return to the U.S., Shelikhova was apprehended at the JFK airport in New York.

Shelikhova plead guilty to one count of conspiracy to commit money laundering. She has been sentenced to serve fifteen years in prison; three years of supervised release with a concurrent exclusion from Medicare, Medicaid, and all other Federal healthcare programs; ordered to forfeit $36,241,545; and ordered to pay $50,943,386 in restitution. Thirteen other co-conspirators have also been convicted in this case; one of those being Shelikhova's son.


Medical Director & Six Therapists Indicted for Alleged $63 Million Health Care Fraud

July 22, 2013, by The McKellar Law Firm, PLLC

Health care fraud attorneys will rarely see larger health fraud cases than the case involving Health Care Solutions Network (HCSN), which resulted in the arrest of 7 people last week in Miami, Florida. HCSN's medical director, Roger Rousseau, and six therapists were arrested for allegedly defrauding Medicare and Florida Medicaid out of more than $63 million.

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According to the indictment, from roughly 2004 through 2011, director Rousseau and therapists Doris Crabtree, Angela Salafia, Liliana Marks, Ruben Busquets, Alina Fonts, and Blanca Ruiz all allegedly took part in committing various health care fraud schemes that included providing health services that were either unnecessary or not given, altering and fabricating medical records, and constructing false and fraudulent claims for services that, again, either unnecessary or not given.

Although the case against these HCSN employees is still currently under investigation, 18 USC § 1347 outlines the possible consequences if they are convicted of having committing health care fraud. Punishments include severe fines and imprisonment of up to 10 years, or both. In the event that serious bodily injury or death resulted as a consequence of the fraud, prison terms increase to 20 years or life, respectively.

The so-called "ringleader" of the HCSN health care fraud scheme, Armando Gonzalez, has already entered a guilty plea for conspiracy to commit health care fraud and money laundering. In February of 2013, he was sentenced to 24 years in federal prison and ordered to pay restitution of in excess of $28 million.

According to the FBI's "White Collar Crime" website, health care fraud is estimated to cost our country $80 billion annually with that figure rising every year. Because the loss is so high and the effects far-reaching, the federal government will continue to prosecute those persons suspected of defrauding either/both federal and private insurance programs.

Tennessee Doctor Sentenced to 2 Years in Prison for Providing Unapproved Foreign Medication

June 12, 2013, by The McKellar Law Firm, PLLC

While most health care fraud cases deal with drug diversion, improper billing, and fraudulent insurance claims, there are other potential pitfalls for medical providers which are less common. One such pitfall is violating the Food, Drug, and Cosmetics Act (21 U.S.C. § 301, et al.).


According to a press release from the U.S. Attorney's Office, Johnson City, Tennessee physician William Kincaid, was sentenced to 2 years in federal prison earlier this week for violating the Food, Drug, and Cosmetic Act. Kincaid was a doctor with East Tennessee Hematology-Oncology Associates, P.C., d/b/a McLeod Cancer and Blood Center.

Kincaid entered into a plea agreement, wherein he admitted that he had been obtaining unapproved drugs from a Canadian business, Quality Specialty Products, beginning in 2007. Such unapproved drugs are often referred to as "misbranded" drugs. These misbranded drugs included chemotherapy medications and were administered at Kincaid's medical clinic.

Greeneville Federal Court Judge J. Ronnie Greer sentenced Kindcaid, and the Judge declared that Kincaid's actions were "about greed" and the "motivation was to make more money." Judge Greer also pointed out that, although it was impossible to know which patients had received the unapproved drugs, the "emotional harm" to patients from not knowing whether they had received unapproved drugs contributed to the seriousness of the offense.

Kincaid's attorney informed the Court that his client had entered into an agreement with the United States and the State of Tennessee to pay $2.55 million in settlement of civil claims under the False Claims Act for false and fraudulent claims submitted to Medicare and TennCare.

Tennessee Hospital Pays $883k to Settle False Claims Act Violations

January 18, 2013, by The McKellar Law Firm, PLLC

The Nashville Business Journal reports that Tennessee-based Wayne Medical Center has entered into an agreement with the Federal Government to settle False Claims Act allegations, which were actually self-reported by Wayne Medical Center. Wayne Medical Center has agreed to pay $883,451 as part of the settlement. The improper claims relate to ambulance services of the hospital, and include providing medically unnecessary services, improperly documented services, and lack of the requisite signatures.


As I have written about previously, the False Claims Act [FCA] (31 U.S.C § 3729 et seq.) penalizes those who defraud the government. For example, the FCA imposes civil penalties for making false claims for payments to the government, using false records to support a false claim, or receiving compensation from the government but delivering less than the proper amount to the intended recipient.

The penalties under the FCA are severe, and a civil penalty up to $11,000 may be assessed for each false claim. The government may also seek treble damages for each violation. The Justice Department has increasingly used the FCA to recover large sums of money. In Nashville, which is part of the Middle District of Tennessee, the the Middle Tennessee office for the U.S. Attorney secured more than $100 million in recoveries or settlements from health care fraud actions in 2011.

As an added punishment, violators of the FCA may be excluded altogether from federal health care programs such as Medicare and Medicaid. (42 U.S.C. § 1320a-7(b)).

Tennessee Nurse Sentenced to 3 Years Probation for Drug Diversion

November 13, 2012, by The McKellar Law Firm, PLLC

One of the fastest growing areas of prosecution is what is commonly referred to as drug diversion. If a medical care provider either issues medication outside of accepted medical standards or if the provider diverts the medication away from the proper recipient, the provider may be charged with violating federal drug laws pursuant to 21 U.S.C. § 841, and the penalties can be severe, including the possibility of life imprisonment.


Jonesborough, Tennessee resident Sharon Minns Kyker, who previously worked as a registered nurse at the James H. Quillen Department of Veterans Affairs Medical Center, pled guilty earlier this year to obtaining controlled substances by fraud, deception, and subterfuge by means of falsely documenting having provided a dose to a patient. According to a press release from the United States Attorney's Office for the Eastern District of Tennessee, Kyker admitted to diverting a quantity of hydromorphone (aka Dilaudid) by falsely claiming that he had provided the medication to a patient.

Earlier this month, Kyker was fortunate to receive a sentence of three years of probation, during which time she must participate in mental health and substance abuse treatment, may not possess occupations with access to patient medications, and must complete 50 hours of community service.

Tennessee Physical Therapy Assistant Pleads Guilty to Health Care Fraud

September 19, 2012, by The McKellar Law Firm, PLLC

According to 18 USC § 1347, anyone convicted of defrauding, or attempting to defraud, a health care benefit program faces fines and possible incarceration, which could even result in a life sentence if death resulted from the deception. Former physical therapist assistant Patricia J. Boshears of Knoxville, Tennessee recently pled guilty to violating this statute, according to a press release from the U.S. District Attorney's Office.


The press release states that Boshears formerly owned, managed, and worked as a physical therapy assistant at Total Rehab, Inc. in Knoxville, Tennessee. After an investigation by the Office of Inspector General, Health and Human Services Division, Boshears acknowledged deliberately filing false claims in an attempt defraud Medicare for patient services that did not qualify for reimbursement. In order for claims to qualify for Medicare reimbursement, all patient services must be provided by either a licensed physical therapist or under the direct supervision of a licensed physical therapist. However, from June 2009 to October 2010, Boshears and other Total Rehab, Inc. employees operated unlicensed and without supervision resulting in Medicare incurring losses of $68,096.27.

Boshears now faces a possible 10-year prison sentence as well as financial liability for restitution, forfeiture, and other fines. Her sentencing hearing is scheduled for December 17, 2012 before the Honorable Thomas W. Phillips.

Norman McKellar Awarded Top Attorney Badge and Clients' Choice Badge by Avvo

The McKellar Law Firm, PLLC, is pleased to announce that Norman D. McKellar has received the Top Attorney Badge and Clients' Choice Badge, both of which are listed below.

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Texas Doctor and Staff Charged in Alleged $375 Million Medicare Scheme

April 3, 2012, by The McKellar Law Firm, PLLC

The Federal Government is continuing its crackdown on Medicare fraud. According to a recent article in the Insurance Journal, a physician, his office manager, and five owners of home health agencies were arrested after allegedly committing health care fraud totaling nearly 375 million dollars in Dallas, Texas.


These charges come after investigations conducted by the Medicare Fraud Strike Force, a division of the Health Care Fraud Prevention and Enforcement Action Team (HEAT). According to the investigation, Dr. Jacques Roy owned and operated a practice that certified or directed the certification of more than 11,000 individual patients from more than 500 home health agencies (HHA). During its five-year stint, Dr. Roy's practice certified more Medicare beneficiaries for home health services and had more patients than any other medical practice in the United States. According to the indictment, the fraudulent activity caused more than $350 million dollars to be erroneously billed to Medicare and more than 24 million dollars to be fraudulently billed to Medicaid by Dr. Roy and the HHAs associated with his practice.

Dr. Roy and the HHAs with whom he allegedly conspired with were caught due to suspicious billing spikes tracked by the Health and Human Services (HHS). While a vast majority of physicians who certified patients for home health only signed off on 104 or fewer patients in the year 2010, Dr. Roy certified more than 5,000 patients in that year alone.

The federal government has recently been cracking down health care fraud due to its belief that such fraud not only increases costs for consumers, taxpayers, and health insurance plans; it also victimizes the elderly and disadvantaged. Since 2007, the Medicare Fraud Strike Force has charged more than 1,190 defendants who have collectively charged the Medicare program more than 3.6 billion dollars. So to send a clear message to other potential physicians thinking about committing healthcare fraud, Dr. Roy and his fellow conspirators each face up to ten years in prison and a $250,000 fine for each count of conspiracy as well as a maximum penalty of five years in prison and a $25,000 fine for each false statement charged against them. Seventy-eight additional HHAs associated with Dr. Roy have also been suspended by the Centers for Medicare & Medicaid Services (CMS) based on allegations of fraud against them.

Proposed Bill Would Expand Use of Tennessee Prescription Drug Database

January 11, 2012, by The McKellar Law Firm, PLLC

Most can agree that the abuse of prescription narcotics (oxycodone, oxycontin, etc.) is an epidemic in America. According to police, this type of drug abuse has now surpassed the use of methamphetamine and crack cocaine. Lawmakers in Tennessee hope to be at the forefront of combating the problem by proposing new legislation that would require prescribers and pharmacists to check the prescription drug database for potential abuse.


In an article by Matt Lakin (and posted on titled "Checks and balances: Doctors, law enforcement spar over prescription-drug database," Tennessee Senator Ken Yager's bill addressing the prescription drug database is outlined. Senator Yager proposes that the current database be used more "effectively" by requiring pharmacists to check the database for all patients, even long established ones, before writing or filling any narcotic prescriptions. He hopes this will help deter patients from doctor-shopping for the drugs.
Tennessee's current database is only accessible by pharmacists and doctors. However, doctors and pharmacists are only required to log the prescriptions in the database. Currently, there is no law requiring the database to be checked prior to writing or filling a prescription.

According to the article the most recent statistics state that "13.7 million prescriptions" were logged last year, but only "1.2 million checks" were made of patient profiles in Tennessee.

Critics of Yager's bill are concerned about the time it will take doctors and pharmacist to check the database and the effects the bill may have on the doctor-patient relationship. Prosecutors' answer to these concerns are to allow broader access by others such as doctor's support staff, pharmacy technicians, probation and parole officers, drug court judges, etc. This broadening of access raises privacy and abuse concerns with the Tennessee Medical Association.

Yager states that it is likely that more than one bill will be introduced regarding the prescription database issue next year. His bill will only support checks made by pharmacist and doctors. He understands that a bigger burden will be placed on doctors and pharmacists, but explains something must be done to hinder those trying to obtain multiple prescriptions. Yager expects to present his bill in January, 2012.

Federal Government Increases Money Recovered from Medicaid Scams

November 4, 2011, by The McKellar Law Firm, PLLC

Medicaid fraud defense attorneys will be among the first to tell you that federal prosecutors are becoming more active in pursuing alleged healthcare fraud, particularly as it relates to Medicaid Fraud. As it turns out, the Government is reaping the financial benefits of their efforts.


According to an article in USA Today, the Federal Government made over $1.85 billion in Medicaid fraud prosecutions in 2010. This is triple the amount gained in 2004, where the Federal Government made only $573 million.

Medicaid is a state program that uses federal funds to assist children, pregnant woman, disabled, and elderly patients who need medical care but fall below the poverty line. However, a growing number of medical providers have found ways to bill their respective state programs for services that were either underperformed or not performed at all. To help combat this fraudulent behavior, the Obama Administration created certain programs and regulations while passing the new health care law.

For example, all medical professionals who provide health care for Medicaid patients are now required to keep electronic records. This requirement enables law enforcement to more successfully catch possible fraudulent activity. Also, private Medicaid contractors who audit health care clinics are now required to report any potential fraudulent activity to enforcement agencies. The Federal government has also sent more resources to high-fraud states like Florida and Texas to help with investigations and better catch fraudulent behavior.

Florida Man Sentenced to 50 Years in Federal Prison for Medicare Fraud

October 3, 2011, by The McKellar Law Firm, PLLC

The Miami Herald reports that a Florida man is now facing over 50 years in Federal prison for Medicare fraud while running a chain of mental-health clinics in Florida. This sentence is the longest single sentence handed down for a Medicare fraud conviction.

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Over an eight-year span, Duran collected $87 million in Medicare payments and $205 million in bills that he generated by paying kickbacks to physicians who would refer patients to his clinic, American Therapeutic. He then began to be investigated after a former nurse filed a civil whistle-blower case in 2007 with the Justice Department. The Justice Department contacted American Therapeutic's lawyer about the investigation, yet Duran did not stop committing fraud until he was finally arrested.

While showing remorse for his actions during the sentencing proceedings, Duran admitted that he tried to steal as much money as he could from Medicare. Also, while Duran claimed that he lived a "middle-class life" while committing fraud, he drove a Maserati, sent his three children to private school, and paid for his ex-wife's home in North Miami while traveling out of the country with his girlfriend.

The judge gave an extremely high sentence to send a message that there is a "critical need for deterrence against healthcare fraud" in Florida. As of now, Florida is the nation's capital of Medicare corruption. Both Duran and his girlfriend, who co-owned American Therapeutics with Duran, pled guilty to conspiracy, fraud, and money-laundering. Thirty-four other people, including American Therapeutic employees, doctors, therapists, nurses, and recruiters have also been charged. Prior to Duran's sentencing, the highest Medicare fraud sentence was thirty years back in 2008.

Georgia Doctor's Health Care Fraud Conviction Reversed on Appeal

August 10, 2011, by The McKellar Law Firm, PLLC

In United States v. Ly, No. 09-12515, 2011 WL 2848477, at *1 (11th Cir. July 20, 2011), the United States Court of Appeals for the 11th Circuit reversed a pro se defendant's conviction when it was apparent that the defendant misunderstood his right to give a narrative testimony without having to be cross-examined by the prosecution.


Defendant Hung Thien Ly was a medical practitioner who was indicted on 129 counts of writing prescriptions for certain medications "outside the usual course of professional practice and without legitimate medical purpose" under 21 U.S.C. § 841(a)(1) an 21 C.F.R. § 1306.04. Ly claimed that he was indigent and therefore requested court-appointed counsel. The Government opposed the motion, arguing that Ly moved all his assets into his wife's name and was therefore not indigent. The magistrate judge accordingly denied Ly's request. Ly subsequently pled not guilty and, after the magistrate warned Ly of the dangers that came with representing himself at trial, decided that he would still defend his charges pro se.

Ly had no prior legal training or experience in a courtroom. After the prosecution presented their arguments, the court explained that Ly could testify as to what kind of practice he had and how he handled his patients. Ly was unaware that he could testify in narrative form and therefore did not need to be questioned by opposing counsel. After Ly revealed his confusion to the court, the judge did nothing to correct Ly's misunderstanding. Ly therefore chose not to testify on his own behalf and was subsequently found guilty on all 129 counts of health care fraud. Ly then appealed his case, arguing that the district court denied him his right to testify by failing to correct his misunderstanding regarding the availability of narrative testimony.

On appeal, the Government argued that a district court has no duty to act as a pro se defendant's lawyer and therefore had no duty to correct Ly's misunderstanding. The 11th Circuit held, however, that a court has an obligation to protect pro se defendants from inadvertent forfeiture of the right to testify if the court has already engaged in a conversation with the defendant regarding that right. Since Ly had no legal training or courtroom experience, it was reasonable for Ly to believe that direct testimony only allows for a question-and-answer dialogue between an attorney and a witness. Once it was apparent that Ly misunderstood this right, the district court should have corrected Ly. The 11th Circuit also stressed that their holding only applies in situations like Ly's where a court has already discussed with the defendant their right to testify and it is apparent that this right is misunderstood by the defendant.

Atlanta Chiropractor Sentenced to 57 Months Imprisonment and $6.5 Million in Restitution for Health Care Fraud

July 11, 2011, by The McKellar Law Firm, PLLC

An Atlanta, Gerogia chiropractor was sentenced to nearly five years in prison for conspiracy to commit health care fraud, according to a press release from the United States Attorneys' Office. Andrew Sokol pleaded guilty to charges that he fraudulently billed several private insurance companies for millions of dollars in physical therapy services that he never actually provided his patients. In addition to his prison sentence, Sokol was also ordered to pay restitution of over $6.5 million.


According to the Government's press release, Sokol defrauded insurance companies by offering services like chiropractic care, personal training, and massages to the patients at his "WellnessOne" clinics in the Atlanta area. He would then bill insurance companies for the services, claiming he provided patients with physical therapy. Sokol specifically targeted employees at companies that offered Blue Cross Blue Shield policies because their plans provided generous physical therapy benefits. Sokol would offer promotional incentives to these employees such as massage gift cards, restaurant and gas cards, gift bags, and free lunches to entice them to use the clinic's services. He also waived deductibles and co-payments, so his patients were actually compensated for the services they received. Sokol did employ doctors and physical therapists, but they saw very few WellnessOne patients. These professionals were merely on the payroll so that Sokol could bill the insurance companies for their higher rates, while massage therapists were actually providing the massages. The scheme allowed Sokol to pocket millions of dollars by billing personal training sessions and massages as physical therapy.

Sokol's case is another example of the Government's crackdown on health care fraud as a means to help control skyrocketing health care costs. According to the FBI, fraudulent billing to private insurance companies and public health care programs such as Medicare and Medicaid account for an estimated 3 to 10 percent of total health care expenditures in the U.S., a potential cost of over $200 billion annually. Because of these enormous costs, federal law enforcement agencies are increasing their efforts to detect these schemes. In 2010, the government recovered $4 billion from health care fraud enforcement and prevention efforts relating to public programs alone. There are huge sums of money at stake for both public health programs and private insurers, so cases like Andrew Sokol's are likely to be prosecuted vigorously well into the future.

Atlanta Pain Clinic Operators Arrested for Illegal Distribution of Prescription Medication and Wire Fraud

According to a press release from the U.S. Attorney's Office for the Northern District of Georgia, federal law enforcement officers arrested five people last week connected to an alleged "pill mill" in the Atlanta, Georgia area. The five defendants are the owners, manager, and doctor at the Atlanta Medical Group, a pain clinic that prosecutors allege was illegally distributing Oxycodone. According to the indictment, Jason Cole Votrobek, Jesse Violante, and Roland Rafael Castellanos provided the financing and were responsible for operating the clinic; Tara Atkins worked as the office manager; and Dr. James Chapman was the primary physician on staff.


The investigation suggests that Dr. Chapman was seeing as many patients as possible in order to maximize profits since most of the Oxycodone was dispensed on site. The indictment further alleges that patients were not given proper medical examinations prior to receiving their prescriptions and that non-medical staff helped with medical procedures so that the clinic could see even more patients. The defendants may have pocketed millions of dollars in just one year. The five defendants are now facing drug and money laundering charges in federal court.

These arrests illustrate how law enforcement and prosecutors are increasing their focus on stopping the illegal distribution of prescription drugs. As John S. Comer of the DEA stated in discussing the investigation, "those involved in 'pill mill' activity are in fact drug dealers." Law enforcement is also focusing on illegal prescription drugs because of the consequences of abuse of pain medications. Overdose deaths caused by prescription pain killers have increased four-fold from 1999 and now account for more overdose deaths in the U.S. than heroin and cocaine combined.

Investigations into these "pill mills" frequently involve many different law enforcement organizations. For example, in the Atlanta Medical Group case, the FBI, the Georgia Bureau of Investigation, Drug Enforcement Administration, Bartow County Sheriff's Office, and the IRS all participated in the investigation.

The penalties these defendants are facing are severe, and this case illustrates that not only are the doctors and clinic owners exposed to potential criminal action, but the staff can be exposed to criminal action as well. Federal law provides a maximum sentence of 20 years in prison for illegal distribution of a controlled substance such as Oxycodone, and even more time could be warranted if the medicine distributed results in someone's death. Additionally, the charges for money laundering also carry fines and a maximum penalty of 20 years imprisonment. As the government continues to crack down on suspected pill mills, many more people could be facing these serious charges.

Florida Sleep Clinics Charged with Violating the False Claims Act

June 16, 2011, by The McKellar Law Firm, PLLC

Earlier this week, a federal criminal Complaint was filed against a Florida sleep clinic and its owner. According to an article in Forbes online magazine, Bay Area Sleep Associates LLC, a Florida-based group, and its owner are facing charges related to violation of the False Claims Act ("FCA") for knowingly making false claims for reimbursement from Medicare and other federal programs. Medicare regulations require that diagnostic testing services, like those available from Bay Area Sleep Associates, be performed by licensed or certified technicians for reimbursement to be available.


The Complaint specifically alleges that unlicensed sleep technicians were performing sleep tests on patients, that the defendants knew that this unlicensed work violated the reimbursement regulations, yet submitted claims for reimbursement anyway.

The FCA (31 U.S.C § 3729 et seq.) penalizes companies, contractors, and individuals who defraud the government. The FCA provides civil penalties for those who (among other things) make false claims for payments to the government, those who make or use false records relating to a false claim, or receive money or property from the government and deliver less than the full amount to its intended recipient.

The penalties under the FCA can be severe. A civil penalty up to $11,000 may be assessed for each false claim. Treble damages are available to the government as well. The Justice Department has used the FCA to recover an estimated $7.4 billion since January 2009 with approximately $5.8 million of that from cases involving health care fraud. Additionally, a judgment or settlement under the FCA can cause a business or individual to be excluded altogether from federal health care programs such as Medicare and Medicaid. (42 U.S.C. § 1320a-7(b)).

The FCA also provides a tremendous incentive to potential whistleblowers. It permits a whistleblower, referred to as a "Relator," to bring a civil action under the FCA on behalf of the United States. The Relator can receive between 15 and 30 percent of the amount recovered, plus attorney fees and expenses. This case involving Bay Area Sleep Associates case was allegedly initiated by a whistleblower.