The U.S. Department of Justice announced on July 22, 2016 that the owner of more than 30 Miami-area skilled nursing and Assisted Living Facilities, a hospital administrator, and a physician’s assistant have been charged in federal court with conspiracy, obstruction, money laundering, and health care fraud in connection with an alleged $1 billion scheme involving numerous Miami-based health care providers.
In announcing the charges, the Special Agent in Charge stated, “[The owner/defendant] is alleged to have been at the top of a complex and profitable health care fraud scheme that resulted in staggering losses – in excess of $1 billion.”
According to the federal indictment, the owner operated a network of over 30 skilled nursing facilities and Assisted Living facilities that gave him access to thousands of Medicare and Medicaid beneficiaries, many of whom did not qualify for skilled nursing home care or for placement in an assisted living facility. Nonetheless, the three defendants admitted them to their nursing homes or assisted living living facilities where the beneficiaries received medically unnecessary services that were billed to Medicare and Medicaid.
The indictment also alleges that the defendants further enriched themselves by receiving kickbacks in order to steer the beneficiaries to other health care providers, including community mental health centers and home health care providers, who also performed medically unnecessary treatments that were billed to Medicare and Medicaid. In order to conceal the kickbacks from law enforcement, the kickbacks were often paid in cash or were disguised as charitable donations, payments for services, and sham lease payments, according to the federal charges.
Two of the three defendants are also charged with obstructing justice (following the arrest of two co-conspirators in 2014, the owner/defendant allegedly attempted to fund a co-conspirator’s flight from the United States in order to avoid trial in Miami; another of the three defendants allegedly created sham medical director contracts following receipt of a grand jury subpoena in June 20, 2016, in order to conceal and disguise the payment of kickbacks she made in exchange for patient referrals for admission to nursing homes and assisted living facilities owned by the owner/defendant and to a Miami-area hospital).
According to the July 22, 2016 announcement of the charges, the owner/defendant paid $15.4 million in 2006 to resolve civil federal health care fraud claims for unnecessarily admitting patients from his assisted living facilities into a Miami-area hospital. Nonetheless, the owner/defendant and his co-conspirators allegedly continued their criminal activity, adapting their scheme to prevent detection and continue their fraud after the civil settlement. The recently filed indictment alleges that the co-conspirators employed sophisticated money laundering techniques in order to hide the scheme and the owner/defendant’s identify from federal investigators.
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