The Justice Department on Thursday announced charges against 15 defendants, including six medical professionals, in a Los Angeles-area health care fraud takedown that prosecutors say collectively resulted in over $1.8 billion in fraudulent claims to government and private health care programs — yaani, roughly $180 crore in claims. Eight defendants were arrested on Thursday, the department said.
Source: US Department of Justice, Office of Public Affairs
The largest case, according to prosecutors, involved more than $1.6 billion billed in a scheme to lure vulnerable individuals to California for sham substance abuse treatment — the largest sober home fraud case of its type ever prosecuted by the department. Prosecutors allege the scheme used "body brokers," or marketers, to recruit people to Southern California and other places for treatment that was fraudulent or a sham, through dozens of purported treatment companies. The department identified Nathan Young, David Young, Honey Phipps and Cody Phipps as defendants in that case, and said Nicholas Moore, described as an area manager, has pleaded guilty and admitted helping submit $199 million in fraudulent claims.
Source: US Department of Justice
Sham treatment: over $1.6 billion billed for substance-abuse treatment prosecutors call a sham — described as the largest sober-home fraud case the department has ever prosecuted. Artery procedures: $134 million fraudulently billed to Medicare for unnecessary atherectomy procedures that prosecutors say resulted in injury to patients. Hospice: over $138 million billed to Medicare in three hospice fraud schemes where patients were allegedly not terminally ill. Pharmacy: a separate indictment in a $270 million scheme to defraud Medi-Cal, California's Medicaid program, through pharmacy claims for bogus prescriptions.
"These charges include the largest sober home fraud scheme the Department has ever prosecuted, and a scheme involving unnecessary invasive procedures detected through data analytics," said Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division. "Our message is simple: if you steal health care dollars from the American taxpayer or abuse your position to harm patients, we are coming for you – and the data will lead us to wherever you are."
Source: US Department of Justice, Office of Public Affairs
Of the eight defendants arrested Thursday, five were expected to make initial appearances in US District Court in downtown Los Angeles, two in the Northern District of Texas and one in the Northern District of Illinois, according to the US Attorney's Office for the Central District of California. The cases were brought through a mix of indictments, criminal complaints and informations.
Source: US Attorney's Office, Central District of California
What is solid
- The Justice Department announced the charges and the arrest of eight defendants on Thursday, October 22.
- Prosecutors put the combined alleged false claims at more than $1.8 billion across the treatment, artery-procedure, hospice and pharmacy cases.
- One man described by prosecutors as an area manager in the treatment case, Nicholas Moore, has pleaded guilty and admitted helping submit $199 million in fraudulent claims, according to the department.
What is only claimed
- Whether the billed treatment and procedures were knowingly fraudulent, and how much insurers actually paid out, must still be proved in court.
- All other defendants are presumed innocent unless and until proven guilty; the charges are allegations, not findings.
For readers in California's Punjabi diaspora — many of whom work in health care, pharmacies, transport and small business — the case is a reminder of how aggressively federal authorities are now using billing data to build fraud cases. Prosecutors said the artery-procedure scheme was detected through data analytics, and the takedown follows a much broader June action in which the department announced charges against 455 people in cases involving more than $6.5 billion in alleged false claims.
Source: US Department of Justice