Thursday, November 19, 2015
DOJ TAKES ACTION AGAINST DIETARY SUPPLEMENT MAKERS AND MARKETERS
FROM: U.S. JUSTICE DEPARTMENT SUPPLEMENT
Tuesday, November 17, 2015
Justice Department and Federal Partners Announce Enforcement Actions of Dietary Supplement Cases
Criminal Charges Brought against Bestselling Supplement Manufacturer
Among the cases announced today is a criminal case charging USPlabs LLC and several of its corporate officers. USPlabs was known for its widely popular workout and weight loss supplements, which it sold under names such as Jack3d and OxyElite Pro.
The sweep includes federal court cases in 18 states and was announced today by Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division; Deputy Commissioner for Global Regulatory Operations and Policy Howard Sklamberg J.D. of the Food and Drug Administration (FDA); Acting Deputy Director J. Reilly Dolan of the Federal Trade Commission (FTC)’s Bureau of Consumer Protection; Acting Deputy Chief Inspector Gary Barksdale of the U.S. Postal Inspection Service (USPIS); and Chief Richard Weber of the Internal Revenue Service’s (IRS) Criminal Investigation (CI) Division. The Department of Defense (DoD) and the U.S. Anti-Doping Agency (USADA) are also participating in the sweep to unveil new tools to increase awareness of the risks unlawful dietary supplements pose to consumers and, in particular, to assist service members targeted by illegitimate athletic performance supplements.
“The Justice Department and its federal partners have joined forces to bringing to justice companies and individuals who profit from products that threaten consumer health,” said Principal Deputy Assistant Attorney General Mizer. “The USPlabs case and others brought as part of this sweep illustrate alarming practices the department found—practices that must be brought to the public’s attention so consumers know the serious health risks of untested products.”
During the period of the sweep, 117 individuals and entities were pursued through criminal and civil enforcement actions. Of these, 89 were the subject of cases filed since November 2014.
Criminal Matters
An 11-count indictment was unsealed earlier today against USPlabs LLC, a Dallas firm, which formerly manufactured highly popular workout and weight loss supplements. The indictment charges USPlabs, S.K. Laboratories Inc., based in Anaheim, California, and their operators with a variety of charges related to the sale of those products. Jacobo Geissler, 39, of University Park, Texas, the CEO of USPlabs; Jonathan Doyle, 37, of Dallas, the president of USPlabs; Matthew Hebert, 37, of Dallas, responsible for product packaging design at USPlabs; Kenneth Miles, 69, of Panama City, Florida, the quality assurance executive in charge of compliance at USPlabs; S.K. Laboratories Inc.; Sitesh Patel, 32, of Irvine, California, the vice president of S.K. Laboratories; and Cyril Willson, 34, of Gretna, Nebraska, a consultant to USPlabs, are charged with various counts associated with the unlawful sale of dietary supplements. Additionally, USPlabs, Geissler, Doyle and Hebert are charged with obstruction of an FDA proceeding and conspiracy to commit money laundering.
Four of the defendants were arrested earlier today and the other two will self-surrender. Along with the arrests, FDA and IRS-CI special agents seized assets in dozens of investment accounts, real estate in Texas and a number of luxury and sports cars.
The indictment alleges that USPlabs engaged in a conspiracy to import ingredients from China using false certificates of analysis and false labeling and then lied about the source and nature of those ingredients after it put them in its products. According to the indictment, USPlabs told some of its retailers and wholesalers that it used natural plant extracts in products called Jack3d and OxyElite Pro, when in fact it was using a synthetic stimulant manufactured in a Chinese chemical factory.
The indictment also alleges that the defendants sold some of their products without determining whether they would be safe to use. In fact, as the indictment notes, the defendants knew of studies that linked the products to liver toxicity.
The indictment also alleges that in October 2013, USPlabs and its principals told the FDA that it would stop distribution of OxyElite Pro after the product had been implicated in an outbreak of liver injuries. The indictment alleges that, despite this promise, USPlabs engaged in a surreptitious, all-hands-on-deck effort to sell as much OxyElite Pro as it could as quickly as possible. It was sold at dietary supplement stores across the nation.
“This joint agency effort is a testament to our commitment to protecting consumers from potentially unsafe dietary supplements and products falsely marketed as dietary supplements,” said Deputy Commissioner Sklamberg. “The criminal charges against USPlabs should serve as notice to industry that if products are a threat to public health, the FDA will exercise its full authority under the law to bring justice.”
Today’s criminal charges are among 14 criminal cases prosecuted by the Civil Division’s Consumer Protection Branch and U.S. Attorney’s Offices across the country from November 2014 to November 2015. See this chart. Of the 14 criminal cases prosecuted during this timeframe, 11 cases against 29 individuals and entities have been filed since November 2014.
The charges and allegations in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Civil Cases
The Department of Justice also filed in the past week five civil cases seeking injunctive relief against a number of businesses and individuals that allegedly sold supplements as disease cures or that were otherwise in violation of the law. These matters, investigated by USPIS and the FDA, include the following:
United States v. Clifford Woods LLC, doing business as Vibrant Life, and Clifford Woods. A complaint, filed in the U.S. District Court for the Central District of California, alleges that the defendants unlawfully sold Taheebo Life Tea, Life Glow Plus, Germanium and Organic Sulfur (identified as methyl sulfonyl methane) as treatments for various diseases including Alzheimer’s disease and cancer. The complaint alleges that the defendants’ conduct defrauded consumers through the sale of unapproved new and misbranded drugs.
United States v. James R. Hill, doing business as Viruxo. A complaint, filed in the U.S. District Court for the Middle District of Florida, alleges that the defendants unlawfully sold a dietary supplement called Viruxo as a treatment for herpes. The complaint alleges that the defendants’ conduct defrauded consumers through the sale of unapproved new and misbranded drugs.
United States v. Lehan Enterprises, Inc., doing business as Optimum Health, and Lesa Sverid. A complaint, filed in the U.S. District Court for the District of Massachusetts, alleges that the defendants unlawfully sold products called DMSO Cream, DMSO Cream with Aloe and DMSO Roll On as treatments for conditions and diseases including arthritis and cancer. The complaint alleges that defendants sold unapproved new and misbranded drugs.
United States v. Bethel Nutritional Consulting, Felix Ramirez, and Kariny Ramirez. A complaint, filed in U.S. District Court for the District of New Jersey, alleges that the defendants distribute dietary supplements in a manner that does not conform to current good manufacturing practice for dietary supplements and that they are making claims about the uses for many of the products that render them unapproved and misbranded drugs. Furthermore, FDA testing has revealed that some of defendants’ products contain active pharmaceutical ingredients that are not listed on the products’ labels, including one ingredient that was withdrawn from the market in 2010 because of safety concerns. The defendants in this matter have agreed to be bound by a consent decree of permanent injunction banning them from selling dietary supplements until they come into compliance with the law.
United States v. VivaCeuticals, Inc., doing business as Regeneca Worldwide, and Matthew Nicosia. A complaint filed in U.S. District Court for the Central District of California alleges that dietary supplements sold by the defendants are adulterated because they are not manufactured in accordance with the FDA’s current good manufacturing practice regulations. One of the dietary supplements, a product called RegeneSlim Appetite Control (RegeneSlim), contains the ingredient 1, 3 dimethylamylamine (DMAA), an unsafe food additive under the federal Food, Drug and Cosmetic Act, but does not declare DMAA as an ingredient. In addition, the defendants market RegeneSlim to be used as a disease cure.
“Postal Inspectors have a long history of effectively enforcing the mail fraud statute to halt snake oil salesmen and medical quacks from using the mails to purvey their wares upon unsuspecting citizens,” said Acting Deputy Chief Postal Inspector Barksdale. “We look at these latest misrepresentations and frauds as ‘old wine in a new bottle.’ Working with our law enforcement and regulatory partners, we hope to protect American consumers by keeping these scams ‘bottled up’.”
Civil actions brought by the FTC as part of the sweep to combat unsubstantiated supplement claims include the following:
Sunrise Nutraceuticals, LLC. According to the FTC’s complaint, Sunrise, based in Boca Raton, Florida, deceptively claims that its dietary supplement Elimidrol, a “proprietary blend” of herbs and other compounds, alleviates opiate withdrawal symptoms and increases a user’s likelihood of overcoming opiate addiction. The FTC’s complaint alleges, however, that Sunrise’s ads for Elimidrol are deceptive because they are false or unsubstantiated.
Health Nutrition Products. The FTC’s complaint charged Crystal Ewing, five other individuals and five companies with making false and misleading health and efficacy claims in direct mail ads and on a website owned by Ewing. In ads for W8-B-Gone, CITRI-SLIM 4 and Quick & Easy diet pills, the defendants featured bogus weight-loss experts. Citing fake scientific studies, the defendants also deceptively claimed to have clinical proof that consumers would experience a “RAPID FAT meltdown diet program” that lets them shed five pounds in four days with one pill, or up to 20 pounds in 16 days with four pills. The proposed court orders announced today will settle the FTC’s charges against three defendants involved in the scheme. The order against repeat offender Ewing and her company Classic Productions LLC requires them to admit liability in the case, bans them from selling weight-loss programs, products and services, and imposes a non-suspended judgment of $2.7 million.
NPB Advertising, Inc. According to the FTC’s complaint filed in the U.S. District Court for the Middle District of Florida’s Tampa Division, Florida-based NPB and others capitalized on the green coffee bean diet fad by using false weight-loss claims and fake news websites to market a dietary supplement called Pure Green Coffee. The proposed court order announced today settles the FTC’s charges, bars the defendants from the deceptive acts and practices described in the complaint and imposes a $30 million judgment that will be suspended upon the sale of certain assets, payment of $160,800, and the collection and turnover of an additional $155,760 that was lent to a third party.
“People looking for a dietary supplement to improve their health have to wade through a swamp of misleading ads,” said Director Jessica Rich of the FTC’s Bureau of Consumer Protection. “Be skeptical of ads for supplements that claim to cure diseases, reverse the signs of aging or cause weight loss without diet or exercise.”
Today’s cases are among 25 civil actions pursued by the Civil Division’s Consumer Protection Branch, U.S. Attorney’s Offices and the FTC from November 2014 to November 2015. Of the 25 actions, 22 civil cases against 60 individuals and entities have been filed since November 2014. To date, courts have entered judicial orders in 11 cases, requiring dietary supplement makers to change their business practices to ensure that they are selling their products in compliance with the law.
Educational materials
As part of today’s sweep, the Uniformed Services University of the Health Sciences’ Consortium for Health and Military Performance partnered, through its Human Performance Resource Center (HPRC), with the USADA to develop educational resources for service members to protect them from risky dietary supplements. Through this partnership, the organizations will jointly launch an online interactive educational module called “Get the Scoop on Supplements: Realize, Recognize, and Reduce Your Risk.” Also launching today are two mobile applications: the HPRC’s Operation Supplement Safety (OPSS) High-Risk Supplement List mobile application for Service members and USADA’s Supplement 411 mobile application for athletes (both accessible via the Google Play and Apple App stores and available to the general public).
These educational products will augment the important information available on USADA’s Supplement411.org [external link] website and the OPSS website [external link], including the OPSS High-Risk Supplement List which was launched in February 2015. To access more information available to service members, consult the OPSS website and a recently released video at http://hprc-online.org/blog/decoding-the-dietary-supplement-industry [external link]. To access the educational resources USADA provides for athletes and general consumers to help realize, recognize and reduce the risks associated with using supplement products visit USADA’s website http://www.supplement411.org [external link].
“Ensuring readiness of the force is one of the Department of Defense’s top goals,” said Deputy Assistant Secretary of Defense for Health Affairs Dr. Dave Smith of DoD’s Military Health System. “Unsafe dietary supplements are a threat to readiness in DoD.”
“A combined effort like this is vitally important to protecting the health and safety of athletes at every level,” said USADA CEO Travis T. Tygart. “We work to educate athletes on the risks associated with choosing to use supplements, and we will continue to support further action at a national level to prevent dangerous substances and products from being allowed in the marketplace where they can easily be attained by unsuspecting athletes and other consumers.”
To promote today’s joint sweep, the FTC created an infographic to help consumers understand the range of dietary supplement products and claims, the potential risks of taking supplements and questions to ask a health professional before taking any supplements. The FTC also published blogs for consumers and businesses, and has articles and videos with more information at ftc.gov/dietary supplements.
The FDA continues to warn consumers about the risks associated with some over-the-counter products, falsely marketed as dietary supplements, which contain hidden active ingredients that could be harmful. In the last year, the agency has warned of more than 100 products found to contain hidden active ingredients. These products are most frequently marketed for sexual enhancement, weight loss and body building.
Within the last year, the FDA also sent warning letters to manufacturers selling dietary supplements that contain BMPEA and DMBA, two ingredients that do not meet the statutory definition of a dietary ingredient as well as to several companies selling pure powdered caffeine products that the agency determined to be dangerous and present a significant or unreasonable risk of illness or injury to consumers.
Friday, September 25, 2015
TAX PREPARER ORDERED TO STOP ASSISTING CLIENTS WHO UNDERSTATE TAX LIABILITY
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 23, 2015
Court Orders Florida Tax Return Preparation Company and Owner to Stop Assisting in Knowing Understatements of Tax Liability; Requires Monitoring at Company's Expense
A federal district judge in Miami has ordered a tax return preparation business based in Miami and its owner to stop assisting in the preparation of federal income tax returns that knowingly understate federal income tax liability, the Justice Department announced today.
The injunction also requires Miami-based Ebenezer Tax Services Inc. and its owner, Ernice Joseph, to exercise due diligence in preparing returns that claim the Earned Income Tax Credit and bars them from preparing any return that claims the Fuel Excise Tax Credit. In addition, the judge ordered Ebenezer and Joseph to gather documentation to substantiate the deductions and credits claimed on the returns they prepare and to retain the documentation for a period of five years. The defendants are also required to send a copy of the injunction to customers and others. Finally, the injunction requires that a neutral monitor be engaged at Ebenezer’s and Joseph’s expense to review and monitor their compliance with the injunction and provide a report of its findings to the United States.
If the court later finds that Ebenezer or Joseph have violated any of the terms of the injunction, they will be permanently barred from preparing federal tax returns for others. The court previously barred Primo Tax Services Inc., another company partly owned by Joseph, from preparing returns for others.
According to the complaint, Joseph and Ebenezer Tax Services have prepared federal income tax returns that unlawfully understate income tax liabilities and overstate refunds through a variety of schemes. The complaint alleged that Ebenezer Tax Services prepared returns that unlawfully claimed the Earned Income Tax Credit by reporting fictitious Schedule C businesses or business income. The complaint also alleged that Ebenezer and Joseph prepared returns that claimed credits to which the taxpayers were not entitled in order to overstate their clients’ refunds. According to the complaint, the Internal Revenue Service (IRS) estimates that the activities of Ebenezer Tax Services and Joseph may have led to millions of dollars in revenue losses.
In consenting to the injunction, Ebenezer and Joseph admitted that they had engaged in conduct subject to penalty under Section 6701 of the Internal Revenue Code. Section 6701 penalizes the knowing preparation of documents whose use would result in an understatement of tax liability.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax return preparer, and has launched a free directory of federal tax return preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax DivisionEmail links icon with details.
Thursday, September 17, 2015
KYB PLEADS GUILTY TO PRICE FIXING PRICE OF SHOCK ABSORBERS
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 16, 2015
KYB Agrees to Plead Guilty and Pay $62 Million Criminal Fine for Fixing Price of Shock Absorbers
Kayaba Industry Co. Ltd., dba KYB Corporation (KYB) has agreed to plead guilty and to pay a $62 million criminal fine for its role in a conspiracy to fix the price of shock absorbers installed in cars and motorcycles sold to U.S. consumers.
According to charges filed today, KYB conspired from the mid-1990s until 2012 to fix the prices of shock absorbers sold to Fuji Heavy Industries Ltd. (manufacturer of Subaru vehicles), Honda Motor Co. Ltd., Kawasaki Heavy Industries Ltd., Nissan Motor Company Ltd., Suzuki Motor Corporation and Toyota Motor Company, including their subsidiaries in the United States.
“KYB turned the competitive process on its head by agreeing with its competitors to fix the prices of shock absorbers installed in cars and motorcycles sold in the U.S.,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Working with the FBI and our other law enforcement partners, the Antitrust Division will continue to protect American car buyers and hold automotive part suppliers accountable for their illegal conduct.”
“Any collusive agreement among competitors to restrict price competition undercuts our free enterprise system and violates the law,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio. “We will continue to work to prosecute these fraudulent arrangements in order to protect consumers’ right to free and open competition, particularly in the auto parts industry.”
“Fixing prices and rigging bids is against the law and ultimately harms consumers by artificially inflating prices and creating a corrupt marketplace,” said Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division. “The FBI and our partners will continue to investigate anticompetitive practices and promote fair competition.”
According to the information filed in the U.S. District Court of the Southern District of Ohio, KYB, based in Tokyo, and its two co-conspirators agreed to allocate the supply of shock absorbers sold and determine the price submitted to the targeted vehicle manufacturers. To keep prices up, KYB and its co-conspirators also agreed to coordinate on price adjustments requested by the vehicle manufacturers and strived to keep their conduct secret.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. KYB has agreed to cooperate with the department’s ongoing investigation and the plea agreement is subject to court approval. Including KYB, 37 companies and 55 executives have been charged in the division’s ongoing investigation and have agreed to pay a total of more than $2.6 billion in criminal fines. KYB is being prosecuted by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office, with assistance from the U.S. Attorney’s Office of the Southern District of Ohio.
Wednesday, September 16, 2015
Friday, September 4, 2015
FRENCH PHARMA SUBSIDIARY COMPANY TO PAY $32 MILLION TO RESOLVE CHARGES OF VIOLATING FDCA
FROM: U.S. JUSTICE DEPARTMENT
Thursday, September 3, 2015
Genzyme Corporation to Pay $32.5 Million to Resolve Criminal Liability Relating to Seprafilm
Sanofi Subsidiary Admits Unlawful Conduct and Agrees to Enhance its Compliance Program
Genzyme Corporation, a wholly-owned biotechnology subsidiary of French pharmaceutical company Sanofi, agreed today to resolve criminal charges that it violated the federal Food, Drug and Cosmetic Act (FDCA) with regard to the unlawful distribution of Seprafilm, a surgical device it markets and promotes, the Justice Department announced.
As part of the agreed resolution, the department filed a two-count criminal information in the U.S. District Court for the Middle District of Florida charging that between 2005 and 2010, Genzyme caused a medical device to become adulterated and misbranded while being held for sale. The conduct occurred prior to Sanofi’s acquisition of Genzyme, based in Cambridge, Massachusetts, in 2011. To resolve these charges, Genzyme agreed to enter into a deferred prosecution agreement with the government for a term of at least two years. As part of the agreement, Genzyme agreed to admit to and accept responsibility for the facts underlying the charges and pay a monetary penalty of $32,587,439. It further agreed to undertake several groundbreaking measures to enhance its internal compliance program. The agreement also acknowledges the significant level of cooperation Genzyme provided to the government during its investigation as well as the company’s independent remediation efforts.
Along with the information, the government also filed a consent motion with the court, requesting that its case against Genzyme be stayed during the term of the agreement. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
Today’s agreement is in addition to a separate $22.28 million civil agreement the government reached with Genzyme in December 2013 to resolve allegations under the False Claims Act related to Seprafilm. After today’s agreement, Genzyme will have paid almost $55 million to resolve government allegations regarding Seprafilm. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
“Today’s action demonstrates that the Department of Justice will evaluate the facts of each case and choose the most appropriate tool of the several available to it to best address criminal misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The deferred prosecution agreement with Genzyme is yet another example of the department’s continuing efforts to ensure that pharmaceutical and medical device manufacturers adhere to laws and regulations that have been put in place to protect the health and safety of the American public.”
According to the papers filed in the district court today, Seprafilm is a clear piece of film that can be applied to internal tissues during pelvic and abdominal surgeries to reduce the formation of adhesions—bands of scar tissue that can form between traumatized tissues and organs after surgery, causing them to stick together. Seprafilm was approved by the U.S. Food and Drug Administration (FDA) for use in patients undergoing open abdominal or pelvic laparotomy, which is a traditional surgical technique that utilizes a relatively large incision to permit the surgeon to open and view the patient’s abdominopelvic contents. Over time, laparotomy became a less common surgical technique in favor of laparoscopic surgery, which is perceived to have several advantages for the patient.
To respond to the diminishing number of laparotomies performed, some Genzyme sales representatives taught surgeons and other medical staff how to mix the Seprafilm sheets into a liquid “slurry” that could be squirted through the narrow tubes used during laparoscopic surgery, even though Seprafilm was never indicated or FDA-approved for use in laparoscopic procedures. Genzyme sales representatives’ participation in the preparation of slurry in the operating room caused Seprafilm to become adulterated, according to the criminal charges.
During the course of the government’s investigation regarding Seprafilm slurry, Genzyme voluntarily disclosed to the government that it had distributed promotional material for Seprafilm that implied that Seprafilm had been proven safe and effective for use in gynecologic cancer surgeries, even though Seprafilm’s FDA-approved label cautioned that the device had not been clinically evaluated in the presence of malignancies. Genzyme based its claim on a study that involved only fourteen patients, which was far too few to support such an assertion. A separate count in the government’s information charges that Genzyme’s use of this misleading promotional material caused Seprafilm to become misbranded while held for sale.
“Patients rely heavily on the integrity and efficacy of claims made by manufacturers of medical products,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “When manufacturers make misleading statements about using their products in ways that have not been approved by the FDA, patient care, confidence, and safety are put at risk.”
The case has been handled by Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Simon Gaugush, Chief of the General Crimes Section at the U.S. Attorney’s Office of the Middle District of Florida, with support from FDA’s Office of Criminal Investigations and Office of Chief Counsel.
Sunday, August 23, 2015
OWNER, MANAGERS AMBULANCE COMPANY CONVICTED FOR ROLES IN MEDICARE FRAUD SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, August 19, 2015
Ambulance Company Owner, Operator and Managers Found Guilty in Medicare Fraud Conspiracy
A federal jury in Los Angeles late yesterday convicted the former owner, operator and managers of a Southern California ambulance company of health care fraud charges in connection with a Medicare fraud scheme of at least $2.4 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Acting Special Agent in Charge Steve Ryan of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Region and Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division made the announcement.
Yaroslav Proshak, aka Steven Proshak, 47, of Valley Village, California; Emilia Zverev, 58, of Van Nuys, California; and Sharetta Michelle Wallace, 37, of Inglewood, California, each were convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud following a two-week trial. Proshak’s sentencing is scheduled for Nov. 24, 2015, and Zverev’s and Wallace’s sentencing is scheduled for Nov. 30, 2015, all before U.S. District Judge S. James Otero of the Central District of California, who presided over the trial.
Proshak owned and operated ProMed Medical Transportation, an ambulance transportation company in the greater Los Angeles area that provided non-emergency ambulance transportation services to Medicare beneficiaries, many of whom were dialysis patients. Zverev was the billing manager, and Wallace supervised ProMed’s emergency medical technicians (EMTs).
The evidence at trial demonstrated that, between May 2008, and October 2010, the defendants conspired to bill Medicare for ambulance transportation services for individuals whom the defendants knew did not need such services. In addition, the evidence showed that the defendants instructed EMTs who worked at ProMed to conceal the true medical conditions of patients they were transporting by altering requisite paperwork and creating fraudulent documents to justify the transportation services.
According to evidence admitted at trial, during the course of the conspiracy, ProMed submitted at least $2.4 million in false and fraudulent claims to Medicare for medically unnecessary transportation services. Medicare paid at least $1.2 million of those claims.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI and HHS-OIG. The case was prosecuted by Trial Attorneys Blanca Quintero, Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Subscribe to:
Posts (Atom)