FROM: U.S. DEPARTMENT OF JUSTICE
Friday, August 10, 2012
South Carolina Pharmaceutical Distribution Company Pleads Guilty in Multi-Million Dollar Scheme to Purchase and Sell Drugs in the Grey Market
The Department of Justice announced the guilty plea and sentencing of Easley, S.C.-based Altec Medical for engaging in a multi-million dollar prescription drug scheme. Altec Medical pleaded guilty in U.S. District Court in Miami to one count of conspiring to defraud the U.S. Food and Drug Administration (FDA) and to commit federal offenses in connection with a drug-diversion scheme that lasted from 2007 to 2009.
In the sentencing, U.S. District Judge Robert N. Scola, Jr. ordered Altec to pay a $2 million fine and to forfeit $1 million. The judge also ordered the company to be on probation for one year.
In a criminal information filed with the court, the government charged that Altec paid its supplier and co-conspirator William D. Rodriguez, approximately $55 million for prescription drugs that it knew had been diverted from lawful channels of drug wholesale distribution. "Drug Diversion" refers to various ways in which prescription drugs are removed from lawful channels of distribution and then reintroduced into the marketplace for sale to consumers. In drug diversion schemes, prescription drugs at issue are often stolen from warehouses or cargo trucks; torn from boxes of free samples, repackaged and resold; or bought from individual patients looking to make extra money.
"Drug diversion undermines the safety and effectiveness of our prescription drug system," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. "When individuals divert drugs from lawful channels, we cannot be sure that the drugs are properly handled and stored. As a result, diverted drugs could be expired, become contaminated, or have their mechanisms of action altered. Diversion is a serious crime that puts consumers at risk; we will continue to prosecute those who engage in it aggressively."
The Justice Department advises consumers who have concerns about a drug to check the lot numbers on the manufacturer’s web site to see if there are any warnings about it.
According to a plea agreement that was filed with the court, Altec became aware that Rodriguez had bought these drugs from individuals who had acquired them illegally and who were not properly licensed to sell prescription drugs on a wholesale basis. The government further charged that Altec and Rodriguez orchestrated the reentry of these drugs into the lawful channels of distribution. According to the government, Rodriguez first sent the diverted drugs to companies he controlled in South Carolina. His companies, in turn, resold the drugs to Altec, which, in turn, resold the drugs to various purchasers throughout the United States, including drug distributors with valid drug distribution licenses. This process caused reentry of the diverted drugs into the ordinary, lawful channels of distribution. Eventually, the diverted drugs were bought by retail pharmacies, which dispensed the drugs by filling prescriptions for individual consumers.
Finally, the government charged that Altec and Rodriguez attempted to conceal their scheme by falsifying a variety of business records. In particular, Altec and Rodriguez falsified documents known as "drug pedigrees." Drug pedigrees are statements required by the FDA of all those who sell wholesale quantities of prescription drugs. The drug pedigrees are supposed to accurately identify all prior sales and transactions so that it is clear that the drugs have been acquired lawfully, and properly stored and held along the way. Despite knowing that the law required accurate pedigrees, Altec admitted that it created pedigrees that falsified prior transactions to make it appear as though the drugs had originally been acquired lawfully.
Use of diverted drugs can cause unpredictable adverse side effects and may fail to treat the condition for which a consumer is taking the drugs. According to the government, neither purchasers who bought from Altec nor consumers who later bought the drugs at retail pharmacies would have purchased the drugs had they known that the drugs had been diverted.
In June 2012, in U.S. District Court in Miami, Rodriguez pleaded guilty to conspiracy and money laundering in a separate case charging him with, among other things, his role in this drug diversion scheme. He has not yet been sentenced.
The case was prosecuted by Assistant U.S. Attorney Jon M. Juenger, of the U.S. Attorney’s Office for the Southern District of Florida, and David A. Frank, of the Justice Department’s Consumer Protection Branch. Additional assistance was provided by Joshua Eizen, of the FDA’s Office of Chief Counsel for Enforcement. The case was investigated by the FDA’s Office of Criminal Investigations
Saturday, August 11, 2012
Friday, August 10, 2012
SEC V. HEART TRONICS, INC., ET AL.
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission announced today that Martin B. Carter and Ryan A. Rauch have agreed to settle charges brought against them in SEC v. Heart Tronics, Inc., et al. The complaint alleged that Heart Tronics repeatedly announced millions of dollars in fraudulent sales orders for its heart monitoring device between 2006 and 2008 when, in fact, the company never had viable sales orders from actual customers. Carter fabricated numerous documents to support the false disclosures, and also arranged to ship products to a friend to create the illusion that the company was delivering its product to a bona fide customer. The Commission's complaint also alleged that Rauch solicited numerous investors to buy Heart Tronics stock but failed to disclose that he was being paid by Heart Tronics in exchange for promoting the company.
On October 5, 2011, Carter pled guilty to one criminal count of conspiracy to commit mail fraud, wire fraud and obstruction of justice based on his creation of fake sales orders and other documents for Heart Tronics and providing false and misleading information to Commission staff during the investigation. To settle the Commission's civil charges, Carter has consented to the entry of a final judgment permanently enjoining him from violating Sections 5(a) and (c) , 17(a)(1) and 17(a)(3) of the Securities Act of 1933 (Securities Act); Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act); and Exchange Act Rules 10b-5(a), 10b-5(c) and 13b2-1; and aiding and abetting violations of Sections 10(b), 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 10b-5(a), 10b-5(c), 12b-20, 13a-1, 13a-11, and 13a-13. In addition, Carter has agreed to a permanent penny stock bar pursuant to Section 20(g) of the Securities Act and Section 21(d)(6) of the Exchange Act. Carter's proposed judgment, which is subject to court approval, will not impose disgorgement or penalties based on Carter's sworn financial condition.
Rauch has consented, without admitting or denying the Commission's allegations, to the entry of a final judgment that permanently enjoins him from violating Section 17(b) of the Securities Act, imposes a three-year penny stock bar pursuant to Section 20(g) of the Securities Act, and orders him to pay $15,000 of disgorgement plus prejudgment interest of $2,789.04 and a civil penalty of $20,000. The proposed judgment is subject to court approval.
On December 20, 2011, the Commission filed a civil enforcement action in federal district court in the Central District of California alleging that Heart Tronics, Inc. (formerly known as Signalife, Inc. and Recom Managed Systems, Inc.), and several individuals associated with the Company, engaged in a wide-ranging series of frauds, including the repeated announcement of fictitious sales orders in Heart Tronics' SEC filings, press releases and other public broadcasts. The fraud schemes were masterminded by Mitchell J. Stein, the purported outside counsel to Heart Tronics and the husband of Heart Tronics' majority shareholder. From at least December 2005 through September 2008, while he was leading a campaign of public misinformation to drive up the price of Heart Tronics' stock, Mitchell Stein continuously directed the sale of his and his wife's Heart Tronics stock through a series of trusts and other nominee accounts for a net profit of more than $5.8 million. On December 13, 2011, a grand jury indicted Stein on 14 criminal counts of conspiracy to commit mail and wire fraud; mail fraud; wire fraud; securities fraud; money laundering; and conspiracy to obstruct justice. The Commission's civil action against the remaining defendants, including Stein, Heart Tronics' co-CEOs Willie Gault and Rowland Perkins, and former stock broker Mark Nevdahl, is stayed until the conclusion of the criminal case against Stein
The Securities and Exchange Commission announced today that Martin B. Carter and Ryan A. Rauch have agreed to settle charges brought against them in SEC v. Heart Tronics, Inc., et al. The complaint alleged that Heart Tronics repeatedly announced millions of dollars in fraudulent sales orders for its heart monitoring device between 2006 and 2008 when, in fact, the company never had viable sales orders from actual customers. Carter fabricated numerous documents to support the false disclosures, and also arranged to ship products to a friend to create the illusion that the company was delivering its product to a bona fide customer. The Commission's complaint also alleged that Rauch solicited numerous investors to buy Heart Tronics stock but failed to disclose that he was being paid by Heart Tronics in exchange for promoting the company.
On October 5, 2011, Carter pled guilty to one criminal count of conspiracy to commit mail fraud, wire fraud and obstruction of justice based on his creation of fake sales orders and other documents for Heart Tronics and providing false and misleading information to Commission staff during the investigation. To settle the Commission's civil charges, Carter has consented to the entry of a final judgment permanently enjoining him from violating Sections 5(a) and (c) , 17(a)(1) and 17(a)(3) of the Securities Act of 1933 (Securities Act); Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act); and Exchange Act Rules 10b-5(a), 10b-5(c) and 13b2-1; and aiding and abetting violations of Sections 10(b), 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 10b-5(a), 10b-5(c), 12b-20, 13a-1, 13a-11, and 13a-13. In addition, Carter has agreed to a permanent penny stock bar pursuant to Section 20(g) of the Securities Act and Section 21(d)(6) of the Exchange Act. Carter's proposed judgment, which is subject to court approval, will not impose disgorgement or penalties based on Carter's sworn financial condition.
Rauch has consented, without admitting or denying the Commission's allegations, to the entry of a final judgment that permanently enjoins him from violating Section 17(b) of the Securities Act, imposes a three-year penny stock bar pursuant to Section 20(g) of the Securities Act, and orders him to pay $15,000 of disgorgement plus prejudgment interest of $2,789.04 and a civil penalty of $20,000. The proposed judgment is subject to court approval.
On December 20, 2011, the Commission filed a civil enforcement action in federal district court in the Central District of California alleging that Heart Tronics, Inc. (formerly known as Signalife, Inc. and Recom Managed Systems, Inc.), and several individuals associated with the Company, engaged in a wide-ranging series of frauds, including the repeated announcement of fictitious sales orders in Heart Tronics' SEC filings, press releases and other public broadcasts. The fraud schemes were masterminded by Mitchell J. Stein, the purported outside counsel to Heart Tronics and the husband of Heart Tronics' majority shareholder. From at least December 2005 through September 2008, while he was leading a campaign of public misinformation to drive up the price of Heart Tronics' stock, Mitchell Stein continuously directed the sale of his and his wife's Heart Tronics stock through a series of trusts and other nominee accounts for a net profit of more than $5.8 million. On December 13, 2011, a grand jury indicted Stein on 14 criminal counts of conspiracy to commit mail and wire fraud; mail fraud; wire fraud; securities fraud; money laundering; and conspiracy to obstruct justice. The Commission's civil action against the remaining defendants, including Stein, Heart Tronics' co-CEOs Willie Gault and Rowland Perkins, and former stock broker Mark Nevdahl, is stayed until the conclusion of the criminal case against Stein
Thursday, August 9, 2012
EMPLOYMENT SCREENER WILL PAY $2.6 MILLION TO SETTLE FAIR CREDIT REPORTING ACT CHARGES
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, August 8, 2012
Employment Screening Services Provider Settles Charges of Violating Fair Credit Reporting Act
Oklahoma-based Company Agrees to Pay U.S. $2.6 Million Penalty
A company that marketed public records about consumers to employers making hiring decisions agreed to settle charges that it violated the Fair Credit Reporting Act and pay $2.6 million in civil penalties , the Justice Department announced.
In a complaint filed today, the United States alleged that HireRight Solutions Inc., an Oklahoma corporation based in Tulsa, Okla., violated the Fair Credit Reporting Act (FCRA) by failing to comply with FCRA provisions designed to ensure the accuracy of background reports about potential employees. HireRight combined public information, including court records, into profiles provided to thousands of employers considering consumers for jobs, primarily in the trucking industry. The complaint alleges that poor quality control led HireRight to include erroneous and duplicate information in its reports. The complaint also alleges that HireRight failed to provide consumers timely access to the information in their own files and did not appropriately conduct investigations of disputed items when requested.
"Inaccurate consumer reports can keep qualified applicants from finding work and keep employers from finding good employees," said Stuart Delery, Acting Assistant Attorney General for the Civil Division. "In this age of increased collection and distribution of consumer information, aggressive enforcement of the FCRA ensures that these reports contain facts, not mistakes."
Along with the $2.6 million civil penalty, HireRight agreed to injunctions against future FCRA and Federal Trade Commission (FTC) Act violations in a proposed consent decree filed with the complaint. The consent decree also requires HireRight to maintain reasonable procedures to ensure the accuracy of reports and, upon request, to provide consumers the information in their files, such as criminal history reports. Access to these reports ensures that the consumers can dispute erroneous criminal history information that would substantially interfere with their ability to obtain a job.
The FTC, which oversees the FCRA, referred the case to the Justice Department. The lawsuit, United States v. HireRight Solutions Inc., was filed in the District of the District of Columbia.
Acting Assistant Attorney General Delery thanked the Federal Trade Commission for referring this matter to the Department. The Consumer Protection Branch of the Justice Department’s Civil Division brought the case on behalf of the United States.
Wednesday, August 8, 2012
Employment Screening Services Provider Settles Charges of Violating Fair Credit Reporting Act
Oklahoma-based Company Agrees to Pay U.S. $2.6 Million Penalty
A company that marketed public records about consumers to employers making hiring decisions agreed to settle charges that it violated the Fair Credit Reporting Act and pay $2.6 million in civil penalties , the Justice Department announced.
In a complaint filed today, the United States alleged that HireRight Solutions Inc., an Oklahoma corporation based in Tulsa, Okla., violated the Fair Credit Reporting Act (FCRA) by failing to comply with FCRA provisions designed to ensure the accuracy of background reports about potential employees. HireRight combined public information, including court records, into profiles provided to thousands of employers considering consumers for jobs, primarily in the trucking industry. The complaint alleges that poor quality control led HireRight to include erroneous and duplicate information in its reports. The complaint also alleges that HireRight failed to provide consumers timely access to the information in their own files and did not appropriately conduct investigations of disputed items when requested.
"Inaccurate consumer reports can keep qualified applicants from finding work and keep employers from finding good employees," said Stuart Delery, Acting Assistant Attorney General for the Civil Division. "In this age of increased collection and distribution of consumer information, aggressive enforcement of the FCRA ensures that these reports contain facts, not mistakes."
Along with the $2.6 million civil penalty, HireRight agreed to injunctions against future FCRA and Federal Trade Commission (FTC) Act violations in a proposed consent decree filed with the complaint. The consent decree also requires HireRight to maintain reasonable procedures to ensure the accuracy of reports and, upon request, to provide consumers the information in their files, such as criminal history reports. Access to these reports ensures that the consumers can dispute erroneous criminal history information that would substantially interfere with their ability to obtain a job.
The FTC, which oversees the FCRA, referred the case to the Justice Department. The lawsuit, United States v. HireRight Solutions Inc., was filed in the District of the District of Columbia.
Acting Assistant Attorney General Delery thanked the Federal Trade Commission for referring this matter to the Department. The Consumer Protection Branch of the Justice Department’s Civil Division brought the case on behalf of the United States.
Wednesday, August 8, 2012
LIME DUST TO BE CONTROLED IN CHICAGO
FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
EPA Reaches Agreement with Carmeuse Lime to Control Dust from its Chicago Plant
Chicago (Aug. 7, 2012 ) - The U.S. Environmental Protection Agency has reached agreement with Carmeuse Lime, Pittsburgh, Pennsylvania, to resolve Clean Air Act violations at its Chicago lime manufacturing facility. The company will pay a $350,000 fine and spend $125,000 on lead abatement in south side neighborhoods.
“As a result of this agreement, residents of Chicago’s south side will breathe cleaner air and children will be protected from lead contamination,” said EPA Regional Administrator Susan Hedman.
EPA and the City of Chicago conducted a joint inspection of the Carmeuse plant in response to complaints from local residents about excess dust. The inspection revealed poor maintenance at the facility, which led to the release of dust into the surrounding neighborhood.
The consent decree requires Carmeuse to upgrade and replace equipment and to improve maintenance and housekeeping practices. By implementing these changes, which have been/will be incorporated in the facility's air permit, Carmeuse will dramatically reduce the amount of dust released into the neighborhood.
Under terms of the consent decree, Carmeuse will also hire a nonprofit organization to install new energy-efficient windows in neighborhood homes that have window frames with lead-based paint. Window replacements will occur in the houses of low income residents with young children in the Englewood, West Englewood and South Chicago neighborhoods.
Carmeuse is a major lime producer, with 35 facilities in the United States and Canada.
EPA Reaches Agreement with Carmeuse Lime to Control Dust from its Chicago Plant
Chicago (Aug. 7, 2012 ) - The U.S. Environmental Protection Agency has reached agreement with Carmeuse Lime, Pittsburgh, Pennsylvania, to resolve Clean Air Act violations at its Chicago lime manufacturing facility. The company will pay a $350,000 fine and spend $125,000 on lead abatement in south side neighborhoods.
“As a result of this agreement, residents of Chicago’s south side will breathe cleaner air and children will be protected from lead contamination,” said EPA Regional Administrator Susan Hedman.
EPA and the City of Chicago conducted a joint inspection of the Carmeuse plant in response to complaints from local residents about excess dust. The inspection revealed poor maintenance at the facility, which led to the release of dust into the surrounding neighborhood.
The consent decree requires Carmeuse to upgrade and replace equipment and to improve maintenance and housekeeping practices. By implementing these changes, which have been/will be incorporated in the facility's air permit, Carmeuse will dramatically reduce the amount of dust released into the neighborhood.
Under terms of the consent decree, Carmeuse will also hire a nonprofit organization to install new energy-efficient windows in neighborhood homes that have window frames with lead-based paint. Window replacements will occur in the houses of low income residents with young children in the Englewood, West Englewood and South Chicago neighborhoods.
Carmeuse is a major lime producer, with 35 facilities in the United States and Canada.
Tuesday, August 7, 2012
MINE SAFETY AND HEALTH ADMINISTRATION'S "EXAMINATIONS" RULE EFFECTIVE AUGUST 6, 2012
FROM: U.S. DEPARTMENT OF LABOR
MSHA's 'examinations' rule for underground coal mines effective Aug. 6Regulation requires mine operators to identify and correct hazardous conditions
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration's final rule "Examinations of Work Areas in Underground Coal Mines for Violations of Mandatory Health or Safety Standards," which was published April 6, 2012, in the Federal Register, becomes effective today. The rule requires mine operators to identify and correct hazardous conditions and violations of nine health and safety standards that pose the greatest risk to miners, including the kinds of conditions that led to the deadly explosion at the Upper Big Branch Mine in April 2010.
"Effective pre-shift, supplemental, on-shift and weekly examinations are the first line of defense to protect miners working in underground coal mines," said Joseph A. Main, assistant secretary of labor for mine safety and health.
After analyzing its accident reports and enforcement data for underground coal mines covering a five-year period, MSHA determined that the same types of violations of health or safety standards are found by MSHA inspectors in underground coal mines every year, and that these violations present some of the most unsafe conditions for coal miners.
"These repeated violations expose miners to unnecessary safety and health risks that should be found and corrected by mine operators. The final rule, effective today, will increase the identification and correction of unsafe conditions in mines earlier, removing many of the conditions that could lead to danger, and improve protection for miners in underground coal mines," said Main.
The rule requires that, during pre-shift, supplemental, on-shift and weekly examinations, underground coal mine operators, in addition to examining for hazardous conditions as in the existing regulations, examine for violations of the nine specific health and safety standards. The rule also requires operators to record the actions taken to correct hazardous conditions, as in the existing regulations, and violations of the nine standards. Additionally, operators must review with mine examiners, on a quarterly basis, citations and orders issued in areas where pre-shift, supplemental, on-shift and weekly examinations are required.
The nine standards address ventilation, methane, roof control, combustible materials, rock dust, equipment guarding and other safeguards. They are consistent with the standards emphasized in MSHA's Rules to Live By initiative and the types of violations cited in MSHA's accident investigation report on the Upper Big Branch Mine explosion as contributing to the cause of that deadly accident. MSHA launched Rules to Live By, an outreach and enforcement program designed to strengthen efforts to prevent mining fatalities, in February 2010.
In 2011, MSHA issued approximately 158,000 violations, of which approximately 77,000 were attributable to underground coal mines, even though these mines represent just 4 percent of all mines.
MSHA's 'examinations' rule for underground coal mines effective Aug. 6Regulation requires mine operators to identify and correct hazardous conditions
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration's final rule "Examinations of Work Areas in Underground Coal Mines for Violations of Mandatory Health or Safety Standards," which was published April 6, 2012, in the Federal Register, becomes effective today. The rule requires mine operators to identify and correct hazardous conditions and violations of nine health and safety standards that pose the greatest risk to miners, including the kinds of conditions that led to the deadly explosion at the Upper Big Branch Mine in April 2010.
"Effective pre-shift, supplemental, on-shift and weekly examinations are the first line of defense to protect miners working in underground coal mines," said Joseph A. Main, assistant secretary of labor for mine safety and health.
After analyzing its accident reports and enforcement data for underground coal mines covering a five-year period, MSHA determined that the same types of violations of health or safety standards are found by MSHA inspectors in underground coal mines every year, and that these violations present some of the most unsafe conditions for coal miners.
"These repeated violations expose miners to unnecessary safety and health risks that should be found and corrected by mine operators. The final rule, effective today, will increase the identification and correction of unsafe conditions in mines earlier, removing many of the conditions that could lead to danger, and improve protection for miners in underground coal mines," said Main.
The rule requires that, during pre-shift, supplemental, on-shift and weekly examinations, underground coal mine operators, in addition to examining for hazardous conditions as in the existing regulations, examine for violations of the nine specific health and safety standards. The rule also requires operators to record the actions taken to correct hazardous conditions, as in the existing regulations, and violations of the nine standards. Additionally, operators must review with mine examiners, on a quarterly basis, citations and orders issued in areas where pre-shift, supplemental, on-shift and weekly examinations are required.
The nine standards address ventilation, methane, roof control, combustible materials, rock dust, equipment guarding and other safeguards. They are consistent with the standards emphasized in MSHA's Rules to Live By initiative and the types of violations cited in MSHA's accident investigation report on the Upper Big Branch Mine explosion as contributing to the cause of that deadly accident. MSHA launched Rules to Live By, an outreach and enforcement program designed to strengthen efforts to prevent mining fatalities, in February 2010.
In 2011, MSHA issued approximately 158,000 violations, of which approximately 77,000 were attributable to underground coal mines, even though these mines represent just 4 percent of all mines.
Monday, August 6, 2012
DETROIT-AREA WOMAN PLEADS GULITY TO $10 MILLION PSYCHOTHERAPY FRAUD
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, August 2, 2012
Detroit-Area Adult Day Care Center Owner Pleads Guilty to $10 Million Psychotherapy Fraud Scheme
WASHINGTON – A Detroit-area adult day care center owner pleaded guilty today for her role in a $10 million psychotherapy fraud scheme, announced the Departments of Justice and Health and Human Services (HHS) and the FBI.
Checarol Robinson, 41, pleaded guilty today before U.S. District Judge Nancy D. Edmunds in the Eastern District of Michigan in Detroit, to an indictment charging her with one count of conspiracy to commit health care fraud and three counts of health care fraud. At her sentencing, scheduled for Dec. 4, 2012, Robinson faces a maximum penalty of 10 years in prison and a $250,000 fine for each count.
According to the indictment, Robinson owned group homes inhabited by Medicare beneficiaries. In return for payments, Robinson allegedly provided these Medicare beneficiaries’ information to a fraudulent psychotherapy company owned by a co-conspirator–Caldwell Thompson Manor Inc.–to be used to bill Medicare for psychotherapy services that were not provided and/or not medically necessary.
According to the indictment, Robinson later owned and operated P&C Adult Day Center (P&C), which was incorporated in May 2010. P&C purported to provide psychotherapy services. Robinson allegedly falsely billed Medicare for individual and group therapy services that were not provided by P&C and/or not medically necessary using the Medicare beneficiaries from her group homes. Robinson’s alleged co-conspirator from the scheme at Caldwell Thompson, who was also a licensed social worker, would sign patient charts for psychotherapy services purportedly performed at P&C that were medically unnecessary and never performed.
Caldwell Thompson and P&C allegedly submitted more than $10 million of false claims to Medicare in the course of the conspiracy.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG), Chicago Regional Office.
The case is being prosecuted by Assistant Chief Gejaa T. Gobena and Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section and Assistant U.S. Attorney for the Eastern District of Michigan Philip A. Ross. The case was investigated by the FBI and HHS-OIG, and 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 Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Thursday, August 2, 2012
Detroit-Area Adult Day Care Center Owner Pleads Guilty to $10 Million Psychotherapy Fraud Scheme
WASHINGTON – A Detroit-area adult day care center owner pleaded guilty today for her role in a $10 million psychotherapy fraud scheme, announced the Departments of Justice and Health and Human Services (HHS) and the FBI.
Checarol Robinson, 41, pleaded guilty today before U.S. District Judge Nancy D. Edmunds in the Eastern District of Michigan in Detroit, to an indictment charging her with one count of conspiracy to commit health care fraud and three counts of health care fraud. At her sentencing, scheduled for Dec. 4, 2012, Robinson faces a maximum penalty of 10 years in prison and a $250,000 fine for each count.
According to the indictment, Robinson owned group homes inhabited by Medicare beneficiaries. In return for payments, Robinson allegedly provided these Medicare beneficiaries’ information to a fraudulent psychotherapy company owned by a co-conspirator–Caldwell Thompson Manor Inc.–to be used to bill Medicare for psychotherapy services that were not provided and/or not medically necessary.
According to the indictment, Robinson later owned and operated P&C Adult Day Center (P&C), which was incorporated in May 2010. P&C purported to provide psychotherapy services. Robinson allegedly falsely billed Medicare for individual and group therapy services that were not provided by P&C and/or not medically necessary using the Medicare beneficiaries from her group homes. Robinson’s alleged co-conspirator from the scheme at Caldwell Thompson, who was also a licensed social worker, would sign patient charts for psychotherapy services purportedly performed at P&C that were medically unnecessary and never performed.
Caldwell Thompson and P&C allegedly submitted more than $10 million of false claims to Medicare in the course of the conspiracy.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG), Chicago Regional Office.
The case is being prosecuted by Assistant Chief Gejaa T. Gobena and Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section and Assistant U.S. Attorney for the Eastern District of Michigan Philip A. Ross. The case was investigated by the FBI and HHS-OIG, and 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 Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Sunday, August 5, 2012
JUDGE ORDERS HALT TO INTIMIDATION OF EMPLOYEES SUPPORTING A UNION NLRB
FROM: U.S. NATIONAL LABOR RELATIONS BOARD
A federal judge has ordered American Reclamation, Inc., a Los Angeles trash hauling and recycling service, to stop violating federal labor laws by threatening employees with dismissal for supporting a union, among other things, and to offer interim reinstatement to three employees who were fired.
Judge Dean D. Pregerson of the U.S. District Court for the Central District of California issued the temporary injunction on Tuesday at the request of the NLRB, while the case is pending before Administrative Law Judge William Kocol. The injunction will remain in effect until the NLRB process is complete.
A complaint issued by the NLRB Regional Office in Los Angeles in April alleged that American Reclamation engaged in multiple unfair labor practices beginning in early October 2011, during a union organizing campaign. The company allegedly threatened employees that they would be fired for supporting the union and that the company would be closed or sold if the employees voted for the union. In addition, company officials unlawfully promised improved working conditions, including better safety equipment, to discourage their support for the union.
Two employees who openly supported the union were discharged in October 2011, and a third was discharged in January 2012 after photographing hazardous materials and encouraging employees to voice concerns about hazardous materials they were handling. The injunction orders the company to offer reinstatement to the three employees, and to read the order to all employees.
Attorneys Juan Carlos Ochoa Diaz and J. Carlos Gonzalez represented the Board in this matter in the District Court.
A federal judge has ordered American Reclamation, Inc., a Los Angeles trash hauling and recycling service, to stop violating federal labor laws by threatening employees with dismissal for supporting a union, among other things, and to offer interim reinstatement to three employees who were fired.
Judge Dean D. Pregerson of the U.S. District Court for the Central District of California issued the temporary injunction on Tuesday at the request of the NLRB, while the case is pending before Administrative Law Judge William Kocol. The injunction will remain in effect until the NLRB process is complete.
A complaint issued by the NLRB Regional Office in Los Angeles in April alleged that American Reclamation engaged in multiple unfair labor practices beginning in early October 2011, during a union organizing campaign. The company allegedly threatened employees that they would be fired for supporting the union and that the company would be closed or sold if the employees voted for the union. In addition, company officials unlawfully promised improved working conditions, including better safety equipment, to discourage their support for the union.
Two employees who openly supported the union were discharged in October 2011, and a third was discharged in January 2012 after photographing hazardous materials and encouraging employees to voice concerns about hazardous materials they were handling. The injunction orders the company to offer reinstatement to the three employees, and to read the order to all employees.
Attorneys Juan Carlos Ochoa Diaz and J. Carlos Gonzalez represented the Board in this matter in the District Court.
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