FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission v. Glenn Hoppes, United States Energy Corp., TN-KY Development Fund LP, TN-KY Development Fund II LP and TN-KY Development Fund III LP, Civil Action No. 13-CV-00868-SDM-AEP
The Securities and Exchange Commission today announced it has filed a civil injunctive action against Glenn Hoppes, of Clearwater, Florida, and four companies he controls, United States Energy Corp., TN-KY Development Fund LP, TN-KY Development Fund II LP and TN-KY Development Fund III LP, for fraudulently offering unregistered investments in oil drilling projects.
The SEC’s complaint alleges Hoppes hired Joseph Hilton to sell limited partnership units in three oil drilling projects in 2011 and 2012 and financially supported Hilton’s boiler room despite knowing Hilton was barred from acting as a broker by a 2008 SEC enforcement action and was using an alias to avoid association with the prior SEC action. Through Hilton’s efforts, US Energy raised approximately $2.5 million from approximately 100 investors. The US Energy securities offerings were not registered with the SEC as required under the federal securities laws.
According to the SEC’s complaint, Glenn Hoppes also made misrepresentations to investors in the sale of the units. Hoppes misled investors about US Energy’s oil well assets and omitted information from offering material concerning his personal bankruptcy and the prior SEC action against Hilton. The SEC brought an emergency action against Hilton in 2012 for violations of the antifraud and registration provisions of the federal securities laws in connection with his conduct at US Energy and at a subsequent company he founded.
The SEC’s complaint charges Hoppes, US Energy, TN-KY I, TN-KY II and TN-KY III with violations of Sections 5(a) and (c) and 17(a)(2) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(b). The complaint also charges Hoppes and US Energy with violations of 17(a)(1) and (3) of the Securities Act and Exchange Act Rule 10b-5(a) and (c) and with aiding and abetting Hilton’s Exchange Act Section 15(a) violations. The SEC is seeking disgorgement of ill-gotten gains plus prejudgment interest, civil penalties, and permanent injunctions against Hoppes and his entities.
Saturday, April 13, 2013
Friday, April 12, 2013
JUSTICE SETTLES IMMIGRATION-RELATED DISCRIMINATION CLAIM WITH PROPERTY MANGEMENT COMPANY
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, April 9, 2013
Justice Department Settles Immigration-Related Discrimination Claim Against Property Management Company
The Justice Department today reached an agreement with Milestone Management Company, a nationwide residential property management firm headquartered in Dallas, resolving claims that the staffing company violated the anti-discrimination provision of the Immigration and Nationality Act (INA).
In a charge filed with the department, a lawful permanent resident alleged that after working for Milestone for three years, the company improperly demanded that he produce an unexpired lawful permanent resident card, despite the fact that he had presented proper work authorization documentation at the time of hire. The company discharged the worker when he was unable to present the document. The department’s investigation revealed that Milestone had also improperly reverified the documentation of other lawful permanent residents when their documentation expired and that it did not reverify expired documentation of U.S. citizens. The anti-discrimination provision generally prohibits treating employees differently in the employment eligibility verification and reverification processes based on citizenship or national origin unless required by law.
In response to the Justice Department’s investigation, Milestone immediately reinstated the charging party and provided full backpay for his six weeks of lost wages. Milestone cooperated with the department’s requests for information regarding its employment authorization verification processes throughout the investigation, and took proactive steps in collaboration with the department to provide corrective training for Milestone employees before the investigation had been concluded.
Under the terms of the agreement, Milestone agreed to pay $20,000 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA and be subject to monitoring of its employment eligibility verification practices for a period of three years. The case settled prior to the Justice Department filing a complaint in this matter.
"We commend Milestone’s full cooperation with the Department’s investigation of this matter, and its proactive efforts to ensure that all of its employees responsible for completing Form I-9 are fully aware of their obligations under the INA’s antidiscrimination provisions," said Gregory B. Friel, Deputy Assistant Attorney General for the Civil Rights Division.
Tuesday, April 9, 2013
Justice Department Settles Immigration-Related Discrimination Claim Against Property Management Company
The Justice Department today reached an agreement with Milestone Management Company, a nationwide residential property management firm headquartered in Dallas, resolving claims that the staffing company violated the anti-discrimination provision of the Immigration and Nationality Act (INA).
In a charge filed with the department, a lawful permanent resident alleged that after working for Milestone for three years, the company improperly demanded that he produce an unexpired lawful permanent resident card, despite the fact that he had presented proper work authorization documentation at the time of hire. The company discharged the worker when he was unable to present the document. The department’s investigation revealed that Milestone had also improperly reverified the documentation of other lawful permanent residents when their documentation expired and that it did not reverify expired documentation of U.S. citizens. The anti-discrimination provision generally prohibits treating employees differently in the employment eligibility verification and reverification processes based on citizenship or national origin unless required by law.
In response to the Justice Department’s investigation, Milestone immediately reinstated the charging party and provided full backpay for his six weeks of lost wages. Milestone cooperated with the department’s requests for information regarding its employment authorization verification processes throughout the investigation, and took proactive steps in collaboration with the department to provide corrective training for Milestone employees before the investigation had been concluded.
Under the terms of the agreement, Milestone agreed to pay $20,000 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA and be subject to monitoring of its employment eligibility verification practices for a period of three years. The case settled prior to the Justice Department filing a complaint in this matter.
"We commend Milestone’s full cooperation with the Department’s investigation of this matter, and its proactive efforts to ensure that all of its employees responsible for completing Form I-9 are fully aware of their obligations under the INA’s antidiscrimination provisions," said Gregory B. Friel, Deputy Assistant Attorney General for the Civil Rights Division.
Thursday, April 11, 2013
CFTC ORDERS INTERACTIVE BROKERS LLC, TO PAY $225,000 CIVIL MONETARY PENALTY
FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Orders Connecticut-based Interactive Brokers LLC, a Registered Futures Commission Merchant, to Pay a $225,000 Civil Monetary Penalty
Firm failed to supervise its employees, failed to maintain sufficient U.S. dollars in customer segregated accounts, and failed to compute on a currency-by-currency basis the amount of customer funds on deposit and required to be on deposit in segregated accounts
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order requiring Interactive Brokers LLC (IB) of Greenwich, Conn., to pay a $225,000 civil monetary penalty for failing to calculate the amount of customer funds on deposit, the amount of funds required to be on deposit in customer segregated accounts, failing to maintain sufficient U.S. dollars (USD) in customer segregated accounts in the United States to meet all USD-denominated obligations, and supervision failures. The CFTC’s Order also requires IB to cease and desist from violating CFTC Regulations, as charged.
IB, an on-line brokerage firm, is a Futures Commission Merchant and Retail Foreign Exchange Dealer with more than 140,000 customer accounts.
Specifically, the CFTC Order finds that from at least January 2008 through at least April 4, 2011, IB failed to compute as of the close of business each day, on a currency-by-currency basis, the amount of customer funds required to be on deposit and the amount of customer funds actually on deposit in segregated accounts on behalf of commodity and options customers.
Additionally, between September 21, 2011 and May 8, 2012, IB improperly covered a portion of its USD commodity futures and options customer obligations with Japanese yen and Swiss francs to maximize its interest earnings and not at the request of any of its commodity customers, the Order finds. As a result, IB did not retain enough USD in segregation to meet its USD-denominated obligations to its commodity customers – with the USD segregation requirement shortfall ranging from approximately $90 million to $300 million during that time, according to the Order. IB discovered and self-reported this violation to the CFTC on May 10, 2012; however, IB had excess segregated funds ranging from $48.4 million to $455.3 million at all relevant times, according to the Order.
The Order also finds that prior to May 9, 2012, IB did not have adequate procedures in place and failed to adequately train and diligently supervise its officers, employees, and agents to prevent the violations described in the Order. However, the Order finds that IB independently implemented corrective measures after discovering the violations and cooperated with the CFTC’s Division of Enforcement in investigating the circumstances.
The CFTC appreciates the assistance of the Division of Swap Dealer and Intermediary Oversight. The CFTC also appreciates the assistance of the National Futures Association.
The CFTC Division of Enforcement staff members responsible for this matter are Allison Passman, Heather Johnson, Susan Gradman, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
CFTC Orders Connecticut-based Interactive Brokers LLC, a Registered Futures Commission Merchant, to Pay a $225,000 Civil Monetary Penalty
Firm failed to supervise its employees, failed to maintain sufficient U.S. dollars in customer segregated accounts, and failed to compute on a currency-by-currency basis the amount of customer funds on deposit and required to be on deposit in segregated accounts
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order requiring Interactive Brokers LLC (IB) of Greenwich, Conn., to pay a $225,000 civil monetary penalty for failing to calculate the amount of customer funds on deposit, the amount of funds required to be on deposit in customer segregated accounts, failing to maintain sufficient U.S. dollars (USD) in customer segregated accounts in the United States to meet all USD-denominated obligations, and supervision failures. The CFTC’s Order also requires IB to cease and desist from violating CFTC Regulations, as charged.
IB, an on-line brokerage firm, is a Futures Commission Merchant and Retail Foreign Exchange Dealer with more than 140,000 customer accounts.
Specifically, the CFTC Order finds that from at least January 2008 through at least April 4, 2011, IB failed to compute as of the close of business each day, on a currency-by-currency basis, the amount of customer funds required to be on deposit and the amount of customer funds actually on deposit in segregated accounts on behalf of commodity and options customers.
Additionally, between September 21, 2011 and May 8, 2012, IB improperly covered a portion of its USD commodity futures and options customer obligations with Japanese yen and Swiss francs to maximize its interest earnings and not at the request of any of its commodity customers, the Order finds. As a result, IB did not retain enough USD in segregation to meet its USD-denominated obligations to its commodity customers – with the USD segregation requirement shortfall ranging from approximately $90 million to $300 million during that time, according to the Order. IB discovered and self-reported this violation to the CFTC on May 10, 2012; however, IB had excess segregated funds ranging from $48.4 million to $455.3 million at all relevant times, according to the Order.
The Order also finds that prior to May 9, 2012, IB did not have adequate procedures in place and failed to adequately train and diligently supervise its officers, employees, and agents to prevent the violations described in the Order. However, the Order finds that IB independently implemented corrective measures after discovering the violations and cooperated with the CFTC’s Division of Enforcement in investigating the circumstances.
The CFTC appreciates the assistance of the Division of Swap Dealer and Intermediary Oversight. The CFTC also appreciates the assistance of the National Futures Association.
The CFTC Division of Enforcement staff members responsible for this matter are Allison Passman, Heather Johnson, Susan Gradman, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Tuesday, April 9, 2013
HELATH CARE COMPANY SETTLES FALSE CLAIMS ACT ALLEGATIONS FOR $25.5 MILLION
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 3, 2013
Intermountain Health Care Inc. Pays U.S. $25.5 Million to Settle False Claims Act Allegations
Intermountain Health Care Inc. has agreed to pay the United States $25.5 million to settle claims that it violated the Stark Statute and the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today. Intermountain operates the largest health system in the state of Utah.
The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them. The relationships at issue in this matter that the United States alleged were prohibited by the Stark Statute included employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.
"The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician's judgment about the patient's true healthcare needs," said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."
"People should expect that hospitals and doctors care more for their patients than their bottom line profits," said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. "So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations. We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice."
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
The case was handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Wednesday, April 3, 2013
Intermountain Health Care Inc. Pays U.S. $25.5 Million to Settle False Claims Act Allegations
Intermountain Health Care Inc. has agreed to pay the United States $25.5 million to settle claims that it violated the Stark Statute and the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today. Intermountain operates the largest health system in the state of Utah.
The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them. The relationships at issue in this matter that the United States alleged were prohibited by the Stark Statute included employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.
"The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician's judgment about the patient's true healthcare needs," said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."
"People should expect that hospitals and doctors care more for their patients than their bottom line profits," said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. "So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations. We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice."
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
The case was handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Monday, April 8, 2013
MIAMI-BASED HEALTH CARE CLINIC SENTNECED IN $50 MILLION FRAUD SCHEME
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, April 5, 2013
Miami-Based Health Care Clinic and Its Owners and Operators Sentenced for $50 Million Fraud Scheme
The owners and operators of Biscayne Milieu, a Miami-based mental-health clinic, and the clinic itself were sentenced today for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Antonio Macli, 73, Jorge Macli, 41 and Sandra Huarte, 49, all of Miami, and Biscayne Milieu were sentenced by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. Antonio Macli was sentenced to serve 360 months in prison; Jorge Macli was sentenced to serve 300 months in prison; and Huarte was sentenced to serve 262 months in prison. In addition, Biscayne Milieu, the corporate entity these defendants controlled, was sentenced to one year of probation. In addition to their prison terms, Antonio Macli, Jorge Macli and Huarte were each sentenced to serve three years of supervised release. Restitution payments for each of the defendants will be determined on April 25, 2013.
The defendants were each convicted on Aug. 24, 2012, of conspiracy to commit health care fraud, at least one substantive count of health care fraud, and conspiracy to offer and pay kickbacks following a two-month jury trial. Antonio and Jorge Macli and Huarte were also each convicted of conspiracy to commit money laundering and substantive money laundering counts at trial.
According to the evidence at trial, Biscayne Milieu was a closely held, family-run fraudulent clinic that was owned by Antonio Macli and his son Jorge Macli. Antonio Macli’s daughter Sandra Huarte was an executive at the clinic. Together the defendants created and oversaw a scheme in which they, along with their co-defendants, submitted over $50 million in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided or that were not reimbursable under applicable Medicare rules. Many of the patients admitted to Biscayne Milieu that they were not eligible for PHP treatment because they were chronic substance abusers, suffered from dementia and would not benefit from group therapy, or were not mentally ill and were procuring false diagnoses of mental illness in order to obtain exemptions from the civics portion of the U.S. citizenship application.
The evidence at trial further showed that Antonio and Jorge Macli and Huarte collectively paid patient recruiters more than $1 million in illegal kickbacks to recruit Medicare patients who were ineligible for PHP treatment. Biscayne Milieu then billed Medicare for tens of millions of dollars in PHP treatments for these patients. Antonio and Jorge Macli and Huarte also hired doctors, therapists and other health care professionals to further their massive illegal scheme. Along with co-conspirators working at their direction, they created falsified medical records intended to conceal their Medicare fraud and phony "case manger" contracts in an attempt to hide their extensive illegal kickbacks.
Antonio Macli was the initiator of the fraud scheme, enlisted his son and daughter to participate in it and had primary control over the clinic’s bank accounts that received money stolen from Medicare that was then used to pay illegal kickbacks.
Jorge Macli was most responsible for the clinic’s day-to-day operations and took steps, on a daily basis, to conceal and further the fraud, including deflecting complaints from patients and staff and paying bribes to patients in exchange for their silence.
Huarte oversaw both the kickback payments and the Medicare billings for the clinic. Huarte ensured that Biscayne Milieu’s fraudulent claims could pass scrutiny by Medicare by creating fraudulent paperwork and medical files, and soliciting other employees to do the same, so that these false claims were paid.
Evidence further revealed that Antonio and Jorge Macli and Sandra Huarte engaged in a sophisticated scheme to use a series of ostensibly legitimate corporations to conceal and launder Biscayne Milieu’s fraudulent profits.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
The case is being prosecuted by Assistant U.S. Attorneys for the Southern District of Florida Michael Davis, Marlene Rodriguez and James V. Hayes. Hayes was formerly a Trial Attorney in the Criminal Division’s Fraud Section. The case was investigated by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 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.
Friday, April 5, 2013
Miami-Based Health Care Clinic and Its Owners and Operators Sentenced for $50 Million Fraud Scheme
The owners and operators of Biscayne Milieu, a Miami-based mental-health clinic, and the clinic itself were sentenced today for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Antonio Macli, 73, Jorge Macli, 41 and Sandra Huarte, 49, all of Miami, and Biscayne Milieu were sentenced by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. Antonio Macli was sentenced to serve 360 months in prison; Jorge Macli was sentenced to serve 300 months in prison; and Huarte was sentenced to serve 262 months in prison. In addition, Biscayne Milieu, the corporate entity these defendants controlled, was sentenced to one year of probation. In addition to their prison terms, Antonio Macli, Jorge Macli and Huarte were each sentenced to serve three years of supervised release. Restitution payments for each of the defendants will be determined on April 25, 2013.
The defendants were each convicted on Aug. 24, 2012, of conspiracy to commit health care fraud, at least one substantive count of health care fraud, and conspiracy to offer and pay kickbacks following a two-month jury trial. Antonio and Jorge Macli and Huarte were also each convicted of conspiracy to commit money laundering and substantive money laundering counts at trial.
According to the evidence at trial, Biscayne Milieu was a closely held, family-run fraudulent clinic that was owned by Antonio Macli and his son Jorge Macli. Antonio Macli’s daughter Sandra Huarte was an executive at the clinic. Together the defendants created and oversaw a scheme in which they, along with their co-defendants, submitted over $50 million in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided or that were not reimbursable under applicable Medicare rules. Many of the patients admitted to Biscayne Milieu that they were not eligible for PHP treatment because they were chronic substance abusers, suffered from dementia and would not benefit from group therapy, or were not mentally ill and were procuring false diagnoses of mental illness in order to obtain exemptions from the civics portion of the U.S. citizenship application.
The evidence at trial further showed that Antonio and Jorge Macli and Huarte collectively paid patient recruiters more than $1 million in illegal kickbacks to recruit Medicare patients who were ineligible for PHP treatment. Biscayne Milieu then billed Medicare for tens of millions of dollars in PHP treatments for these patients. Antonio and Jorge Macli and Huarte also hired doctors, therapists and other health care professionals to further their massive illegal scheme. Along with co-conspirators working at their direction, they created falsified medical records intended to conceal their Medicare fraud and phony "case manger" contracts in an attempt to hide their extensive illegal kickbacks.
Antonio Macli was the initiator of the fraud scheme, enlisted his son and daughter to participate in it and had primary control over the clinic’s bank accounts that received money stolen from Medicare that was then used to pay illegal kickbacks.
Jorge Macli was most responsible for the clinic’s day-to-day operations and took steps, on a daily basis, to conceal and further the fraud, including deflecting complaints from patients and staff and paying bribes to patients in exchange for their silence.
Huarte oversaw both the kickback payments and the Medicare billings for the clinic. Huarte ensured that Biscayne Milieu’s fraudulent claims could pass scrutiny by Medicare by creating fraudulent paperwork and medical files, and soliciting other employees to do the same, so that these false claims were paid.
Evidence further revealed that Antonio and Jorge Macli and Sandra Huarte engaged in a sophisticated scheme to use a series of ostensibly legitimate corporations to conceal and launder Biscayne Milieu’s fraudulent profits.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
The case is being prosecuted by Assistant U.S. Attorneys for the Southern District of Florida Michael Davis, Marlene Rodriguez and James V. Hayes. Hayes was formerly a Trial Attorney in the Criminal Division’s Fraud Section. The case was investigated by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 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, April 7, 2013
CINCINNATI CONTRACTOR SENTENCED FOR ROLE STEALING FROM EMPLOYEE 401k FUNDS
FROM: U.S. DEPARTMENT OF LABOR
CINCINNATI – The owner and president of Sigma Capital, Inc. in Cincinnati, Samuel P. Mays, 62, was sentenced in U.S. District Court today to 51 months in prison followed by three years of supervised release for bribing a government official and stealing from his employees’ 401k funds.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robert Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Office (FBI), Elton Malone, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Special Investigations Branch, and L. Joe Rivers, Regional Director, U.S. Department of Labor, Employee Benefits Security Administration announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith.
A jury convicted Mays in September 2012 of one count each of bribery of a public official, conspiracy, theft or embezzlement from an employee pension plan, and making false statements.
The scheme involved Mays and another construction contractor, Paul McDonald, 70, of Pleasant Hill, California, and David Mersch, 61, the former Operations Officer for the Cincinnati offices of the U.S. Centers for Disease Control in Cincinnati.
According to trial testimony, Mersch, who lived in Florence, Kentucky accepted bribes from Mays and McDonald in the form of cash and home improvements with a value of at least $175,000 between 2005 and 2011. The jury also convicted Mays of deducting approximately $125,000 from his employees’ paychecks for contribution to their 401k plans, but never depositing the money.
"The nature of a bribery offense is difficult to quantify, because the victim is the public at large and the damage extends beyond the dollars exchanged," Assistant U.S. Attorney Tim Mangan wrote in a memorandum filed with the court prior to sentencing. "This pattern of bribery undermines the government contracting process and destroys the presumed impartiality of federal contracting officers."
McDonald pleaded guilty on November 9, 2011 to one count of bribery. He was sentenced on October 31, 2012 to serve five years of probation including 21 months of home confinement and pay a $5,000 fine. He was also disqualified from holding any office of honor, trust or profit and ordered to resign his employment with Entek Mechanical Corporation and to cooperate with the United States in seeking the surrender of Entek’s certification as a government contractor. Mersch pleaded guilty on July 19, 2011 to bribery and is serving 42 months in federal prison. Both testified against Mays during the trial.
"Mays victimized taxpayers and jeopardized his hard-working employees’ futures," said Elton Malone, Special Agent in Charge of the Special Investigations Branch within the U.S. Department of Health and Human Services’ Office of Inspector General. "We will not tolerate conspiracy schemes and will continue to work tireless to punish such corruption."
"Employer sponsored retirement plans serve a vital role in providing a financially secure retirement for America’s workers," said L. Joe Rivers, Regional Director for the Cincinnati Regional Office of the Labor Department’s Employee Benefits Security Administration. "This case underscores EBSA’s commitment to protecting the assets of 401(k) and other employee benefit plans and punishing those who would divert these funds for their own enrichment."
Stewart commended the cooperative investigation by FBI, HHS inspector general, and Department of Labor investigators, as well as Assistant U.S. Attorneys Timothy Mangan and Christy Muncy, who represented the United States in this case.
Mays will surrender to begin serving his prison sentence on a date to be set by the U.S. Marshals Service and the Bureau of Prisons.
CINCINNATI – The owner and president of Sigma Capital, Inc. in Cincinnati, Samuel P. Mays, 62, was sentenced in U.S. District Court today to 51 months in prison followed by three years of supervised release for bribing a government official and stealing from his employees’ 401k funds.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robert Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Office (FBI), Elton Malone, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Special Investigations Branch, and L. Joe Rivers, Regional Director, U.S. Department of Labor, Employee Benefits Security Administration announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith.
A jury convicted Mays in September 2012 of one count each of bribery of a public official, conspiracy, theft or embezzlement from an employee pension plan, and making false statements.
The scheme involved Mays and another construction contractor, Paul McDonald, 70, of Pleasant Hill, California, and David Mersch, 61, the former Operations Officer for the Cincinnati offices of the U.S. Centers for Disease Control in Cincinnati.
According to trial testimony, Mersch, who lived in Florence, Kentucky accepted bribes from Mays and McDonald in the form of cash and home improvements with a value of at least $175,000 between 2005 and 2011. The jury also convicted Mays of deducting approximately $125,000 from his employees’ paychecks for contribution to their 401k plans, but never depositing the money.
"The nature of a bribery offense is difficult to quantify, because the victim is the public at large and the damage extends beyond the dollars exchanged," Assistant U.S. Attorney Tim Mangan wrote in a memorandum filed with the court prior to sentencing. "This pattern of bribery undermines the government contracting process and destroys the presumed impartiality of federal contracting officers."
McDonald pleaded guilty on November 9, 2011 to one count of bribery. He was sentenced on October 31, 2012 to serve five years of probation including 21 months of home confinement and pay a $5,000 fine. He was also disqualified from holding any office of honor, trust or profit and ordered to resign his employment with Entek Mechanical Corporation and to cooperate with the United States in seeking the surrender of Entek’s certification as a government contractor. Mersch pleaded guilty on July 19, 2011 to bribery and is serving 42 months in federal prison. Both testified against Mays during the trial.
"Mays victimized taxpayers and jeopardized his hard-working employees’ futures," said Elton Malone, Special Agent in Charge of the Special Investigations Branch within the U.S. Department of Health and Human Services’ Office of Inspector General. "We will not tolerate conspiracy schemes and will continue to work tireless to punish such corruption."
"Employer sponsored retirement plans serve a vital role in providing a financially secure retirement for America’s workers," said L. Joe Rivers, Regional Director for the Cincinnati Regional Office of the Labor Department’s Employee Benefits Security Administration. "This case underscores EBSA’s commitment to protecting the assets of 401(k) and other employee benefit plans and punishing those who would divert these funds for their own enrichment."
Stewart commended the cooperative investigation by FBI, HHS inspector general, and Department of Labor investigators, as well as Assistant U.S. Attorneys Timothy Mangan and Christy Muncy, who represented the United States in this case.
Mays will surrender to begin serving his prison sentence on a date to be set by the U.S. Marshals Service and the Bureau of Prisons.
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