Government Enforcement Actions

May 12, 2016

Kentucky anesthesiologist Jaime Guerrero was sentenced to 100 months in prison for his role in the unlawful distribution of controlled substances, including the prescription opioid hydrocodone without a legitimate medical purpose.  Guerrero also agreed to pay $827,000 in victim restitution to nine health care benefit programs.  He also pleaded guilty to multiple counts of unlawful distribution or dispensing of controlled substances, health care fraud, conspiracy and money laundering.  DOJ

May 9, 2016

CA oncologist Dr. John F. Kiraly and his wife Rena Kiraly, who served as the doctor’s office administrator, have paid $300,000 to settle allegations that they violated the False Claims Act by improperly billing Medicare for certain chemotherapy drugs purchased from an unlicensed foreign pharmaceutical distributor.  Specifically, the Kiralys purchased chemotherapy drugs from Warwick Healthcare Solutions Inc., also known as Richards Pharma, a former United Kingdom-based drug distributer that distributed non-FDA approved drugs throughout the United States.  DOJ (EDCA)

May 13, 2016

A Somerville-based ambulance services provider has been sued for allegedly overbilling the state’s Medicaid program (MassHealth) for more than $600,000 in ambulance services that reflected a higher level of care than was actually provided. The complaint against Cataldo Ambulance Service, Inc. (Cataldo), filed on Thursday in Suffolk Superior Court, alleges that from 2005 to November 2015, Cataldo billed MassHealth for Emergency Advanced Life Support (ALS) services when, in fact, the patient’s condition at the scene only required, and the patient only received, Emergency Basic Life Support (BLS) services. Cataldo provides a variety of transportation services, including emergency ambulance services, throughout the Greater Boston area. According to the complaint, Cataldo’s inappropriate billing practices persisted despite being notified that, in many instances, the patient’s condition and the services rendered were insufficient to justify billing at an ALS level. MA

May 13, 2016

Georgia announced that Family Dermatology, P.C. has entered into a settlement with the State of Georgia in response to allegations that it violated the Georgia Fair Business Practices Act by attempting to collect debts from consumers without sufficiently confirming that the debts were valid and/or that the billing statements were accurate. A number of consumers claimed they had been billed for services for which they had already paid, while others alleged that the company failed to timely submit claims to consumers’ insurance providers, resulting in the insurance providers denying the claims and consumers then being charged. When consumers tried to contact Family Dermatology to question the bills, most claimed they were unable to get through to customer service. Family Dermatology, P.C., while denying any wrongdoing, has entered into an Assurance of Voluntary Compliance which requires it to pay restitution to consumers who, due to the company’s billing practices, paid alleged debts they did not owe. The company must also cease collecting on 42,301 customer accounts for services provided prior to April 1, 2013, totaling $8,892,215, and pay $5,000 in fees and penalties. GA

May 13, 2016

Michael Mancil Brown was found guilty by a federal jury sitting in Nashville for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns. Brown, 37, of Franklin, Tennessee, was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion. According to testimony at trial, evidence recovered from a computer seized from the home of Brown in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers LLP and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010. Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns. The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account. DOJ

May 11, 2016

The CFPB took action against All American Check Cashing, Inc., which offers check cashing and payday loans, and its owner Michael Gray, for allegedly tricking and trapping consumers.  The complaint alleges that All American tried to keep consumers from learning how much they would be charged to cash a check, used deceptive tactics to stop consumers from backing out of transactions, made deceptive statements about the benefits of its high-cost payday loans, and also failed to provide refunds after consumers made overpayments on their loans.  CFPB

May 11, 2016

Pennsylvania announced the arrest of a Dauphin County man charged in connection with the alleged theft of $5.7 million from clients of his former payroll service company. According to a criminal complaint, William Simon Sullivan Jr., 42, was the owner and operator of a company known as Net Pay Solutions, Inc., a payroll service that is no longer in business. Prior to a bankruptcy filing, the company at one time handled payroll processing, as well as the payment of federal, state and local taxes for more than 200 businesses located throughout the country. It is alleged that Sullivan, as the business’ chief executive, used funds that were allocated solely to pay his clients’ taxes to instead pay his company’s operating expenses and financial obligations. He also is accused of using client funds to cover personal spending on vehicles, travel and home renovations, investigators allege in a criminal complaint. PA

May 11, 2016

A federal grand jury in the District of Nevada returned a superseding indictment charging a Las Vegas woman with two counts of filing false tax returns with the Internal Revenue Service (IRS) and one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws. According to the superseding indictment, from at least 2005 through at least 2009, Judith Woodward, then known as Judith Atwell, was the 99 percent owner and joint operator of a dry cleaning business, Canyon Gate Cleaners, in Las Vegas, Nevada, which she held in the name of a partnership called Canyon Enterprises LLC. Woodward is alleged to have underreported the gross receipts of Canyon Gate Cleaners on the partnership’s 2005 through 2009 tax returns. She is also alleged to have underreported her personal income on her 2005 through 2009 individual income tax returns. According to the superseding indictment, between at least 2005 and 2009, Woodward concealed the true gross receipts of the business by depositing hundreds of thousands of dollars of cash receipts into personal bank accounts she controlled or by not depositing the cash receipts into any bank account. DOJ

May 11, 2016

A federal court has ordered West Palm Beach-area tax return preparer Paul Jean not to prepare federal tax returns for anyone except himself. The order was entered after Jean failed to respond to the United States’ civil complaint. According to the complaint, Jean has operated under the business names Whiz Tax and Rejoice Tax Services. The complaint alleges he has prepared returns that claim fabricated or inflated tax credits including claiming improper earned income tax credits, education credits, or fuel credits. The Internal Revenue Service (IRS) estimates that Jean, directly or indirectly, has prepared and filed more than 3,000 tax returns since 2012, according to the complaint, and that the harm Jean’s conduct has inflicted on the U.S. Treasury may be in the millions of dollars. DOJ

May 11, 2016

A federal grand jury sitting in New Orleans, Louisiana, returned an indictment against a LaPlace, Louisiana, woman charging her with 37 counts of aiding and assisting in the preparation of false tax returns, eight counts of contempt of court, one count of bank fraud and one count of forgery of a judge’s signature. According to the indictment, Shawanda Nevers aka Shawanda Hawkins and Shawanda Bryant, operated a tax return preparation business under several names and at various locations in the LaPlace area. It is alleged that between 2011 and 2016, Nevers filed 37 false tax returns for clients that claimed a variety of fraudulent losses and deductions, including false Schedule C businesses and false unreimbursed employee expenses. In September 2014, a federal judge permanently enjoined Nevers from preparing federal tax returns. Nevers is charged with contempt of court for violating that injunction by preparing eight federal income tax returns in 2015 and 2016. Nevers also is charged with forging the signature of a federal bankruptcy judge on a false document purporting to be an order reinstating a bankruptcy petition and with bank fraud for submitting a fraudulent claim for losses supposedly caused by the BP Deepwater Horizon oil spill in 2010. DOJ