Government Enforcement Actions

September 22, 2014

Akinola Afolabi, former owner of Long Beach, California medical supply company Emmanuel Medical Supply was sentenced to serve 30 months in prison and ordered to pay $1.5 million in restitution for his role in a scheme to provide unnecessary power wheelchairs to Medicare patients, resulting in $2.6 million in fraudulent claims to Medicare.DOJ

September 19, 2014

Stewart and Michael Parnell , two former officials of the Peanut Corporation of America (PCA), were convicted of conspiracy, mail and wire fraud, and the introduction of misbranded food into interstate commerce in connection with the unlawful sale of salmonella-tainted peanuts and peanut products. Expert evidence at trial showed that tainted food led to an outbreak in 2009 with more than 700 reported cases of salmonella poisoning which translates into more than 22,000 total cases. The government presented evidence the Parnells defrauded PCA customers and jeopardized the quality and purity of their peanut products. Specifically, the government presented evidence that defendants misled customers and the FDA about the presence of salmonella in their products. DOJ

September 18, 2014

Three patient recruiters were sentenced to prison for their participation in a $20 million health care fraud scheme involving defunct home health care company Trust Care Health Services. Estrella Perez was sentenced to 37 months and ordered to pay $1.2 million; Solchys Perez was sentenced to 30 months and ordered to pay $746,000; and Abigail Aguila was sentenced to 30 months and ordered to pay $491,000. According to court documents, Estrella Perez, Solchys Perez, and Aguila recruited patients for Trust Care, a Miami home health care agency, in exchange for kickbacks paid in cash or by check to the defendants or their shell companies. In turn, Trust Care billed the Medicare program for home health care and therapy services that were not medically necessary or were not provided. DOJ

September 17, 2014

Fort Lauderdale based home health care company A Plus Home Health Care, and its owners Tracy and Stephen Nemerofsky, agreed to pay $1.65 million to settle charges A Plus violated the False Claims Act by paying spouses of referring physicians for sham marketing positions to induce patient referrals. According to the government, the company allegedly hired at least seven spouses and one boyfriend of physicians to perform marketing duties but required them to do little if any real work. Their salaries instead were allegedly for the purpose of inducing and rewarding the physicians’ referrals of Medicare patients to A Plus. Whistleblower Insider

September 16, 2014

Wesley Harlan Kingsbury, general manager of the Southern California ambulance company Alpha Ambulance Inc., pleaded guilty to conspiracy to commit Medicare fraud. According to court documents, Kingsbury conspired with Alex Kapri and Aleksey (Russ) Muratov, the owners of Alpha Ambulance, as well as the training supervisor Danielle Medina, to bill Medicare for ambulance transportation services for individuals that Kingsbury knew did not need to be transported by ambulance. In addition, he instructed emergency medical technicians that worked at Alpha Ambulance to conceal the true medical condition of patients they were transporting by altering requisite paperwork and creating false reasons to justify the transportation services. DOJ

September 15, 2014

Episcopal Ministries to the Aging, a Maryland not-for-profit corporation that owns skilled nursing facilities, agreed to pay $1.3 million for submitting false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc. DOJ

September 11, 2014

Hewlett-Packard subsidiary Hewlett-Packard Russia pleaded guilty to felony violations of the Foreign Corrupt Practices Act (FCPA) for bribing Russian government officials to secure a large technology contract with the Office of the Prosecutor General of the Russian Federation. According to the plea agreement, HP Russia executives created a multimillion dollar secret slush fund, at least part of which was used to bribe Russian government officials who awarded the company a contract valued at more than 35 million euros. HP Russia will pay a $58.8 million fine. DOJ

September 9, 2014

Don Langford, former chief credit officer and senior vice president of Nebraska-based TierOne Bank, pleaded guilty for his role in a scheme to defraud TierOne’s shareholders and regulators. Specifically, Langford conspired with others to hide losses at the bank by cooking the bank’s books and reporting falsified information to stakeholders, regulators, external auditors, and the investing public. The bank even made an unsuccessful attempt to get taxpayer TARP funds in November 2008. TierOne filed for bankruptcy shortly after the Office of Thrift Supervision shut the bank down in June 2010. DOJ

September 8, 2014

Cruz Sonia Collado, the owner and operator of now defunct home health care company Nestor’s Health Services was sentenced to 75 months in prison and ordered to pay $6.5 million in restitution for her participation in a $6.5 million Medicare fraud scheme under which she paid kickbacks and bribes to patient recruiters in return for their providing patients to Nestor’s for home health care and therapy services that were medically unnecessary and, in many instances, not provided. DOJ

September 5, 2014

Life Care Services LLC, a manager of skilled nursing facilities based in Des Moines, Iowa, and CoreCare V LLP, doing business as ParkVista, a skilled nursing facility in Fullerton, California, agreed to pay a total of $3.75 million for causing the submission of false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc. DOJ