Whistleblower Group

January 29, 2016

Amalya Cherniavsky and her husband Vladislav Tcherniavsky, the former owner and former operator of California-based durable medical equipment supply company JC Medical Supply were sentenced  for their roles in a $1.5 million Medicare fraud scheme.  They were ordered to pay $614,418 in restitution and Tcherniavsky was ordered to serve 51 months in prison.  The evidence at trial demonstrated that they paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions—primarily for expensive, medically unnecessary power wheelchairs—which the defendants then used to support fraudulent bills to Medicare.  DOJ

January 29, 2016

Arthur Budovsky, founder of Liberty Reserve, which billed itself as the Internet’s "largest payment processor and money transfer system," pleaded guilty to running a massive money laundering enterprise used by cybercriminals around the world to launder the proceeds of their illegal activity.  Budovsky specifically designed Liberty Reserve to help users conduct anonymous and untraceable illegal transactions and launder the proceeds of their crimes.  Before the government shut it down in May 2013, Liberty Reserve had more than 5 million user accounts worldwide and had processed millions of transactions.  Budovsky admitted to laundering more than $250 million in criminal proceeds.  DOJ

January 29, 2016

U.S. Navy Lieutenant Commander Todd Dale Malaki was sentenced to 40 months in prison and pay a $15,000 fine and $15,000 in restitution for accepting bribes from foreign defense contractor Glenn Defense Marine Asia (GDMA) in exchange for classified U.S. Navy ship and submarine schedules and other internal Navy information.  While he was working as a supply officer for the U.S. Navy’s Seventh Fleet, Malaki began a corrupt relationship with Leonard Glenn Francis, the former president and CEO of GDMA, a company that provided port services to U.S. Navy ships and submarines throughout the Pacific.  As part of the scheme, Malaki provided Francis with classified U.S. Navy ship schedules and proprietary invoicing information about GDMA’s competitors in exchange for luxury hotel stays in Singapore, Hong Kong and the island of Tonga, as well as envelopes of cash, entertainment expenses and the services of a prostitute.  To date, 10 individuals have been charged in connection with this scheme.  DOJ  Just a day earlier, U.S. Navy Commander Michael Vannak Khem Misiewicz pleaded guilty to participating in the same scheme.  DOJ

January 27, 2016

Mohammed Elsaleh, owner and operator of former Houston-area ambulance company National Care EMS agreed to settle allegations that he and the company provided kickbacks to various nursing facilities and hospitals in exchange for rights to the institutions’ more lucrative Medicare and Medicaid transport referrals.  The settlement calls for Elsaleh to pay $125,000 to resolve the “swapping” allegations made against him and the company.  Elsaleh’s brother, Husam Alsaleh, the owner and operator of a successor company also called National Care EMS agreed to pay $120,000 in furtherance of the settlement.  DOJ (SDTX)

January 27, 2016

Milton Russ Barnhill was sentenced to 11 years in prison for conspiring with others to defraud the Federal Crop Insurance Corporation and the Farm Service Agency, both agencies of the United States, in connection with federal crop insurance claims and other federal taxpayer subsidies.  As charged, Barnhill produced crops which he sold in the names of others which he then reported on insurance claims that the crops were lost due to natural disasters.  He also placed crops and insurance policies into the names of conspirators to boost the amount of money he could collect on the insurance claims.  DOJ (EDNC)

January 27, 2016

Arizona developer and attorney John Keith Hoover was sentenced to 10 years in prison for his role in a major investment and bankruptcy fraud in which he created nearly two dozen companies solicit money from Arizona and California investors for bogus real-estate developments.  Several investors were widows who gave Hoover control of the bulk of their estates based on his friendship with their families and because of the trust he developed as an attorney.  Hoover encouraged investors to liquidate retirement accounts, life-insurance policies, mutual funds and securities, and Social Security death benefits to fund their investments with him, and then used investor money to pay his living expenses.  When he ran out of money, he refinanced properties with false representations about salary, assets, liabilities, employment, and sources of down payments. Then, he and his wife filed bankruptcy while hiding assets.  DOJ (AZ)

January 29, 2016

Florida arrested three individuals for allegedly defrauding Medicaid out of more than half a million dollars. Two more defendants are being sought by authorities for arrest. According to the investigation, Matthew, Micah and Jimmie Harrell, along with Kenneith Durden and Keith Daly, billed Medicaid for services not provided and fraudulently used a licensed mental health provider’s information without that provider’s knowledge or consent to become accepted as a Medicaid provider. Matthew Harrell and Kenneith Durden allegedly set up parallel, fraudulent business operations in Florida, Georgia and Louisiana that all engaged in similar criminal activities. The businesses operated under the names Revive Athletics Florida, Divine Consulting Services, and Durden Consulting Services of Florida. FL