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Criminal Proceedings

This archive displays posts tagged as involving criminal law proceedings relevant to whistleblowers. You may also be interested in our pages:

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October 16, 2018

Two doctors and three nurses were sentenced to prison for their roles in fraudulently billing Medicare $11 million through claims submitted by two companies—Timely Home Health Services Inc., a home health provider, and Boomer House Calls, a house call provider, both in the Dallas area. The scheme allegedly took place from 2007 to 2015 and involved falsifying records so it appeared that Medicare beneficiaries received home health services when in fact they did not. The five defendants will serve sentences ranging from as little as 6 months to as much as 10 years in prison. DOJ

October 16, 2018

A Medicaid transportation provider, its president, and a driver have been sentenced to pay a $10,000 fine and serve 2-4 years in prison for stealing a total of $1.2 million from New York's Medicaid program. The driver who was sentenced, Haimid Thompson, was accused of paying a Medicaid recipient to enroll in services from his employer and submitting falsified logs showing daily trips on behalf of the recipient. He was ordered to pay $23,598. The company, 716 Transportation, Inc., was sentenced to a fine of $10,000, and the president, Wossen Ambaye was ordered to pay restitution of $900,497, for knowing the services billed were not actually provided. NY AG

October 15, 2018

The heir of a family skincare business has been sentenced to almost 3 years in prison for multiple counts of tax fraud. James Wright of B&P Company, Inc.—which has been selling a wrinkle reduction product called Frownies since 1889—allegedly diverted money from the company to a series of entities that he then used to fund personal expenses. Through a company he called The Remnant, Inc., Wright paid rent and utilities for himself and other immediate family members. Through a private foundation he called Fore Fathers Foundation, he paid high school and college tuition for his five children. According to the DOJ press release, Wright had previously pleaded guilty to concealing income through trusts. In addition to the new prison sentence, he is ordered to pay almost restitution of $150,000. DOJ

October 12, 2018

A father and son duo has plead guilty to causing over $27 million in losses from Affordable Care Act (ACA) programs in twelve states, including Arizona, California, Connecticut, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, and Texas. Jeffrey and Nicholas White of California allegedly made a living from drug rehabilitation centers through patient referral bonuses and cuts of money paid out by ACA programs. To maximize their profits, they enrolled participants in ACA programs in high paying states, regardless of whether the participants even lived in that state. The Whites also went to great lengths to further the fraud, including creating fictitious contact information, paying patients' insurance premiums, and paying for their transport to out-of-state rehabilitation centers. They each face a maximum of 10 years in prison. USAO CT

October 11, 2018

A Washington couple will serve time in federal prison for defrauding investors of $12.7 million over the course of 7 years. Delving into their ties to various religious organization, Laurence Hong and Grace Hong convinced more than 55 clients to invest their life savings in a hedge fund that they called Pishon Holdings, by claiming that Laurence had experience investing vast sums of money on behalf of wealthy families and Grace had experience working for an investment firm. In fact, Laurence, also known as Sung Hong, had just completed a nearly 3 year sentence for investment fraud when he began the new scheme. With the funds they stole from investors, the couple paid for rent on a house, bought a yacht and multiple luxury vehicles (including an Aston Martin, BMW, Lamborghini, and Maserati), and went on extravagant family vacations to the Bahamas and Beverly Hills. Laurence will now serve another 15 years in prison, and Grace, also known as Hyun Joo Hong, will serve 6 years. They have also been ordered to pay restitution of more than $12.7 million. USAO WDWA

October 9, 2018

Darrell Smith, who had worked as an investment advisor in Northern Iowa, was sentenced to nearly 15 years in prison following a guilty plea for charges arising from his fraudulent  diversion of funds from his clients to bio-energy and ethanol companies that he owned and/or controlled.  Smith stole over $2.4 million from client accounts, and has been ordered to pay restitution of over $ 1 million.   DOJ

October 4, 2018

Mercy Ainabe of Houston, Texas, was sentenced to nine years in prison for her role in a $3.6 million home healthcare Medicare fraud scheme.  Ainabe served as a patient recruiter, selling patient information to home healthcare companies, including Texas Tender Care, which then submitted claims to Medicare for home health services that were not medically necessary, were not provided, or both. USAO SDTX

September 27, 2018

Millicent Traylor, M.D., of Detroit, Michigan was sentenced to over 11 years in prison today for her part in a health care scheme against Medicare from 2011 to 2016. Traylor and her co-conspirators defrauded Medicare of an estimated $8.9 million during that period. They submitted fraudulent claims for home health care services and other services which were not provided or not medically necessary. At times, the physician services which were provided were provided by Dr. Traylor, though she was unlicensed during that period. Furthermore, evidence presented during the four-day trial showed that Traylor forged the signature of licensed physicians on prescriptions for opioid medications, oxycodone for instance, as a way to encourage patient participation in the scheme. Traylor’s three co-conspirators will also serve time in prison.  DOJ  

September 25, 2018

Edward J. DiMaria, the former chief financial officer of Bankrate, Inc., a publicly traded company, plead guilty and was sentenced to ten years in prison for orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.  DiMaria admitted that between 2010 and 2014 he took actions to artificially inflate Bankrate’s earnings by leaving millions of dollars in unsupported expense accruals on Bankrate’s books, then selectively reversing those accruals in later quarters to boost earnings, as well as misrepresenting other company expenses.  DiMaria lied to Bankrate's independent auditors to conceal the fraud.  As a result of the accounting fraud, Bankrate’s financial statements filed with the SEC were materially misstated.  S.D. Fla. USAO; DOJ

September 24, 2018

Azam Doost, the former owner of Equity Capital Mining LLC, which operated a marble mine in Afghanistan, was convicted for defrauding the Overseas Private Investment Corporation, a U.S. government agency in a $15.8 million loan the company obtained from OPIC. Doost had represented that he had no affiliation with mine suppliers who were paid from the loan proceeds; in fact, he had financial relationships with several of the suppliers, and diverted OPIC funds paid to those suppliers for his own use.  DOJ  For information on later sentencing, see here.
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