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Top Ten Financial and Healthcare Fraud Prison Sentences of 2018

Posted  January 11, 2019

Financial and healthcare fraud schemes can result not just in civil investigations and liability, but also in prison time for the individuals involved.  In 2018, the Department of Justice obtained substantial prison sentences in numerous cases involving healthcare and financial frauds, helping to bring justice to the patients, investors, or individuals harmed by criminal fraudsters.  Many of the fraudulent schemes involved in these convictions are of the type that whistleblowers report, and whistleblowers can play an important role in bringing information to the government that leads to criminal investigations and charges.

The top financial and healthcare fraud prison sentences that we found interesting in 2018, based on the length of the sentence given, are listed below, with links to more information about each of the cases.

  1.  Rafael Arias– In February 2018, Rafael Arias, the owner of multiple home health agencies in South Florida was sentenced to 20 years in prison for his role in a $66 million Medicare fraud. In this home health care fraud scheme, Arias admitted to recruiting people to serve as false owners to mask his ownership interest in home health agencies, paying illegal bribes and kickbacks, and submitted fraudulent claims to Medicare.
  2. Arthur Lamar Adams– In October 2018, Arthur Lamar Adams was sentenced to approximately 19.5 years in prison for his role in a large Ponzi scheme that defrauded over 320 investors of over $165.5 million. Over a seven year period, Adams falsely told investors that his company, Madison Timber Properties, LLC bought and sold timber rights and that all investments in the company would go towards financing contracts with lumbar mills. In reality, Adams ran a Ponzi scheme with investors’ money, falsified timber deeds, forged signatures, and created false or fraudulent documents for investors.
  3. Edward Durante– In May 2018, Edward Durante was sentenced to 18 years in prison stemming from a scheme to defraud retirees of over $15 million and for committing perjury in an SEC deposition. Durante began the scheme while serving a prison sentence for a prior securities fraud conviction.
  4. Nicholas A. Borgesano– In April 2018, Nicholas Borgesano was sentenced to 15 years in prison and ordered to pay $54 million in restitution for his role in a massive compounding pharmacy fraud scheme conducted by his company A to Z Pharmacy. The compounding scheme generated over $100 million in fraud proceeds for Borgesano’s company. Borgesano admitted that he and his co-conspirators manipulated billing codes in reimbursement claims.
  5. Laurence and Grace Hong– In October 2018, Laurence and Grace Hong were sentenced to 15 and 6 years respectively in prison for their roles in defrauding investors of over $12 million over a seven year period. The Hongs convinced over 50 investors to invest their life savings in a hedge fund they created called Pishon Holdings. The Hongs told their clients that Laurence Hong had extensive experience in handling large sums when in reality he has just completed a 3 year prison sentence for investment fraud. The Hongs used client funds to fund extravagant purchases and vacations.
  6. Darrell Smith– In October 2018, Darrell Smith, a northern Iowa-based investment advisor, was sentenced to almost 15 years in prison for his role in diverting client funds to his own companies. Smith was found to have stolen over $2.4 million from client accounts and was ordered to pay over $1 million in restitution.
  7. Larry B. Howard– In March 2018, Larry Howard the owner of Florida-based Fertility Pharmacy was sentenced t0 13 years in prison for his role in a kickback scheme related to pain and scar creams. Howard’s kickback scheme resulted in the payment of $4.3 million in fraudulent claims.
  8.  Syed Imran Ahmed– In February 2018, Syed Ahmed was sentenced to 13 years in prison for his role in submitting millions of dollars worth of false and fraudulent claims to Medicare. Ahmed was a practicing physician at various New York facilities and billed Medicare for incision-and-drainage wound debridement procedures he did not perform.
  9. Jacklyn Price– In November 2018, Jacklyn Price, the owner of two Detroit-area health clinics  was sentenced to 13 years in prison for falsely billing Medicare for services obtained through kickbacks, were not medically necessary, were not actually provided, or were provided by unlicensed practitioners. Price was also ordered to pay $6 million in restitution for defrauding Medicare. Her co-defendants in the matter were sentenced in September.
  10. Roger Hudspeth– In May 2018, Virginia-based investment adviser Roger Hudspeth was sentenced to 12.5 years in prison for selling fraudulent, unregistered securities to his clients. The fraudulent securities were created, offered, and controlled by an associate of Hudspeth that had been banned by FINRA for other fraudulent activities. Hudspeth’s actions led to clients losing over $6 million.

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Tagged in: Criminal Proceedings, Financial and Investment Fraud, Healthcare Fraud, Securities Fraud, Top 10,