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Top Ten Financial and Healthcare Fraud Prison Sentences of 2021

Posted  January 28, 2022

Individuals involved in financial and healthcare fraud schemes face not just civil liability, but also criminal penalties – including prison time. In 2021, the Department of Justice obtained substantial prison sentences in a myriad of cases involving healthcare and financial frauds, many of which involved convictions of the type of fraudulent schemes that whistleblowers report. Whistleblowers play an essential role in exposing fraud and bringing information to the government that can result in recoveries for taxpayers and injured parties, as well as criminal investigations and sentencing.

Below are the top 10 prison sentences we found notable in 2021 in cases involving financial & investment fraud or healthcare and pharmaceutical fraud. Each description has links with more information about each of the cases and the types of fraud schemes that resulted in the prison sentences.

  1. Javaid Perwaiz, an OB/GYN who practiced in Hampton Roads, Virginia, was sentenced to 59 years in prison after a jury convicted him of charges related to his performance of hysterectomies, sterilizations, and other medically unnecessary surgeries and procedures on patients without their informed consent – in many cases by falsely telling them they had cancer or needed the procedure to avoid cancer.  In addition, Perwaiz induced labor in patients early so that he could bill for the deliveries, sometimes falsifying records to support the induction.
  2. Daryl Bank of Port St. Lucie, Florida was sentenced to 35 years in prison following his conviction at trial on securities fraud charges related to his sale, through his company Dominion Private Client Group, of unregistered securities in companies that he owned and controlled, despite his previous FINRA bar from the securities industry.
  3. Jeff Carpoff, the owner of California-based DC Solar, was sentenced to 30 years in prison for his role in a billion-dollar Ponzi scheme.  Together with his wife Paulette and five other co-conspirators, Carpoff lied to investors about market demand for his company’s mobile solar generator (MSG) units, using false lease contracts and financial statements to back up the lie.  In addition to selling thousands of MSGs that didn’t even exist, the defendants paid prior investors using funds from newer investors, then laundered their ill-gotten gains.
  4. Brenda Rodriguez, the owner, and operator of Texas-based QC Medical Clinic, was sentenced to 25 years in prison for running an $11 million healthcare fraud scheme that involved paying doctors to approve Medicare beneficiaries for home health services. She then sold the physician approvals to various home health providers, causing the providers to bill Medicare for services that were medically unnecessary, never provided, and/or arose from illegal inducements.
  5. Trivikram Reddy, a Nurse Practitioner, was sentenced to 20 years in prison for healthcare conspiracy and wire fraud.  Reddy stole the identities of six physicians by submitting fraudulent bills to Medicare and private insurers.  To hide his crimes, Reddy manufactured medical records to support his fraudulently-submitted bills and diverted millions of dollars in proceeds of the fraud to himself.  In addition to the prison sentence, Reddy was ordered to pay more than $52 million in restitution.
  6. Jonathan Dean Davis, the owner of the Retail Ready Career Center, a for-profit trade school, was sentenced to nearly 20 years in prison following his conviction on education fraud  Davis marketed his school’s HVAC training course to veterans by falsely securing certification of his program by Texas state agencies in order qualify the program under the Veteran’s Educational Assistance Act.  In fact, Retail Ready used up veteran’s GI Bill benefits and failed to prepare them for careers while collecting more than $72 million in GI Bill benefits from the VA.  Davis was also ordered to pay $65.2 million in restitution and forfeit $72.5 million.
  7. Wayde McKelvy, a Colorado resident, was sentenced to 18 years in prison and ordered to pay $37 million in restitution after being convicted for running a Ponzi scheme.  McKelvy and others operated Mantria Corporation, which they claimed offered huge returns by investing in real estate and green energy projects.  The defendants obtained more than $54 million in funds from duped investors.
  8. Wade Ashley Walters, the co-owner of multiple compounding pharmacies and pharmaceutical distributors in Mississippi, was sentenced to 18 years in prison and ordered to pay over $287 million in restitution and over $56 million in forfeiture after pleading guilty to healthcare fraud and money laundering.  Ashley Walters admitted to being the mastermind behind a four-year scheme that defrauded TRICARE and private health benefit programs of over $287 million.  To perpetuate the compounding pharmacy fraud, Walters and his co-conspirators solicited and paid recruiters to procure prescriptions for highly reimbursed compounded medications, solicited and paid physicians to authorize prescriptions for same, adjusted prescription formulas to ensure the highest reimbursement possible, and improperly waived or reduced mandatory beneficiary copayments.
  9. Alberto Orian Gonzalez-Delgado was sentenced to 5 years in prison after pleading guilty to conspiracy to commit health care fraud and wire fraud.  He was one of eight individuals to be sentenced for a money laundering scheme in Florida and Michigan involving the use of nominee owners to fraudulently purchase home health agencies and then bill Medicare for services that were never provided to Medicare beneficiaries.  The defendants caused the payment of approximately $53 million in fraudulent claims.
  10. Richard Ayvazyan was sentenced to 17 years in prison for fraudulently obtaining more than $20 million in Paycheck Protection Program and Economic Injury Disaster Loan COVID-19 relief funds.  Ayvazyan’s wife, Marietta Terabelian, and brother, Artur Ayvazyan, were also convicted for participating in the COVID-19 fraud scheme, and sentenced, respectively, to six and five years in prison.  The defendants used dozens of false identities to submit fraudulent applications for approximately 150 PPP and EIDL loans, supporting applications with false and fictitious documents including fake identity documents, tax documents, and payroll records.

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Tagged in: Compounding Pharmacy Fraud, COVID-19, Criminal Proceedings, Education Fraud, Financial and Investment Fraud, Healthcare Fraud, Home Health and Hospice, Lack of Medical Necessity, Medicare, Money Laundering, Ponzi Schemes, Securities Fraud, Top 10,