April 2012 Volume 8 Number 8

HEAT Actions Since the Beginning of FY2012

By Matthew Fisher, Mirick O’Connell, Worcester, MA

AuthorSince the beginning of Fiscal Year 2012, the Medicare Fraud Strike Forces (the “MFSF”) operating within the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”) have been very active, making numerous arrests, obtaining new indictments, securing plea bargains, and obtaining verdicts. HEAT is active across the country, with a significant portion of its recent enforcement activity occurring in Florida, Illinois, Louisiana, Michigan, New York, and Texas.

Major New Indictments

The current fiscal year has seen some of the largest indictments and takedowns of alleged Medicare fraud schemes ever. The following are highlights of a few indictments:

  • On November 2, 2011, the Department of Justice (“DOJ”), with the assistance of the New York MFSF, indicted twelve individuals, including four doctors and a chiropractor, of defrauding Medicare for more than $95 million by paying kickbacks to Medicare beneficiaries in order to use their names in falsely billing Medicare for physical therapy and other medically unnecessary services.1 Eleven of the defendants either were arrested or voluntarily surrendered immediately. At the time of the indictment, the twelfth defendant was expected to surrender soon thereafter.2
  • On November 3, 2011, DOJ, with the assistance of the Detroit MFSF, arrested and indicted a Detroit resident for his role in an alleged $30 million Medicare fraud scheme for submitting claims for services that were never provided or were medically unnecessary.3 It is alleged that the fraudulent claims were submitted through at least four home health agencies.
  • On February 8, 2012, DOJ, with the assistance of the Houston MFSF, indicted Mohammed Khan, a hospital assistant administrator, for allegedly participating in a fraud scheme concerning the submission of false claims for mental health treatment.4 It is alleged that Khan provided kickbacks to group care homes and assisted living facilities in exchange for delivering ineligible Medicare beneficiaries for partial hospitalization services at the administrator’s hospital. The alleged scheme fraudulently billed Medicare for $116 million.
  • On February 28, 2012, DOJ, with the assistance of the Houston MFSF, brought the largest Medicare fraud indictment in history of HEAT against Dr. Jacques Roy, a physician, his office manager, and five home health agency owners, in addition to suspending 78 home health agencies from participating in Medicare.5 The indictment is especially noteworthy for the use of new fraud detection tools that analyze large amounts of data to identify suspicious billing spikes.6 The scheme itself resulted in $375 million of fraudulent claims.
  • On March 6, 2012, DOJ, with the assistance of the Chicago MFSF, indicted eleven new defendants, including two physicians and four registered nurses, for charges of not providing services or providing medically unnecessary services to Medicare beneficiaries in the operation of two home health care businesses.7 This marks an expansion of one of the first actions for the Chicago MFSF, which was formed in 2011.

As can be seen from the indictments, HEAT is focusing a large part of its attention on the home health industry. This focus is further highlighted by a March 2012 report from the Office of the Inspector General that found 22 percent of claims were submitted in error because there was a lack of medical necessity or were coded inaccurately.8 Accordingly, more indictments in the home health field may reasonably be expected.

Major Resolutions

In addition to bringing a host of new enforcement actions, HEAT was also successful in bringing a number of actions to resolution. These resolutions include both plea bargains for prison time and restitution payments as well as favorable jury verdicts that also secured imprisonment for defendants and restitution payments to the Medicare Trust Fund.

  • DOJ, with the assistance of the Miami MFSF, secured multiple plea agreements in a fraud case involving falsification of patient records to create the appearance of qualifying for therapy and home health services.9 Beatriz Torres-Cruz pled guilty on November 8, 2011, ultimately receiving a sentence of 12 months imprisonment and a $195,000 restitution order. Three other defendants, Lisandra Alonso, Jose Ros and Farah Maria Perez, were sentenced on January 5, 2012, receiving a range of 6-78 months imprisonment and restitution orders ranging from $118,000 to $15.3 million. A fifth defendant, Jorge Pineiro, was sentenced on April 9, 2012 to 18 months imprisonment and a $118,000 restitution order.10
  • In January 2012, DOJ, with the assistance of the Miami MFSF, received multiple guilty pleas in related cases involving the payment of kickbacks to the owners and operators of assisted living facilities and halfway houses in return for referring patients for unnecessary diagnostic sleep disorder testing.11 One defendant, Barry Nash, the operator of a halfway house, received a sentence of 24 months in jail and was ordered to make a restitution payment of $366,139.12
  • DOJ, with the assistance of the Louisiana MFSF, obtained multiple guilty pleas in cases brought against durable medical equipment suppliers who allegedly obtained prescriptions for various types of medical equipment, which prescriptions were then sold to intermediary companies.13 The pleas were obtained on January 31, 2012, February 3, 2012 and February 6, 2012 and involved Chikenna Jones, an owner of one of the medical equipment companies, and Rodney Taylor and Fred Belcher, two individuals who acted as recruiters.14
  • On November 22, 2011, DOJ, with the assistance of the Detroit MFSF, obtained a guilty plea from Dr. Errol Sherman, a podiatrist who billed for thousands of nail avulsion procedures over a three year period, which included claims for procedures that were never rendered.15
  • On November 29, 2011, DOJ, with the assistance of the Michigan MFSF, received a guilty plea from Santiago Villa-Restrepo, a patient recruiter who bribed beneficiaries to visit clinics, which obtained the beneficiaries’ Medicare numbers and billed for medically unnecessary services.16 Mr. Villa-Restrepo received a sentence of 30 months imprisonment and was ordered to pay restitution of $2,998,321.94.17
  • On November 30, 2011, Vanessa Dowell, an occupational therapy assistant pled guilty for preparing and signing falsified occupational therapy files for services that were never provided, but still submitted for payment.18 Ms. Dowell was not certified as an occupational therapy assistant, and falsified records to aid her employer’s fraud scheme. The two owners of Ms. Dowell’s employer pled guilty on September 15, 2011 and January 18, 2012.19
  • On February 2, 2012, DOJ, with the assistance of the Detroit MFSF, obtained a guilty verdict against Tariq Mahmud, the owner of a rehabilitation agency.20 The agency purchased prepackaged falsified occupational therapy files that were then fraudulently billed to Medicare. The defendant submitted claims for more than $2 million.

The multiple plea agreements and verdicts show the full range of activities investigated under HEAT. The actual activities identified, however, do not vary much from case to case. The activities almost exclusively involved falsification of records to some degree that were then submitted for payment. The cases were also resolved quickly with most results coming less than a year after indictment.

What to Expect for the Rest of Fiscal Year 2012

In light of the numerous actions taken by HEAT since the beginning of the fiscal year and the ever increasing focus of the entire government to recover money and stop fraud, it can only be expected that more indictments will follow. Additionally, as the government’s use and familiarity with data analysis improves, it is likely that even small-scale fraud schemes will be uncovered more quickly and prosecuted to put providers on all levels on notice that no improper action will be tolerated.


United States v. Drivas et al, 2010-00771 (E.D.N.Y.).

2 Dept. of Justice News Release, Office of Public Affairs, Nov. 2, 2011, available at: http://www.justice.gov/opa/pr/2011/November/11-crm-1440.html.

United States v. Mehmood, 2011-30572, United States District Court for the Eastern District of Michigan. The case was consolidated in 2012 under Docket Number 2012-20042).


United States v. Kahn, 2012-00064 (N.D. Tex.).


United States v. Roy et al, 2012-00054 (N.D. Tex.).


HEAT Press Release, Feb. 28, 2012, available at: http://stopmedicare.fraud.gov/HEATnews/texas/html.


United States v. Gabriel, 2011-00054 (N.D. Ill.).


Documentation of Coverage Requirements for Medicare Home Health Claims, Department of Health and Human Services Office of the Inspector General, March 2012, available at: http://oig.hhs.gov/oei/reports/oei-01-08-00390.asp.


United States v. Nunez et al, 2011-20113 (S.D. Fla.).


HEAT Press Releases, available at: http://www.stopmedicarefraud.gov/HEATnews/florida/index.html.


United States v. Wilner et al, 2011-20100 (S.D. Fla.): United States v. Nash, 2011-20592 (S.D. Fla.).


Judgment, United States v. Nash, 2011-20592, Dkt. No. 40 (S.D. Fla.).

13 United States v. Jones et al, 2010-00104 ( M.D. La.).

HEAT Press Release, available at: http://www.stopmedicarefraud.gov/HEATnews/louisiana/index.html.


United States v. Sherman, 2011-20051 (E.D. Mich.).


United States v. Hernandez et al, 2011-20076 (E.D. Mich.).

17 Judgment as to Santiago Villa-Restrepo, United States v. Hernandez et al, 2011-20076, Dkt. No. 205 (E.D. Mich.).
18 United States v. Mahmud et al, 2011-20078 (E.D. Mich.).
19 Id.

United States v. Mahmud et al, 2011-20078 (E.D. Mich.).

The ABA Health eSource is distributed automatically to members of the ABA Health Law Section . Please feel free to forward it! Non-members may also sign up to receive the ABA Health eSource.