Patient Recruiter Pleads Guilty for Role in Fraudulent Medicare Testing Scheme

April 22, 2010 - Detroit-area resident Melvin Young pleaded guilty today to engaging in a fraudulent medical testing scheme, announced the Departments of Justice and Health and Human Services (HHS).

Young, 56, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Court Judge Patrick J. Duggan in the Eastern District of Michigan. Young faces a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not yet been scheduled.

According to the plea documents, be ginning in approximately September 2007, Young began recruiting and transporting patients to a clinic called Ritecare LLC. Ritecare was owned and operated by co-conspirators and had locations in Detroit and Livonia, Mich. Young admitted that he and a co-conspirator paid kickbacks to Medicare beneficiaries that he recruited and transported to Ritecare. According to the plea documents, the owners and operators of Ritecare were the source of the funds used by Young to pay the Medicare beneficiaries he recruited. Young admitted that he would keep part of the funds he received from the owners and operators of Ritecare to secure patients as a kickback for referring the Medicare beneficiaries he recruited. Typically, the owners of Ritecare would provide Young $100-$150 per patient he recruited, with Young retaining $50-$75 of that amount for the referral.

According to the plea documents, the patients Young recruited had to subject themselves to medically unnecessary tests to receive the money. Per instructions from the owners and operators of Ritecare, Young admitted that he instructed the patients to claim they had certain symptoms to trigger medically unnecessary tests. Consequently, the patients’ medical records contained false symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed.

Young admitted that he was responsible for recruiting at least 269 patients to Ritecare. Through his recruitment efforts, Young caused the submission of approximately $940,760 in false or fraudulent billings by Ritecare for the 269 patients he recruited. Medicare paid approximately $533,643 on those claims.

Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office. This case was prosecuted by Assistant Chief John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section. This case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for approximately $1.1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.