Western District Health Care Fraud Task Force Investigations Lead to Charges Against Two Individuals

New Multi-Agency Task Force Efforts Result in Federal Bills of Indictment

CHARLOTTE, NC—Today, the United States Attorney’s Office for the Western District of North Carolina announced two health care fraud indictments, which are the work of the newly formed Western District Health Care Fraud Task Force. This multi-agency initiative is designed to combat and eliminate health care fraud in the Western District of North Carolina.

Edward Gerard Payton, 50, of Charlotte, the former Executive Director of Mecklenburg Open Door (MOD) has been indicted on charges of embezzling $147,000 from the non-profit community mental health agency in Charlotte.

Sarah Lavonne Willis, 48, of Charlotte is charged in a 27 count bill of indictment which alleges that she submitted more than $600,000 in false Medicaid claims.

The joint Health Care Fraud Task Force is a multi-agency team of federal and state investigators from the Federal Bureau of Investigation, Department of Health and Human Services Office of the Inspector General, DEA, IRS, U.S. Postal Inspection Service, the North Carolina Attorney General’s Medicaid Investigations Unit, and the North Carolina Department of Insurance. Health Care Fraud investigations are among the Justice Department’s top priorities and this Task Force’s mission is to identify and punish those who defraud the health care system, and to reduce the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

“Federal and state law enforcement, investigators, and prosecutors have forged an important partnership because we each understand the devastating effects of health care fraud,” said Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. “Our shared concern, goal, and mission is to protect our health care system and our taxpayers from this escalating crime. Our Task Force is an important step forward in this fight in our district. Health care fraud schemes are becoming more sophisticated and more complicated; nonetheless, we are vigorously responding with innovative and well-coordinated investigative efforts.”

The five-count federal indictment alleges that Payton embezzled $147,000 from Mecklenburg Open Door (MOD), a non-profit community mental health agency in Charlotte which provides mental health services and housing to area mentally ill individuals. Payton is charged with theft and embezzlement concerning programs receiving federal funds and theft and embezzlement from a health care benefit program. Additionally, the indictment alleges that he used an MOD corporate credit card and automobile for his personal use, in violation of MOD policy. According to the charges contained in the indictment, Payton, as Executive Director of MOD, from January 2007 to April 2010, embezzled funds from MOD by directing employees of MOD to issue additional unauthorized payments to him through a series of checks which he characterized as “loans” or “advances.” These payments totaled approximately $147,100 of MOD’s money. If convicted, Payton faces a maximum statutory penalty of 10 years’ imprisonment, a $250,000 fine, or both, as to each criminal count.

Sarah Lavonne Willis, 48, of Charlotte, is charged in a 27-count federal indictment which alleges that she submitted more than $600,000 in false and fraudulent Medicaid claims. According to the indictment, Willis is alleged to have carried out the scheme from 2007 to 2010. During this time, she falsely billed the North Carolina Medical Assistance Program (Medicaid) for behavioral therapy services which she did not provide and which were not eligible for reimbursement. Willis is also charged with seven counts alleging money laundering and two separate counts of failing to file tax returns. The indictment alleges that Willis used the proceeds of her scheme to defraud Medicaid to purchase personal vehicles, including a 2006 Bentley Continental Flying Spur, a 2007 Hummer H2, and a 2007 Dodge Charger SE. She is alleged to have also paid for personal spa services, lodging, room service, and entertainment at the Ballantyne Resort and the Ritz Carlton. During the course of the investigation of Willis, the United States Secret Service seized the following property for forfeiture to the United States: $193,283.71 in funds, a 2006 Bentley Continental Flying Spur, a 2007 Hummer H2, a 2002 Cadillac Escalade, a 2006 Chevrolet Monte Carlo, and a 2007 Dodge Charger. Federal forfeiture laws authorize the seizure of property that there is probable cause to believe constitutes proceeds of health care fraud. If convicted, Willis faces a maximum statutory penalty of 10 years of imprisonment, a $250,000 fine, or both, as to each criminal count.

Today, federal agents from the FBI and IRS executed arrest warrants against Payton. Willis is already in federal custody on unrelated charges.

“Working together to fight health care fraud can really pay off, as these cases demonstrate. By combining forces, state and federal investigators and prosecutors can better protect taxpayer dollars and consumers’ wallets,” said North Carolina Attorney General Roy Cooper.

"These cases demonstrate how federal and state agencies can leverage precious resources to fight health care fraud," said Special Agent in Charge Derrick L. Jackson of the Atlanta Region of the Department of Health and Human Services Office of Inspector General. "OIG will continue working closely with our task force partners to protect both taxpayers as well as state and federal health care programs."

“When people defraud our health care system, we all end up literally paying for their crime. Health care fraud costs this country more than $60 billion a year, which means doctor’s visits or filling prescriptions become more expensive. The members of this new task force are using a concerted and unrelenting approach to going after fraudsters who think they can escape notice,” said Owen D. Harris, Special Agent in Charge of the Charlotte Division of the FBI.

“The agencies involved are sharing information that allows investigators and prosecutors to connect the dots much faster and act swiftly to stop a rampant problem.” IRS-CI Special Agent Jeannine A. Hammett stated, “Health care fraud is a serious offense. Those who believe they can defraud the government and get away with it will find that they will be caught. IRS-Criminal Investigation special agents along with their task force counterparts will seek out those who commit fraud and make sure they do not profit from their misdeeds.”

The criminal cases announced here today are being prosecuted by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Charlotte Office.

An indictment is merely an allegation, and defendants are presumed innocent until and unless proven guilty.