National health care fraud takedown results in charges
against over 590 individuals responsible for over $2 billion in fraud losses -
Largest health care fraud enforcement action in U.S. Department of Justice
history
LOUISVILLE, Ky. –United States Attorney Russell M. Coleman today
announced the results of a health care fraud sweep in the Western District of
Kentucky as part of the national health care fraud takedown led by the Justice
Department. The law enforcement takedown, in the Western District of Kentucky,
resulted in charges against ten individuals for their alleged participation in
health care fraud schemes, to include unlawful dispensing of controlled
substances, including opioids.
“Healthcare fraud is nothing more than theft and drug dealing, though
using complex techniques on a large scale” stated United States Attorney
Russell Coleman. “Today’s announcement evidences a commitment across law
enforcement to hold these offenders accountable for the harm they visit upon
Kentucky families and taxpayer resources.
U.S.
Attorney Coleman was joined in the announcement by:
Amy Hess,
Special Agent in Charge, Louisville Division, Federal Bureau of Investigation
stated, “Health care fraud is a growing and serious crime that impacts every
city and small town in the Commonwealth.
The FBI is dedicated to working with our federal, state, and local
partners to seek justice for the victims of health care professionals who have
abandoned their oath to do no harm.”
“Doctors
have a duty to do no harm and provide competent care to their patients,”
said D. Christopher Evans, Special Agent
In Charge of the Drug Enforcement Administration’s Louisville Field
Division. “The message we are sending
today is clear. We will not tolerate
drug dealers in lab coats. If you’re a
doctor and you’re prescribing dangerous narcotics in a reckless or
irresponsible manner, we’re coming after you.”
“Health
care fraud costs taxpayers billions of dollars and places our most vulnerable
citizens at risk for harm and neglect,” said Special Agent in Charge Derrick L.
Jackson, of the U.S. Department of Health and Human Services, Office of
Inspector General. “Working with our law enforcement partners, we are dedicated
to protecting patients and the federal health care programs intended to serve
them.”
“This
operation by our federal partners and my office is critical each year in
stopping those who would harm Kentuckians and our health care system,
especially those accused of unlawful distribution and dispensing of controlled
substances given our state’s drug epidemic,” Attorney General Andy Beshear
said. “I want to thank the offices of our U.S. Attorneys, FBI, DEA, neighboring
states' Medicaid Fraud units and others for continuing to fight back against
those who defraud our people and our critical government programs.”
“Medicaid
fraud leaves in its wake many victims,” Indiana Attorney General Curtis Hill
said. “Any licensed providers who commit this offense are taking advantage of
those for whom they are supposed to provide care, including the disabled and
less fortunate who rely on Medicaid. In addition, they are also fleecing
taxpayers whose hard-earned money is used to fund these programs. The investigators
and lawyers in our Medicaid Fraud Control Unit are doing good work to help
bring lawbreakers to justice. At the same time, we respect the due process to
which all are entitled, and all those who stand accused of crimes are certainly
presumed innocent until a court finds otherwise.”
“Health
care fraud affects every American and today’s announcement illustrates that the
IRS and our law enforcement partners are steadfast in our commitment to
detecting and dismantling health care fraud schemes and holding perpetrators of
these crimes accountable,” said Ryan L. Korner, Special Agent in Charge, IRS
Criminal Investigation. “Waste, fraud and abuse take critical resources out of
our health care system, contribute to the rising cost of health care and
degrades the integrity of our health care system and legitimate patient care.”
Anthony S.
Gooden, Senior Supervisory Agent, Louisville Division, U.S. Postal Inspection
Service. “The United States Postal Inspection Service is dedicated to
protecting the United States Mail from criminal attack and criminal
misuse. This includes protecting all
businesses and postal customers from any form of fraud utilizing the mails. We continuously work with other local, state
and federal law enforcement agencies to identify and prosecute anyone utilizing
the mail in furtherance of a fraud scheme.”
Steve
Conrad, Chief, Louisville Metro Police Department. “This is yet another example
of how collaboration between State, Local, and Federal law enforcement
strengthens our effectiveness and works to hold people violating the law
accountable.”
In the
Western District of Kentucky, four separate cases were indicted on June 25,
2018, and two cases were indicted on May 24, 2018, where the defendants made
initial appearances yesterday. The
charges included unlawful distribution and dispensing of controlled substances,
health care fraud, theft from a health care benefit program, paying or offering
health care kickbacks, mail fraud, money laundering, conspiracy, and aggravated
identity theft.
Specifically, in United States v. Chandra Dundumalla Reddy and Vinodini
Dundumalla Reddy: Dr. Chandra Reddy, a licensed physician and Vinodini Reddy,
his wife, were charged with two counts conspiracy to commit health care fraud
and one count conspiracy for making false statements relating to health care
matters. Dr. Reddy was also charged with
one count of conspiracy for unlawfully allowing his nurse practitioners to use
his DEA number to prescribe controlled substances. The charges stem from defendants’ role in a
$390,000 upcoding medical services and “incident to” billing scheme. In
addition, Dr. Reddy pre-signed a large number of controlled substance
prescriptions for his nurse practitioners, who did not have DEA numbers or had
limited prescription writing authority, in order to allow the nurse
practitioners to distribute controlled substances to patients while Dr. Reddy
was either out of the country or out of the office.
In United
States v. Monica Berry and Brandon Gordon: Monica Berry, a medical assistant in
Dr. Chandra Reddy’s medical office, and Brandon Gordon, a patient, were charged
with one count of conspiracy to unlawfully distribute controlled substances,
three counts conspiracy to commit health care fraud, and three counts
aggravated identity theft. The charges
stem from Monica Berry using Dr. Reddy’s DEA number to issue Schedule II-IV
controlled substances in which Brandon Gordon diverted the prescriptions to the
street. Some of the people who purchased
and/or filled the prescriptions used their insurance, causing insurance
carriers to pay for medically unnecessary drugs. The defendants diverted approximately 17,750
units of Hydrocodone, 2,580 units of oxycodone, 1,895 units of Xanax, 210 unit
of Ambien, 570 unit of Phentermine, and 600 units of Soma to the street.
In United
States v. Yesdel Acosta and Eduardo Chinea-Martinez: Defendants were charged
with one count of conspiracy to commit health care fraud, sixteen counts health
care fraud, thirteen counts theft from a health care benefit program, thirteen
counts aggravated identity theft, ten counts money laundering, and four counts
mail fraud. The charges stem from
defendants’ role in operating three false-front medical clinics where
defendants stole the identity of five physicians, four of which were Kentucky
physicians, and numerous patients to unlawfully bill for services never
rendered, resulting in $4,700,000 in false medical billings submitted to three
insurance companies and $258,000 paid in false medical billings.
In United
States v. Osmaro Ruiz: Defendant was
charged with one count of conspiracy to commit health care fraud, seven counts
health care fraud, seven counts aggravated identity theft, and ten counts of
money laundering. The charges stem from
defendant operating a false-front pharmacy where he stole and used the identity
of patients and doctors to bill for prescriptions the patients never
received. The scheme resulted in
approximately $858,000 being paid out in fraudulent proceeds.
In United
States v. Dr. Peter Steiner: Dr.
Steiner, psychiatrist, was charged with one count conspiracy to unlawfully
distribute Schedule II-IV controlled substances, thirteen counts to distribute
Schedule II controlled substances, and twelve counts to distribute Schedule III
controlled substances. The charges stem
from Dr. Steiner operating Kentuckiana Mental Health Associates, a mental health
and opioid addiction practice, where Dr. Steiner prescribed medically
unnecessary drugs that were also prescribed outside the usual course of
professional practice. He prescribed
thousands of units of stimulants and Buprenorphine. He unlawfully distributed opiates as well.
In United
States v. Dr. Bingston Crosby and Lacy Black:
Dr. Crosby, chiropractor and owner of Crosby Chiropractic Center, Inc.,
and Lacy Black, Crosby’s runner/marketer, were charged with one count of
conspiracy to commit health care fraud, and each one count of paying or
offering health care kickbacks. Crosby
is also charged with eight counts health care fraud, seven counts of money
laundering, and seven counts mail fraud.
Dr. Crosby paid Black to recruit Kentucky Medicaid and private auto
insurance patients to treat at his chiropractic clinic. Black promised the patients cash or other
remunerations to receive treatment at the chiropractic clinic. Crosby billed for services not rendered when
he added charges for treatment patients did not receive.
In
addition, our law enforcement partners executed multiple search warrants over
the last four weeks related to alleged health care fraud and opiate
overprescribing offenses. On Monday, May
21, 2018, a search warrant was executed at Ft. Knox, Kentucky at a
pediatrician’s office. On Tuesday, June
12, 2018, six search warrants were executed at six different locations around
Louisville, Kentucky, including four pain clinics and one residence. Finally,
two warrants were executed on June 22, 2018, at an Oncologist’s practice in
Elizabethtown, Kentucky and the doctor’s residence in Louisville, Kentucky.
These
cases are being handled by Assistant United States Attorneys Joe Ansari,
Lettricea Jefferson-Webb, and Robert Bonar.
U.S. Attorney Coleman acknowledged and credited the law enforcement
agencies investigating these cases: Federal Bureau of Investigation (FBI), U.S.
Department of Health and Human Services-Office of Inspector General (HHS-OIG),
U.S. Drug Enforcement Administration (DEA), U.S. Department of Labor (DOL),
United States Postal Inspection Service (USPIS), Internal Revenue Service
Criminal Investigation (IRS-CI), Defense Criminal Investigative Service (DCIS),
Louisville Metro Police Department (LMPD), Kentucky State Police (KSP), Barren
River Drug Task Force, Indiana and Kentucky Medicaid Fraud Control Units,
Kentucky Cabinet for Health and Family Services – Office of Inspector General
(CHFS-OIG), and the Kentucky Department of Insurance (KYDOI).
Earlier
today, Attorney General Jeff Sessions and Department of Health and Human
Services (HHS) Secretary Alex M. Azar II, announced the largest ever health
care fraud enforcement action by the Medicare Fraud Strike Force, involving
over 590 charged defendants across 58 federal districts, including over 150
doctors, nurses and other licensed medical professionals, for their alleged
participation in health care fraud schemes involving over $2 billion in false
billings. Of those charged, today’s
action also involved charges against over 150 defendants, including doctors,
for their roles in prescribing and distributing opioids and other dangerous
narcotics, amounting to more than 13 million illegal dosages of opioids. Thirty state Medicaid Fraud Control Units
also participated in today’s arrests. In
addition, HHS announced today that from June 2017 to the present, 587 providers
have been served with exclusion notices for conduct related to opioid diversion
and abuse.
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The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless proven guilty.
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