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Monday, February 17, 2020

Raleigh County Woman Enters Guilty Plea to Health Care Fraud


Defendant fraudulently obtained over $300,000

CHARLESTON, W.Va. – Julie M. Wheeler entered a guilty plea for federal health care fraud, announced United States Attorney Mike Stuart.  Wheeler, 43, of  Beckley, faces up to 10 years of incarceration, a $250,000 fine, and  three years of supervised release when sentenced on May 20, 2020.  She will also be subject to an order of restitution in an amount ranging from $302,131 to $469,983, with the final determination to be made by the Court at sentencing. 

“Can you imagine?  Wheeler defrauded the Spina Bifida Health Care Benefits Program and in the process stole hundreds of thousands of dollars from taxpayers,” said United States Attorney Mike Stuart.  “Taking advantage of the condition of spina bifida of a child for personal greed is truly a despicable crime. Wheeler even admitted that she defrauded the VA of hundreds of thousands of dollars and deprived the victim- a child diagnosed with spina bifida- of services.  The VA provides critical benefits and services to heroic veterans and their dependents.  Our veterans deserve better.  The families of our veterans deserve better.  And the victims of terrible conditions like spina bifida deserve all of God’s graces.  Greed is a terribly destructive human condition.”

The VA provided health care benefits to certain Korean and Vietnam War veteran’s children who were diagnosed with spina bifida through the Spina Bifida Health Care Benefits Program.  Spina bifida is a type of  birth defect where there is an incomplete closing of the spine, potentially leading to complications including difficulty in walking, poor bladder or bowel control, and difficulty in mobility.  A veteran’s child, K.L., received such a diagnosis and qualified for in home care through this VA program.

Wheeler was related to K.L and was also the owner of a homecare services company, JRW Homecare Support Services.  Wheeler was hired to provide services to K.L. due to K.L.’s spina bifida condition at the VA approved rate of $736 a day to provide eight hours of daily services.  Wheeler’s care was supposed to include bathing, grooming, changing K.L.’s clothes and other issues associated with K.L.’s hygiene, food intake, and lifestyle.

Wheeler submitted fraudulent applications where she filled out VA forms and was overpaid for providing care for K.L.  Specifically, Wheeler did not provide K.L. the care for and during the time period described.  Wheeler submitted claims to the VA stating that she provided care for K.L. eight hours a day, seven days a week, from October 2016 to April 2018 at the full daily rate of $736 a day.  Wheeler gave a statement to the VA and the FBI admitting that she greatly inflated the rate and quality of the care that she provided to K.L. This was corroborated by other witnesses who provided statements that Wheeler did not provide eight hours of daily care.  Wheeler further admitted that her conduct defrauded the VA of hundreds of thousands of dollars and deprived the victim of services.  The victim of the spina bifida diagnosis,  K.L., has since passed away.

Stuart praised the work of the Veterans Affairs - Office of Inspector General (VA-OIG), the Federal Bureau of Investigation, the Office of Veterans Affairs (VA), and the United States Department of Health and Human Services - Office of Inspector General (HHS-OIG).   The investigation was conducted by members of the United States Attorney’s Healthcare Fraud Abuse, Recovery and Response Team (ARREST), an innovative approach linking civil and criminal enforcement efforts together in a comprehensive attack on the opioid epidemic and healthcare fraud.   United States Attorney Mike Stuart announced the formation of ARREST in February 2019.  All health care related cases in the Southern District of West Virginia, whether they are the subject of criminal or civil investigation or enforcement, are directed through ARREST.  Included within the purview of the team are the Opioid Fraud and Abuse Detection Unit, Affirmative Civil Enforcement Unit, Appalachian Regional Prescription Opioid (ARPO) Strike Force, Medicare and Medicaid Fraud, and Asset Forfeiture efforts related to all healthcare matters.

Senior United States District John T. Copenhaver, Jr. presided over the plea hearing.  Assistant United States Attorney Erik S. Goes handled the prosecution.

Federal Jury Convicts Doctor on Fraud Charges for Approving Medically Unnecessary Tests


CHICAGO — A federal jury in Chicago has convicted a physician on fraud charges for approving medically unnecessary tests that were billed to Medicare.

While working for Chicago-based Grand Medical Clinic Inc., DR. OMAR GARCIA authorized percutaneous allergen tests for numerous Medicare beneficiaries, knowing that the tests were not medically necessary.  In most instances, Dr. Garcia issued his approval after the tests had already been completed.  Dr. Garcia submitted or caused to be submitted fraudulent claims to Medicare for payment of the unnecessary tests.

The jury in federal court in Chicago on Monday convicted Dr. Garcia, 52, of Ocala, Fla., and formerly of Wilmington, Ill., on all six counts of health care fraud.  Each count is punishable by a maximum sentence of ten years in prison.  U.S. District Judge Matthew F. Kennelly set sentencing for May 6, 2020.

The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; and Martin J. Dickman, Inspector General of the U.S. Railroad Retirement Board.  The U.S. Office of Personnel Management and the U.S. Food and Drug Administration provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Kavitha J. Babu and Saurish Appleby-Bhattacharjee.

Evidence at the five-day trial revealed that Dr. Garcia’s fraud scheme began in 2011 and continued until 2015.  Dr. Garcia and others submitted the fraudulent bills from Grand Medical and other medical entities in an attempt to reduce the volume of billing by any single company and minimize scrutiny from Medicare.  After the entities received payments from Medicare, Dr. Garcia was paid via checks reflecting his percentage of the payments.

American Businessman Who Ran Houston-Based Subsidiary of Chinese Company Sentenced to Prison for Theft of Trade Secrets


            WASHINGTON – The head of a Houston-based company that was the subsidiary of a Chinese company that developed stolen trade secrets was sentenced Monday to sixteen months in prison and ordered to forfeit $342,424.96 by U.S. District Judge Christopher R. Cooper of the District of Columbia.

            Shan Shi, 55, of Houston, Texas, had previously been found guilty by a jury on July 29, 2019, of Conspiracy to Steal Trade Secrets.  Evidence presented during a three-week trial established that Shi had entered into an agreement with Taizhou CBM Future New Material Science and Technology Co. Ltd (CBMF) to develop the manufacture of syntactic foam, which is a buoyancy material that aids in offshore oil and gas drilling.  The defendant specifically pledged to build “China’s first deep[-]sea drilling buoyance [sic] material production line” by moving to “digest/absorb” the relevant, critical U.S. technology.  The defendant then set up a U.S.-based corporation, CBM International, Inc., (CBMI) and hired ex-employees of a victim company that manufactured syntactic foam, located in Houston, Texas.  These employees had access to trade secrets developed by the victim company, and the defendant was aware that they had signed agreements with the victim company not to disclose proprietary information.  The former employees of the victim company then transferred proprietary information to CBMI and the defendant, who used the information to create a syntactic foam manufacturing process in China.

            The government also entered into evidence that the defendant intended to benefit the People’s Republic of China (PRC) by developing the technology, and that after the technology was stolen, the defendant attempted to sell syntactic foam based on the stolen proprietary information to the China National Offshore Oil Corporation (CNOOC) and the People’s Liberation Army (PLA) of the PRC.  The defendant was arrested along with five other individuals in the United States after he and CBMI attempted to market related-technology in the District of Columbia.  An additional Chinese national living in China, Hui Huang, was also charged. Shi, defendant Gang Liu, CBMI, and CBMF were subsequently charged in a superseding indictment with Conspiracy to Commit Economic Espionage, in violation of 18 U.S.C. § 1831.  Shi and CBMI and CBMF were additionally charged in the superseding indictment with Conspiracy to Commit Money Laundering, in violation of 18 U.S.C. § 1956(h).  The jury found the defendant guilty of Conspiracy to Steal Trade Secrets, and acquitted on the remaining counts.  The trial was solely of defendant Shi.

            “Yesterday’s sentencing underscores our determination to prosecute those who would steal trade secrets from American businesses and further misuse them for their own research and development,” said U.S. Attorney Timothy J. Shea for the District of Columbia.  “The Court made clear that the defendant knew or intended that the offense would benefit the People’s Republic of China.  To those who would steal proprietary information from U.S. companies and provide it to a foreign government, our message is that you will be prosecuted to the fullest extent of the law.”

            This case was investigated by the Houston Field Office of the Federal Bureau of Investigation, the Bureau of Industry and Security (BIS) Office of Export Enforcement of the U.S. Department of Commerce, and the Internal Revenue Service-Criminal Investigation (IRS-CI).

            The case was prosecuted by Assistant U.S. Attorneys Jeff Pearlman, Luke Jones, Zia Faruqui, and former Special Assistant United States Attorney W. Joss Nichols of the District of Columbia; Senior Counsel Matthew R. Walczewski of the Computer Crime and Intellectual Property Section of the Criminal Division of the Department of Justice; and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section of the Department of Justice.