The Trump administration’s Department of Justice (DOJ) recently announced that it has charged 455 defendants in connection with over $6.5 billion in alleged healthcare fraud. While critics will point to the fact that these are merely charges, many of these will likely result in convictions and monetary recoupment to taxpayers. In fact, in the last two months alone, the DOJ has secured several major convictions and rewards in its pursuit of all kinds of fraud, with COVID-19 recovery and healthcare billing related fraud being standout examples.
COVID-19 Fraud
In June, the owner of a North Carolina tax return preparation business joined seven of his co-conspirator employees in pleading guilty to preparing false returns claiming fraudulent refunds based on COVID-19 tax credits. Sentencing is scheduled for August and September. Taxpayers stand to recoup significant funds given that as a result of the conspiracy, the IRS paid out approximately $13.9 million in fraudulent tax refund claims. In May, a Brooklyn tax preparer was sentenced to 36 months in prison for her role in a fraud scheme that fraudulently claimed more than $600 million in COVID-19-related employment tax credits.
The latest news of 455 more defendants being charged will likely continue to fuel successful anti-fraud activities.
Also in May, an Illinois woman was convicted of unemployment insurance fraud for submitting false claims to a COVID-19 assistance program. Haim Hmaidan of Illinois and her co-conspirators submitted nearly 700 fraudulent unemployment insurance claims that caused over $11 million in fraudulent unemployment benefits to be dispersed. Her sentencing is scheduled for October.
Also in May, a Florida man was sentenced to 63 months in federal prison for wire fraud and money laundering. As part of his sentence, the court entered an order of forfeiture for nearly $740,000, the proceeds of the offenses. The defendant had submitted a fraudulent Paycheck Protection Program (PPP) loan application of a sham business.
Also in May, the DOJ obtained a court order authorizing the recovery of nearly $30 million in restitution for the U.S. Small Business Administration (SBA), after two defendants were sentenced for participating in a scheme to defraud the Paycheck Protection Program (PPP). These two defendants had transferred millions from their personal brokerage accounts to newly-created family trusts after receiving funds from the PPP.
In April, a Pennsylvania man was sentenced to 30 months in prison for one count of wire fraud and one count of making and subscribing a false tax return, with the defendant being ordered to pay restitution of approximately $352,000 dollars. The defendant submitted at least 10 applications seeking pandemic stimulus funds through both the Economic Injury and Disaster Loan (EIDL) program, as well as the PPP, for companies that did not have business operations.
In April, an Oregon woman was sentenced to 28 months in federal prison, and three years of supervised release, for submitting fraudulent pandemic unemployment applications, falsely claiming over two dozen employees, and causing the government to pay her over half a million dollars in benefits. She was also ordered to pay approximately $581,000 in restitution.
In April, a resident of Los Angeles, California, was sentenced to 144 months in prison for conspiracy to commit wire fraud and conspiracy to launder approximately $59 million to China through his involvement in a conspiracy to obtain state unemployment compensation funds, and other public funds, through fraudulent means. The defendant and his co-conspirators pretended to operate legitimate businesses selling masks and other COVID-19 personal protective equipment. The defendant was ordered to forfeit over $59 million, along with other properties.
Healthcare Billing Fraud
In May, a member of a Moscow-based criminal organization was sentenced to 10 years in prison for his participation in an approximately $2 billion international health care fraud conspiracy to fraudulently bill private health care benefit programs. Two of his co-defendants were sentenced to 120 months’ and 97 months’ imprisonment, respectively. The court ordered the first defendant to forfeit $3.2 million and one of his co-defendants to forfeit more than $1.8 million.
In May, a federal jury convicted a Michigan nurse and home health care agency owner for operating a $1.6 million scheme to defraud Medicare. She will be sentenced in September.
Also in May, two men were sentenced for their roles in a scheme to defraud Medicare, Medicaid, and private health insurance companies by submitting over $522 million in fraudulent claims for medically unnecessary genetic tests that were obtained through the payment of illegal kickbacks and bribes. Reyad Salahaldeen of Georgia, was sentenced to 151 months in prison, while Mohamad Mustafa of Georgia was sentenced to three years in prison. In addition to the prison sentences, Salahaldeen was ordered to pay over $84.5 million in restitution and to forfeit approximately $3.0 million from two bank accounts, a 2019 GMC Yukon, and properties in Texas and Georgia. Mustafa was ordered to pay over $64.3 million in restitution.
Also in May, three Florida men were sentenced to 60, 70, and 78 months in prison, respectively, for their participation in a scheme to defraud Medicare through fake durable medical equipment companies and to launder more than $2.2 million in illicit health care fraud proceeds. At sentencing, two defendants were ordered to pay approximately $2.2 million in forfeiture and $3.0 million in restitution, while the third defendant was ordered to pay approximately $1.7 million in forfeiture and $2.2 million in restitution.
Also in May, a California doctor was convicted for a $45 million scheme to defraud Medicare by submitting claims for Botox injections that were never provided and medically unnecessary, and for obstructing the investigation by manipulating and altering medical records in an attempt to mislead criminal investigators. Sentencing is scheduled for September.
Also in May, the founder and owner of a healthcare software company was convicted for his role in operating a platform that generated false doctors’ orders and prescriptions to defraud Medicare and other federal health care benefit programs out of more than $1 billion. A sentence hearing is scheduled for August.
The DOJ is having a very active spring in combatting all kinds of fraud, with COVID-19 recovery and healthcare billing fraud seeing lots of convictions and monetary recoupments. The latest news of 455 more defendants being charged will likely continue to fuel successful anti-fraud activities.
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