White Collar Crime

Published on: December 27, 2010

Southern California Medicare Fraud Alert: Miami-based Medicare Scam Explodes — Tens of Millions of Dollars Allegedly Stolen

Although Southern California healthcare fraud is an enormous and perennial problem – witness the massive Armenian Mafia Medicare scam story that broke in October 2010 – the city of Miami, Florida remains the “national epicenter for Medicare fraud,” according to a story in the AP from five days ago.

The latest big breaking Medicare scam involves the drug Arformoterol, an emphysema and bronchitis drug. The Department of Health and Human Services reports that, over a year-and-a-half long period, Miami-Dade County healthcare providers paid out $34 million for drugs that should have only cost about $3.7 million. Medicare paid for 7 million units but only received 750,000 units. The fraud, which totaled more than $30 million, sounds like a big deal. But $30 million is peanuts compared with the total Medicare fraud committed annually in Miami – “roughly $3 billion,” according to the AP.

The arformoterol overbilling scheme is just one of dozens of similar scams recently perpetrated by technically savvy crooks. According to the AP, “The spike in arformoterol only came after authorities tried to crack down on another inhaler drug… as authorities have caught onto one scam, crooks have moved on to another, such as by shifting from durable medical equipment and HIV drug scams to physical therapy and home healthcare fraud.”

Published on: December 13, 2010

Massive Los Angeles Healthcare Fraud (and Elsewhere) Settlement Makes Taxpayers Livid

by Michael Kraut

The Wall Street Journal, Washington Post, Bloomberg News and other major media services are reporting on an enormous Los Angeles medical fraud (and elsewhere) settlement involving three pharmaceutical firms: Abbott Laboratories, B. Braun Medical of Bethlehem, Pennsylvania, and Roxane Laboratories of Columbus, Ohio. All told, the $420+ million settlement stemmed from a whistleblower charge pursuant to the False Claims Act.

Essentially, the drug companies overinflated their benchmark pricing to government insurers. In other words, they gave pharmacies and doctors a discounted price, and then they inflated how much the drugs cost and passed that difference onto the taxpayers. This illegal inflation became so well known that the benchmark — called the Average Wholesale Price (AWP) — soon became known among everyone in the industry as “ain’t what’s paid.” A spokesman for the Justice Department put it bluntly: “The only persons who paid the inflated, reported drug price were you, the American taxpayers.”

Cases of medical, dental, and chiropractic fraud, insurance fraud, credit card fraud, and other Southern California white collar crimes are significant and troubling. But the typical local cases pale in comparison with the national Medicare and Medicaid schemes unraveled by the Justice Department recently. Here is a quick recap of a few jaw dropping settlements:

Published on: November 30, 2010

Southern California Medicare Fraud Alert: Florida Couple Pays More Than $22 Million to Resolve Fraud Allegations

by Michael Kraut

A 70-year old cardiologist, Dr. Walter Janke, and his wife, Lalita Janke, have agreed to pay $22.6 million to resolve Medicare fraud allegations – a stunning move that has analysts who follow events in the world of Los Angeles Medicare fraud talking.

The Jankes had owned two large organizations – Medicare Advantage and America’s Health Choice Medical Plans – and allegedly overstated patient diagnoses to garner extra money from the federal government. Lawyers for the U.S. in District Court argued that Jankes’ acts violated the False Claims Act. The U.S. has frozen $20 million of the Jankes’ assets. The settlement will be paid out of those assets as well as out of their personal funds.

The Centers for Medicaid and Medicare Services (CMS) has been engaged in a long and heated battle with the Jankes, according to an article in South Florida Business Journal. The cardiologist’s attorney lamented the situation: ”there has been a long history of clear animosity directed at the Janke’s from CMS.” The attorney argued that the Medicare audit done to determine the settlement amount was unfair – essentially, by extrapolating based on a fraction of a percentage of patient cases, CMS might have erred by as much as 30%.

Published on: November 15, 2010

Kansas Doctor Sentenced to Three Years in Federal Prison for Fraud; Los Angeles Medical Fraud Analysts Examine Case

by Michael Kraut

Southern California medical care fraud analysts have been wrapped up debating the massive October bust of a Medicare fraud ring allegedly tied to the Armenian mafia. But a breaking story out of Kansas has siphoned off a lot of media attention.

Wayne W. Williamson, 67, an Olathe Kansas ex-physician, was sentenced last Monday to a three year federal jail sentence for distributing prescription drugs illegally and committing healthcare fraud. Williamson pled guilty in July to medical fraud and to harassing a Kansas medical investigator. White collar crime prosecutors said that Williamson used to go into apartment complex parking lots and sell drugs out of his car – drugs like Percocet, Xanax, and OxyContin. One “client” allegedly paid the doctor for $150 for prescriptions of Oxycodone. The client then resold those pills on the black market for $30 each to make a profit. The man testified to making several transactions with the former doctor over two years. Williamson also billed Medicare and Medicaid for non-existing services. The court ordered him to pay restitution of nearly $3,000. Williamson also surrendered his medical license and agreed to never practice medicine in the U.S. again.

Southern California healthcare fraud is an immensely complicated crime. Depending on what you allegedly did, how you did it, and various other factors, you can face charges pursuant to many different laws. For instance, Labor Code Section 3700, Penal Code Section 118, Penal Code Section 550, and Insurance Code Section 1871.4 could be applicable. If convicted, you can face jail time, loss of your license, strict probation terms, major court costs and fines, and mandatory restitution to providers like Medi-Cal, Medicare, or insurance companies.

Law enforcement agents are familiar with myriad “varieties” of Southern California insurance fraud, white collar crime, and healthcare fraud. For instance, if you made up medical records, billed providers like Medi-Cal or Medicare for services that you never rendered, prescribed medicines that were not necessary, or “double billed” or offered excessive and unnecessary procedures, prosecutors can go after you.

Given how complicated these charges can be, it’s important to have a savvy and experienced Southern California medical care fraud attorney on your side, like Los Angeles Criminal Defense Attorney Michael Kraut.

Published on: November 1, 2010

Southern California Medical Fraud Experts Examine Kansas Doctor’s Sentence

by Michael Kraut

Analysts who study health, chiropractic, and dental fraud in Los Angeles have been heatedly discussing a case out of Kansas. A former doctor, John R. Toth, pled guilty last week to a variety of federal counts, including a count of reckless and voluntary manslaughter, stemming from a bizarre scheme to treat patients for a non-existent epidemic of Lyme disease.

The Weird Back Story
In 2001, the then Dr. Toth collaborated with a variety of businesspeople associated with the firm American Biologics to market drugs and a special microscope by ginning up fears of a Lyme disease epidemic. Apparently, Toth and his associates believed that Lyme disease was a primary cause of many illnesses. In any event, Toth prescribed various medications that the Food and Drug Administration had neither reviewed nor approved. One of those patients, Beverly Wunder, suffered serious renal failure as a result of the intravenous injection of a medication, and she fell into a coma and died. Toth was arrested and charged with a variety of crimes, including misbranding drugs for interstate commerce, using adulterated medical devices, committing mail fraud, and committing reckless and voluntary manslaughter.

If convicted of all recent counts, the 61 year-old could face 5 years in federal prison and a fine of $250,000. He already served 32 months in a state jail, after he pled no contest to the reckless and voluntary manslaughter charge back in November 2007.

If you or someone you care about has been arrested for Southern California healthcare fraud, Los Angeles insurance fraud, or white collar crimes in Southern California, you could face serious penalties. Prosecutors could charge you pursuant to Insurance Penal Code Section 550, Insurance Code Section 1871.4, Penal Code Section 118, or Labor Code Section 3700. Your charges and potential penalties obviously will depend on what you did and how prosecutors want to handle your case.

So how should you respond most effectively? A connected and experienced Southern California medical fraud attorney can help you piece together a smart, proactive defense.

Published on: October 25, 2010

Southern California DUI Statistics Highlight Serious Problem in the Southland

by Michael Kraut

A few weeks ago, Insurance.com released its list of the 20 Top DUI Cities in the United States. If you have been arrested for Los Angeles DUI, Burbank DUI, Glendale DUI, or Pasadena DUI, you have a lot of company. The Insurance.com survey found that LA ranked as the seventh biggest city for DUI offenders. Three other California cities also made the Top 10: San Francisco, San Jose, and San Diego.

An on-site analysis at Insurance.com discussed why certain cities rank higher than others. The survey suggested three reasons:

1. Some people drink and party more in certain cities.
2. Cities with weaker public transportation systems have more DUI offenders because bar hoppers and partiers can’t avail themselves of subways and buses as easily to get home.
3. The strictness of enforcement can play a role. For instance, both San Diego and San Jose (the #1 and #2 cities in the survey) boast extremely robust and well-funded programs to stop Southern California DUI behavior.

The Insurance Institute for Highway Safety has found that cities with concentrations of young people – particularly at colleges – witness higher than average numbers of DUI arrests. The potency of enforcement surely also must play a huge role in these statistics. A San Jose PD officer spoke to that point: “We do have a high incidence of DUIs… that’s not to say that smaller departments don’t have it, but I don’t think they have the resources to detect it.”

Insurance.com used data from auto insurance applications to arrive at its figures.

If you have been hit with a charge of driving under the influence in Pasadena or elsewhere in the Southland, you might be wondering what specifically constitutes a violation of the law. If you are arrested for a “standard” DUI – an incident not complicated by injury or other charges – you will likely face a charge of violation of California Vehicle Code Section 23152(a) or 23152(b).

23152(a) says that, if a California officer stops you while you are driving an auto or other motor vehicle while under the influence of alcohol or drugs, you may face criminal charges that could lead to sentences like license suspension, jail time, serious fines, points on your DMV record, and strict probation terms.

23152(b) alternatively defines the crime of Southern California DUI as driving with a BAC level (blood alcohol concentration) of 0.08% or more. If your BAC level is positive for DUI, you can face the same punishments stipulated in 23152(a).

To respond effectively to charges, you may wish to consult an attorney experienced with Southern California DUI law.

Published on: October 18, 2010

Southern California Medical Fraud Experts Flabbergasted by Allegations against Fugitive Doctor

by Michael Kraut

Last week, a fugitive former doctor — Steven G. Moos — pled “not guilty” to a battery of charges, including government medical fraud. His bizarre circumstances have Los Angeles medical fraud experts talking. Particularly in light of last week’s massive bust of an alleged Armenian gang-centered Medicare fraud ring — which sprawled across 25 states — Moos’ saga hints at a potentially deeper and more systemic problem within the medical community.

The long and weird allegations against Steven G. Moos
Over a decade ago, the then Dr. Moos got in trouble with the Oregon Board of Medical Examiners for prescribing hair loss drugs and Viagra to web customers anonymously. A few years, later authorities in Washington County, Oregon got a warrant to search Moos’ home on Bull Mountain and found illegal drugs and cocaine. He was charged with endangering child welfare and possessing controlled substances.

In early 2003, the OR State’s Medical Board suspended his license to practice medicine. In 2004, federal prosecutors charged Moos with trying to import controlled substances (in this case, growth hormone) from China. In 2004, Moos was indicted by Federal Grand Jury for a variety of charges, and Oregon State’s Attorney General won a judgment against him, which included a $400,000 civil penalty and mandatory reimbursement for customers he had scammed with a cream that he sold to enhance vaginal stimulation.

After getting hit with all these charges, Moos fled the country to the United Arab Emirates. In the UAE, he allegedly impersonated a respectable US physician (Dr. Steven Hopping) and performed surgery on people in his kitchen table. In some cases, he injured these patients so badly that they were left with deformities. Finally, the 41-year-old got caught at Dallas International Airport after flying home from the UAE.

Charges of California insurance fraud, Los Angeles medical fraud, or any other kind of Los Angeles white collar crime can lead to a vast and frightening array of penalties, including jail time, suspension of your license to practice, massive fines and court costs, damage to your reputation, mandatory restitution to people (or institutions) you’ve harmed financially, and more.

If you’ve been charged with a Southern California white collar crime (such as insurance fraud in Los Angeles or elsewhere in the Southland), your choice of representation can make an enormous difference.

Published on: October 13, 2010

Massive Los Angeles Health Care Fraud Arrest — Part of the Biggest Bust in US History

by Michael Kraut

This morning, federal prosecutors launched a multistate series of raids, arresting 73 people in conjunction with what may turn out to be the largest medical care fraud scheme in history of the United States — including many arrests here for health care fraud and insurance fraud in Los Angeles and throughout the Southland for Los Angeles health care fraud.

Before we dive into this story–which will surely occupy media outlets for some time–let’s first review some examples of state insurance fraud and medical insurance fraud so you can understand Los Angeles white collar crime better:

* Chiropractor in Glendale bills an insurer for work he never did.
* Dentist in Pasadena orders completely unnecessary tests for a patient for the explicit purpose of pocketing insurance money.
* Family doctor in Beverly Hills works with associates to falsify medical records of patients to get extra money from an insurer.

Anyone who is in the pre-filing stage for Los Angeles medical insurance fraud can be at serious risk for massive fines, a prison sentence, and other serious penalties.

Now that you have some background in state insurance fraud law, let’s turn our attention to the details of this massive bust.

United States Attorney Preet Bharara revealed that a veritable army of Armenian gangsters allegedly bilked Medicare out of $163 million — a coordinated criminal effort that “put the traditional Mafia to shame.”

The scope of the alleged insurance fraud is breathtaking. Federal authorities initiated an investigation after thousands of Medicare patient and doctor records were reported stolen — these records included patients’ dates of birth and Social Security numbers. The medical billing fraud network (and associates) set up fake clinics in 25 states — 118 fake clinics, all told — to bill Medicare for providing (non-existent) services.

The FBI described these clinics as “completely notional” — that is, they didn’t actually exist. The doctor-patient interactions at these clinics were apparently a “mirage.” Prosecutors highlighted some examples:

* eye doctors supposedly billing for bladder tests
* delivery room doctors ordering up skin allergy tests
According to the US attorney, the Los Angeles health care fraud network had been operating under the guidance of Armen Kazarian, the Armenian equivalent of a Mafia godfather. Kazarian — as of this writing — is being held at a Los Angeles jail.

In addition to the Southern California medical billing fraud arrests, police have detained people in New York, Mexico, Georgia, and Ohio. Kazarian and the 72 others are scheduled to be arraigned this afternoon on these charges, which will include: identity theft, money laundering, racketeering conspiracy, and bank fraud.

Insurance fraud in Southern California is a serious crime — whether you’re a chiropractor, dentist, doctor, or other caregiver. If you’re in the pre-filing stages, you should be aware of the potential ramifications of conviction, which can include:

* the loss of your professional license
* a lengthy prison sentence
* serious court costs and fines
* mandatory restitution to insurance agencies
* loss of ability to provide Medicare or Medi-Cal services in the future
Doctor, dentist, and chiropractor insurance fraud in Los Angeles can be charged pursuant to a variety of laws, depending on what prosecutors allege you did. These laws include Insurance Code Section 1871.4, Penal Code Section 550, Penal Code Section 118, and Labor Code Section 3700.

What specifically constitutes Southern California health care fraud? Here are some examples:

* creating false medical records
* billing twice for chiropractic, dental, or other medical work
* ordering unnecessary medications
* billing Medicare or another program for work not provided
* requesting unnecessary tests for patients
If you are in the pre-filing stage of a federal or Southern California medical billing fraud case, it’s essential to discuss your situation with a credentialed Southern California health care fraud lawyer. Whether you’ve been hit with insurance fraud in Glendale or chiropractic fraud in Pasadena, you need to understand your rights and responsibilities under the law.

Published on: August 9, 2010

Los Angeles Healthcare Fraud Experts Weigh in on Breaking Case Out of Miami

by Michael Kraut

Last week, two former operators of a Miami Clinic pled guilty in Federal Court to multiple counts of submitting false claims, committing fraud, and paying kickbacks, prompting a wide ranging discussion among Southern California medical fraud policy wonks.

Jose Nogueira and his brother Rolando Nogueira operated a clinic for AIDS patients called T&R Rehabilitation Professional Corp. They allegedly bilked the government for services that they didn’t provide – particularly expensive HIV infusion services. In April, the government handed down an indictment against the brothers, and they fled the U.S. But the long arm of the law caught up with them. They got apprehended and brought back to Miami for trial for Medicare fraud amounting to over $13.7 million. A sentencing hearing has been scheduled for the 5th of November, and each brother faces a maximum of 40 years in prison for the multiple counts.

Los Angeles Medicare fraud, insurance fraud, credit card fraud, and other white collar crimes can result in massive jail sentences, steep fines, and other grievous penalties. Southern California healthcare fraud is charged according to Insurance Code Section 1871.4 as well as Penal Code section 550. Healthcare employers can also be charged under Labor Code section 3700 and Penal Code section 818. If you are convicted of Southern California healthcare fraud, you can face jail time, loss of your medical license, major court costs and fines, and forced restitution to insurers or Medicaid or Medi-cal.

Published on: August 2, 2010

Southern California Medical Fraud Experts React to Tampa Bust

by Michael Kraut

Los Angeles medical fraud analysts are closely following a breaking story out of Tampa that may have broader implications for white collar crime prosecution. The Hillsborough County Sheriff’s office staged a raid on a local medical rehabilitation clinic on July 16th and arrested four people in conjunction with an alleged scam to bilk insurers by staging fake car crashes.

The four people busted – Jacqueline Rosales, Sugeidi Serrano, Juan Martinez, and Ernie Azucey — will face charges of managing a racketeering influenced corrupt organization – a.k.a, a RICO. Essentially, according to reports, the individuals staged car crashes and then submitted claims to insurance companies for non-existent damage and medical bills.

If you or a loved one faces a similar charge of Southern California white collar crime, you may have a difficult time formulating an effective defense. After all, charges of Los Angeles insurance fraud, Southern California credit card fraud, racketeering, and medical fraud of any kind tend to be multifaceted, dynamic, and extremely complicated. Unless your attorney has experience dealing specifically with your kind of case, you may struggle to be able to come up with an appropriate response to the charges. In short, you could face jail time and other unpleasant punishments.