Three Detroit-Area Residents Plead Guilty to Health Care Fraud

WASHINGTON—Jackson, Mich., resident Terrence Hicks and Detroit residents Muhammed Al Mahdi and John Saunders pleaded guilty in U.S. District Court in the Eastern District of Michigan this week for their roles in a $4.2 million Medicare fraud scheme, Assistant Attorney General Lanny A. Breuer of the Criminal Division, Acting U.S. Attorney Terrence Berg of the Eastern District of Michigan, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office, and Daniel R. Levinson, Inspector General of the Department of Health and Human Services (HHS) announced today.

Hicks, 42, and Saunders, 70, pleaded guilty to one count of conspiracy to commit health care fraud before Chief Judge Gerald E. Rosen of the U.S. District Court in Detroit today; Al Mahdi, 63, pleaded guilty on Dec. 15, 2009, to the same charge before Chief Judge Rosen.All three defendants admitted that they participated in a conspiracy to defraud Medicare, operating out a Southfield, Mich., clinic called Sacred Hope Center (Sacred Hope).The clinic purported to specialize in providing injection and infusion therapy services to Medicare patients.

Specifically, Hicks admitted that beginning in September 2006, he began working as a patient recruiter and driver at Sacred Hope.Sacred Hope was owned by defendant’s co-conspirators, Jose Rosario and Daisy Martinez, who pleaded guilty in the same case in August and September 2009, respectively.According to court documents, Sacred Hope routinely billed the Medicare program for medications and services that were medically unnecessary and, in many instances, never provided.Hicks admitted to being aware that the purpose of the clinic was to defraud the Medicare program, not to provide legitimate health care to patients.

According to court documents, Medicare beneficiaries were not referred to Sacred Hope by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks.Hicks, along with co-conspirator Wayne Smith, who pleaded guilty on Dec. 10, 2009, was responsible for driving into Detroit neighborhoods and recruiting Medicare beneficiaries by offering them cash and prescriptions for controlled substances.In exchange for their kickbacks, the Medicare beneficiaries would visit the clinic, typically driven there by Hicks and/or Smith, and sign documents indicating that they had received the services billed to Medicare.Hicks and/or Smith would obtain cash on a daily basis from co-conspirators for the purpose of paying the beneficiaries cash kickbacks.Hicks or Smith would then distribute this cash to the Medicare beneficiaries.

In their pleas, Al Mahdi and Saunders admitted that they were Medicare beneficiaries who permitted their Medicare numbers to be used for fraudulent billings at Sacred Hope.Specifically, they admitted being driven by Hicks and Smith to Sacred Hope, and signing forms indicating that they had received injection and/or infusion therapy.They admitted that in return for signing these forms, they were paid cash kickbacks of approximately $50 per visit.

Both defendants admitted that when visiting Sacred Hope, they were repeatedly injected with unknown substances, the purposes of which were never explained to them.Al Mahdi and Saunders were aware that the clinic was making notations in medical charts for medications that were never provided to them. Both Al Mahdi and Saunders admitted that they did not visit Sacred Hope for the purpose of receiving legitimate medical care. Rather, they visited Sacred Hope for the sole purpose of receiving kickbacks, and knowingly allowed Medicare to be billed for the services supposedly provided to them there.

The case is being prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan.The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of Michigan.Since the inception of Strike Force operations in March 2007—Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four) and Brooklyn (Phase Five)—the Strike Force has obtained indictments of more than 460 individuals and organizations that collectively have falsely billed the Medicare program for more than one billion dollars.In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the HEAT team, go to: www.stopmedicarefraud.gov.