Patient Recruiter and Physical Therapist Sentenced in Connection with Detroit-Area Medicare Fraud Schemes

WASHINGTON—Miami resident Timothy Pierce was sentenced today to 48 months in prison for his participation in a fraudulent Medicare infusion scheme, and Troy, Michigan, resident Jay Jha was sentenced to 27 months in prison for his participation in a separate fraudulent physical therapy scheme, announced the Departments of Justice and Health and Human Services (HHS).

U.S. District Court Judge Denise Page Hood in the Eastern District of Michigan sentenced Pierce to three years of supervised release following his prison term and ordered Pierce to pay $6.09 million in restitution, jointly with co-defendants. U.S. District Court Judge Sean F. Cox in the Eastern District of Michigan sentenced Jha to three years of supervised release following his prison term and ordered Jha to pay $772,800 in restitution.

Pierce pleaded guilty on Nov. 18, 2009, to one count of conspiracy to commit health care fraud. According to the plea documents, beginning in approximately March 2006, Pierce entered into an agreement with the owners of Dearborn Medical Rehabilitation Center (DMRC) to recruit patients for DMRC, a business that purported to provide infusion and injection therapy services to Medicare patients. Specifically, Pierce admitted that he was hired to recruit, drive and pay kickbacks to Medicare beneficiaries to induce them to visit DMRC. According to plea documents, Pierce paid the beneficiaries to sign paperwork indicating that they had received infusions and injections of specialty medications that they did not in fact receive. Pierce, who is also a Medicare beneficiary, admitted that he signed paperwork indicating that he had received infusions and injections of specialty medications that he did not receive, enabling DMRC to falsely bill for services never rendered to him. DMRC billed Medicare approximately $9.1 million while the conspiracy was in operation.

Jha pleaded guilty on Aug. 26, 2009, to conspiracy to commit health care fraud. According to information contained in plea documents, Jha, a licensed physical therapist, admitted that he began working in approximately February 2003 as a contract therapist for a co-conspirator who owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries. According to his plea documents, Jha admitted that he, his co-conspirator and others created fictitious therapy files appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by co-conspirators.

Jha also admitted that during the course of the scheme he signed approximately 336 fictitious physical therapy files, indicating that he had provided physical therapy services to Medicare beneficiaries, when in fact he had not. Jha admitted that he was paid between $90 and $110 for each file he falsified. Jha also admitted that between approximately February 2003 and December 2005, he falsified physical therapy files that supported claims to the Medicare program totaling approximately $1.6 million. Medicare paid approximately $772,800 on those claims. Jha admitted that, throughout the conspiracy, he was fully aware that Medicare was being billed for physical therapy services that he falsely indicated he had performed.

These sentencings were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

The cases were prosecuted by Assistant Chief John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section as well as former Special Assistant U.S. Attorney Thomas W. Beimers. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 560 individuals who collectively have falsely billed the Medicare program for approximately $1.2 billion. 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 Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.