Fort Lauderdale, Florida-Area Halfway House Operator Sentenced to 33 Months in Prison for Participating in Fraud and Kickback Scheme

WASHINGTON—The manager and operator of a Fort Lauderdale, Fla.-area halfway house was sentenced today to 33 months in prison for his role in a Medicare fraud kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI and Department of Health and Human Services (HHS).

Butler Moultrie, 46, was sentenced by U.S. District Judge Donald M. Middlebrooks in the Southern District of Florida. In addition to his prison term, Moultrie was sentenced to three years of supervised release and was ordered to pay $801,000 in restitution.

Moultrie pleaded guilty in December 2011 to one count of conspiracy to commit health care fraud.

According to court documents, most of the residents at Moultrie’s halfway house were recovering from drug and/or alcohol addictions. Moultrie agreed to refer Medicare beneficiaries who resided at his halfway house to ATC to purportedly receive intensive mental health services called partial hospitalization program (PHP) treatment in exchange for illegal health care kickbacks. Moultrie admitted that he knew the kickbacks were illegal and that ATC fraudulently billed the Medicare program for the PHP services. Moultrie also knew that no doctor had prescribed PHP treatment for his patient referrals and that his residents required drug and/or alcohol addiction treatment rather than mental health services.

According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and its related company, the American Sleep Institute (ASI). In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services. The ineligible beneficiaries attended treatment programs that were not legitimate so that ATC and ASI could bill Medicare more than $200 million in medically unnecessary services.

According to the plea agreement, Moultrie’s participation in the fraud resulted in approximately $1.9 million in fraudulent billing to the Medicare program.

ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and ten of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz. In addition to Moultrie, 11 other assisted living facility and halfway house owners and operators and patient recruiters have been convicted for their roles in the fraud scheme. Eight of these defendants, including Moultrie, have been sentenced to prison.

Today’s sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

The case is being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino of the Criminal Division’s Fraud Section. 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 Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants that collectively have billed the Medicare program for more than $3.2 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.