Windham County Woman Sentenced to 37 Months in Prison for $1.4 Million Health Care Fraud

The Office of the United States Attorney for the District of Vermont stated that on January 12, 2012, Senior United States District Judge J. Garvan Murtha sentenced Sharon Johnson, 63, of West Dover, Vermont, to 37 months in prison for conspiracy to commit health care fraud. Judge Murtha also ordered Johnson to pay restitution to Mutual of Omaha Insurance Company in the amount of $1,395,755.42.

Johnson previously pled guilty to one count of conspiracy to commit health care fraud and mail fraud. As part of the plea agreement, Johnson admitted that she had obtained over $1,000,000 in fraudulent proceeds from Mutual of Omaha.

Mutual of Omaha discovered the fraud during a 2006 audit of its claims processing system, and referred the matter to the FBI. Subsequent investigation revealed that Rachel Lenagh, a then-employee of Mutual of Omaha, had paid almost $1.4 million in fraudulent claims to Johnson. Investigators also discovered that Lenagh processed payment to Johnson on claims for which there were no supporting medical bills or other relevant documentation, and that these fraudulent payments occurred at Johnson’s direction.

On October 17, 2007, a federal grand jury sitting in Omaha, Nebraska returned a seven-count indictment against Johnson and Lenagh. Lenagh pled guilty in Nebraska to conspiracy to commit health care fraud and was sentenced on February 6, 2009 to 24 months in prison and restitution in the amount of $1,395,755.42.

The United States Attorney commended the FBI in Nebraska and Vermont and the United States Postal Inspection Service in Nebraska for their excellent work in this case.

The United States is represented by Assistant United States Attorneys Paul J. Van De Graaf and Kevin J. Doyle. The defendant is represented by Bradley S. Stetler, Esq. of the Burlington law firm Stetler, Allen &Kampmann.