Two Women Sentenced to Prison for Health Care Fraud Conspiracy, Illegal Kickbacks, and Forged Prescriptions for Controlled Substances

CHARLOTTE, NC—A Rowan County woman and her Mecklenburg County co-conspirator were sentenced to prison on Friday, November 2, 2012, in U.S. District Court for their role in a scheme to defraud Medicare and Medicaid and related offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

Chief U.S. District Court Judge Robert J. Conrad, Jr. sentenced Karen Wills (a/k/a Karen Boykin and Karen Jackson), 43, of Salisbury, to serve 97 months in prison, followed by three years of supervised release. She was also ordered to pay $786,316 as restitution to Medicaid, Medicare, and Medco Health Solutions. Wills’ co-defendant, Wendy Gibson (a/k/a Wendy Fitzgerald), 40, of Charlotte, was sentenced to 48 months in prison followed by three years of supervised release. Judge Conrad ordered Gibson to pay $358,330 as restitution to Medicare, Medicaid, and Medco Health Solutions.

In January 2012, Wills and Gibson pleaded pled guilty to one count of health care fraud conspiracy, one count of paying and receiving illegal kickbacks, and one count of conspiracy to distribute controlled substances. Wills pleaded guilty to one additional count of health care fraud conspiracy.

U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Russell F. Nelson, Special Agent in Charge of the United States Secret Service (USSS), Charlotte Field Division; Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI); Sheriff Kevin L. Auten of the Rowan County Sheriff’s Office; and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD).

According to filed documents, statements made in court, and Friday’s sentencing hearings:

From around January 2008 to around 2009, Wills, Gibson, and others engaged in an illegal kickbacks scheme involving power wheelchairs. Wills used her position with her employer’s company to submit fictitious referrals for patients to receive medically unnecessary power wheelchairs from Gibson’s employer’s company. In some instances, Wills forged a physician’s signature on required qualification documents, while Gibson tracked and directed payment to those referrals. The defendants admitted to concealing the illegal kickback payments by falsely representing on invoices and checks that the payments were for nursing and billing services. This scheme resulted in payments for the medically unnecessary equipment from Medicare and Medicaid in excess of $300,000.

The defendants also conspired to distribute controlled substances and to commit health care fraud. Wills admitted that she forged a physician’s signature on prescription pads she misappropriated from her employer and issued fraudulent prescriptions in Gibson’s name. The prescriptions were written for controlled substances including oxycodone and hydrocodone/acetaminophen pills. Gibson admitted that she used her health insurance prescription benefit program to pay for the fraudulent prescriptions, resulting in payments in over $30,000 for these fraudulent prescriptions. Wills and Gibson obtained and illegally distributed approximately 3,000 oxycodone pills and approximately 5,000 hydrocodone/acetaminophen pills.

According to filed documents and statements made in court, from around 2008 to January 2011, Wills and others participated in a scheme to defraud Medicare and Medicaid by submitting false and fraudulent claims for medical services which were medically unnecessary.

From around 2008 to January 2011, Wills also participated in a separate scheme to defraud Medicare and Medicaid by submitting false and fraudulent claims for medical services, including electromyography (EMG) and anorectal manometry (AM), among others. These diagnostic and treatment procedures were medically unnecessary, not provided, or both. As a result of this scheme, Medicare and Medicaid paid over $400,000 in reimbursement payments to the fraudulent claims.

From around August 2008, Wills and others became aware of the investigation into the fraudulent billing practices. In an effort to cover the fraudulent scheme, Wills created several false EMG and AM reports and placed them in patient files. As part of her guilty plea, Willis admitted that the amount of loss intended to be caused by the scheme was in excess of $400,000 but less than $1,000,000.

Wills has been in federal custody on these charges since August 2011. She will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Gibson is released on bond and will be ordered to report to a federal facility to serve her prison sentence. Federal sentences are served without the possibility of parole.

The investigation into Wills and Gibson was handled by HHS-OIG, MID, FBI, USSS, NC SBI, CPMD, and Rowan County Sheriff’s Office. The prosecution is being handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The task force is a multi-agency team of experienced federal and state investigators and prosecutors, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system and reducing the potential for health care fraud in the future. The task force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The task force builds upon existing partnerships between the agencies, and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud, please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS) or e-mail at HHSTips@oig.hhs.gov.