NATIONAL HEALTH CARE FRAUD TAKEDOWN RESULTS IN CHARGES AGAINST 601 INDIVIDUALS RESPONSIBLE FOR OVER $2 BILLION IN FRAUD LOSSES

WASHINGTON - Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced today the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.

Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Deputy Director David L. Bowdich of the FBI, Assistant Administrator John Martin of the Drug Enforcement Administration (DEA), Deputy Inspector General Gary Cantrell of the HHS Office of Inspector General (OIG), Deputy Chief Eric Hylton of IRS Criminal Investigation (CI), Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director of the Center for Program Integrity Alec Alexander and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS).

Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units.

The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.

“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”

“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money—it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

In connection with the national healthcare fraud takedown, the Office of the United States Attorney for the District of Vermont announced that Jennifer Stocker, 41, of New Haven, Vermont, was charged this week. On June 26, 2018, the government filed a criminal information charging Stocker with making false statements in applications for benefits funded with monies including from the U.S. Department of Health and Human Services. The charge stems from multiple applications that Stocker submitted between March 2014 and December 2015 for child care, health care, and other benefits in which Stocker falsely concealed the fact that she was married. In a plea agreement also filed June 26, 2018, Stocker has agreed to plead guilty and pay restitution totaling $139,597.35. As part of the plea agreement, the parties have agreed to jointly recommend a sentence of a five year term of probation.

The United States Attorney emphasized that the charges in the information are merely accusations and that the defendant is presumed innocent unless and until she is proven guilty. If convicted, Stocker faces up to five years’ imprisonment and a fine of up to $250,000. The actual sentence would be determined by the judge overseeing the case with reference to federal sentencing guidelines.

The Department of Health and Human Services Office of Inspector General and the State of Vermont, Program Integrity Units for the Child Development Division, Economic Services Division, and the Office of Vermont Health Access investigated Stocker’s actions. Stocker is represented by Assistant Federal Public Defender Elizabeth Quinn. The prosecutor is Assistant U.S. Attorney Nicole Cate.

U.S. Attorney Christina Nolan praised the federal and state investigative partners for their diligent and thorough investigation of Stocker’s fraud. “We will continue to prioritize prosecution of those who fraudulently obtain public funds, working with our outstanding federal and state investigative partners. The U.S. Attorney’s Office is committed to deploying civil and criminal resources to protect taxpayer dollars and bring justice to those who steal from the treasury.”

“Those who engage in health care fraud are exploiting programs that provide care for millions of Americans,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General. “This takedown sends a clear message that we will aggressively pursue criminals to ensure they are held accountable for their actions.”

The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.

A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.