Owner of Nursing Agency Convicted of Multi-Million-Dollar Fraud and Money Laundering Scheme
BOSTON—After deliberating for less than four hours, a federal jury convicted the owner of a home nursing agency for fraudulently billing millions of dollars of services to Medicare and then laundering the proceeds. The jury also decided that the defendant’s $750,000 home in Natick is forfeitable because it was purchased with the fraud proceeds.
Following a 15-day trial, Michael Galatis, 63, was convicted of conspiracy to commit health care fraud, ten counts of health care fraud, and seven counts of money laundering. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Feb. 26, 2015.
The jury also found that Galatis used portions of the proceeds of the fraud scheme to purchase a $750,000 house in Natick in 2010. Over the course of 14 months, Galatis purchased the house, and paid off a mortgage, in increments including $50,000 and in excess of $100,000, until he owned it free and clear of a mortgage. The jury’s finding renders Galatis’s home forfeitable. In addition, the jury found that $50,000 contained in two bank accounts related to the fraud scheme is forfeitable.
Galatis, a registered nurse, owned and operated At Home VNA (AHVNA), a home health agency located in Waltham. The Medicare program pays for home health services under specified conditions. From 2006 to 2012, Galatis caused AHVNA to submit more than $27 million in false and fraudulent claims to Medicare, and Medicare paid AHVNA more than $20 million for home health services.
Galatis, along with his co-conspirator, trained AHVNA nurses to recruit older patients on Medicare who lived in large apartment buildings. Galatis held “wellness clinics” at these buildings where nurses convinced senior citizens to enroll with AHVNA and have a nurse visit them in their home. Galatis trained AHVNA nurses to manipulate the patients’ Medicare assessment forms to make it appear as though the patients qualified for Medicare home health services, when that was often not the case. The home health orders were signed by AHVNA’s paid medical director, Dr. Spencer Wilking, who has separately pleaded guilty to health care fraud.
The elderly patients’ primary care physicians were unaware that AHVNA was sending nurses to see their patients in their homes. A number of primary care physicians complained to Galatis and asked him to stop seeing the patients, but he ignored these complaints. Similarly, AHVNA’s nurses asked Galatis if they could stop seeing the patients, because they did not need home health services, but Galatis refused these requests as well.
In 2011, Medicare passed a new requirement that a physician certify that she or he had a face-to-face encounter with the patient about the need for home health care. Even after this regulation was enacted, Galatis continued to bill Medicare for millions of dollars of home health care even though Dr. Wilking continued to sign each order without examining any of the patients.
The charging statutes provide a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss resulting from the offense, and restitution to the Medicare program. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Dr. Wilking is scheduled to be sentenced on Feb. 3, 2015. Janice Troisi, also a registered nurse and the AHVNA clinical director, is expected to go to trial on June 22, 2015.
United States Attorney Carmen M. Ortiz; Philip Coyne, Special Agent in Charge of the U.S. Health and Human Services, Office of Inspector General, Office of Investigations; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys David S. Schumacher and Lisa A. Schlatz of Ortiz’s Health Care Fraud Unit. The trial team was also assisted by the New England Benefit Integrity Support Center, a fraud contractor for the Medicare program.