Charlotte Jury Delivers Guilty Verdicts Against Leader Of Healthcare Fraud Scheme And Co-Conspirator

CHARLOTTE, N.C. –  A federal jury in Charlotte has convicted the leader and co-conspirator of a health care fraud scheme that fraudulently billed Medicaid for more than $10 million in false claims, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Cynthia Teresa Harlan, 48, of Charlotte, and Claude Bernard McCrae, 38, of Hamlet, N.C., were convicted of one count of health care fraud conspiracy following a four-day trial.  Co-defendant Tyree Craig Jones, 38, of Charlotte, pleaded guilty to one count of health care fraud conspiracy on the fourth day of trial.  Harlan was also convicted of three counts of making false statements relating to heath care matters, three counts of aggravated identity theft, and one count of obstruction of a health care fraud investigation.  Chief U.S. District Judge Frank D. Whitney presided over the trial.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Rose in making today’s announcement. 

According to evidence admitted at trial, witness testimony and other information contained in filed court documents:

Between October 2012 and August 2013, Harlan used a network of accomplices, including Jones and McCrae, to carry out an extensive health care fraud scheme involving the fraudulent submission of fake reimbursement claims to Medicaid for services that were never actually provided to beneficiaries.  Harlan owned and operated Heartland Consulting and Marketing, Inc., a Charlotte-area company, purportedly specializing in the operation of mental health companies and Medicaid reimbursement.  Harlan recruited a team of individuals that included mental health practitioners, note writers, patient recruiters, mental and behavioral health services providers and medical billers, and directed them to fabricate the necessary paperwork used to support the fraudulent claims billed to Medicaid.  The fabricated paperwork included the names and beneficiary information of Medicaid recipients, fabricated intake packets, non-existent mental health diagnoses and made-up treatment plans and fake dates of service.  It also included fake notes describing therapy services that never occurred.  All of this information was organized in a manner to make it appear that the companies and clinicians involved in the scheme had provided legitimate therapy beneficiaries, contrary to the truth.  The patient files were intended to deceive Medicaid auditors in case there was an inquiry about the accuracy of the fake claims. 

Jones and McCrae were the co-owners of two outpatient mental and behavioral health services companies, Kings of Carolina Care 1, Inc. (Carolina Care 1), and Esteem Family Life Center, LLC (Esteem), both located in Rockingham, N.C.  The two men partnered with Harlan and others to submit false reimbursement claims to Medicaid, claiming that the two entities provided mental and behavioral health services to the Medicaid recipients, when, in reality no services were provided at all.  According to court records, Jones and McCrae, through Carolina Care 1, attempted to obtain from Medicaid over $5 million in fraudulent reimbursement claims and received over $1.3 million from Medicaid for the fraudulent claims. 

Evidence at trial demonstrated that Harlan, Jones and McRae accomplished some of the fraud by misappropriating the Medicaid identification number of doctor.  This doctor had never agreed to be part of Carolina Care 1, yet the group claimed that this doctor had provided over $2.3 million in therapy services to Medicaid recipients in just one year.  Additionally, evidence presented at trial demonstrated that the false claims submitted by Carolina Care 1 indicated that Carolina Care 1 allegedly serviced over 500 clients in a single day.

Trial evidence also established that Harlan misused the names and Medicaid identification numbers of hundreds of Medicaid beneficiaries, including A.H., B.H. and M.H., in order to accomplish the scheme.  According to the mothers of A.H. and M.H., who testified at trial, their children did not have mental health issues and never received any therapy services from any company.  Harlan received over $400,000 for her role in the scheme.  When Harlan became aware that she was being investigated for Medicaid fraud, Harlan directed some of her co-conspirators to destroy records as well as incriminating emails and text messages relevant to the scheme for the purpose of obstructing the investigation. 

“Harlan and her extensive network of fraudsters and cheats repeatedly cheated North Carolina’s Medicaid program of money intended to pay for medical services of those in real need.  The U.S. Attorney’s Office will continue to ferret out health care fraud and hold accountable those who cheat important government programs and steal taxpayers’ dollars,” said U.S. Attorney Rose.

“Medicaid fraud deprives much-needed services to poor and disabled North Carolinians and increases health care costs for everyone.  The people trusted with the resources to care for others should not use that access to defraud the healthcare system.  The FBI will work tirelessly to ensure federal funding is spent in an appropriate and legal manner,” said FBI’s Special Agent in Charge Strong. 

To date, the following individuals have been prosecuted federally in connection with this health care fraud conspiracy:

• Aliya Boss was previously sentenced to 44 months in prison, three years supervised release and was ordered to pay $ 1,135,302.27 in restitution. Boss filed reimbursement claims to Medicaid fraudulently claiming that she had provided mental health and behavioral health services to beneficiaries.

• Alexander Bass and Torrey Darnell Moton were previously sentenced to 32 and 25 months in prison, respectively, three years of supervised release and were ordered to pay $370,372.37 as restitution.Bass and Moton owned United Rehabilitation Services (URS), in Erwin, N.C., and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.

• Sakeenah Davis and Kino Williams were previously sentenced to 42 and 35 months in prison, respectively, three years supervised release and were ordered to pay $ 506,124.00 in restition.  Davis and Williams owned New Choices Youth and Family Services, in Charlotte, North Carolina, and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.

• Jacqueline Ford was previously sentenced to 21 months in prison and three years supervised release and was ordered to pay $442,679.92 restitution.  Ford fabricated notes to support the false claims submitted by Carolina Care 1, URS and other companies.

• Zaria Humphries was previously sentenced to 24 months in prison and three years supervised release and was ordered to pay $222,037 in restitution.  Humphries submitted false claims through her company Life Impact Solutions.

• Tanisha Melvin was sentenced to 33 months in prison, three years of supervised release and was ordered to pay $392,159.81 in restitution.Melvin was responsible for creating fake patient records for the conspiracy.

• LaChanda Clotiel Parks, also responsible for generating fake patient paperwork, was sentenced to 28 months in prison followed by three years of supervised release, and was ordered to pay $352,565.69 in restitution for her role in the conspiracy.

• Dr. Wanda Webb was sentenced two years probation and ordered to pay $79,338.74 in restitution.  Webb also submitted fraudulent claims through her company, Cornerstone Counseling and Consulting.

• D’Marcus White, also responsible for generating fake patient paperwork, was previously sentenced to two years probation and ordered to pay $543,366.64 in restitution.

• Jason Adam Townsend is also facing health care fraud conspiracy and aggravated identity theft charges, for submitting fraudulent claims through his medical billing services company, Townhall Enterprises, LLC, located in Raeford, N.C.

McCrae is currently released on bond.  Jones was remanded to federal custody on July 14, 2016, and Harlan remains in federal custody.  A sentencing date for the defendants has not been set yet.

The health care fraud conspiracy charge carries a maximum prison term of 10 years.  The maximum prison term for making false statements relating to health care matters is five years per count. The maximum penalty for obstruction of a health care fraud investigation offense carries a maximum prison term of five years and the aggravated identity theft charge carries a mandatory prison term of two years per count, consecutive to any other term of imprisonment.

The investigation was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. In making today’s announcement, U.S. Attorney Rose also thanked the Rockingham Police Department and the Richmond County Sheriff’s Office for their assistance at trial.  The United States is being represented by Assistant U.S. Attorneys Kelli Ferry and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte.

The investigation is the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, 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.  To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.