April 30, 2014

Two Fugitives Arrested in Continuum Healthcare Kickback Conspiracy

HOUSTON—Two more Houston residents have been taken into custody on charges contained in a 13-count indictment alleging a conspiracy to pay kickbacks to 10 area personal care home owners and patient advocates, announced United States Attorney Kenneth Magidson. Jacqueline Harris, 51, and Vernon Lacy, III, 29, were patient advocates for Continuum Healthcare LLC. Both were fugitives in the case until they were found and arrested by the U.S. Marshals Service Gulf Coast Regional Fugitive Task Force with the assistance of the FBI.

Harris made her initial appearance today before U.S. Magistrate Judge George C. Hanks Jr. in Houston, while Lacy appeared before U.S. Magistrate Judge Nancy K. Johnson yesterday. Lacy and Harris were temporarily ordered into custody pending their detention hearings before U.S. Magistrate Judge Hanks at 10:00 a.m., tomorrow and Friday, respectively.

The indictment also charges Jeffery Parsons, 55, of Crockett, and David Edson, 65, of Palm Harbor, Florida, who were the vice presidents of Development and Operations, respectively, for Continuum Healthcare LLC. Also charged are personal care home owners Aretha Johnson, 61, of Sweeney; Inger Michelle Pace, 51, James Bobino, 44, and Mary Browning, 66, all of Houston; Deborah Davis, 51, of Atlanta, Georgia; and patient advocates Earnestine Johnson, 55, and Ronald Turner, 53, both of Houston.

The indictment alleges Edson and Parsons ran Continuum, which owned and operated three community mental health centers in the greater Houston area. They allegedly billed Medicare and Medicaid for mental health services which were unnecessary, and, in some cases, not even provided. According to the indictment, Edson and Parsons directed kickbacks to be paid to numerous area personal care home owners and patient advocates in exchange for the referral of Medicare patients to Continuum.

Harris, Lacy, Aretha Johnson, Pace, Bobino, Browning, Davis, and Earnestine Johnson are charged with conspiring to solicit or receive kickbacks in connection with the Medicare and Medicaid programs.

Edson, Parsons, and Aretha Johnson are also charged with money laundering for engaging in monetary transactions in criminally derived property greater than $10,000 from proceeds of the conspiracy to pay and receive kickbacks. According to the allegations in the indictment, Edson and Parson caused $173 million to be billed to the Medicare and Medicaid programs for patients obtained as the result of illegal kickbacks paid to the personal care home owners and patient advocates. Medicare and Medicaid paid a total of approximately $69.4 million to Continuum, according to the charges.

Conspiracy to pay and receive kickbacks carries a maximum penalty of five years in a federal prison, upon conviction, while money laundering carries a maximum penalty of 10 years. Both convictions also carry a maximum fine of $250,000.

The criminal charges are the result of a joint investigation conducted by agents of the FBI, Department of Health and Human Services-Office of Inspector General, Texas Attorney General’s Office-Medicaid Fraud Control Unit, Internal Revenue Service-Criminal Investigation, and the Railroad Retirement Board-Office of Inspector General. This case will be prosecuted by Assistant United States Attorney (AUSA) Al Balboni and Special AUSA Adrienne Frazior.

An indictment is an accusation of criminal conduct, not evidence.

A defendant is presumed innocent unless and until convicted through due process of law.