U.S. Attorney's Office
Western District of Tennessee
(901) 544-4231
February 25, 2015

Federal Indictments Returned Against Jackson-Area Residents in Health Care Fraud Scheme Targeting Medicare Card-Holders

JACKSON, TN—Calvin Bailey, 64, of Jackson, Tennessee; Sandra Bailey, 64, of Jackson, Tennessee; and Cindy Mallard, 49, of Bradford, Tennessee; have been charged in an indictment alleging a conspiracy to commit health care fraud and to pay illegal kickbacks in connection with health care services, announced United States Attorney for the Western District of Tennessee, Edward L. Stanton III. Sandra Bailey was also indicted for eight counts of health care fraud and nine counts of paying illegal kickbacks to health care providers and patient-referral sources.

Initial appearances for all three defendants were held today at the United States Courthouse in Jackson, Tennessee, and all were released on bond. Sandra Bailey and Mallard each worked for several years in health care businesses in the Jackson, Tennessee area. Calvin Bailey has been employed as the principal at Medina Middle School in Medina, Tennessee, and has also been employed by medical equipment supply companies.

According to the indictment, Sandra Bailey and Calvin Bailey paid illegal kickbacks to referral sources to identify Medicare card-holders. Sandra Bailey and, on at least one occasion, Calvin Bailey, marketed power wheelchairs and back braces to the Medicare card-holders. Sandra Bailey told targeted Medicare card-holders that the equipment would be free and told card-holders that they needed to get the wheelchairs whether they were needed or not because Medicare might stop paying for them. Although Medicare paid only 80% of the costs for wheelchairs, some of the card-holders had secondary insurance carriers, including TennCare and TriCare, who paid the remaining 20%. For patients without secondary insurance, the defendants helped the patients fill out forms that would waive the requirement for any payment by the card-holder.

In addition to the illegal kickbacks to referral sources, Sandra Bailey also made illegal kickback payments to some health care providers who performed—or who were supposed to have performed—face-to-face evaluations of card-holders to qualify the card-holders for power wheelchairs. Cindy Mallard, who was the office manager at the Medina Family Medical Clinic in Medina, Tennessee, assisted Sandra Bailey by visiting card-holders with Sandra Bailey and filling out forms that were supposed to be filled out during a face-to-face evaluation of a patient by a physician or other qualified health care provider. Mallard then assisted Sandra Bailey in getting those forms signed by providers who were supposed to have conducted face-to-face evaluations of the card-holders. Mallard also received kickback payments on behalf of one of the health care providers who signed the forms.

After the defendants identified card-holders and arranged for evaluation paperwork to be submitted to Medicare for payment for medical equipment, sales commissions were then paid to Calvin Bailey, Sandra Bailey, Mallard, or other members of the Baileys’ and Mallard’s families.

This investigation is being conducted by the Department of Health and Human Services-Office of the Inspector General, the Federal Bureau of Investigation and the Tennessee Bureau of Investigation. Assistant U.S. Attorney John Fabian represents the government.

The charges and allegations contained in indictments are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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