Married Couple, Son, and Accomplice Indicted for Defrauding Medicare
JACKSON, TN—The February 2015 indictment of a married couple and their accomplice, charging them with defrauding Medicare, has been superseded to add the couple’s son as a fourth defendant. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the superseding indictment today.
In addition to Calvin Bailey, Sandra Bailey, and Cindy Mallard, Bryan Bailey has also been charged in a superseding indictment alleging a conspiracy to commit health care fraud and to pay illegal kickbacks in connection with health care services. Bryan Bailey has also been charged with wire fraud.
According to the superseding indictment, Sandra Bailey and Calvin Bailey sold durable medical equipment including power wheelchairs and back braces. From November 2009 to September 2011, they were both employed at Jaspan Medical Systems, a durable medical equipment company with an office in Jackson, Tennessee. Durable medical equipment is designed for repeated use and medical purpose.
The Baileys’ co-defendant, Mallard, also worked as a salesperson for Jaspan from June 2011 to September 2012. Prior to that, Mallard was employed as an office manager at Medina Family Medical Clinic from November 2009 until June 2011.
Bryan Bailey, Sandra Bailey and Calvin Bailey’s son, was the operations manager at Jaspan from December 2009 to July 2013.
From at least November 2009 to April 2013, all four defendants were members of a conspiracy to defraud Medicare, a federal health care benefit program, of thousands and also pay illegal kickbacks to health care providers and patient-referral sources.
Earlier this year, three of the defendants—Calvin Bailey, Sandra Bailey, and Mallard—were indicted for conspiracy to commit health care fraud and to pay illegal kickbacks in connection with health care services. Sandra Bailey was also indicted on multiple counts of health care fraud and paying illegal kickbacks to health care providers and patient-referral sources.
Sandra Bailey and Mallard each worked for several years in health care businesses in the Jackson, Tennessee area. Calvin Bailey was employed as the principal at Medina Elementary School in Medina, Tennessee, and was also employed by various medical equipment supply companies.
According to the superseding indictment, Sandra Bailey paid illegal kickbacks to referral sources to identify Medicare card-holders. Sandra Bailey marketed power wheelchairs and back braces to the Medicare card-holders. Commissions for sales of wheelchairs to the Medicare card-holders identified by the referral sources were distributed among the four defendants, as well as to Bryan Bailey’s wife and Mallard’s husband and daughter.
In addition to the illegal kickback payments to referral sources, Sandra Bailey also paid kickbacks to some health care providers who performed—or were supposed to have performed—face-to-face evaluations of card-holders to qualify them for power wheelchairs. Mallard, who was the office manager at Medina Family Medical Clinic, assisted Sandra Bailey by visiting card-holders with her. Mallard also filled out forms that were supposed to be completed 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.
All four defendants face up to five years’ imprisonment and fines of up to $250,000 on the conspiracy charge.
Sandra Bailey also faces up to 10 years and a fine of up to $250,000 on each of eight counts of health care fraud.
Sandra Bailey faces up to five years and a fine of up to $250,000 on each of nine counts of paying illegal kickbacks.
In addition to the conspiracy charge, Bryan Bailey faces up to 20 years and a fine of up to $250,000 for wire fraud.
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.
The case is being prosecuted by Assistant U.S. Attorney John Fabian on the government’s behalf.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.