Nurse, CEO Arrested for Health Care Fraud

SHERMAN, TX—U.S. Attorney John M. Bales announced today that two Dallas County men have been arrested in a health care fraud scheme in the Eastern District of Texas.

BRANDON ALLEN RAY, 30, appeared for arraignment before U.S. Magistrate Judge Amos Mazzant on Jan. 12, 2010, on charges of health care fraud, conspiracy and embezzlement in connection with health care. STEWART POWERS, 56, also appeared on charges of conspiracy and embezzlement in connection with health care. Ray and Powers were arrested on Jan. 6, 2010.

According to the indictment, from 2005 to 2007, Ray, a registered nurse, is alleged to have billed Medicaid $280,550 for private-duty nursing services he did not actually provide to an invalid patient. Additionally, from 2005 to 2006, Ray was employed as a part time registered nurse for Senior Health Services, Inc., d/b/a Community Specialty Hospital located in Sherman, Texas and Powers was the Chief Executive Officer of the hospital. During this time, Ray and Powers are alleged to have conspired to embezzle funds from the hospital in a scheme which involved Ray submitting false work-and-time records to the hospital for payment and Powers approving the false records and directing hospital personnel to process time cards and write payroll checks. The loss to the hospital is estimated to be $54,000.

Ray and Powers were indicted by a federal grand jury on Dec. 9, 2009. If convicted, they each face up to 10 years in federal prison. It is important to note that an indictment is merely a charge and should not be considered as evidence of either guilt or innocence.

"When Medicare and Medicaid providers are motivated by greed, our most vulnerable citizens, the old and the poor, are put at risk", said Special Agent in Charge Mike Fields of the HHS Office of Inspector General's (OIG) Dallas Regional Office. "Our HHS OIG agents will continue to work closely with our law enforcement partners to investigate providers who will stop at nothing to loot the Medicare and Medicaid programs."

This case is being investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services Office of Inspector General – Office of Investigations, the Texas Attorney General's Office – Medicaid Fraud Control Unit and prosecuted by Assistant U.S. Attorney Kevin D. Collins.