Nine Charged in $13 Million Detroit Medicare Fraud Schemes Involving Nerve Conduction Tests

WASHINGTON—Nine individuals, five of whom reside in Miami-Dade County, Fla., and four of whom reside in Detroit, have been indicted in the Eastern District of Michigan in connection with two alleged Medicare fraud schemes involving approximately $14 million, Assistant Attorney General Lanny A. Breuer of the Criminal Division, Acting U.S. Attorney Terrence Berg of the Eastern District of Michigan, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh of the Chicago region the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) Field Office announced today.

Also today, the Departments of Justice and HHS announced the expansion of Medicare Fraud Strike Force operations to Brooklyn, N.Y., Tampa, Fla., and Baton Rouge, La. The Medicare Fraud Strike Force has been operating in South Florida since March 2007, and currently also operates in South Florida, Los Angeles, Detroit and Houston. The expansion was announced by Secretary Kathleen Sebelius of HHS and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

In the first indictment unsealed today, Emilio Haber, Alejandro Haber, Maria Haber, Hans Lobato, Emma King and Melvin Young were charged with participating in a scheme to submit claims to Medicare for medically unnecessary testing services. All the defendants named in the indictment were charged with one count of conspiracy to commit health care fraud. Emilio Haber and Alejandro Haber were also each charged with two counts of health care fraud.

The indictment alleges that Alejandro Haber and Maria Haber established two clinics, Ritecare LLC and CompleteHealth LLC in 2007. The two clinics merged in 2008 under the name Ritecare. The two owners, as well as co-conspirators Emilio Haber and Hans Lobato, were allegedly involved in a scheme to perform and bill Medicare for unnecessary tests at the individual clinics and at the merged entity. The most prominent tests were nerve conduction studies, according to the indictments. Clinic owners and employees allegedly paid kickbacks to patient recruiters, including King and Young, to obtain patients. The patient recruiters would, in turn, allegedly use that same money to pay kickbacks to patients to induce them to go to Ritecare. The clinic owners and patient recruiters allegedly instructed the patients to feign symptoms to justify expensive testing. During the course of the fraudulent scheme, Ritecare submitted more than $11 million in claims to Medicare.

In the second indictment unsealed today, Carlos Grana, Dwight Armstrong and Price Marshall were charged with participating in a scheme to submit claims to Medicare for medically unnecessary testing services. All the defendants named in the indictment were charged with one count of conspiracy to commit health care fraud. Carlos Grana and Dwight Armstrong were also each charged with two counts of health care fraud.

The indictment alleges that Grana was the principal operator of clinic called Careplus LLC. Grana was allegedly involved in a scheme at Careplus to perform and bill Medicare for unnecessary tests, the most prominent being nerve conduction studies. Grana allegedly paid kickbacks to patient recruiters, including Armstrong and Marshall, to obtain patients. The patient recruiters would, in turn, allegedly use that same money to pay kickbacks to patients to induce them to go to Ritecare. Grana and the patient recruiters allegedly instructed the patients to feign symptoms to justify expensive testing. During the course of the fraudulent scheme, Careplus submitted more than $2.8 million in claims to Medicare.

The charges of conspiracy to commit health care fraud and conspiracy to commit money laundering each carry a maximum prison sentence of 10 years. In addition, each count of committing health care fraud carries a maximum sentence of 10 years in prison.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

The cases are being prosecuted by Senior Trial Attorney John K. Neal, Trial Attorneys Gejaa T. Gobena and Benjamin D. Singer, and Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and U.S. Attorney Berg of the Eastern District of Michigan. Since the inception of Strike Force operations in March 2007—Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four), and Brooklyn (Phase Five)—the Strike Force has obtained indictments of more than 460 individuals and organizations that collectively have falsely billed the Medicare program for more than one billion dollars.

The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. In May 2009, the Department of Justice and HHS announced the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a renewed effort to focus joint efforts to prevent fraud and enforce current anti-fraud laws around the country. As part of the HEAT initiative, Medicare Fraud Strike Force operations were expanded from South Florida and Los Angeles to Detroit and Houston, and now to Brooklyn, N.Y., Tampa, Fla., and Baton Rouge, La.

To learn more about the HEAT initiative, go to: http://www.stopmedicarefraud.gov/.