Houston Federal Jury Returns Guilty Verdicts in Health Care Fraud Trial

HOUSTON—Kelvin Washington, 48, of Houston, has been convicted on all counts of health care fraud, conspiracy and violations of the anti-kickback statute charged against him, United States Attorney Kenneth Magidson announced today. The verdicts were returned less than an hour ago after six days of trial and three-and-a-half hours of deliberation.

The evidence in the week-long trial showed that from 2003 to 2007, Washington received illegal payments for the referral of dialysis patients to a Houston ambulance transport service. In addition, he conspired with others to have unsuspecting doctors sign transport prescriptions for dialysis patients never admitted to a Sugar Land nursing home where he worked.

Testimony at trial showed that Washington was paid for the referral of dialysis patients to an ambulance service that was under contract with the nursing home where he worked. The evidence also showed that he would present prescriptions to doctors who worked at the nursing home. The doctors testified that they would not have signed the prescriptions if they had known the various patients were never admitted to the nursing home.

The jury also heard evidence that the ambulance service paid the Washington in checks totaling $22,200 with many tied to specific patients. Washington did not report all the income he made to the Internal Revenue Service (IRS) from the ambulance service. At trial, an undercover video and audio tape showed one of the managers of the ambulance company bribing a patient to ride with the ambulance company. The ambulance company would later bill Medicare for this patient, a paid informant whose own doctors would not sign a prescription for him. The bill to Medicare was based upon a false script from the nursing home administrator. In a search warrant executed on a co-conspirator’s home, “The List” was discovered which detailed payments made not only to Washington but also to patients who rode with the ambulance service. A computer file from that home also showed detailed records tracking payments for patients, the check numbers for those payments and the fact that payments were made to the defendant.

The false scripts alone resulted in $1.2 million billed to Medicare and Medicaid and approximately $450,000 paid.

U.S. District Court Judge Nancy Atlas, who presided over the trial, has set sentencing for Feb. 23, 2012, at 1:00 p.m. At that time, Washington faces a maximum penalty of five years in prison for each of the three convictions for violating the anti-kickback statute as well as a maximum five years for the one conviction of conspiracy to commit health care fraud. In addition, he also faces up to 10 years for each of the six convictions of health care fraud. Each of the 10 counts for which he was convicted also carries a possible $250,000 fine. Washington was permiited to remain on bond pending his sentencing hearing.

The charges are the result of the investigative efforts of Health and Human Services-Office of Inspector General, Office of Investigations; Texas Attorney General’s Medicaid Fraud Unit, FBI and the United States Attorney’s Office. Special Assistant United States Attorney Suzanne Bradley and Assistant United States Attorney Al Balboni prosecuted the case.