Richmond Woman Indicted for Embezzling $800,000 from Virginia Birth Injury Fund
|U.S. Attorney’s Office October 07, 2009|
RICHMOND, VA—Iris F. Allen, 44, of Richmond, Va., has been indicted by a federal grand jury for allegedly embezzling more than $800,000 from the Virginia Birth-Related Neurological Injury Compensation Fund, also known as the Virginia Birth Injury Fund (BIF).
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and William C. Mims, Attorney General for the Commonwealth of Virginia, made the announcement after Allen’s arrest this morning.
In an indictment returned yesterday but unsealed this morning, Allen was charged with 12 counts of embezzlement from a health care benefits program; 11 counts of health care fraud; three counts of aggravated identity theft; and two counts of interstate transportation of stolen property.
The maximum penalty for each count of embezzlement, health care fraud and interstate transportation of stolen property is 10 years in prison and a fine of up to $250,000. The maximum penalty for each count of aggravated identity theft is a mandatory term of two years in prison, which must run consecutive to any other prison term imposed.
A former claims manager, Allen worked at the fund from 2004 until earlier this year. BIF was created by the Virginia General Assembly in 1987 to provide lifetime medical benefits to participating infants born with severe birth-related neurological injuries. BIF is currently funded by participating physicians and hospitals.
The indictment alleges a fraudulent billing and embezzlement scheme that began in July 2006. Allen is alleged to have devised a scheme to submit false invoices to BIF for payment to one of two companies she created. The businesses—identified in the indictment as Paratransit Company of Virginia and Dandridge Design and Construction, L.L.C.—were listed as the vendor or contractor on numerous false or inflated invoices. Unbeknownst to the BIF representative issuing payments, Allen was the sole owner of both companies. In some instances, the invoices were for services never rendered and, in others, Allen submitted inflated invoices above the total cost for actual services provided by other vendors. The total amount of fraudulent claims alleged in the indictment is $819,111.48.
Allen is also alleged to have used the names of the parents of claimants in an attempt to create the appearance of legitimate invoices submitted to BIF.
In addition to today’s indictment, Allen was served with a temporary restraining order directing that she refrain from liquidating assets.
The case is being investigated by the FBI and the Virginia State Police. The case is being prosecuted by Special Assistant United States Attorney and Assistant Attorney General Shannon Y. Dion and Assistant United States Attorney Laura Colombell Marshall.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.usdoj.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.