Voter fraud

Well, I'm not too proud to admit it when I'm wrong. Since the beginning of the Republican efforts to stamp out voter fraud I've argued that these bills were addressed at a crime that was all but nonexistent. I'm ashamed to say that the Republicans have proved me wrong. 

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Voter fraud virtually non-existent

Natasha Khan and Corbin Carson, writing in the August 11 Washington Post:

A new nationwide analysis of more than 2,000 cases of alleged election fraud over the past dozen years shows that in-person voter impersonation on Election Day, which has prompted 37 state legislatures to enact or consider tougher voter ID laws, was virtually nonexistent.  

The analysis of 2,068 reported fraud cases by News21, a Carnegie-Knight investigative reporting project, found 10 cases of alleged in-person voter impersonation since 2000. With 146 million registered voters in the United States, those represent about one for every 15 million prospective voters.

Therefore, as Libby Spencer points out in a Detroit News opinion piece, with no evidence to support the need, voter ID laws are legislation in search of a cause... laws in search of a crime. There are age-old reasons for such laws; voter disenfranchisement and election theft.

Indeed, these new voter ID laws could prevent five million legitimate American voters from casting a ballot, as is their Constitutional right. I’m sure it’s just a coincidence that many of these disenfranchised voters are likely to vote Democratic. 

Oh wait, it’s not a coincidence at all. The authors of these laws have admitted in court they have absolutely no evidence of voter fraud and in an unguarded moment, one state Representative in Pennsylvania admitted voter ID laws were specifically enacted to help the Republicans cheat to win...

Pennsylvania so values the right to vote that it inducts citizens who have voted in 50 sequential elections into a voter Hall of Fame. There are 5,923 Pennsylvania citizens who have been inducted that remain alive and are registered to vote, but now the Republican legislature in that state has enacted voter ID laws that could prevent perhaps 23% of these from voting in the 2012 elections.

"These are 1,384 individuals who have not missed a general election since at least 1961 -- but who may very well be prevented from voting for the first time this year -- if they are unaware of the new Voter ID Law, or unable to obtain the proper ID in time for the election,"

We are witnessing again today the very thing that has gone on in this country since our Founding; one or multiple classes will be denied the right to vote based upon some fiction. In the beginning days of this country only landed white men had the right to vote; women, slaves and the indentured purportedly did not have the mental capacity to understand politics, were disallowed and this disenfranchisement was codified in law.

Four score and seven years later we saw an end to slavery, but blacks were still denied the right to vote. It took another century before the right was extended to African American men, and shortly afterwards the women's suffrage movement succeeded in gaining the votie for what was thought to be the last of the disenfranchised classes. All American adults were finally free to go to the polls and cast a ballot.

But it didn't last even until the ink on the VRA had a chance to dry. State laws started popping up enacting poll taxes, literacy tests and a litany of other creative means to reinstitute what the VRA and CRA had made illegal.

Those were Democrats doing that in the 1960's, in 2012 it is the Republicans trying to steal elections by some eerily familiar means. 22 states, all with Republican majorities in the statehouse, have enacted some form of voter ID law. Some states went beyond simple ID requirements, enacting laws placing onerous burdens on voter registration drives, redrawing precinct lines that divided communities, even purges of the voter roles to exclude individuals who could not be counted as reliably Republican.

Thanks to extended early voting hours Democrats took Ohio in 2008, so following the 2010 takeover by Republicans, that party responded by curtailing the early voting period for 2012, shortening it from 35 to just 11 days and eliminating voting on the Sunday before the election. That Sunday is the day when African-American churches historically rally their congregants to go to the polls.

Activists gathered enough signatures to block those restrictions by forcing a referendum on Election Day, so Republicans repealed their own bill, but continued a ban on early voting three days before Election Day. In 2008 93,000 Ohioans voted in those last three days. The legislature magnanimously granted an exception for active duty members of the military, who coincidentally tend to lean Republican.

Ohio was one of five states since 2010 limiting early voting days, but Ohio Republicans are not stopping there. They are further tilting the playing field by expanding early voting hours in counties with reliable Republican populations and cutting back those hours in counties that leaned to the left in 2008 and 2010.

In the cities of Cleveland, Columbus, Akron and Toledo, early voting hours will be allowed only from 8 am until 5 pm Monday thru Friday beginning on October 1. The right-leaning counties still get the hours going into the nights and can vote seven days a week. Ohio Republican election commissioners have systematically blocked Democratic efforts to expand early voting hours in the counties with heavy African American populations. In counties where the board of elections are split equally between Democratic and Republican members, the Secretary of State, Republican Jon Husted, has stepped in to break the tie.

They've been called for this obvious attempt at voter suppression and sudddenly Husted is backpedaling.
Similar schemes have been tried in other Republican states with the voter ID scheme being the most popular, but it all boils down to a single concept... voter suppression.

I have to ask, if the Republican way is so great and Republican ideas so bright... why must they resort to dirty tricks to steal elections?

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That guy behind the tree

Recent conversations with conservative friends have not turned out well. One friend is a business consultantwhile another is a small business owner. Both are in healthcare, and due to a high reliance on Medicare and Medicaid funding, their particular niche business has increasingly become a target for fraud.

Fraudsters are a real problem in healthcare. We have all witnessed a steady and rapid loss of profitability for legitimate providers as less scrupulous operators move in. As the wealth of "free" money became apparent, crooks have become bolder, schemes have become more complicated, and the number of fraudulent businesses has exploded.

My friends seems to agree that regulation and enforcement have been woefully insufficient to prevent these con artists from obtaining licensure, stem the tide of criminals entering the industry, monitor compliance with even the pitiful regulations currently in place, or even to investigate and prosecute identified offenders.

We further agree that regulatory and law enforcement agencies charged with keeping the playing field level for all competitors have failed in that duty... doing a sub-par job of protecting the public and maintaining the integrity of the system. In much of health care... and this business in particular... perhaps only one in a hundred scofflaws will ever feel any real heat from the regulators, and even fewer will ever see the inside of a courtroom. 

The reason so many crooks get into the business and thrive is simply because (1) the laws and regulations are lenient, (2) cops and regulators are understaffed and underfunded, so the odds of being caught are low, and (3) even if busted, the court dockets are so swamped that only the highest profile cases are prosecuted.

For law enforcement it is far less expensive to cut the losses, shutter the business and seek to recover what small amount of the lost money they can. The criminal more often than not drives off in thier Lexus or Mercedes, forms a new corporation and reopens down the street under a new name... very often serving up the same scam.

In their particular industry, my friends have been active in efforts to turn this situation around. They have in their own way contributed toward a movement asking for enhanced regulation and greater enforcement.

Until now we are all on the same page, but we derail when I suggest that the problem we are seeing in this industry is a product of the long-running and misleading effort to broad scale deregulate business and defund government regulators... all in the name of job creation.

Don't regulate me… Don't regulate thee… Regulate that man… Behind the tree.

Funny what a good friend I am when we all agree that one particular industry needs better regulation and enforcement, but suddenly I’m a pinko, lefty, socialist liberal when I suggest that other businesses need similar regulation.

There are reasons for the burdensome regulations... not just in health care but for every business. Regulations are intended to protect the public from fraud and negligence... to shield owners of small businesses from the unscrupulous actions of cons and competitors... and to protect investors from greed and scams.

Regulations in every industry became necessary not due to the whim of some bureaucrat, but in response to the actions of fraudsters just like those with whom my friends now suffer. A apt phrase I once heard says that "every rule in the book has blood on it."

There is always someone conniving to make the easy buck by cutting corners, picking pockets or dumping on others. This has happened again and again in just about every industry.... thus there are regulations and regulators. Since about the time of Barry Goldwater, however, the very bureaucrats previously charged with preventing the evils have themselves been branded as evil. 

This is a problem with neoconservative idealism, and it represents the very dangerous attitude that in 2007 played a large part in bringing the world’s financial house down. But it seems we haven't learned much. Conservatives (by dogma) and Democrats (in election year politics) have sold out to mantra of unfettered capitalism. Congress has now crafted a bipartisan bill that once again opens these flood gates... all in the name of job creation and at the peril of the little guy.

A ProPublica article by Jesse Eisinger talking about the de-regulatory aspects of the proposed Jobs Act illustrates this position well. The article, titled Congress’s Genius Jobs Plan—for Fraudsters, Shills, and Wall St. Analysts, quotes Columbia law professor John Coffee, who brands the bill as "the boiler room legalization act."

Boiler room operations were one of the unsung job creators of the 1990s, producing some of America's greatest penny stocks and boom times for yacht makers and coke dealers.

... Taking advantage of the revolutionary possibilities of the Internet, the bill loosens decades-old investor protections so that companies can directly advertise to those who would like to be separated from their money. It does that by giving broad exemptions for start-ups that want to "crowdfund" by raising small amounts of money over the Internet. I.P.O. pitches next to "Lose Your Belly!" ads. Sounds like a great idea!

As my friends prove, all regulation is not bad. Certainly we should review and selectively revise, but the neoconservative charge toward broad-brush deregulation makes the world a little less safe for those wishing only a level playing field.

Crooks, scofflaws and fraudsters do not play fair and generally will not play by the rules, but at least when there are rules in place there is recourse. What we need are reasonable rules supported by sufficiently funded regulators and enforced by a credible force of law.

I've seen little evidence that reasonable regulation stifles job growth, but the evidence of harm to the economy, the environment and of individuals from excessive deregulation or selective enforcement of existing regulation is abundant. Deregulation should follow a great deal of contemplation of potential downsides and consideration of alternate means of accomplishing the goal.

My friends understand the need for regulation and enforcement when it affects their lives and livelihoods, but for some reason it escapes them how others might deserve the same protections and the same opportunities.

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The scope and the scale

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE                Wednesday, September 7, 2011

Medicare Fraud Strike Force Charges 91 Individuals for Approximately $295 Million in False Billing

WASHINGTON – Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in eight cities has resulted in charges against 91 defendants, including doctors, nurses, and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $295 million in false billing.

Read the rest of the story HERE.

Links to indictments:

Miami

U.S. v. Jenkins et al
U.S. v. Masson
U.S. v. Hashmi
U.S. v. Hernandez
U.S. v. Roque
U.S. v. Varona
U.S. v. Williams et al
U.S. v. Nash
U.S. v. Ramrup
U.S. v. Revels et al
U.S. v. Macli et al
U.S. v. Trematerra
U.S. v. Rodriguez et al
U.S. v. Morales et al
U.S. v. Gonzalez et al
U.S. v. Jackson
U.S. v. Cargile
U.S. v. Pressley

Houston

U.S. v. Latson
U.S. v. Akinbile

Baton Rouge

U.S. v. Jackson et al
U.S. v. Hunter et al

Detroit

U.S. v. Rahman et al
U.S. v. Funderburg
U.S. v. Berry et al

Los Angeles

U.S. v. Hakopian
U.S. v. Tamamian
U.S. v. Pak
U.S. v. Firempong

Brooklyn

U.S. v. Stoff et al

Dallas

U.S. v. Leong

Chicago

U.S. v. Canastra
U.S. v. Ferrell et al
U.S. v. Natale

Due to public interest in this case, the Department of Justice is releasing documents that may not be in an accessible format. If you have a disability and the format of any material on the site interferes with your ability to access some information, please email the Department of Justice webmaster at webmaster@usdoj.gov or contact Alisa Finelli at 202.514.2007. To enable us to respond in a manner that will be of most help to you, please indicate the nature of the accessibility problem, your preferred format (electronic format (ASCII, etc.), standard print, large print, etc.), the web address of the requested material, and your full contact information so we can reach you if questions arise while fulfilling your request..

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How's that voucher program working for you?

Not so well in Florida...

McKay scholarship program sparks a cottage industry of fraud and chaos

But really... what did you expect?

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Paying the bills

President Obama called it a shellacking, but that doesn’t go far enough in describing the events of November 02, 2010. The leader of the Democrats had his chewed up ass handed to him in a sack. Various pundits have analyzed the reasons for this ad nauseum, so I will belabor only one… that which the right so fondly calls Obamacare, but more correctly known as the Patient Protection and Affordable Care Act, or PPACA.

We’ve discussed the bill as if it were healthcare reform, but in reality the crux of the bill addressed the public and private medical insurance systems. The only people in this nation who don’t feel like those systems need work are either insurance industry executives, people in the pockets of insurance industry, or partisan fools blindly parroting industry pawns.

We needed legislation that would restrain the careless, greedy practices of the private providers while maintaining the positive practices, that would reform the public insurers to better serve both the patients and the healthcare providers, and that would address fraud, waste and abuse of both private and public programs. What we got was the proverbial lipsticked pig.

A pig it may be… but this pig is not all pork. There are aspects of PPACA where the promise is coming true.

For many years now in this country there have existed certain groups of people who were perfectly satisfied with the pre-reform system. Insurance executives and stockholders, of course, but as bad as those guys behaved, they are not the truly bad guys. For the most part they have worked within the system, even if motivated by greed.

Greed is also a mark of con artists, fraudsters and organized criminal groups who really loved the ease with which the system could be scammed. Estimates in 2009 pegged the cost of fraud and waste to both private and public insurance systems at $100 billion. The private insurers are smaller and able to do a far better job policing claims, so the lion’s share of loss is bilked from the public coffers; an amount estimated somewhere between $60 and $80 billion annually.

Prior to PPACA, government enforcement efforts were sporadic and ineffective overall. This has since changed.

One of the main reasons fraudsters have found such an easy time with Medicare is the system's "pay and chase" system. Under current law Medicare must make payment for any claimed benefit within a very short time period, inhibiting any possibility of prior review. The process creates a system where the government finds itself reacting to fraud, rather than preventing the abuse before it happens... and in a swamped system the reactions are painfully slow.

Published reports late last year indicate about $47 billion was paid out in questionable claims. Some is simple billing mistakes, most of it is fraud, and very little will ever be recovered. Criminal elements have grown wise to the detection schemes and often disappear before any effort at recovery can commence.

This is where Obama’s reforms have started to play a role, and the efforts began even before PPACA was passed. The first administration effort to overhaul the health care system and stop the billions of dollars lost to abuse came in 2009 with the creation of the multi-agency Medicare Fraud Task Force (HEAT). In just over a year and a half the task force has racked up scores of indictments in 22 separate investigations over 11 states and the District of Columbia.

Next came the recovery audit contractors, of which there are two varieties.

Many improper Medicare and Medicaid claims are due simply to billing mistakes rather than fraud. To address this the administration created the Recovery Audit Contractors (RAC) program. The RACs provide valuable audit tools to combat overpayments and eliminate false claims. Since the providers targeted by the RACs are not considered criminal, certain limitations are imposed to ensure an audit does not negatively impact patient care.

RAC purview currently is only Medicare Part A and B, but PPACA reforms mandate them covering Part D prescription and Advantage plans by the end of next year. States will also be required to establish RAC contracts to address Medicaid claims.

Another layer of protection, one which is more geared toward fraud and intentional abuse, is known as a Zone Program Integrity Contractor (ZPIC). ZPICs have the authority to audit any Medicare or Medicaid related claim, and unlike the RACs who earn a paycheck based upon a percentage of recoveries, and are thus motivated to shoot for the stars, ZPICs are paid a a flat, annual contract rate and are thus motivated to find even small amounts of fraud. Their incentive is in maintaining a lucrative federal contract.

RAC and ZPIC audits may be triggered through data analysis, in response to complaints, or as a result of whistleblower information.

These new levels of integrity protection are already having profound impact. Within months of the establishment of these programs, a RAC initiated federal Qi Tam lawsuit accusing Dallas Fire Rescue of bilking Medicare by overbilling an estimated $41 million was filed by a whistleblower who once worked for the City. At about that same time, various ZPICs were working the lower end of the scale. In May, the Texas contractor identified $2.9 million is false claims filed by a home health provider. There have been scores of lesser audits all over the country revealing various levels of fraud. To date the ZIPCs have identified problem areas in 10 states, and audits are expanding into those areas.

President Obama identified the reduction of healthcare fraud and insurance abuse as a primary means of paying the price tag for PPACA. These three programs are showing good promise toward fulfilling that promise.

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AMBULANCE COMPANY OWNER SENTENCED TO 15 YEARS IN FEDERAL PRISON

U.S. Department of Justice

United States Attorney James T. Jacks 


Northern District of Texas

                           

                                            

FOR IMMEDIATE RELEASE
WEDNESDAY, OCTOBER 13, 2010

MEDIA INQUIRIES: KATHY COLVIN
http://www.usdoj.gov/usao/txn/

PHONE: (214)659-8600 

LOCAL AMBULANCE COMPANY OWNER
SENTENCED TO 15 YEARS IN FEDERAL PRISON
AND ORDERED TO PAY $1.3 MILLION IN RESTITUTION
FOR RUNNING HEALTH CARE FRAUD SCHEME

Defendant Fraudulently Billed Government More Than $3.5 Million for 
Transferring Patients to Scheduled Dialysis Appointments


DALLAS — The owner/operator of Royal Ambulance Service, Inc. and First Choice EMS, Inc., Muhammed Nasiru Usman, 50, of Arlington, Texas, was sentenced this afternoon by U.S. District Judge Jorge A. Solis to 180 months in prison, announced U.S. Attorney James T. Jacks of the Northern District of Texas. In addition, Usman was ordered to pay $1,317,179 in restitution. Usman was convicted in May 2010 on all 14 counts of a superseding indictment charging various offenses, including health care fraud and money laundering, related to a health care fraud scheme he ran. Two co-defendants, Shaun Outen, 32, of Aubrey, Texas, and David McNac, 35, of Dallas, pleaded guilty to their role in the conspiracy prior to trial and are awaiting sentencing. Specifically, the jury found Usman guilty on one count of conspiracy to commit health care fraud, 12 counts of health care fraud and one count of engaging in monetary transactions in property derived from specified unlawful activity.

When in business, Royal had offices in Dallas and DeSoto, Texas. First Choice EMS, Inc. was previously located in Carrollton, Texas. McNac worked as the director and/or manager of Royal and First Choice; Outen served as the director of operations and an upper-level supervisor.

Royal and First Choice primarily transferred patients on a non-emergency basis to and from dialysis treatments three times per week. The government presented evidence that Usman, Outen and McNac conspired to defraud Medicare and Medicaid by submitting fraudulent claims related to the transportation of dialysis patients. As part of the conspiracy, the defendants told Royal and First Choice employees to omit facts when documenting their transports of Royal and First Choice patients, such as whether the patients walked to the ambulance, in order to qualify the transports for reimbursement. Additionally, many of the companies’ records revealed that patients simply rode to their appointments in a captain’s chair in the back of the ambulance rather than lying on a stretcher.

The government presented further evidence that Usman, Outen and McNac were responsible for submitting more than $3.5 million in fraudulent claims to Medicare and Medicaid through Royal Ambulance and First Choice EMS, resulting in payments of more than $1.3 million. 

The case was investigated by the U.S. Department of Health and Human Services - Office of Inspector General, the FBI, Texas Attorney General Greg Abbott’s Office - Medicaid Fraud Control Unit, the U.S. Office of Personnel Management and IRS - Criminal Investigation.

Assistant U.S. Attorney Katherine Miller and Special Assistant U.S. Attorney Michael McCarthy prosecuted the case.

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Recent federal anti-fraud efforts productive

One of the schemes touted by the Obama administration as a means to help pay for healthcare reform appears to be having some effect. Added resources provided to law enforcement and regulatory agencies have produced some impressive results in a remarkably short period of time.

Last year a Houston Podiatrist and a co-defendant were arrested on federal charges of submitting false and fraudulent claims to both the Medicare and Medicaid health care programs. Franklin Beltre, DPM, was actually out of the state for much of the time, while the services were performed instead by co-defendant Manuela Alana, an unlicensed, unsupervised podiatrist. Both defendants accepted a plea bargain with Beltre this month receiving a 36-month sentence and Alana sentenced to 24 months.

On June 17th, Dr. John Edward Perry III, MD, age 47, of The Woodlands, Texas, and Kate Ose Olear, age 43, a Nigerian national residing in Houston, have been convicted of conspiracy to commit healthcare fraud. Durable medical equipment company (DME) owner Olear billed Medicare $2.8 million for unnecessary arthritis kits, with authorization from Perry, for more than 683 beneficiaries – some of whom were deceased.

Also on June 17th, 50-year-old Nicodemus Udofia of Tyler, Texas, was arrested by a joint team of state and federal investigators. Udofia, the owner of a Tyler DME, is charged with multiple counts of health care fraud, wire fraud, illegal remunerations, and aggravated identity theft.

Then on June 21^st, four Houston-area home health agency owners and three of their employees were charged for alleged participation in a $5 million Medicare fraud scheme. Clifford Ubani, 52; Ezinne Ubani, 45; Princewill Njoku, 51; Caroline Njoku, 45; Mary Ellis, 54; Michelle Turner, 42; and Cynthia Garza-Williams, 49, are charged with a variety of counts, including conspiracy to commit health care fraud, paying and/or receiving kickbacks, and making false statements in the submission of claims to the Medicare program.

The investigations all are part of the Medicare Fraud Strike Force; a joint effort by agents of the U.S. Department of Health and Human Services, the Office of Personnel Management, Drug Enforcement Administration Diversion Division, Texas Attorney General Medicaid Fraud Control Unit, United States Railroad Retirement Board and the FBI.

These are just a few cases from my home state of Texas that have been in the news over the past couple of weeks. The year-old strikeforce teams (dubbed HEAT) deployed across the country are being very effective. Nationwide, in just the first half of 2010, their efforts are being credited with the recovery of more than $3 billion, including $670 million in audit receivables and $2.5 billion in investigative receivables. For every dollar invested in the program, four dollars are being recovered and returned to the trust fund.

1,935 individuals and entities have been excluded from participating in federal health care programs. Additionally, 293 criminal actions and 164 civil actions have been initiated. Several criminals are already serving time.

The HEAT teams are weeding the patch, reducing false claims recovering ill-gotten monies and jailing the bottom feeders. Far more importantly, the honey pot has been salted. The formerly low-hanging fruit of federal money has become become incredibly difficult and more risky, resulting in fraudsters not quite so as anxious to apply for a provider number.

The Obama administration’s healthcare cost containment efforts are effective but largely unnoticed by the mainstream press. However, he wins a gold star from this blogger.

Additional resources and news HERE, HERE and HERE.

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Nigerian Scammers and White-Collar Crime

Fraud is a cottage industry in Nigeria. Stealing money or property to the Nigerian is the equivalent to counting coup. Political, social, and economic conditions have prompted Nigerian scammers to expand globally.

Nigerian criminal enterprises developed pretty rapidly over the past 30 years due mainly to the globalization of world economies and the leapfrog advances in the Internet and other communications technologies. Simplified international travel, growth in world trade, and borderless financial transactions enable fraud-minded Nigerians to reach out and touch the more prosperous world cultures. Take for instance the now infamous Nigerian Letter to which people continue to fall prey.

Nigerian gangs operate in more than 80 other countries and are among the most aggressive and expansionist international criminal groups. Nigerian criminal enterprises have been identified in several major U.S. metropolitan areas, but are most prevalent in Atlanta, Baltimore, Chicago, Dallas, Houston, Milwaukee, Newark, New York, and Washington, D.C.

White-collar crime isn’t their only cup of tea. The most profitable activity engaged in by the Nigerians is drug trafficking. The large populations of Nigerians living in India, Pakistan, and Thailand are estimated to move about 90 percent of the world’s heroin from those areas into the U.S. and Europe. The associated money laundering has helped establish Nigerian criminal enterprises on every populated continent of the world.

Nigerian groups are well known for their financial frauds, costing the U.S. an estimated $1 - $2-billion annually. Schemes are diverse and target individuals, businesses, and government programs. Their frauds include staged auto accidents, healthcare billing scams, life insurance schemes, bank, check, and credit card fraud, advance-fee schemes (the afore mentioned Nigerian Letter), and use of false identities.

The Nigerian gangs are well experienced in running drugs, illegal gambling, and prostitution rings, but they are learning that it is far safer and potentially more profitable to file fraudulent claims with the federal Medicare program and state-run Medicaid plans.

In a 2009 interview, Timothy Menke, head of investigations for the Office of Inspector General at the Department of Health and Human Services said, "They're hitting us and hitting us hard. Organized crime involvement in health care fraud is widespread."

Healthcare fraud often requires identity theft as well; sometimes those of doctors, who bill for services, and variously the identity of the patients, whose beneficiary numbers entitle them to access medical care and necessary equipment. Nigerian criminals have become expert at collecting both.

One scheme involves stealing the identity of the doctor, who may work at one clinic but doesn’t know about the other clinics that the criminal sets up using the physician’s license and identifiers. In 2008 a Federal jury found Leonard Uchenna Nwafor guilty of using a Los Angeles physician’s identification to bill Medicare for $800,000 worth of unneeded power wheelchairs.

Patient beneficiary numbers are easy to buy or steal, and the poor often go along with suggestions from “marketers” sent to impoverished neighborhoods offering cigarettes or food in exchange for the use of Medicare numbers. In other cases, patients are paid to visit fake medical clinics. Once the patient provides the required Medicare or Medicaid information, the clinic operators bill vast sums to the programs. In some instances the clinics shut down, but the billing never ceases.

As was identified even before the turn of the millennium, ambulance transportation fraud is becoming a favorite of these Nigerian scammers. In 2000 the FBI launched a national initiative on Ambulance and Medical Transportation Fraud. Over a 3-year period 37 FBI field offices investigated 101 cases pertaining to ambulance or medical transportation fraud and identified dozens of Nigerian scammers. The cases built from those investigations resulted in 55 convictions, 34 plea agreements or settlements, and total restitution ordered of $65 million.

More recently, two Nigerian immigrants, Mazen and Wesam Abdallah of Houston, were sentenced to 30 months in Federal confinement for a multi-million dollar ambulance fraud case. A Dallas area case was recently tried, with the Nigerian ambulance firm owner found guilty of 13 counts of conspiracy to commit Medicare fraud, and one count of money laundering.

The Dallas case was rooted in the 2006 “Operation Easy Rider” initiative, in which over a dozen ambulance companies were raided by a joint task force consisting of both state and federal law enforcement. 

Operations such as Easy Rider are too few and too far between. The Inspector General's office of the Department of Health and Human Services estimates it is on track to recover about $4-billion this year by breaking up health care fraud schemes perpetrated by all types of criminals, from organized rings to corrupt doctors. However, this is a drop in the bucket, as the estimated loss to fraud will exceed $80-billion.

[Edited to correct embarrassing typos]

~~

Another one bites the dust

U.S. Department of Justice

United States Attorney
James T. Jacks

Northern District of Texas

FEDERAL JURY CONVICTS LOCAL
AMBULANCE COMPANY OWNER

Defendant Fraudulently Billed Government More Than $3.5 Million for Transferring Patients to Scheduled Dialysis Appointments

DALLAS — The owner/operator of Royal Ambulance Service, Inc. and First Choice EMS, Inc., Muhammed Nasiru Usman, was convicted yesterday afternoon by a federal jury on all 14 counts of a superseding indictment charging various offenses, including health care fraud and money laundering, related to a health care fraud scheme he ran, announced U.S. Attorney James T. Jacks of the Northern District of Texas. The trial began on Tuesday, April 27, 2010, before U.S. District Judge Jorge A. Solis. Two other defendants charged in the case, Shaun Outen, 32, of Aubrey, Texas, and David McNac, 35, of Dallas, pleaded guilty to their role in the conspiracy prior to trial.

“This verdict is the culmination of a concerted and joint effort by the HHS Office of Investigations, the FBI and the Texas Medicaid Fraud Control Unit to quickly bring to justice those who prey on our poor and elderly for financial gain,” said Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Dallas Regional Office.

Specifically, the jury found Usman, 50, of Arlington, Texas, guilty on one count of conspiracy to commit health care fraud, 12 counts of health care fraud and one count of engaging in monetary transactions in property derived from specified unlawful activity. The conspiracy count carries a maximum statutory sentence of five years in prison and a $250,000 fine. Each of the health care fraud counts carries a maximum statutory sentence of 10 years in prison and a $250,000 fine. Usman is scheduled to be sentenced by Judge Solis on July 28, 2010. McNac pleaded guilty on April 22, 2010, and is scheduled to be sentenced on July 21, 2010. Outen pleaded guilty on March 24, 2010; his sentencing is set for June 16, 2010.

When in business, Royal had offices in Dallas and DeSoto, Texas. First Choice EMS, Inc. was previously located in Carrollton, Texas. McNac worked as the director and/or manager of Royal and First Choice from April 2004 to July 2007. Outen served as the director of operations of Royal from August 2004 to October 2005 and then from May to November 2006, Outen served as an upper-level supervisor for Royal and First Choice.

Royal and First Choice primarily transferred patients on a non-emergency basis to and from dialysis treatments three times per week. The government presented evidence that Usman, Outen and McNac conspired to defraud Medicare and Medicaid by submitting fraudulent claims related to the transportation of dialysis patients. As part of the conspiracy, the defendants told Royal and First Choice employees to omit facts when documenting their transports of Royal and First Choice patients, such as whether the patients walked to the ambulance, in order to qualify the transports for reimbursement. Additionally, many of the companies’ records revealed that patients simply rode to their appointments in a captain’s chair in the back of the ambulance rather than lying on a stretcher. The government presented further evidence that Usman, Outen and McNac were responsible for submitting more than $3.5 million in fraudulent claims to Medicare and Medicaid through Royal Ambulance and First Choice EMS, resulting in payments of more than $1.2 million. 

The case is being investigated by the U.S. Department of Health and Human Services - Office of Inspector General, the FBI, Texas Attorney General Greg Abbott’s Office - Medicaid Fraud Control Unit, the U.S. Office of Personnel Management and IRS - Criminal Investigation.

Assistant U.S. Attorney Katherine Miller and Special Assistant U.S. Attorney Michael McCarthy are prosecuting the case.

###

Guilty plea in Texas ambulance health care fraud

Shamelessly stolen, verbatim, from The Associated Press

March 25, 2010, 12:38PM

DALLAS — An ex-supervisor with two Dallas-area ambulance services has pleaded guilty in a bogus claims investigation over transporting dialysis patients.

Shaun Outen of Aubrey faces sentencing June 16 after pleading guilty to conspiracy to commit health care fraud.

Prosecutors say the 32-year-old former employee of two companies, Royal Ambulance Services Inc. and First Choice EMS Inc., entered his plea Wednesday. Outen faces up to five years in prison, plus could be fined $250,000 and required to make restitution.

Investigators say Outen, who also was an emergency medical technician, was director of operations during parts of 2004, 2005 and 2006.

Outen acknowledged conspiring with two co-defendants, who face trial in April, to defraud Medicare and other federal programs. Prosecutors say nearly $1.6 million in fraudulent claims were submitted, resulting in payments of more than $500,000.

Nothing else to add...

;~)

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More comments on Healthcare Fraud

According to a paper published last year by the National Health Care Anti-Fraud Association, there was nearly $2.3 trillion spent on health care in 2007, with somewhere between 3% and 10% ($70 – $230 billion) of that lost to fraud. The federal government estimates annual losses to public insurance plans (Medicare/Medicaid/VA, and the various Federal Employees Insurance Plans) to be somewhere north of $60 billion. Doing the math it appears conceivable that as much or more fraud exists with private insurers as with our current public options.

NHCAA estimates that every $2 million invested in fighting health-care fraud returns $17.3 million in recoveries, court-ordered judgments, denial of bogus claims, and related anti-fraud savings. The average private health insurance company Special Investigative Unit (SIU) has an annual budget between $1.9 and $2 million, employs a fulltime staff of 19, maintains 363 open cases, and worked 791 cases in 2007 (last year for which data was available). About 75% of these SIU’s employ forensic data fraud-detection software.

A George Washington University Medical Center paper, released in June, produced figures similar to the NHCAA’s, and detailed fraud schemes used by the offenders. Miscoding or up-coding, double billing, kickbacks, unbundling of procedure charges, forum shopping, ghost patients, unnecessary procedures, and billing for procedures that were never performed the most prevalent.

The paper’s authors called the issue "a systemic problem affecting public and private insurers alike, in the individual market, the employer-sponsored group market and public programs."

Private medical insurance providers are targets for those who would commit fraud. Some fraud is simply opportunistic, and healthcare providers commit a fair share, but the same organized criminals targeting the public payers perpetrate the lion’s share.

Although private insurance fraud probably equals or surpasses the public options, large Medicare and Medicaid fraud convictions get more press. There are several reasons for the publicity disparity. The federal government is required to report fraud in the government programs, and does so in semi-annual reports issued by the U.S. Health and Human Services – Office of the Inspector General (HHS-OIG). The trials of those violating the Federal False Claims Act are held in federal courts, prosecuted by ambitious Assistant U.S. Attorneys eager to see their name in print. Private insurance frauds are generally prosecuted on the state level where the publicity isn’t so splashy.

The private insurers themselves account for at least a portion of fraudulent activities reported. Earlier this year two South Carolina Blue Cross/Blue Shield employees received short prison sentences for falsely submitting phony medical reimbursement claims and reaping a portion of the rewards.

The Government Accounting Office (GAO) issued a report in 1999 titled “Improprieties by Contractors Compromised Medicare Program Integrity.” Culpable Medicare contractors were identified and their fraudulent actions detailed. The report authors found, since 1993, that criminal or civil actions have been taken against at least six contractors resulting from fraudulent actions while under contract with Medicare. BCBS was the largest offender, with subsidiaries in Alabama, California, Florida, Illinois, Massachusetts, Michigan, and Pennsylvania among those listed as having fleeced the system out of millions of dollars by falsifying or altering documentation. Many of the prosecutions were the result of whistleblowers within the BCBS organizations.

Certainly all of this shows that the problem of healthcare fraud is pervasive, widespread and probably under reported; that incompetence is endemic within the claims systems, both public and private, but more than anything it indicates that monitoring should be improved and enforcement enhanced. Assigning the fox to guard the henhouse is proving to be a dangerous option.

It leaves me wondering how anything that will safeguard taxpayer money will be accomplished with the practices of proprietary private industry and the multitude of carriers, both small and large. The fragmentation and lack of a central database is a glaring loophole in the enforcement system, allowing offenders to game the system. Perhaps, for this reason alone, it points to the validity of a government run (or managed) central health insurance claims center… or even a (Gasp!) single-payer option.

[Thanks to BadTux for the muse]

Medicare and Medicaid fraud

This is the story I found in my Fort Worth Star Telegram this morning.

Texas a hotbed as authorities crack down on Medicare, Medicaid fraud

It could easily be subtitled "Why Government Run Healthcare Will Never Work".

Due to budget constraints and resistance to needed regulation, congress will never allocate sufficient resources to monitor any of the "free money" plans under their purview. As a result, some of the less scrupulous elements of our society have come to view the federal government as a slot machine.

The power scooter case referenced in the article only mentioned one offender, albeit a large one, while law enforcement acknowledges that there are hundreds, perhaps thousands of similar offenders stealing billions of dollars from the Medicare system, and more schemes are hatched every day.

Notice that the article speaks of millions of dollars in the few cases mentioned, yet the total annual loss to fraud is estimated at $60 billion. Notice also the length of time between the "Easy Rider" ambulance effort (December 2006) and when the three offenders will actually face a judge (December 2009).

It takes time for law enforcement and the prosecutors to build a good case and prepare for trial, but the bad guys have no such constraints and they never stop working.

For every criminal taken down, dozens are skulking in the shadows ready to take their place, and dozens more are filing new license applications. They have found the odds of getting caught to be in their favor, and have learned clever ways to mitigate even those odds. Many of these criminals are immigrants (one of the men mentioned in the article is of Nigerian origin) who can easily flee to their home country if they are unfortunate enough to attract unwanted attention.

The Star-Telegram story describes only the tip of an iceberg. The bad guys were getting away with this for a long time before law enforcement finally took notice, and by the time enforcement efforts got rolling there were far more criminals than there were cops. Only the worst offenders have ever garnered any attention, leaving the little fish free to continue their criminal enterprise.

With the insufficient resources available, all efforts aimed at getting this under control have proved futile. Investigators and prosecutors are hamstrung by policies intended to protect legitimate small business, and what regulation we have is full of loopholes.

Then we have the showboat aspect of criminal investigation and prosecution. To justify their efforts, government agents want the big splash. One case with big dollar signs is easier to prosecute than several cases of lesser magnitude, and a big case looks good on the résumé.

The smarter criminals know they become targets if their billing goes over a certain amount, so they keep it low enough to stay below the radar. After a year or two of fraudulent billing, they change the names of their companies (along with their Medicare billing account number) and keep doing the same thing. Many do nothing more than repaint the ambulance and buy new uniform shirts, then keep on committing the same fraud with the same patient base.

The result is a story like this one; the feds bragging about the big rat they caught while the little rats scurry around doing business as usual. Prosecutors earn stripes for jailing an offender on a $2 million crime, but nothing is said about the remaining $59,998,000,000.

The only way to enforce the law is to have sufficient resources and plenty of boots on the ground. We need more cops, prosecutors and courts. We can spend the money on regulation, enforcement and prosecution… or we can give it to the crooks.

An old saw comes to mind: Watch your pennies, nickels and dimes. The dollars will take care of themselves.

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Wired in from the road...

COURTHOUSE NEWS SERVICE

Monday, June 08, 2009Last Update: 10:35 AM PT

Ambulance Firms Accused of Medicare Fraud
By DAVID LEE

DALLAS (CN) - The owner and managers of two ambulance companies face a 15-count federal indictment with conspiracy to commit health care fraud, health care fraud and money laundering. They are charged with fraudulently supplying ambulances to dialysis patients who didn't need them: "many of the companies' records revealed that patients rode to their appointments in a captain's chair in the back of the ambulance rather than lying on a stretcher" prosecutors said.

Muhammed Nasiru Usman, of Arlington, Texas; David McNac of Dallas and Shaun Outen of Aubrey are each charged with one count of conspiracy to commit health care fraud and multiple counts of health care fraud. They are accused of falsely billing Medicare, Texas Medicaid, and the Federal Employees Health Benefit Program for non-emergency ambulance transportation of patients to and from dialysis appointments starting in early 2004.

Usman also was charged with one count of money laundering: buying a Lexus with the fraudulently obtained payments from the health-care programs.
Usman, the owner of Royal Ambulance Services, and First Choice EMS, employed McNac as a director of both companies and Outen as a supervisor. Prosecutors say all three were responsible for fraudulent billing exceeding $1.5 million and the payment of more than $550,000 by Medicare, Medicaid, and private insurance.

"The fraudulent claims misrepresented medical conditions of patients in order to qualify for reimbursement from Medicare, Medicaid, and private insurance, and falsely stated that legitimate ambulance services were provided," prosecutors say. "In reality, many of the companies' records revealed that patients rode to their appointments in a captain's chair in the back of the ambulance rather than lying on a stretcher."

The defendants each face up to 5 years in prison and a $250,000 fine if convicted of conspiracy and up to 10 years and a $250,000 fine for each count of health care fraud. Usman also faces up to 10 years, restitution and a $250,000 fine if convicted of money laundering.

The indictment stemmed from "Operation Easy Rider," in which search warrants were executed on ambulance companies across Texas. It was a joint operation between the U.S. Department of Health and Human Services - Office of Inspector General and Texas Attorney General Greg Abbott's Medicaid Fraud Control Unit.

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You Knew It, Right?

Federal investigators have launched 20 (say that again. 20!) investigations into possible securities fraud, insider trading, and tax violations in the $750-billion financial bailout program, the Los Angeles Times reports. The cases mark the first wave on probes into possible corruption in the TARP program, and the total fraud involved could reach the billions.

You just knew this was going to happen.