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U.S. Attorneys » Middle District of Pennsylvania
Health Care Fraud The U.S. Attorney’s Office places a high priority on criminal and civil enforcement in cases involving health care fraud and unauthorized health care benefits payments, as well as related activities such as fraud against the elderly and prescription drug fraud. The office works on these matters with the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation, the Internal Revenue Service, the Drug Enforcement Administration, the Food and Drug Administration (FDA), the Office of the Pennsylvania Attorney General, District Attorney’s Offices within the Middle District, the Pennsylvania Department of State and the NEPA Insurance Fraud Task Force. Anyone with information concerning suspected health care fraud or irregularities should contact the HHS-OIG at 1-800-HHS-TIPS (1-800-4478477) and/or the U.S. Attorney’s Office at 717-221-4482, attention Assistant U.S. Attorneys Kim Douglas Daniel (Criminal) or Melissa Swauger (Civil), Health Care Fraud Coordinators. Recent Cases And Settlements CRIMINAL PROSECUTIONS
Fuhai Li On July 19, 2016, a Pike County physician, Fuhai Li, age 51, was indicted on charges of unlawfully distributing controlled substances without a legitimate medical purpose, money laundering, and tax evasion. Li was taken into custody today and appeared before United States Magistrate Judge Joseph F. Saporito, Jr. in Wilkes-Barre for his initial appearance. The 24 count indictment by a Federal Grand Jury in Scranton on July 19, alleges that, beginning in 2011 and continuing into 2015, Li unlawfully provided prescriptions for excessive quantities of oxycodone and other narcotics to individuals who he knew were not seeking the drugs for a legitimate medical purpose. One charge specifically alleges that Li unlawfully distributed a controlled substance and caused the death of one of his patients. Li is also charged with 15 counts of alleged unlawful distribution of controlled substance to different persons repeatedly over extended periods between 2011 and 2015. He is also charged with unlawfully distributing and dispensing a controlled substance to a pregnant individual and with opening and maintaining premises at two locations in Milford, Pennsylvania, for the purpose of distributing controlled substances outside the usual course of professional practice and without legitimate medical purpose. Li allegedly sought and received payments in cash from recipients of the unlawfully distributed controlled substance. Many of the recipients were from outside of Pennsylvania. Some of the recipients, in turn, distributed the unlawfully obtained controlled substance to others in exchange for money. Li’s activities were allegedly not in the usual course of medical practice in one or multiple ways, as stated in the indictment, including: inadequate verification of the patient’s medical complaint; cursory or no medical examinations by LI; inadequate patient medical history and no follow-up verification; incomplete or inadequate mental or physical examinations; treating patients with highly addictive controlled substances while failing to consider other treatment options; lack of, or inadequate, diagnostic testing; increasing the patients’ dosages over time unnecessarily; and prescribing inappropriate combinations of drugs to patients. Li is charged with three counts of tax evasion for the years 2011 through 2013. The indictment alleges that during the execution of federal search warrants by Drug Enforcement Administration (DEA) agents at his office and residences in January 2015, more than $1,000,000 in cash was seized. The indictment alleges that for the years 2011 through 2013, Li evaded federal taxes in an amount in excess of $300,000. Li is also charged with money laundering in connection with a $385,572 wire transfer mortgage payment on an East Stroudsburg residence and a $158,699 certified check for the purchase of a property in Milford, both allegedly involving properly derived from Li’s unlawful distribution of controlled substances. According to the Indictment, Li is subject to forfeiture to the United States government, of any and all proceeds derived from unlawful activity as a result of the offenses alleged in the indictment, including U.S. currency and properties located in both Pike and Monroe counties. Currently, Li continues to maintain a Pennsylvania medical license. He surrendered his DEA registration at the time the search warrants were executed. The charges stem from a coordinated investigation initiated by Drug Diversion Agents located in Scranton, DEA, Scranton, and the Internal Revenue Service – Criminal Division, Scranton. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski. Amy and Joseph Schneider On June 20, 2016, the former office manager to a York physician and her husband were sentenced in U.S. District Court in Harrisburg for conspiring to obtain and distribute up to 20,000 units of oxycodone through fraud and forgery. Amy Schneider, 31, was sentenced to serve 30 months in federal prison incarceration. District Court Judge Sylvia H. Rambo also sentenced Joseph Schneider, 31, to 46 months’ imprisonment. Both defendants also were sentenced to three-year terms of supervised release following their incarceration, and payment of $800 fines. In addition to conspiracy and distribution of oxycodone, Amy Schneider pleaded guilty in January 2016 to illegally using a Drug Enforcement registration to obtain a controlled substance. Joseph Schneider pleaded guilty to acquiring a prescription by fraud or forgery as well as conspiracy and distribution of oxycodone. The two were held responsible for between 10,000 and 20,000 tablets of oxycodone. Amy Schneider was the officer manager for a York physician. She was permitted to use pre-signed prescription forms each week. The forms, intended to be used to write prescriptions for refills for patients, were fraudulently used to obtain oxycodone for the couple. Amy Schneider wrote prescriptions for Joseph Schneider. He took the prescriptions to pharmacies to be filled. Most of the oxycodone was consumed by the couple; some of the tablets were distributed to others. The conspiracy began in approximately January 2014 and continued until at least May 2015. The case was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Christy H. Fawcett. China Scott On March 30, 2016, China Scott, age 45, of Middletown, Pennsylvania was indicted by a federal grand jury in Harrisburg for Health Care Fraud. Between November 2015 and January 2016, Scott provided home health care services to a disabled individual through her employment at Cool Waters, a home health care agency located in Dauphin County. Scott allegedly failed to notify the agency that she is an excluded person, meaning that no payment could be made by a federal health care benefit program for services provided by her due to two previous health care fraud convictions. The investigation was conducted by the U.S. Department of Health and Human Services and prosecution is assigned to Christy H. Fawcett. Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines. The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant. Dr. John Terry, Thomas Ray, Stephen Heffner and David Hatch On May 25, 2016, Dr. John Terry, age 65, and Thomas Ray, age 53, both of Wellsboro, were sentenced by Chief United States District Court Judge Christopher C. Conner in Williamsport. Terry was sentenced to 20 months’ in federal prison and ordered to pay $4,762 in restitution to the state Department of Human Services for fraudulent prescriptions he wrote for Oxycodone, a Schedule II controlled substance. Ray was sentenced to 71 months’ in federal prison for possession with intent to distribute a controlled substance, which will run consecutively to 30 months of a Tioga County term consisting of 51 months to 15 years. Ray is serving the state sentence on unrelated charges. In April 2013, Terry caused Medicare to be billed for fraudulent prescriptions of Oxycodone intended for David Hatch, age 28, of Addison, New York, but written in the name of Stephen Heffner, Jr., age 46, of Elkland. Terry knowingly wrote the prescription in the name of Heffner, knowing Heffner was not his patient, and that the Oxycodone was intended for Hatch. Medicare paid for the prescription received by Heffner but actually delivered to Hatch. Terry also wrote prescriptions for Oxycodone and other narcotics for Ray, in reckless disregard of the fact that the drugs were not being used by Ray for legitimate medical purposes, but being diverted and sold on the street. Medicaid paid for the medically unnecessary prescriptions written for Ray. Heffner and Hatch were both previously sentenced to six months’ probation for theft from the Medicare Program. The investigation was initiated in June 2013 by the Drug Enforcement Administration (DEA) drug diversion agents and the Department of Health and Human Services Office of Inspector General. During the execution of a federal search warrant at his office on July 8, 2013, Dr. Terry voluntarily agreed to surrender his medical license and his DEA registration. The defendants were indicted in August 2014 and subsequently pled guilty. The Pennsylvania State Police assisted in the investigation. Assistant United States Attorney Michelle Olshefski prosecuted the case. Advantage Medical Transport and Serge Sivchuk On November 12, 2015, the owner of a Harrisburg-based ambulance company was sentenced to 24 months in prison and ordered to pay $494,378 in restitution and fines. Serge Sivchuk, age 30, the owner of Advantage Medical Transport, Inc, formerly headquartered at 733 Fire House Lane, Harrisburg, was sentenced by US District Court Chief Judge Christopher C. Connor yesterday to the two year term and ordered to pay $194,378 restitution to Medicare. Judge Connor also fined Sivchuk $300,000. Judge Connor also ordered Advantage to pay $194,378 restitution to Medicare (jointly and severally with Sivchuk), and further ordered the company to pay an additional $250,000 fine. Sivchuk and Advantage were indicted in January 2012 by a Middle District of Pennsylvania grand jury and charged with multiple counts of false statements in health care matters and health care fraud. The charges stemmed from Advantage’s non-emergency, ambulance transport of Harrisburg area dialysis patients between 2009 and 2011. The Indictment alleged Sivchuk defrauded Medicare by submitting hundreds of claims for the nonemergency transport of Medicare beneficiaries because the patients were ambulatory and their ambulance transports were not medically necessary. Sivchuk pleaded guilty to one count of false statements in health care matters on February 22, 2013; Advantage pleaded guilty to 14 counts of False Statements in Health Care Matters less than 3 months later on May 1, 2013. The Indictment focused on an August 2010 audit and a June 2, 2011 search of Advantage’s business premises by federal law enforcement officers. In response to the audit Sivchuk provided Medicare dozens of ambulance Trip Sheets, which are prepared by Emergency Medical Technicians (EMTs) at the time of each ambulance transport. The Trip Sheets contain a narrative section that describes the patient’s physical condition and ability to ambulate,. The Trips Sheets serve as the primary support document for each Medicare billed, ambulance transport claim. The June 2, 2011, search by the FBI revealed Sivchuk did not submit the original trip sheets to the auditors but instead submitted copies of other trip sheets that had been re-written and forged to conceal the fact the beneficiaries were ambulatory. Medicare paid Advantage approximately $166 for each leg of a transport to and from a dialysis treatment center, plus $5.49 per mile. Many dialysis patients underwent 3 treatments per week. Thus, one week’s transport of just one dialysis patient yielded Advantage more than $1,000. At the time the investigators executed the June 2, 2011, search warrant, the U.S. Attorney’s Office filed a civil action in federal court that froze more than $875,000 in Sivchuk controlled bank accounts. The government intends to recoup the restitution and fines imposed by Judge Connor today from these frozen bank accounts. The case is part of a priority program within the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Pennsylvania focusing on health care fraud. The case was prosecuted by Assistant U.S. Attorneys Kim Douglas Daniel and Anthony Scicchitano, and was investigated by the Harrisburg Offices of the HHS Inspector General’s Office and the FBI. Cheryl Floyd On October 19, 2015, Cheryl Floyd, age 52, Harrisburg, owner of Floyd Nutrition LLC, was sentenced to 30 months in federal prison by United States District Court Judge Sylvia H. Rambo today in Harrisburg for introducing misbranded drugs into interstate commerce and money laundering. Judge Rambo also ordered Floyd to pay $10,000 in fines and $7,530 in restitution. According to summaries presented to the court by Assistant U.S. Attorney Christy H. Fawcett in connection with the guilty plea and the sentencing hearing, Floyd, also known as Cheryl Floyd Brown, was the owner and operator of an internet-based business known as Floyd Nutrition LLC, based at her Harrisburg residence and with warehouse facilities in the Harrisburg area. The items offered for sale between 2010 and 2014 were purported all-natural dietary supplements sold as weight loss products. They contained the drugs sibutramine and phenolphphthalein which are not listed as ingredients in the product labels. According to U.S. Food and Drug Administration (FDA), sibutramine was the active pharmaceutical ingredient in Meridia, a prescription weight loss drug removed from the market in 2010 following studies that showed increased instances of heart attack and stroke in the studied population. Phenolphphthalein was an over-the-county drug until 1999 when FDA reclassified it as not generally safe because it posed a carcinogenic risk. As a result of the health risks, the FDA detained shipments of the products coming from China intended for Floyd’s business. In July 2014, search warrants executed at locations used by Floyd’s business resulted in seizure of a large quantity of the products. The products were sold over the internet by Floyd under names such as Slim Trim U, ZXT Slim Bee Pollen, Magic Slim, ZXT Bee Pollen, ZXT Gold Infinity, Lean Body Extreme, Bnew Beauty and Body and Natural Body Solutions. “Manufacturing and selling products marketed as ‘all-natural’ dietary supplements put U.S. consumers at risk of serious injury or death when they actually contain dangerous pharmaceutical ingredients,” said George M. Karavetsos, Director, FDA Office of Criminal Investigations. “We will continue working with our law enforcement partners to protect consumers from public health risks and fraud.” Akeia Conner, Internal Revenue Service, Special Agent in Charge, said “I would first like to commend the United States Attorney’s office and the FDA Office of Criminal Investigations for their fine work on this investigation. Today’s sentence along with the seizure of over $1,000,000 in assets sends a clear message to those considering similar conduct. The Internal Revenue Service, Criminal Investigation stands committed to providing the financial expertise in these investigations and uncovering the flow of money which is the lifeblood of any drug enterprise.” Floyd pled guilty in May 2015 pursuant to a plea agreement that included an agreement to forfeit five properties in Harrisburg owned by the defendant, a 2014 Chevy truck, and nine bank accounts. Three of the properties forfeited thus far have netted $1,016,943. Floyd is to surrender to the Federal Bureau of Prisons on November 16, 2015. This case was investigated by the FDA Office of Criminal Investigations, Internal Revenue Service Criminal Investigations, and the Dauphin County Drug Task Force and prosecuted by Assistant U.S. Attorney Christy H. Fawcett Joan Cicchiello On September 23, 2015, a Mount Carmel woman was indicted yesterday by a grand jury in Harrisburg on charges related to health care fraud. Joan Cicchiello, age 64, of Mount Carmel, Northumberland County, Pennsylvania, the owner and operator of Twilight Beginnings, a psychiatric and counseling practice, was charged with one count of health care fraud and 14 counts of making false written statements and writings to obtain Medicare payments. According to the indictment, between May 2010 and the present, Cicchiello’s business contracted with skilled nursing facilities in Adams, Dauphin, York, Franklin, Schuylkill, Lancaster and Northumberland Counties to provide mental health services to residents. The indictment alleges that Cicchiello, a certified registered nurse practitioner, employed at least four individuals who did not meet Medicare licensing requirements for the provision of mental health services. Services were allegedly provided by the individuals but false claims for payment were submitted to Medicare indicating that Cicchiello had provided the services and were paid on that basis. Cicchiello fraudulently obtained on-line certification in pastoral counseling for workers, falsely stated on applications for renewal of her license that she had never been convicted of any felony and misdemeanor offenses, and submitted false claims to Medicare stating she had provided medical or counseling services on dates when she was on vacation or actually traveling outside the United States. The indictment also contains an allegation by the government seeking forfeiture of property derived from the offenses. The case was investigated by the Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorney Christy H. Fawcett is the assigned prosecutor. Kristy Scott Jewett On September 23, 2015, Kristy Scott Jewett, age 35, of Carlisle, was indicted on charges of theft of public funds. The Indictment alleges that, from 2008 to June 2014, Jewett was the Office Manager for Forest Park Health Center and Rehabilitation in Carlisle, Pennsylvania, a facility that receives in excess of $10,000 in federal benefits annually. In that capacity, Jewett had responsibility for financial accounts at Forest Park, including resident trust funds. The Indictment alleges that the funds held deposits of residents of the facility to be used for care-related and incidental expenses, and that Jewett, in each of four separate years, stole more than $5,000 of Resident Trust Fund money for her own benefit and use. Jewett allegedly made false entries in the ledgers of the Resident Trust Fund account and falsified monthly account reconciliations provided to Forest Park managers to conceal the scheme. The Indictment by a federal grand jury in Harrisburg was filed on September 23, 2015. Jewett was arrested, appeared in court before U.S. Magistrate Judge Susan E. Schwab, and was released on her own recognizance. The case has been assigned to U.S. District Judge William W. Caldwell. The investigation was conducted by the Federal Bureau of Investigation. Prosecution has been assigned to Assistant U.S. Attorney Joseph J. Terz. Floyd Benko On July 29, 2015, a former Hershey Medical Center Research Technologist was indicted by a federal grand jury in Harrisburg on health care fraud and false statements charges in connection with performing flawed genetic diagnostic tests for 124 cancer patients. Floyd Benko, age 60, a former research technologist at the Hershey Medical Center in Hershey, PA, was charged with one count of health care fraud and two counts of false statements in health care matters. Benko surrendered on July 31, the Indictment was unsealed and Benko had his initial appearance in court before U.S. Magistrate Judge Susan E. Schwab. Benko was released on his own recognizance. According to the Indictment, Benko, a resident of Palmyra, PA, allegedly performed gene mutation tests for 124 advanced stage cancer patients at the Medical Center in 2013 and 2014. These tests help physicians diagnose a patient’s particular type of cancer so that specifically tailored treatments can be administered to the patient. Benko allegedly did not perform the tests, or assays, in the manner called for by Hershey’s standard operating procedures. Subsequent retesting of the patients revealed that 60 of the 124 patients had results that varied from results obtained by an outside laboratory. The Medical Center considers those results as “discordant.” Benko is charged in the two false statement counts with lying to administrators of the Hershey Medical Center about how he conducted the assays in two written statements he provided the hospital in April and October of 2014. Benko also allegedly failed to disclose and concealed the fact that he did not follow standard Hershey operating procedures by not preserving the patients’ leftover tissue and DNA samples. According to the Indictment, the Hershey Medical Center incurred losses totaling $102, 406 as a result of Benko’s fraud, $65,000 for outside laboratory testing and $37,406 for assay refunds. Hershey Medical Center reported the incident to law enforcement agencies and is cooperating with the investigation. According to the Medical Center, the patients who had a discordant test result in the relevant time period have been notified by the Center. Persons seeking further information concerning the flawed tests should contact Hershey Medical Center’s Chief Medical Officer at 717-531-4595. The Medical Center provided information regarding this case on its website on September 23, 2014. http://pennstatehersheynewsroom.org/pressresources/statements/penn-state-hershey-provides-information-about-molecular-lab-inconsistencies/ Benko resigned from his position at the Medical Center in April 2014. The case is being investigated by the Harrisburg Office of the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Kim Douglas Daniel and Anthony Scicchitano. Beverly Hannibal Beverly Hannibal, age 48, formerly of Williamsport, but now living in Lancaster, was sentenced to 10 months imprisonment and ordered to pay $43,614.65 in restitution on January 27, 2016, by United States District Court Judge Malachy E. Mannion. On November 13, 2014, Hannibal was indicted by a federal grand jury in Williamsport for health care fraud in connection with a Medicaid program. The indictment alleges that Hannibal fraudulently obtained $22,448 from the Pennsylvania Medicaid Home and Community Based Services Attendant Care Program, a federally funded health care benefit program. Hannibal allegely submitted false and fraudulent applications identifying her nephew and, later in the scheme, a friend of hers, as direct care workers providing personal assistance to her. Although they performed no work, Hannibal allegedly prepared false timesheets reporting hours purportedly worked by them, forged signatures on the timesheets, and then submitted them for payment. The indictment alleges that Hannibal received reimbursement checks and had her nephew cash some of them and give her the proceeds, and that she also forged signatures on the checks and transacted them. Hannibal appeared before Chief Magistrate Judge Martin C. Carlson on November 20, 2014 and was released on bail. The case was investigated by the Office of Inspector General, U.S. Department of Health and Human Services and the Federal Bureau of Investigation. Prosecution was assigned to Assistant United States Attorney George J. Rocktashel. Edward Evans Edward Evans, age 50, of Wernersville, PA, was sentenced to 12 months plus one day imprisionment and ordered to pay $35,312.00 in restitution on December 15, 2015, by United States District Court Judge Matthew W. Brann. On November 19, 2014, Evans was charged on in a one-count felony information with health care fraud based on the submission of false claims to the Pennsylvania Attendant Care Medicaid Waiver Program. The information alleges Evans’ billed for and received reimbursement for attendant care services which were never performed. The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Pennsylvania Attorney General’s Medicaid Fraud Control Section. Assistant United States Attorney Wayne P. Samuelson prosecuted the case. Andrew Newton Dr. Andrew Newton, age 42, a psychiatrist with an office in Mt. Carmel was charged on November 14, 2014 in a six-count Information with false billings for psychotherapy services. Newton is currently a Harrisburg resident. It is alleged that between August 2010, and November 2011, Newton billed Medicare for face-to-face therapy sessions when he was in fact out of the country. The government also filed a plea agreement in the case which is subject to approval of the Court. In March 2014, Newton was sentenced to two years probation and 80 hours of community service and was ordered to pay $94,539 in restitution. The investigation was conducted by the U.S. Department of Health & Human Services, Office of Inspector General, and the Federal Bureau of Investigation – Williamsport office. Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case. Maria Giacalone-Hewson A Canadensis chiropractor was sentenced on November 6, 2014, in federal court in Scranton, by United States District Judge Robert Mariani, to serve 15 months in prison on charges of aiding the preparation and filing of a false federal income tax return and false statements relating to healthcare matters. Dr. Maria Giacalone-Hewson, age 43, a resident of Canadensis who operated Canadensis Healthcare, Inc., pleaded guilty to the tax and fraud charges in September of 2013. A criminal Information was filed against Giacalone-Hewson on July 15, 2013. The charges against her arose from the filing of a 2006 federal income tax return that falsely claimed her taxable income was $89,754, when, in fact, she had taxable income of $1,151,928, and owed at least $363,566 in taxes for that year. Giacalone-Hewson was also held accountable at sentencing for taxes of $113,821 that she owed for tax years 2007 through 2010. The criminal Information to which Giacalone-Hewson pleaded guilty also charged her with making false statements relating to healthcare matters. At the time of her guilty plea, Dr. Giacalone-Hewson admitted that she made false statements in connection with payment for health care benefits by submitting false written statements claiming that chiropractic and other services were provided to certain patients when no such services were in fact provided. The investigation was conducted by the Internal Revenue Service Criminal Investigation, the United States Secret Service and the Northeastern Pennsylvania Insurance Fraud Task Force. The case was prosecuted by Assistant United States Attorney William S. Houser. Ronald McAdams On March 18, 2015, United States District Court Judge Matthew W. Brann sentenced Ronald McAdams to 6 months imprisonment. McAdams was also ordered to pay restitution in the amount of $9,900 to the United States Department of Public Welfare. On Augut 26, 2014, a criminal charge of health care fraud was filed against Ronald McAdams of Williamsport, Pennsylvania. McAdams, age 57, was charged in a one-count felony Information with health care fraud based on submitting false claims to the Pennsylvania Attendant Care Medicaid Waiver Program. McAdams billed for and received reimbursement for attendant care services which were never performed. On March 18, 2015, McAdams was sentenced to six months imprisonment and was ordered to pay $9,900 in restitution. The investigation is being conducted by the U.S. Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Pennsylvania Attorney General’s Medicaid Fraud Control Section. Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case. Sandra Jalowiec Sandra Jalowiec, age 43, Avoca, Pennsylvania was charged with health care fraud in a criminal information filed in U.S. District Court in Scranton on July 29, 2014. On November 13, 2014, Jalowiec was sentenced to two years probation and was ordered to pay $6,071 in restitution. Jalowiec engaged in a scheme and artifice to defraud Blue Cross of Northeastern Pennsylvania for the period beginning January 2008 through May 2014. The charges stem from an investigation initiated in June 2014 by the Federal Bureau of Investigation and the Department of Health and Human Services. The information alleges that Jalowiec defrauded Blue Cross of Northeastern Pennsylvania by forging prescriptions in the name of a licensed medical doctor. The prescriptions were fraudulently written by Jalowiec for pain medications. Blue Cross was then billed for the forged and fraudulent claims. The government also filed a plea agreement in the case. The agreement is subject to the approval of the Court. Jalowiec will be required to pay restitution for the loss amount. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski. Rose Umana On June 22, 2015, Rose Umana pled guility to count 3 of the criminal information filed on June 9, 2015. No sentencing date has been scheduled. On October 22, 2014, a federal grand jury returned a superseding indictment charging Umana, with additional healthcare fraud and money laudering offenses. The superseding indictment charges Umana with health care fraud and money laundering in connection with operation of Vision Healthcare. The new charges are in addition to 34 offenses brought in an indictment returned June 18. The indictment alleges that Umana conducted at least 32 monetary transactions totaling $673,733 with proceeds derived from the fraud in amounts greater than $10,000. The superseding indictment also alleges that approximately $307,000 in three bank accounts held by Umana are forfeitable to the government. On June 18, 2014, a federal grand jury in Harrisburg returned a 34-count indictment charging that between 2010 and 2014 Umana created false identification documents and fictitious occupational licenses for workers not licensed at the level represented on the license. Umana then allegedly submitted bills to Medicaid for medical services supposedly provided by the workers, billed Medicaid for services provided by someone other than the person claimed to be the provider, and billed Medicaid for services not provided or provided by someone not qualified to provide the service. Umana appeared on June 19, 2014 before U.S. Magistrate Judge Susan E. Schwab. She was ordered released and to be under electronic monitoring. Medicaid is the joint federal–state program that provides health care and nursing home coverage to low asset/income individuals. Medicaid in Pennsylvania is administered by the Department of Public Welfare. Vision Healthcare Services, Inc., is a medical staffing company and home care services provider servicing Dauphin, Cumberland, Perry and York Counties and has been enrolled under Medicaid since 2006. This case is the result of a cooperative investigation by the Office of Inspector General, U.S. Department of Health and Human Services; Internal Revenue Service Criminal Investigations; and the Medicaid Fraud Control Section of the Pennsylvania Office of Attorney General. Special Assistant U.S. Attorney Heather Albright of the Pennsylvania Attorney General’s Office, and Assistant U.S. Attorney Christy H. Fawcett are assigned to the case. A false statement relating to health care matters carries a maximum term of imprisonment of five years, the money laundering offense is punishable by up to 10 years’ imprisonment, and identity theft carries a two-year mandatory minimum sentence that must be served consecutively to any other sentence. Peter Capitano On December 18, 2014, United States District Court Judge Malachy E. Mannion sentenced Peter J. Capitano, age 58, to 15 months imprisonment followed by a 3-year term of supervised release. Capitano, a former Old Forge, PA pharmacist, was also ordered to pay restitution in the amount of $166,287.03 to Blue Cross of Northeastern Pennsylvania and Medicaid. A criminal information was filed in January 2014 charging Capitano with engaging in a scheme to defraud Blue Cross of Northeastern Pennsylvania and Medicaid from 2007 through August 2013. The scheme involved submitting claims or causing claims to be submitted to those health benefit providers for drugs allegedly prescribed when the prescriptions did not exist and for drugs not actually dispensed. The charges stemmed from an investigation initiated in February of 2011 by the Federal Bureau of Investigation and the Department of Health and Human Services, Office of Inspector General. Capitano pleaded guilty on April 24, 2014, pursuant to a plea agreement with the government. Assistant United States Attorney Michelle Olshefski prosecuted the case. Timothy Clark On March 20, 2014, Chief United States District Court Judge Christopher Conner sentenced doctor Timothy Clark, age 47, to 15 months imprisonment for health care fraud and pension fraud. Clark was ordered to pay restitution of $130,535.05 and forfeiture of $105,518.46. On April 22, 2013, Clark pleaded guilty in federal court in Harrisburg. Clark is a medical doctor and pulmonologist and the sole owner of Central Pennsylvania Pulmonary Associates(CPPA) and Sleep Disorder Centers of Central Pennsylvania. In June 2012 and again in July, Clark was indicted by a federal grand jury in Harrisburg in separate indictments. In June 2012, Clark was indicted on charges that from July 2010 through December 2011, as the owner of CPPA, and the trustee of the CPPA employee 401(k) Plan, he withheld employee 401(k) contributions and failed to deposit the withheld funds into their 401(k) Plan. Clark instead maintained the employee 401(k) contributions in bank accounts he controlled. Clark’s employees lost approximately $25,000 of their retirement funds. In July 2012, Clark was indicted on charges that from December 2007 through September 26, 2008, Clark, who provided critical care services to patients of Holy Spirit Hospital, intentionally inflated the amount of time the healthcare providers he employed spent with each patient, thereby fraudulently inflating the health insurance claims Clark submitted to Medicare, Highmark, Inc., and Capital Blue Cross. The dollar amount of the fraudulent claims exceeded $500,000. In the indictment’s six money laundering counts, Clark was charged with transferring approximately $103,000 obtained through the healthcare fraud to CPPA payroll and money market accounts. Clark pleaded guilty to embezzlement from an employee benefit plan, executing a scheme to defraud healthcare benefit programs in connection with the delivery and payment of healthcare benefits and money laundering. The case involving the embezzlement from an employee benefit plan was investigated by the United States Department of Labor, Employee Benefits Security Administration, the United States Department of Labor, Office of Inspector General, the United States Department of Health and Human Service, Office of Inspector General, and the Federal Bureau of Investigation. The case involving the health care fraud and money laundering was investigated by the Pennsylvania Office of Attorney General, Insurance Fraud Section; the United States Department of Health and Human Services, Office of Inspector General; the Internal Revenue Service, Criminal Investigations; and the Federal Bureau of Investigation. Both cases were prosecuted by Assistant United States Attorney Joseph J. Terz. CIVIL CASES AND SETTLEMENTS
Walter Krajewski On July 28, 2016, the United States Attorney's Office announced that Krajewski, a primary care doctor in York, Pennsylvania, agreed to pay $300,000 over five years to settle allegations that he violated civil provisions of the federal Controlled Substances Act by pre-signing prescriptions that were later filled for 24,530 tablets of oxycodone that were medically unnecessary. According to the investigation by the DEA, Dr. Krajewski repeatedly pre-signed blank prescriptions at his office practice from January 2014 to May 2015 and provided them to his office manager, allegedly enabling the prescriptions to be filled for 24,530 tablets of oxycodone that had no legitimate medical purpose and that were issued outside the usual course of Dr. Krajewski’s professional practice. Upon discovery, DEA determined that Dr. Krajewski’s office manager allegedly filled those 148 prescriptions of oxycodone because Dr. Krajewski pre-signed the prescriptions without completing the necessary drug and patient information at the same time. Krajewski is a doctor of osteopathic medicine, specializing in family medicine. As a practitioner licensed to dispense controlled drugs, he is subject to requirements of the Controlled Substance Act as administered by the DEA. The U.S. Attorney’s Office and DEA contend that Dr. Krajewski’s pre-signing and providing the blank prescriptions for over a year to his office manager, resulting in oxycodone issued with no legitimate medical purpose and outside the usual course of his professional practice, amounted to civil violations of the Controlled Substances Act. The settlement of the case resolves the matter without the filing of litigation. As part of the settlement, Dr. Krajewski has agreed to pay $300,000, with an initial payment of $60,000 within 20 days of the date of the agreement and monthly installments of $4,000 for 60 months. The agreement includes penalty provisions in the event of any failure to comply with terms of the settlement. Dr. Krajewski has changed his office protocol to prohibit pre-signing of prescriptions for controlled substances. As part of the settlement, Dr. Krajewski also entered into a Memorandum of Agreement (MOA) with the DEA under which he agreed to comply with heightened compliance requirements for logging and reporting his prescriptions of controlled substances to the DEA, and DEA agreed to forgo administrative action against Dr. Krajewski subject to his compliance with the MOA’s terms and conditions. DEA has reported Dr. Krajewski’s conduct to the Pennsylvania Board of Medicine. This matter was investigated by the Civil Division of the United States Attorney’s Office for the Middle District of Pennsylvania and the DEA and is assigned to Assistant United States Attorney Anthony D. Scicchitano. Kurt Bauer On January 6, 2016, the United States Attorney’s Office announced that it entered into a Consent Decree with former chiropractor Kurt Bauer, age 62, of York, PA, to resolve a suit the United States filed alleging that Bauer remained involved in the management of a Medicare provider’s business despite his exclusion by the U.S. Department of Health and Human Services, in violation of the False Claims Act. The resolution was accepted by U.S. District Court Chief Judge Christopher C. Conner. The civil Complaint filed by the United States alleged that Bauer was the former owner of Leader Heights Healthcare, a York County-based chiropractic and primary care provider that accepted Medicare patients. The U.S. Department of Health and Human Services (HHS) excluded Bauer from participating in federal health care programs in 2008, which had the practical effect of precluding his employment at Leader Heights in any capacity. Despite the exclusion and after falsely informing Medicare that he had “[r]etired,” Bauer allegedly retained ownership of Leader Heights until 2009 and continued to be involved in the management and administration of Leader Heights until he learned of the government’s investigation in 2013. During this period of time, Leader Heights allegedly submitted thousands of claims to Medicare for reimbursement for several million dollars. The government contended that, because of Bauer’s involvement in the management and administration of Leader Heights during his exclusion, Bauer knowingly caused the submission of false claims to Medicare that improperly sought reimbursement for the services he provided. The Consent Decree resolves the allegations in the Complaint, and requires Bauer to: Make payments over the next five years to the United States totaling approximately $30,000. Consent to a renewed exclusion from federal health care programs for the next 25 years. Make bi-annual certifications to the U.S. Attorney’s Office for the next 5 years, under penalty of perjury, certifying that he is complying with his renewed exclusion and the pertinent guidance from HHS. This matter was investigated by the U.S. Department of Health and Human Services’ Office of Inspector General and the Health Care Fraud Unit of the U.S. Attorney’s Office. The matter was handled by Assistant U.S. Attorney Anthony Scicchitano for the U.S. Attorney’s Office. Hamilton Health Center On May 27, 2015, Hamilton Health Center, Inc., a federally qualified health center in Harrisburg, Pennsylvania, agreed to pay the United States $270,000 to settle False Claims Act allegations. The settlement results from a self-disclosure by Hamilton to the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) through the OIG’s Provider Self-Disclosure Protocol. Federal law prohibits Medicare and Medicaid from paying for any item or service rendered by an individual excluded from participation in those programs. According to the self-disclosure and the investigation that followed, from 2006 to 2013, Hamilton allegedly employed an individual who had been previously excluded from participation in Medicare and Medicaid. The United States alleged that it had civil claims against Hamilton resulting from Medicare and Medicaid payments it received during that period of time that reimbursed the company for the excluded individual’s services. Hamilton has since taken corrective action and voluntarily disclosed the matter. This settlement resolves the matter without the filing of litigation. HHS OIG has the authority to “exclude” persons or businesses that engage in certain misconduct from participation in Medicare, Medicaid, and other federal healthcare programs. The effect of exclusion is that no federal program payment may be made for items or services provided by the excluded person/business, or provided because the excluded person prescribed or directed the item or service. The prohibited items or services goes beyond direct patient care and include such things as administrative and management services. If a person or business knows or should know that a claim may be submitted to one of the federal healthcare programs that covers one of these prohibited items or services, it exposes itself to liability. The matter was investigated by the United States Attorney’s Office for the Middle District of Pennsylvania and the Office of Inspector General of the U.S. Department of Health and Human Services. The matter was handled by Assistant United States Attorney Anthony D. Scicchitano for the United States Attorney’s Office. Millcreek Township School District On January 14, 2014, Millcreek Township School District agreed to pay the United States $350,000 to resolve allegations that it submitted improper claims to the Medicaid-funded School Based Access Program. Millcreek Township School District is the public school system for students residing in Millcreek Township, Pennsylvania, a suburb of Erie. Millcreek Township School District agreed to pay to resolve allegations that from August 11, 2005, through June 28, 2007, the School District improperly submitted claims to the Pennsylvania School Based Access Program for payment when those claims did not satisfy the necessary program requirements. Payment was due within 60 days from the date of the Settlement Agreement. Payment was received on February 12, 2014. The Pennsylvania School Based Access Program provides federal Medicaid reimbursement to schools for health related services provided by those schools to special needs students as part of an Individualized Education Plan. Schools submitting claims to Access for payment must satisfy a number of requirements, and the amount of reimbursement depends on the type of service performed. The U.S. Attorney’s Office in Harrisburg had jurisdiction because Access is managed by the Pennsylvania Department of Public Welfare and the Pennsylvania Department of Education, both of which are based in Harrisburg. The government determined that the School District submitted Access claims and received federal reimbursement for claims that were improper due, generally, to discrepancies including the absence of recipients on dates billed for services, claims for non-compensable services, improper grouping of services for billing purposes, lack of adequate documentation, and claims for unlisted services. The specific types of violations are set out in the Settlement Agreement. (A copy of the Settlement Agreement is available from the U.S. Attorney’s Office on request.) The U.S. Attorney’s Office credited the assistance provided by the Pennsylvania Department of Public Welfare, which conducted the audit of Millcreek Township School District’s Access claims. The U.S. Attorney’s Office also acknowledged Millcreek Township School District’s cooperation with the investigation. The Settlement Agreement is not an admission of liability by the School District. The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the U.S. Department of Education, Office of Inspector General. The case was handled by Assistant United States Attorneys D. Brian Simpson and Anthony Scicchitano, Civil Division, United States Attorney’s Office. Easton Hospital On April 3, 2013, Easton Hospital has agreed to pay the United States $454,866 to resolve allegations that it submitted improper claims to the Medicare program. Easton Hospital is a subsidiary of Community Health Systems and is located in Easton, Pennsylvania. Easton Hospital has agreed to pay $454,866 to resolve allegations that from January 1, 2004, through May 28, 2009, Easton Hospital improperly submitted claims to the Medicare program for payment that contained evaluation and management services that were not allowable under Medicare. Medicare does not normally allow additional payments for such services performed by a provider on the same day as a procedure, unless the service is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure. In such cases, an attachment to the claim, known as "Modifier 25," may be submitted to allow the additional payment. In this matter, the government determined that Easton Hospital incorrectly attached Modifier 25 to Medicare claims that led Medicare to pay the hospital for evaluation and management services that were not significant and separately identifiable from the underlying procedure for which Medicare also paid the hospital. The U.S. Attorney’s Office acknowledged and Easton Hospital’s cooperation and remedial action which helped to resolve the matter. After the Government contacted Easton Hospital concerning improper Modifier 25 claims, the hospital conducted an internal review to determine what caused the improper claims to be submitted to the Medicare program and took action to increase medical coding training and bolster its compliance program. The Harrisburg Office of the U.S. Attorney’s Office had jurisdiction because Medicare provider claims are processed by Novitas Solutions, Inc., formerly Highmark Medicare Services, in Camp Hill, Pennsylvania. The U.S. Attorney’s Office for the Eastern District of Pennsylvania cooperated in this matter. The case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General, in Harrisburg and handled by D. Brian Simpson, of the United States Attorney's Office, Civil Division. St. Luke's University Health Network On April 3, 2013, St. Luke’s University Health Network agreed to pay the United States $1,029,791 to resolve allegations that it erroneously submitted improper claims to the Medicare program. St. Luke’s University Health Network owns and operates St. Luke’s Hospital of Bethlehem, St. Luke’s Quakertown Hospital, and St. Luke’s Miners Memorial Hospital. St. Luke’s University Health Network has agreed to pay $1,029,791 to resolve allegations that from January 1, 2002, through June 30, 2012, its hospitals erroneously submitted claims to the Medicare program for payment that contained evaluation and management services that were not allowable under Medicare. Medicare does not normally allow additional payments for such services performed by a provider on the same day as a procedure, unless the service is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure. In such cases, an attachment to the claim, known as "Modifier 25," may be submitted to allow the additional payment. In this matter, the government determined that St. Luke’s hospitals incorrectly attached Modifier 25 to Medicare claims that led Medicare to pay the hospitals for evaluation and management services that were not significant and separately identifiable from the underlying procedures for which Medicare also made payments. St. Luke’s fully cooperated in this investigation after being contacted by the government. The Harrisburg Office of the U.S. Attorney’s Office had jurisdiction because Medicare provider claims are processed by Novitas Solutions, Inc., formerly Highmark Medicare Services, in Camp Hill, Pennsylvania. The U.S. Attorney’s Office for the Eastern District of Pennsylvania cooperated in this matter. The case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General in Harrisburg and handled by D. Brian Simpson, of the United States Attorney's Office, Civil Division. Updated August 30, 2016
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