Author Archives: Mark J. Rose, Esq.

Four Miami Residents Sentenced for Their Roles in $63 million HealthCare Fraud Scheme

On November 6, 2015, four former employees of the now defunct healthcare provider Health Care Solutions Network Inc. (HCSN) were sentenced for their role in a scheme to fraudulently bill Medicare and Florida Medicaid for approximately $63 million. U.S. District Judge Robert N. Scola of the Southern District of Florida sentenced Roger Rousseau, 73, of Miami, the former medical director of HCSN to192 months in prison: Liliana Marks, 49, of Homestead, former therapist was sentenced for 72 months in prison; therapist Doris Crabtree, 63, of Miami, and Anglea Salafia, 68, of Miami Beach, were each sentenced to 60 months in prison. All four defendants were sentenced to three years of supervised release.

On August 24, 2015, a Miami jury convicted all four defendants of conspiracy to commit healthcare fraud and Rousseau was additionally convicted of two counts of healthcare fraud. To date a total of 22 defendants have been charged and convicted for their roles in the HCSN scheme, which focused on performing services that were not medically necessary and were never provided.

The HCSN scheme provided intensive mental health services to Medicare and Medicaid beneficiaries in Miami and North Carolina from 2004 to 2011. HCSN paid kickbacks to assisted living facilities owners and operators in Miami who, in exchange, referred beneficiaries to HCSN. In order to support the scheme, Rousseau signed, forged, and altered medical records and Crabtree, Salafia, and Mark also falsified medical records. As a result of the scheme, HCSN submitted approximately $63.7 million in false and fraudulent claims to Medicare, and received payments totaling approximately $28 million on those claims.

Please click here to read the U.S. Department of Justice Press release.

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Filed under Florida, Insurance Fraud

Four Sentenced For $126 million Florida Healthcare Fraud

Four individuals were sentenced on October 29, 2015 in Florida Federal court for their roles in a large complex scheme to rip off the city of Miami, Miami-Dade County Public Schools and numerous major companies for approximately $126 million in false healthcare claims.

The four major defendants in the case were Hendris Castillo Morales, 33, of Miami; Maite Garcia, 40, of Hialeah; Osvaldo Marin Medina, 48, of Hialeah; and Alejandro Biart, 40, of Miami. They were among 15 individuals who have pled guilty, out of 18 charged in connection with the scheme, according to the U.S. Department of Justice.

U.S. District Court Judge Robert N. Scola handed down prison terms to Castillo for a total of 121 months and Garcia for 48 months. Prosecutors stated that Castillo and Garcia were among four defendants who owned and controlled 30 companies at the heart of the scheme in the Miami area. According to prosecutors, the two used medical director staging companies to misappropriate doctors’ licensing information, which they used to submit false claims to insurers.

Judge Scola set a requirement for both Castillo and Garcia of three years of supervised release. They were also ordered to pay more than $13.8 million in restitution.

In a separate case, U.S. District Judge Urusla Ungaro sentenced both Biart and Medina to 41 months in prison followed by three years of supervised release.

Biart was accused of accepting kickbacks from other defendants in return for referring Cigna, Blue Cross Blue Shield and United Healthcare beneficiaries to medical clinics controlled by Castillo, Garcia and co-defendants Rynaldo Castillo and Lizbet Castillo Batista.

Medina was accused of accepting payments in return for allowing his name to be used to incorporate clinics, open bank accounts and cash checks received from Cigna, Blue Cross Blue Shield and United Healthcare.

Click here to read article.

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Filed under Miami-Dade Fraud

Broward County Chiropractor Arrested for $1.5 Million Insurance Fraud Scam

On October 15, 2015, the Florida Department of Financial Services Division of Insurance Fraud (DIF) announced the arrest of Eric Wiegandt, 41, on multiple felony fraud charges for conducting a $1.5 million insurance fraud scheme, according to a press release from DIF.  DIF led a joint state and federal investigation, which revealed that Wiegandt allegedly coordinated a scheme that fraudulently billed Blue Cross Blue Shield (BCBS) for services that were never rendered at his clinic, the Broward Spine and Rehab Center, located in Hollywood, Florida.

According to investigators, Eric Wiegandt fraudulently signed and submitted nearly $1.5 million worth of fictitious and falsely represented insurance claims between 2013 and early 2015. As a result, Wiegandt received commission payments from BCBS in excess of $230,000.

Wiegandt was evicted in 2014 from his Coral Gables practice location because of alleged mismanagement, and lost his license for failure to complete continuing education requirements. Despite not having a license, Wieghandt opened a new clinic located in Hollywood, Florida. The Hollywood Police Department became aware of Wiegandt’s unlicensed practice and arrested him for continuing to conduct an insurance-related business without an active license.  Soon after, the Hollywood Police Department brought in DIF to review the insurance transactions related to the clinic’s day to day operations.  As part of its investigation, DIF found that BCBS flagged Wiegandt due to the high volume of insurance claims and patient visits.  The investigation also revealed that patients who previously visited the Coral Gables location were allegedly receiving duplicative treatments at the Hollywood location.

Wiegandt was arrested on eight counts of healthcare fraud and the case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Florida.

Click here for press release.

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Filed under Insurance Fraud

Chiropractic Clinics Attempt to Defraud GEICO

On October 5, 2015, GEICO filed a lawsuit in federal court against Boston-based Big City Chiropractic & Sports Injury Clinic, according to a Law360 article. GEICO claims that Big City created a scheme to defraud the company out of, up to $1.1 million by overbilling for insurance payments and paying kickbacks to patients for cooperating with the scheme.

In the lawsuit, GEICO alleges that Dr. Brian Elias, Florida-based founder of Big City Chiropractic, and Karen Davis and Dr. Megan Bratton of Massachusetts were involved in the scheme to defraud GEICO. GEICO alleges that the trio earned substantial profits by using unskilled services and staff at their clinic while billing them as services performed by licensed staff. The lawsuit claims that that the trio overused chiropractic practices and submitted inflated demands for insurance payments based on false and deceptive bills and records.

GEICO states in the complaint, that it has already paid at least $110,000 of about $517,000 in submitted bills to Big City. The clinic has billed GEICO so far this year at an estimated annual rate of $600,000.

Big City Chiropractic & Sports Injury is the Massachusetts-based arm of an interstate network of chiropractic clinics operated by Elias.

GEICO is seeking damages including the money unfairly paid to Big City, the costs of handling the investigation, and treble damages under the Racketeer Influenced and Corrupt Organizations Act and Massachusetts consumer protection law.

Click here to read Law360 article (subscription required).

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Filed under Fla. Stat. 627.736 (2008)

Executive Admits to Stealing $860,000 from Coastal Orthopedics

David Brooks, 44, of Ohio plead guilty to mail fraud and faces up to 20 years in federal prison, according to a press release from the U.S. Attorney’s Office of the Middle District of Florida. According to a plea agreement reached in October 2011, Brooks was hired as a Financial Accounting Manager at Costal Orthopedics and Sports Medicine of Southwest Florida located in Bradenton, Florida. During Brooks’ employment at Costal he was convicted of theft, money laundering, and other fraud-related offenses in Ohio. Once Coastal learned of the Ohio charges in June 2013, Coastal fired Brooks and began a review of its books and records.

Coastal found that between January 2012 and June 19, 2013 Brooks has used company accounts to purchase more than $700,000 in American Express gift cards, which he used for personal expenses, including legal fees associated with his Ohio criminal case. In addition, Brooks diverted payroll funds to himself above his normal salary. In order to cover his wrong doing, Brooks altered the company’s books and records.

According to the U.S. Attorney’s Office, Brooks used ten different gift cards to purchase a 2012 Jeep Liberty. The gift cards were shipped directly to Brooks at Coastal on March 15, 2012, and four days later he used them to purchase the vehicle.

In total, Brooks defrauded Costal of $858,883 and of this total he used $702,091.60 to purchase the gift cards for his own personal use and the remaining amount was diverted to his salary.

Click here for press release.

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Filed under Middle District of Florida

Miami Residents Arrested for Conducting $200K in Illegal Insurance Transactions

On September 4, 2015, two Miami residents Alina Del Prado, 60, and Karla Patricia Figueroa, 40, were arrested for deceptively using unsuspecting licensed insurance representatives’ licenses to defraud Florida consumers and illegally conducting more than $200,000 in insurance transactions while operating Quality Insurance Agency (Quality) in Hialeah, Florida.

The Florida Department of Financial Services’ Division of Insurance Fraud (DIF) and the Department’s Division of Insurance Agent and Agency Services (A & A) began an investigation in the beginning of January 2014, which uncovered that Alina Del Prado allegedly submitted an insurance agency license application for Quality using a licensed agent’s name and license number unbeknownst to the agent. A & A conducted an inspection of the agency, which discovered that Del Prado was allegedly using the agent’s name and license number to fraudulently transact insurance business in numerous instances.

The investigation revealed that Del Prado hired Karla Figueroa, who allegedly illegally sold automobile insurance policies as an unlicensed customer representative. Figueroa also utilized an unsuspecting insurance representative’s name and license number to illegally obtain automobile insurance policies.

DIF investigators located the unsuspecting insurance agent and representative whose information was used and confirmed the unauthorized use of their information by Del Prado and Figueroa.

Alina Del Prado and Karla Patricia Figueroa were arrested with a combined bond in excess of $1 million. Del Prado faces over 300 felony charges including money laundering, identify theft, grand theft, transacting insurance without an insurance license, and scheme to defraud. Figueroa faces charges including identity fraud, transacting without an insurance license, and scheme to defraud charges.

Click here to read press release.

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Filed under Fla. Stat. 627.736 (2008)

Water-Loss Claims Hurt South Florida Homeowners

According to an August 25, 2015 article in the Sun Sentinel, South Florida Citizens Property Insurance Co. customers will see a rate increase in their homeowners’ insurance rates. The insurance company stated that South Florida policy holders must pay for the increase in water-loss claims in the region. Citizens pointed out that Miami-Dade, Broward, and Palm Beach counties had a “disturbing rise in water claims and litigation,” which leads many to believe that this is a result of fraudulent claims. Citizens CEO, Barry Gilway, stated that “When you take a look at Miami-Dade and you take a look at the rest of the state, there’s really no major differences in age of the home or frankly, virtually any other characteristic,” which concludes that “there is more fraud.”

According to Gilway, “Water losses are the major reason Citizens is seeking rate hikes for the upcoming year, especially in South Florida. Were it not for water loss, even South Florida policy holders would see rate reductions.” Citizens pointed out that the other counties in the state of Florida will see a rate decrease in their Citizens homeowners insurance.

Click here for full article. (Subscription required)

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Filed under Citizens Property Insurance Co.