DOJ: Houston Home Health Agency Owner Sentenced to 480 Months in Prison for Conspiring to Defraud Medicare and Medicaid of More Than $17 Million
PRESS RELEASE ISSUED 8/ 18/ 17
WASHINGTON – The owner and operator of five Houston-area home health agencies was sentenced on Thursday to 480 months in prison for conspiring to defraud Medicare and the State of Texas’ Medicaid-funded Home and Community-Based Service (HCBS) and Primary Home Care (PHC) Programs of more than $17 million and launder the money that he stole from Medicare and Medicaid. The HCBS and PHC Programs provided qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services” (PAS). This case marks the largest PAS fraud case charged in Texas history.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office, Special Agent in Charge D. Richard Goss of IRS Criminal Investigation’s (CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Godwin Oriakhi, 61, of Houston, was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas. In March 2017, Oriakhi pleaded guilty to two counts of conspiracy to commit health care fraud and one count of conspiracy to launder monetary instruments.
According to admissions made as part of Oriakhi’s plea, he, his co-defendant daughter and other members of his family owned and operated Aabraham Blessings LLC, Baptist Home Care Providers Inc., Community Wide Home Health Inc., Four Seasons Home Healthcare Inc. and Kis Med Concepts Inc., all of which were home health agencies in the Houston area. Oriakhi admitted that he, along with his daughter and other co-conspirators, obtained patients for his home health agencies by paying illegal kickback payments to patient recruiters and his office employees for hundreds of patient referrals. In his plea, Oriakhi also admitted that he, along with his daughter and co-conspirators, paid Medicare and Medicaid patients by cash, check, Western Union and Moneygram for receiving services from his family’s home health agencies in exchange for the ability to use the patients’ Medicare and Medicaid numbers to bill the programs for home healthcare and PAS services. Oriakhi admitted that he, his daughter and their co-conspirators also directly paid some of these patients for recruiting and referring other Medicare and Medicaid patients to his agencies. Additionally, Oriakhi admitted that he, his daughter and other co-conspirators paid physicians illegal kickbacks payments, which Oriakhi and his co-conspirators called “copayments,” for referring and certifying Medicare and Medicaid patients for home health and PAS services.
Oriakhi further admitted that each time he submitted a claim predicated on an illegal kickback payment he knew he was submitting a fraudulent claim to Medicare or Medicaid based on his false representations that the claim and the underlying transaction complied with the federal Anti-Kickback Statute and other state and federal laws. Oriakhi further admitted that he knew that Medicare and Medicaid would not otherwise pay for the fraudulent claims, according to his plea. In addition to the home health care and PAS services fraud scheme, Oriakhi admitted that he and his co-conspirators used the money fraudulently obtained from Medicare and Medicaid to make illegal kickback payments to patient recruiters, employees, physicians and patients to promote the Medicare home health and Medicaid PAS fraud conspiracies, and ensure their successful continuation.
In total, Oriakhi that he and his co-conspirators submitted approximately $17,819,456 in fraudulent home healthcare and PAS claims to Medicare and Medicaid and received approximately $16,198,600 on those claims.
To date, three others have pleaded guilty based on their roles in the fraudulent scheme at Oriakhi’s home healthcare agencies. Oriakhi’s daughter, Idia Oriakhi, and Charles Esechie, a registered nurse who was Baptist’s primary admissions nurse, each pleaded guilty to one count of conspiring with Oriakhi and others to commit health care fraud. Jermaine Doleman, a patient recruiter, pleaded guilty to conspiring with Oriakhi and others to commit health care fraud and launder money. Doleman was also charged in two other healthcare fraud cases. Esechie was also sentenced on August 17, to 60 months in prison. Idia Oriakhi and Jermaine Doleman are awaiting sentencing.
The case was investigated by the IRS-CI, FBI, HHS-OIG and MFCU under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Senior Trial Attorney Jonathan T. Baum and Trial Attorneys Aleza S. Remis and William S.W. Chang of the Fraud Section of the Justice Department’s Criminal Division.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
DOJ: Former CEO of Arthrocare Corporation Convicted for Orchestrating $750 Million Securities Fraud Scheme
PRESS RELEASE ISSUED 8/ 18/ 17
A federal jury today convicted the former chief executive officer of ArthroCare Corporation, a publicly traded medical device company based in Austin, Texas, for his role in orchestrating a fraud scheme that resulted in shareholder losses of over $750 million.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Richard L. Durbin, Jr. of the Western District of Texas and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field office made the announcement.
After a two-week trial, a jury in the Western District of Texas found the former CEO, Michael Baker, 58, of Austin, Texas, guilty of one count of conspiracy to commit wire fraud and securities fraud, seven counts of wire fraud, two counts of securities fraud and two counts of making false statements. Baker was charged in a superseding indictment unsealed on July 17, 2013.
Evidence at trial demonstrated that Baker, along with his co-conspirators, masterminded and executed a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors beginning in 2005 and continuing until 2009. Co-conspirators David Applegate and John Raffle, both former senior vice presidents of ArthroCare, pleaded guilty to multiple felonies in 2013 in connection with their participation in the scheme. Co-conspirator Michael Gluk, former chief financial officer of ArthroCare, pleaded guilty to conspiracy to commit wire and securities fraud on June 14, in connection with his participation in the scheme.
The trial evidence showed that Baker, along with his co-conspirators, determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. Baker and others then caused ArthroCare to “park” millions of dollars’ worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare then reported these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.
Evidence at trial further showed that ArthroCare’s distributors agreed to accept shipment of millions of dollars of products in exchange for special conditions, including substantial, upfront cash commissions, extended payment terms and the ability to return products, allowing ArthroCare to falsely inflate revenue by tens of millions of dollars. Baker and others used DiscoCare, a privately owned Delaware corporation, as one of the distributors to cover shortfalls in ArthroCare’s revenue. At Baker’s direction, ArthroCare shipped product to DiscoCare that far exceeded DiscoCare’s needs.
Baker and others lied to investors and analysts about ArthroCare’s relationships with its distributors, including DiscoCare; Baker caused ArthroCare to acquire DiscoCare specifically to conceal from the investing public, the nature and financial significance of ArthroCare’s relationship with DiscoCare, the evidence showed.
Evidence at trial also established that Baker lied when he was deposed by the U.S. Securities and Exchange Commission in November 2009 about ArthroCare’s relationship with DiscoCare.
Following today’s verdict, U.S. District Judge Sam Sparks of the Western District of Texas, who presided over the trial, remanded Baker into custody. A sentencing date for Baker has not yet been scheduled.
This case was investigated by the FBI’s San Antonio Field Office. The case is being prosecuted by the Fraud Section’s Securities and Financial Fraud Unit Chief Benjamin D. Singer, Assistant Chief Henry P. Van Dyck and Trial Attorney Caitlin
DOJ: Florida Salesman Sentenced to Prison for Tax Evasion
Diverted Income to Pay for Girlfriend’s Cosmetic Surgery, Jewelry, and International Travel
PRESS RELEASE ISSUED 8/ 18/ 17
A Fort Lauderdale, Florida, resident was sentenced to 12 months and one day in prison for tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, Thomas Daly, 53, evaded paying taxes on more than $1.5 million in income that he earned from 2002 to 2015. Except for the 2007 tax year, Daly has not filed an income tax return since 2002. He worked for a Fort Lauderdale company selling hurricane-resistant windows to residential homeowners in South Florida. In August 2009, the Internal Revenue Service (IRS) notified Daly of its intent to levy his wages because of his failure to pay taxes. To obstruct the IRS’s collection efforts, Daly established his own business, South Florida Home Marketing Inc. (SFHM), and changed his employment status from an employee to an independent contractor. Daly listed himself as the director of SFHM and opened a business bank account in its name. Due to Daly’s change in employment status, his employer paid SFHM directly and the IRS’s attempts to levy Daly’s wages were thwarted.
From approximately August 2009 through April 2017, Daly used SFHM’s bank account to pay for personal expenses, including rent, cigars, international travel, entertainment, his girlfriend’s cosmetic surgery, jewelry, and a boat. He also falsely classified numerous personal expenses as business expenses on the memo line of the checks drawn on the SFHM bank account. Daly admitted that he made these false entries with the intent to claim false business expense deductions and evade the assessment of his income taxes. Daly admitted that his actions caused a tax loss of more than $351,241.
In addition to the term of prison imposed, U.S. District Judge Kenneth A. Marra ordered Daly has been ordered to serve two years of supervised release and to pay $459,481.03 in restitution to the IRS.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Charles M. Edgar, Jr. and Michael C. Boteler of the Tax Division, who prosecuted the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
DOJ: California Man Sentenced to Prison for Perpetrating Trademark Scam
PRESS RELEASE ISSUED 8/ 21/ 17
A California man was sentenced to prison today for his role as the mastermind of a $1.66 million mass mailing scam aimed at trademark holders. The former manager of a Wells Fargo branch in Glendale, California, and his associate were also sentenced to prison today for their roles in laundering the scam’s proceeds.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Sandra R. Brown of the Central District of California, Inspector in Charge Nichole Cooper of the U.S. Postal Inspection Service’s (USPIS) Los Angeles Division and Special Agent in Charge Damon Rowe of IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office made the announcement. The sentences were issued by U.S. District Court Judge Stephen V. Wilson.
Artashes Darbinyan, 37, of Glendale, was sentenced to 96 months in prison and was ordered to pay $1,557,979 in restitution. Orbel Hakobyan, 42, of Glendale, was sentenced to 24 months in prison and was ordered to pay $1,218,024 in restitution. Albert Yagubyan, 37, of Burbank, California, was sentenced to 18 months in prison and was ordered to pay $1,048,069 in restitution. In December 2016, Darbinyan pleaded guilty to one count of mail fraud and one count of conspiracy to launder monetary instruments, and Hakobyan pleaded guilty to one count of conspiracy to launder monetary instruments. Following a jury trial in March 2017, Yagubyan was convicted of one count of conspiracy to launder monetary instruments, four counts of concealment money laundering and one count of false bank entries.
As part of his guilty plea, Darbinyan admitted that from September 2013 to September 2015 he ran a mass mailing scam under the names Trademark Compliance Center (TCC) and Trademark Compliance Office (TCO), which targeted small businesses that had recently applied for trademark protection with the U.S. Patent & Trademark Office. The scam involved fraudulent offers of a service in which TCC and TCO promised to monitor an applicant’s trademark for infringing marks and to register the trademark with U.S. Customs and Border Protection (CBP), which offers a real service that screens imports for possibly infringing trademarks. The offers were made via mail solicitations and claimed the services would be provided for $385. Darbinyan never monitored or registered, nor ever intended to monitor or register, any of the trademarks with CBP for the customers who paid the fee, he admitted.
Darbinyan also admitted to concealing his control over the scam through elaborate measures in which he illegally used the identities of other people to open accounts at virtual office centers in the Washington, D.C., area, which received and then forwarded victims’ payments to other virtual office centers in the Los Angeles area. Using those same illicit identities, Darbinyan then, with co-conspirators’ assistance, opened bank accounts at Wells Fargo through which he laundered the proceeds of the scam. To further avoid detection, Darbinyan paid virtual office fees with money orders; used bogus email accounts, which he would only log into using prepaid wireless modems; and regularly changed cell phone numbers.
As part of his guilty plea, Hakobyan admitted to helping launder the proceeds of the trademark scam. Specifically, Hakobyan deposited victims’ checks into bank accounts at Wells Fargo that had been opened under false names. Hakobyan misrepresented his identity to withdraw funds from the accounts at Wells Fargo in the form of cash and cashier’s checks, which he then used to purchase gold, he admitted. In total, he admitted to helping launder approximately $1.29 million of the scam’s proceeds.
According to evidence presented at Yagubyan’s trial, from June 27, 2014 to Sept. 18, 2015, Yagubyan, in his role as manager of a large Wells Fargo branch in Glendale, helped launder victims checks paid to the TCC and TCO. Yagubyan laundered the illegal funds by instructing subordinates at the bank to open bogus bank accounts, into which the illicit proceeds of the TCC and TCO scam were deposited, and to process fraudulent withdrawals, wire transfers and cashier’s checks for co-conspirators Darbinyan and Hakobyan, the evidence showed. The cashier’s checks and wire transfers were made out to gold dealers, turning the victims’ checks into cash and gold that the co-conspirators could spend without being traced back to their fraud scheme. The bank accounts were opened using the identities of individuals from Eastern Europe who were not in the U.S. at the time the accounts were opened. The evidence at trial further showed that Darbinyan paid Yagubyan a percentage of the laundered proceeds and that Yagubyan, in turn, made payments and promises of promotion to subordinates to induce them to conduct the fraudulent transactions.
In total, according to Darbinyan’s guilty plea and the evidence presented at trial, the trademark scam defrauded approximately 4,446 victims of $1.66 million.
USPIS and IRS-CI investigated the case. Trial Attorneys William E. Johnston and Alison L. Anderson of the Fraud Section of the Justice Department’s Criminal Division are prosecuting the case
CONGRESSIONAL WATCH
CONGRESSMAN KILMER, share a quote from the Seattle Times,
A fitting tribute’: Olympic Wilderness renamed for longtime outdoors advocate, former Gov. Dan Evans
“When it came to protecting our most precious outdoor spaces, it wasn’t about Democrats or Republicans,” said Congressman Derek Kilmer, D-Gig Harbor. “But about Washingtonians.” For many, Evans is that rare thing — a beloved politician whose stature transcends party or generation. Naming the wilderness for Evans “puts an iconic name next to an iconic place,” said U.S. Sen. Maria Cantwell, D-Wash.
RELATED SEATTLE TIMES STORY: Washington’s former governor and U.S. senator was honored Friday for a lifetime of bipartisan accomplishment with the renaming of one of his favorite places, now called the Daniel J. Evans Wilderness at Olympic National Park.
Alexander, Murray: 5 Governors to Testify at Sept. 7 Hearing on Stabilizing Premiums in the Individual Market
PRESS RELEASE ISSUED 8/ 23/ 17
WASHINGTON, August 23 — Senate health committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) today announced the Senate health committee will hear September 7 from governors representing the states of Massachusetts, Montana, Tennessee, Utah and Colorado.
Charlie Baker, Governor, State of Massachusetts
Steve Bullock, Governor, State of Montana
Bill Haslam, Governor, State of Tennessee
Gary Herbert, Governor, State of Utah
John W. Hickenlooper, Governor, State of Colorado
The hearing on Thursday, September 7th, “Stabilizing Premiums and Helping Individuals in the Individual Insurance Market for 2018: Governors,” will take place in Dirksen 430 at 9 a.m.
Alexander and Murray announced earlier this month that the committee would hold hearings on stabilizing premiums in the individual insurance market so that the 18 million Americans in the individual market will be able to buy insurance at affordable prices in the year 2018.
Senator Cantwell Works with Makah Tribe, CenturyLink to Bring Broadband to Neah Bay
PRESS RELEASE ISSUED 8/ 18/ 17
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA), the Makah Tribe, and CenturyLink, cut ribbon on new high speed broadband internet in Neah Bay, Washington. The new broadband services will help spur economic development in and around Neah Bay, and will increase access to educational and healthcare services for local residents.
Senator Cantwell has been working with the Makah and CenturyLink to see the project to completion, including federal agency permitting. The announcement was celebrated in Neah Bay with a traditional Makah salmon bake, a ceremonial ribbon cutting, and a service demonstration.
“Broadband is a necessity. Without it, rural communities can’t take advantage of the opportunities presented by our increasingly connected economy,” said Cantwell. “Before there was broadband access at Neah Bay, kids didn’t have high-speed internet to do their homework and entrepreneurs were unable to start online businesses or even develop a basic web-presence. Thanks to the work between CenturyLink and the Makah Tribe, Neah Bay has access to broadband that will support local families and the economy.”
CenturyLink will provide internet speeds between 25 and 40 mbps.
“Gaining community access to Centurylink is a milestone a long time in the making. Our members are happy to hear that we may have faster internet speeds but this is bigger than that,” said Nate Tyler, Chairman of the Makah Tribe. “Broadband access will open the door to providing better services faster. In order to protect our way of life at Makah, security and safety are paramount. Broadband puts new possibilities in reach that can change the way we may operate in health care, law enforcement, oil spill response, and education. We'd like to thank Senator Cantwell for the dedicated and invaluable guidance that she has provided us on these issues.”
40 percent of Americans in rural areas and 68 percent of Americans on tribal lands do not have access to high-speed internet. Over 200,000 Washingtonians lack access to FCC standard broadband. More than 400,000 people in Washington have access to only one provider, leaving them no options to switch.
“We’re excited to help bridge the urban-rural digital divide by building out our broadband services in Neah Bay,” said Sue Anderson, CenturyLink vice president of operations for Washington. “We understand how important it is for our Neah Bay customers, including the Makah Tribe, to have fast, affordable access to the internet, so CenturyLink made this expansion of our high-speed internet service a priority.”
For years, Senator Cantwell has supported the expansion of broadband access to unserved and underserved communities. In 2010, as part of the American Recovery and Reinvestment Act (ARRA) — which provided $40 million in federal grants for expanding access to high-speed, affordable broadband to underserved rural areas — the senator helped secure funding for broadband projects for over 35,000 people and 1,400 businesses in Washington state. Later that year, she contributed to the dedication of $84.3 million in federal stimulus funds for the Northwest Open Access Network to build more fiber optic networks in rural Washington state.
More recently, Cantwell has called on the FCC and the White House to carry out broadband reforms and invest in improving internet access in tribal and rural communities. In early 2017, she also joined Senate Democrats in announcing an infrastructure blueprint that would dedicate $20 billion to improving broadband quality and access in rural and underserved communities.
WORLD AND NATIONAL NEWS BRIEFS
From the UN NEWS CENTER
Australian Jane Connors appointed first UN rights advocate for victims of sexual exploitation
23 August 2017 – Secretary-General António Guterres has appointed Jane Connors, Australian law professional and long-time human rights advocate, as the first United Nations advocate for the rights of victims of sexual exploitation and abuse.
UN releases $2.5 million from pooled fund to tackle energy crisis in Gaza
24 August 2017 – With Gaza entering its fourth month of a serious energy crisis, the United Nations today released a further $2.5 million from a pooled humanitarian fund to cover urgent needs in the Palestinian enclave.
NATIONAL
WP: Escalating feud, Trump blames McConnell and Ryan for upcoming ‘mess’ on debt ceiling
President Trump on Thursday sought to pin blame on his party’s congressional leaders for what the president predicts will be “a mess” to raise the federal governments debt limit.
NYT: Though No Longer Sheriff, Joe Arpaio Is Still a Polarizing Figure
PHOENIX — Noemà Romero still shudders when she hears the name Joe Arpaio, the former sheriff responsible for the workplace raid in 2013 when she was arrested and spent two months in jail.
Daily Bible Verse: [ Thanksgiving for Deliverance from Death ] I love the Lord, because He has heard My voice and my supplications. Because He has inclined His ear to me, Therefore I will call upon Him as long as I live.
Psalm 116:1-2 NKJV
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