- Massachusetts Man Sentenced for Role in Fraud Case
Gregory Conigliaro of Southborough, Massachusetts, was sentenced to one year in prison and one year of supervised release for his part in a vast fraud case involving a company of which he was vice president and general manager. The company, New England Compounding Center (NECC), was fraudulently sending prescriptions, misrepresenting company policy, and avoiding oversight authorities. The company was responsible for a nationwide outbreak of fungal meningitis that was traced back to a pharmaceutical product manufactured by NECC. The VA OIG assisted in the investigation, along with the Food and Drug Administration Office of Criminal Investigations, FBI, Defense Criminal Investigative Service, and the US Postal Inspection Service.
- Rhode Island Woman Sentenced for Theft of Government Funds
From 2017 to 2019, Lisa Heino of Newport, Rhode Island, stole roughly $74,000 from a veteran for whom she was a conservator and representative payee. As a representative, Heino was legally obligated to use the veteran’s funds in their best interest, but she instead used the money to pay for her own personal expenses. After being removed as a conservator and payee, Heino continued to access the veteran’s bank account and benefits, transferring the money into her own account. She admitted to the crimes and was sentenced to two months in prison and three years of supervised release for theft of government funds. The VA OIG and Office of Personnel Management OIG conducted this investigation.
- Florida Woman Sentenced to Three Years in Prison for Healthcare Fraud
From 2018 to 2019, Ruth Bianca Fernandez of Pompano Beach, Florida, took part in a healthcare fraud scheme in which approximately $12 million in Medicare benefits was stolen. Fernandez and another coconspirator, Patsy Truglia, used a telemarketing company owned by Truglia to harvest information that was used to create fake orders for durable medical equipment. The scheme also involved paying bribes to physicians to approve the orders. Fernandez was sentenced to three years in prison after admitting to her role in the conspiracy. The VA OIG took part in the investigation, along with the HHS OIG, FBI, and IRS Criminal Investigation.
- PRAC Health Care Subgroup Issued a Report Offering Insights into Telehealth and Program Integrity Risks across Healthcare Programs during the Pandemic
The Pandemic Response Accountability Committee’s (PRAC) Health Care Subgroup published a report that offers insights about the expansion—and the emerging risks—of telehealth in selected programs across six agencies during the first year of the COVID-19 pandemic. The programs included the Veterans Health Administration, Medicare, TRICARE, Federal Employees Health Benefits Program, Office of Workers’ Compensation Programs, and Department of Justice prisoner healthcare services. The expansion of telehealth services clearly helped millions of individuals access health care during the crisis, but also introduced several integrity risks associated with billing, including high-volume billing, duplicate claims, and inappropriate charges for the most expensive telehealth services. The study found that program integrity can be strengthened by implementing ongoing monitoring of telehealth services, developing controls to prevent inappropriate payments, educating providers and individuals about telehealth, collecting additional data to support oversight, and collecting and reviewing data about the impact of telehealth on quality of care. PRAC’s Health Care Subgroup consists of the inspectors general from the Departments of Veterans Affairs, Justice, Defense, Labor, Health and Human Services, as well as the Office of Personnel Management.
- Florida Man Pleaded Guilty to Making Threatening Communications
In July 2020, Drummond Neil Smithson, an Army veteran from Florida, mailed a threatening communication from Ayer, Massachusetts, to VA threatening to injure members of Moms Demand Action, a grassroots organization advocating for the end to gun violence. Following his indictment by a federal grand jury in May 2022, Smithson pleaded guilty to one count of use of interstate communications to transmit a threat to injure. The investigation was conducted by the VA OIG and FBI.
- Two Former VA Employees Pleaded Guilty in $2.9 Million Scheme
Starting in 2014, Randius McGlown and Charles Gates, two former employees at the Dallas VA Medical Center, carried out a scheme in which two fake companies created by McGlown—G4 Logistics and later Caprice Electronics—fraudulently billed the medical center for items and services that were never delivered. Using their official government positions, the pair created fake purchase orders and invoices billed by the companies that were paid for using the medical center’s purchasing card. The funds were then sent back to McGlown and Gates after being received in an account controlled by a third coconspirator. The two former employees pleaded guilty to theft of government funds. The total loss to VA was $2.9 million. The VA OIG conducted the investigation with assistance from the FBI’s Fort Worth Field Office and the General Services Administration OIG.
- Massachusetts Man Charged for Allegedly Threatening VBA Official
Andrew M. Nyamekye of Centerville, Massachusetts, was charged for allegedly making threats against an executive director at the Veterans Benefits Administration (VBA) regional office in Providence, Rhode Island, as well as to other current and former VA employees via text message. Nyamekye was employed by VA for approximately 10 years and worked at the Providence VBA regional office before his termination in March. He also served in the Army from 2007 to 2011. The VA OIG led the investigation with assistance from the VA Police, Federal Protective Service, and Barnstable Police Department in Massachusetts.
- Sixth Defendant in Diving School Fraud Case Pleaded Guilty
John Spyker of Yulee, Florida, became the sixth defendant to plead guilty for participating in a scheme that stole millions in VA education benefits from January 2021 to January 2022. The case involved fraudulent claims associated with two diving schools in Georgia: Diver’s Den in St. Marys and Scooba Shack in Richmond Hill. As the school certifying official and director of training at Diver’s Den, Spyker submitted fraudulent and false information to VA, including dates of student attendance, hours of instruction, and fake scholarship programs. Spyker and the other defendants defrauded more than $6 million in Post-9/11 GI Bill education benefits. Spyker faces up to five years in prison in addition to financial penalties and restitution. The VA OIG conducted this investigation.
- Former Owner and Operator of Insurance Agency Sentenced for Stealing More than $380,000 in Government Benefits
Patrick Quinn, the former owner of an insurance agency in Arlington, Massachusetts, was sentenced for stealing more than $380,000 in government benefits by falsely telling VA and the Social Security Administration (SSA) that he was unable to work due to a disability. After being discharged from the US Marine Corps in 1995, Quinn applied and was approved for VA disability compensation benefits based on a series of physical injuries and, later, post-traumatic stress disorder. In March 2005, Quinn applied for VA individual unemployability benefits, which is paid to individuals who are unable to maintain gainful employment due to service-connected disabilities. Similarly, in November 2005, Quinn applied and was approved for disability insurance benefits with SSA, claiming he was unable to work due to a disabling condition. In June 2006, Quinn applied for child’s insurance benefits, which are paid to the dependent of a disabled individual receiving disability insurance benefits, on behalf of his minor child. Contrary to his claims to VA and SSA, Quinn was actually self-employed as the owner and operator of an insurance agency since at least March 2003. He also served as the president, treasurer, secretary, and director of Insurance Management Consultants, Inc. from 2000 through 2007, despite telling VA and SSA that the company fired him in 2005. While operating his own insurance company, Quinn regularly received payments ranging from $6,500 to $15,000 and grew his business through acquisitions of nine smaller insurance companies at various times between 2012 and 2019. Additionally, Quinn was appointed by 65 insurance companies to conduct business on their behalf. Quinn was sentenced to one year and one day in prison, one year of supervised release, and restitution of nearly $99,000 to VA. Quinn has already paid restitution more than $281,000 to SSA. The VA OIG and SSA OIG conducted the investigation.
- Navy Veteran Sentenced for Theft of Over $1 Million in Fraudulent Benefits
Angela Marie Farr, who served in the navy from 2005 to 2009, filed claims to VA and the Social Security Administration (SSA) for disability compensation that fraudulently stated she suffered from posttraumatic stress disorder and chronic neck and back pain following a sexual assault and a driving accident that both purportedly occurred while she was on active duty. In support of these claims, Farr filed an entirely fabricated medical record allegedly from the navy, using the names of both real and fictitious physicians. Farr also conspired with her then husband to submit fraudulent disability claims, as well as with her mother to submit fraudulent claims on behalf of her father. The claims resulted in the coconspirators receiving more than $1 million in government benefits to which they were not entitled. Farr was sentenced to 30 months in prison, three years of supervised released, and approximately $476,000 in restitution after previously pleading guilty to theft of government property. The VA OIG and SSA OIG conducted this investigation.
- Two Massachusetts Men Indicted for Allegedly Conspiring to Distribute Fentanyl at VA Medical Center
Two Massachusetts men were indicted on multiple drug charges related to their alleged attempt to sell fentanyl from July to October 2022. Deiby Bladamil Casado Ruiz and Pedro Antonio Sanchez Bernabel allegedly conspired to distribute more than 40 grams of fentanyl at the Edith Nourse Rogers Memorial Veterans’ Hospital in Bedford, Massachusetts. The indictment further alleges that the pair targeted veterans who were seeking treatment for substance use disorder. Bernabel was charged with one count of conspiracy to distribute 40 grams or more of fentanyl and one count distribution of fentanyl. Ruiz was charged with one count of conspiracy to distribute 40 grams or more of fentanyl and two counts of distribution of fentanyl. The investigation involved the VA OIG, FBI, and DEA, with assistance from the Bedford VA Police and Lawrence Police Department.
- New York Man Pleaded Guilty after Offering Bribe to VA Employee
In September and October 2020, Muhammad Z. Aabdin of the Bronx, New York, attempted to win VA contracts to supply personal protective equipment by bribing a VA contracting officer. After making his offer via email and text message, Aabdin was eventually recorded during a phone conversation with an undercover VA OIG agent posing as the contracting officer. Aabdin pleaded guilty to offering a bribe to a public official and is scheduled to be sentenced in March 2023. The VA OIG conducted this investigation.
- West Virginia Woman Indicted after Making Threats to VA Police Chief
Courtney Sedler of Clarksburg, West Virginia, was indicted on three counts of influencing a federal officer by threat after she allegedly threatened to kill the Clarksburg VA medical center’s police chief. Sedler allegedly threatened the chief on three separate occasions throughout 2022. Sedler could face up to 10 years of incarceration if she is found guilty. The VA OIG and VA Police conducted this investigation.
- Navy Veteran Pleaded Guilty to $2 Million Insurance Fraud Scheme
From 2012 to 2015, Christopher Toups, a chief petty officer in the navy, conspired with other individuals, some of whom were sailors and health professionals, to submit fraudulent insurance claims under a program reserved for service members with traumatic injuries. The loss to the program, which is funded by sailors, was nearly $2 million. Aside from the claims Toups submitted for himself, he encouraged other service members to make claims under the program and to pay him a part of their claim payments as a “processing fee.” Toups worked with a navy medical doctor and his then spouse, a navy nurse, to fabricate the traumatic injuries. Toups pleaded guilty to several charges related to this scheme and is scheduled to be sentenced in early February. The VA OIG conducted this investigation with the FBI and Naval Criminal Investigative Service.
- Florida Man Sentenced to 35 Years for Producing and Possessing Child Sexual Abuse Material
Thomas Zayas of Orlando, Florida, was sentenced in federal court to 35 years in prison after pleading guilty to producing and possessing sexually explicit material of a child. A multiagency investigation discovered evidence that Zayas had posed as a teenage boy and coerced a 12-year-old victim into digitally sending explicit material. In addition to his prison sentence, Zayas received 15 years of supervised release and must register as a sex offender. This case was investigated by the VA OIG, FBI, the Orange County Sheriff’s Office, and the US Secret Service.
- Montana Fiduciary Sentenced for Stealing Benefits from Elderly, Disabled Relative
From 2019 to 2021, Ira Westbrook of Bozeman, Montana, served as the fiduciary of an elderly relative who had suffered a stroke and became disabled. A multiagency investigation found that, during this 16-month period, Westbrook stole more than $57,000 in Social Security and VA benefits and used the stolen funds to purchase personal items, including a Jeep Wrangler, a travel trailer, and other day-to-day expenses. Westbrook was sentenced to six months in prison, three years of supervised release, and $57,329 in restitution after previously pleading guilty to Social Security fraud. The VA OIG, SSA OIG, Bozeman Police Department, and Montana Adult Protective Services took part in the investigation.
- Doctor Sentenced for Accepting Illegal Kickback Payment in Return for Writing Prescriptions for Compounded Drugs
On January 22, 2014, Jerry May Keepers, a doctor licensed in the states of Oklahoma and Texas, knowingly received $25,000 from representatives of the OK Compounding pharmacy and agreed to refer prescriptions for expensive compounded drugs to the pharmacy. After the compounded medications were filled, the pharmacy filed claims with several federal healthcare programs, including TRICARE, Medicare, CHAMPVA, and the Federal Employees Compensation Act Program. Keepers was sentenced to 36 months of supervised probation after previously pleading guilty to one count of soliciting and receiving healthcare kickback in violation of the federal anti-kickback statute. The investigation was conducted by the VA OIG, Department of Labor OIG, IRS Criminal Investigation, US Postal Service OIG, FBI, Department of Health and Human Services OIG, and the Defense Criminal Investigative Service.
- Louisiana Fiduciary Pleaded Guilty to Misappropriating Veteran’s Funds
From 2016 until 2018, Sloane Signal-Debose of Slidell, Louisiana, was serving as the fiduciary of a veteran who needed assistance with the management of his finances. During that time, she took more than $100,000 from the veteran’s accounts and used it as the down payment on a home in her name and used additional funds from the veteran to pay contractors working on the home. Signal-Debose then submitted false records to VA to hide her misuse of the veteran’s funds. The former fiduciary pleaded guilty to misappropriating funds and faces up to five years in federal prison. The VA OIG conducted this investigation.
- Purported Orthodox Christian Monk and General Counsel for Monastic Institute Arrested for $3.6 Million COVID Fraud Scheme
Brian Andrew Bushell and Tracey M.A. Stockton of Marblehead, Massachusetts, were charged with conspiracy to commit wire fraud and unlawful monetary transactions in connection with their alleged submission of fraudulent applications for Coronavirus Aid, Relief, and Economic Security (CARES) Act funds. Shortly after CARES Act funds became available in April 2020, Bushell, with Stockton’s assistance, allegedly began submitting numerous applications to the Small Business Administration to receive economic injury disaster loans for several purported nonprofit religious organizations and related businesses he controlled. It is alleged that in the applications, Bushell vastly overstated the organizations’ 2019 operational expenses for the purpose of obtaining larger loan amounts, eventually totaling $3.5 million. Bushell and Stockton also submitted numerous applications for paycheck protection program (PPP) funds for Bushell’s organizations. They allegedly inflated his organizations’ number of employees and payroll expenses, and as a result, obtained an additional $146,608 in PPP funds. Bushell and Stockton used these funds on expenses that would not have been permitted under either program even if the funds had been obtained lawfully. Specifically, Bushell and Stockton allegedly spent more than $1 million of the funds on extensive renovations to two Marblehead properties they planned to develop into a monastic complex that featured a chapel, brewery, and beer garden; approximately $90,000 in audio video system equipment; and nearly $40,000 in antique furniture. This case was investigated in connection with the Pandemic Response Accountability Committee (PRAC) Fraud Task Force, which was established to promote transparency and coordinate oversight of the federal government’s COVID-19 pandemic response.
- Houston Pharmacist Sent to Prison for Fraudulent Compounding Cream Scheme
Kyhati Undavia, of Houston, Texas, was sentenced to 27 months in federal prison after previously pleading guilty to conspiracy to commit healthcare fraud. From December 2012 to December 2018, Undavia hired employees to market Memorial Pharmacy, which she controlled and operated, to physicians as a place to submit compounded drug prescriptions. Instead of providing prescriptions directly to the patients who could select a pharmacy of their choice, physicians sent the prescriptions directly to Memorial Pharmacy. Then, Undavia paid the physicians illegal kickbacks for the prescriptions. Beneficiaries often received medicated creams that they did not need or want. Undavia received approximately $22 million from TRICARE, Department of Labor Office of Workers’ Compensation Programs, and CHAMPVA for the prescriptions.
- Arkansas Woman Sentenced to Prison for Misusing Disability Funds Meant for Her Husband
In 2013, Brandi Goldman of Jonesboro, Arkansas, was married to a US Army reservist who suffered a severe traumatic brain injury in a service-connected accident. As a result of this injury, her husband had many serious physical challenges, and Goldman was appointed as his guardian and fiduciary. Between April 2015 and November 2017, Goldman received more than $258,600 in VA disability payments and $36,000 in Social Security payments. During that timeframe, she withdrew close to $200,000 in cash and accrued about $900 in ATM and overdraft fees. Goldman admitted to spending much of the cash to fund her methamphetamine habit, spending $150 on methamphetamine two to three times per week. She also admitted that five other people moved into the residence with her and her husband, none of whom paid rent or contributed to expenses, some of whom she regularly gave cash. She also admitted paying $68,000 in cash for another home, furnishings for the home, multiple vehicles, and a motor home. Goldman was sentenced to 20 months in prison, three years of supervised release, and $143,000 in restitution after previously pleading guilty to misappropriation by a fiduciary. The VA OIG and Social Security Administration OIG conducted the investigation.
- Texas Woman Found Guilty for Defrauding VA and the Social Security Administration
According to an investigation by the VA OIG and Social Security Administration OIG, Josephine Casandra Perez-Gorda of Dripping Springs, Texas, defrauded VA and the Social Security Administration by overstating the severity and extent of her spouse’s disability from October 2011 through August 2017. Mr. Perez, now deceased, was an Army veteran who participated in the fraud. The couple claimed Mr. Perez was paralyzed from the waist down from an injury he suffered while on active duty. The ruse included applying for and receiving a specially equipped vehicle, a specially adapted home and additional compensation based on his disability rating. The investigation began after the local news ran a story titled, “Homes for Our Troops Questions Veteran’s Paralysis after Video,” which involved a specially adapted house in Dripping Springs that was gifted to the couple by the nonprofit foundation Homes for Our Troops in December 2013. Although Mrs. Perez-Gorda claimed her husband was “paralyzed from the belly button down,” Mr. Perez was seen walking around the neighborhood and playing basketball. VA OIG agents videotaped Mr. Perez walking around without assistance. Mrs. Perez-Gorda was found guilty at trial in the Western District of Texas on charges of wire fraud, mail fraud, conspiracy to commit healthcare fraud, healthcare fraud, false statements related to a healthcare matter, theft of government funds, and aiding and abetting.
- Former Philadelphia VA Hospital Employee Sentenced for Stealing Government Funds
Bruce Minor, of Philadelphia, Pennsylvania, was sentenced to two years in prison, three years of supervised release, and ordered to pay $462,256 in restitution for his scheme to embezzle money from the Philadelphia VA Medical Center. Between December 2015 and September 2019, Minor, a former travel clerk, created fraudulent travel reimbursement claims in the names of at least three other VA medical center employees and then diverted the funds into bank accounts he controlled. This case was investigated by the VA OIG.
- Missouri Man Sentenced for $335 Million Fraud Scheme and Over $615,000 in Tax Violations
Patrick Michael Dingle, of Parkville, Missouri, was sentenced to eight years in federal prison without parole and ordered to forfeit approximately $4.6 million for his role in a scheme to defraud federal programs that award contracts to firms owned by minorities, veterans, and service-disabled veterans. Dingle and his co-conspirators controlled and operated Zieson Construction Company, which was located in North Kansas City. The company was originally formed in 2009 with Stephon Ziegler, an African-American service-disabled veteran, as the nominal owner. Between 2009 and 2018, the company received approximately 199 federal contracts set aside for award to small businesses owned and controlled by service-disabled veterans or certified minorities. However, Ziegler did not control the day-to-day operations or the long-term decision making at the company. Dingle and his co-conspirators actually controlled and operated Zieson, and also received most of the profits. In a separate case, Dingle was ordered to pay approximately $615,000 in restitution to the Internal Revenue Service and $82,704 in restitution to the Missouri Department of Revenue after pleading guilty to filing false tax returns between 2013 and 2016.
- Michigan Man Sentenced to Five Years For Defrauding VA
Joseph Scott Gray of Lawton, Michigan, was sentenced to five years in federal prison for lying to VA to obtain over $250,000 in benefits to which he was not entitled. To obtain those benefits, Gray repeatedly told VA he could not walk or stand, when in fact, he could. On October 26, 2017, Gray went to the Battle Creek VA Medical Center for an exam, and he arrived in a wheelchair. During the exam, Gray told VA employees he had not walked in 10 years and could not use his left hand. Minutes later, Gray went to a local restaurant, where he was observed freely walking in and out of the building and carrying his leftovers in his left hand. Gray was convicted by a federal jury of four counts: engaging in a conspiracy to defraud the government; providing false statements to VA; theft of government funds; and presenting a false, fictitious, or fraudulent claim for benefits. After trial, the Court found that Gray committed perjury by falsely testifying that his medication caused him to lie to VA employees and that his medication caused him to go from being unable to walk one minute to being able to walk the next. The Court also found that Gray falsely testified that it was his brother, not him, in videos from a local feed store in which Gray was seen walking freely and carrying a 50 lb. bag of cat food. The VA OIG completed the investigation.
- Woman Indicted for Preparing Fraudulent Paycheck Protection Program Loans Totaling over $1.1 Million
Sharnae Every, of Houston, Texas, was charged with one count of conspiracy to commit mail fraud and two counts of mail fraud for preparing and submitting fraudulent Paycheck Protection Program (PPP) loan applications. Allegedly, Every created a fictitious business and then recruited individuals to obtain money from the loan program. She charged individuals between $45 and $120 to create fraudulent PPP loan applications and then falsely certified that they were accurate. Once the loans were funded, Every charged individuals approximately $3,500 each. This case was the result of a referral from the COVID-19 Pandemic Response Accountability Committee. Investigators determined there were at least 110 PPP loan applications in the Thibodeaux, Louisiana, area that all had the same invoices and federal tax forms with the same business name and amounts. The VA OIG helped with this multiagency investigation.
- Medical Technology Company President Convicted in $77 Million COVID-19 and Allergy Testing Scheme
Mark Schena of Los Altos, California, the president of Arrayit Corporation—a Silicon Valley-based medical technology company—was convicted of participating in a scheme to mislead investors, commit healthcare fraud, and pay illegal kickbacks in connection with the submission of more than $77 million in false and fraudulent claims for COVID-19 and allergy testing. Schena defrauded Arrayit’s investors by claiming that he invented revolutionary technology to test for virtually any disease using only a few drops of blood, claiming that he was the “father of microarray technology” and on the shortlist for the Nobel Prize. Schena also falsely represented to investors that Arrayit could be valued at $4.5 billion based on purported revenues of $80 million per year, concealing that the company was on the verge of bankruptcy. Schena also orchestrated an illegal kickback and healthcare fraud scheme that involved submitting fraudulent claims to Medicare and private insurance for unnecessary allergy testing. Arrayit ran allergy screening tests on every patient for 120 different allergens, regardless of medical necessity. In order to obtain patient blood specimens, Schena paid kickbacks to marketers in violation of the Eliminating Kickbacks in Recovery Act and orchestrated a deceptive marketing plan that falsely claimed that the Arrayit test was highly accurate in diagnosing allergies, when it was not, in fact, a diagnostic test. Arrayit billed more per patient to Medicare for blood-based allergy testing than any other laboratory in the United States and billed some commercial insurers over $10,000 per test. In early 2020, when Arrayit’s allergy testing business declined because the COVID-19 pandemic, Schena falsely announced that Arrayit “had a test for COVID-19” based on Arrayit’s blood-testing technology. Seeking to capitalize on the nationwide shortage of COVID-19 testing, Schena orchestrated a deceptive marketing scheme that claimed that Dr. Anthony Fauci and other prominent government officials had mandated testing for COVID-19 and allergies at the same time and required that patients receiving the Arrayit COVID-19 test also be tested for allergies. Schena also falsely claimed that the Arrayit COVID-19 test was more accurate than a PCR test for diagnosing COVID-19 infections, while concealing from investors and patients taking the test that the Food and Drug Administration had informed him that the Arrayit test was not accurate enough to receive an Emergency Use Authorization. Schena is currently awaiting sentencing. The investigation was conducted by the VA OIG, FBI, Department of Health and Human Services OIG, Defense Criminal Investigative Service, and US Postal Inspection Service.
- Florida Lab Owner Charged in $53 Million Healthcare Fraud and Kickback Scheme Related to Genetic Cancer Screening Tests
According to a multiagency investigation, Daniel Hurt of Fort Lauderdale, Florida, the owner of several clinical laboratories, allegedly paid kickbacks and bribes to various entities who supplied referrals and orders for genetic cancer screening tests for Medicare and other healthcare benefit program beneficiaries, without regard to medical necessity. Medicare reimbursed the laboratories without knowing that the services were not medically necessary or were procured through the payment of kickbacks. From January 2019 to October 2021, Hurt, through the laboratories, submitted or caused to be submitted approximately 350,000 claims to Medicare. The scheme resulted in Medicare paying the laboratories at least $53.3 million for test claims, with Hurt receiving at least $26.9 million from the reimbursements. Hurt was charged in the District of New Jersey of one count of conspiracy to commit healthcare fraud. The investigation was conducted by the VA OIG, FBI, Department of Health and Human Services OIG, and Defense Criminal Investigative Service.
- VA Employee at the Northampton VA Medical Center in Massachusetts Indicted on Child Pornography Offenses
Kevin A. Divoll of Royalston, Massachusetts, was indicted on one count of distribution of child pornography and one count of possession of child pornography. Divoll, an employee at the Northampton VA Medical Center in Massachusetts, was identified as the owner and user of a device allegedly used to distribute child pornography over the medical center’s public Wi-Fi from May to July 2022. A search of his residence found that Divoll possessed child pornography that involved a prepubescent minor and a minor who had not attained 12 years of age. The VA OIG and VA Police conducted the investigation.
- Global Healthcare Company to Pay $6.3 Million to Resolve False Claims Act Allegations
The global healthcare company Novo Nordisk Inc. has agreed to pay $6.3 million to resolve allegations that it violated the False Claims Act by selling items to the United States that were manufactured in nondesignated countries in violation of the Trade Agreements Act of 1979. The Trade Agreements Act restricts the procurement of goods under certain government contracts to purchases from specific designated countries. From July 2012 through November 2020, Novo Nordisk allegedly sold to US government agencies its NovoFine 30G 8 mm needles and 32G 6 mm needles—all of which were manufactured in nondesignated countries. The investigation was conducted by the VA OIG, Department of Health and Human Services OIG, Defense Criminal Investigative Service, and Army Criminal Investigation Division.
- Florida Man Sentenced for $20 Million Healthcare Fraud Scheme
In 2018, Jonathan Michael Rouffe of Boca Raton, Florida, and his coconspirators established a conglomerate of durable medical equipment (DME) supply companies. During the creation of the companies, they lied to Medicare to secure billing privileges, including placing the companies in the names of straw owners. By concealing their true ownership, the conspirators gained control of more companies, which Medicare generally prohibits, enabling them to submit high volumes of illegal DME claims. During the course of one year, Rouffe and his coconspirators submitted more than $20 million in illegal DME claims, resulting in over $10 million in payments from Medicare and CHAMPVA. To attain such high volumes of claims, Rouffe and his coconspirators used illegal bribes and kickbacks. Specifically, they illegally purchased thousands of DME claims from so-called “marketers.” On invoices, the parties disguised the illegal kickback transactions as marketing services, and the coconspirators claimed that the DME prescriptions had been generated through “telemedicine,” despite no telemedicine actually occurring. Instead, doctors were bribed in exchange for DME approvals. Rouffe was sentenced to four years in prison, forfeiture of over $3 million, and restitution of approximately $11 million after previously pleading guilty to conspiracy to commit healthcare fraud. This case was investigated by the VA OIG, Department of Health and Human Services OIG, and FBI.
- Former South Florida Pharmacy VP and Executive Assistant Sentenced for Roles in Healthcare Fraud Scheme
Matthew Smith of Boca Raton, Florida, the former vice president of a pharmacy in Broward County, admitted to submitting fraudulent claims to Tricare and CHAMPVA for expensive, medically unnecessary compound drugs. Smith paid kickbacks to patient recruiters in exchange for their recruiting beneficiaries and referring prescriptions for the drugs. His executive assistant, Alisa Catoggio, also of Boca Raton, Florida, calculated and tracked the kickbacks and sham copay assistance programs used to further the scheme. The fraudulent referrals caused an actual loss to the government programs of approximately $88 million. Smith was sentenced to seven and a half years in prison. Catoggio, who also pleaded guilty, was sentenced to five years in prison. In addition to the prison sentence, the court imposed restitution of over $75 million. The VA OIG, Defense Criminal Investigative Service, Food and Drug Administration’s Office of Criminal Investigations, and FBI conducted this investigation.
- Maryland Woman Convicted for Conspiracy to Fraudulently Obtain Military Disability Benefits
Mary Francis Biggs of Lexington Park, Maryland, participated in a conspiracy organized by her daughter, Angela Farr, in which false and fraudulent documents were submitted to VA in support of disability claims in the name of Biggs’ husband. The fraudulent documents stated that the husband was homebound and required full-time assistance for basic tasks such as eating, bathing, and dressing. In fact, he lived an ordinary, active life. For at least some of the time, Biggs and Farr concealed their fraud from the husband. Biggs spent the fraudulently received disability compensation payments on daily living expenses, cruise vacations, and a kitchen renovation, even though she was aware that her husband was not entitled to the payments. As a result of the fraud scheme, from 2016 through 2019, Biggs and her husband received over $170,000 in disability benefits and early retirement pay to which they were not entitled. Biggs was convicted of conspiracy to commit theft of government property and theft of government property. The VA OIG and Social Security Administration OIG investigated the case.
- Delaware Man Pleaded Guilty to Unlawfully Distributing Hydroxychloroquine and Other Prescription Drugs
Jose Torres of Shelbyville, Delaware, conspired and agreed with others to unlawfully purchase short-supply drugs and resell those drugs to wholesale distributors. Torres and another company entered business arrangements with retail pharmacies that were not licensed to engage in the wholesale distribution of prescription drugs. He used the business arrangements with retail pharmacies to purchase prescription drugs from authorized distributors, only to resell those drugs to wholesale distributors at a significant markup. For example, on March 2020, Torres purchased hydroxychloroquine sulfate tablets from a pharmacy located in the Eastern District of Tennessee, an unlicensed wholesale distributor, for $178 per unit, and subsequently resold them to a VA medical center for $442 per unit. He pleaded guilty to one count of conspiracy to engage in the unlicensed wholesale distribution of prescription drugs. The investigation was conducted by the VA OIG and FDA Office of Criminal Investigations.
- Veteran Convicted of Defrauding VA for Disability Benefits
An investigation by the VA OIG and Social Security Administration OIG found that Bruce Hay, a veteran from Greeley, Kansas, fraudulently misrepresented the extent of symptoms related to a conversion disorder diagnosis to receive VA disability benefits. Hay claimed he had constant jerking movements and tremors; could walk only with the use of a walker; and could not perform daily activities, such as bathing, dressing, and eating. During VA examinations, he faked and exaggerated physical symptoms, displaying a significant limp, muscle spasms, and head bobs. Based on these misrepresentations, Hay was found to be 100 percent disabled by VA and as a result received more than $450,000 in VA benefits. Information collected through surveillance and testimony, however, showed Hay’s claims of mobility limitations to be false. Without assistance, he engaged in residential construction, hunted deer, drove regularly, and hauled more than a million pounds of scrap metal. A federal jury convicted Hay of wire fraud and theft of government funds.
- Self-Proclaimed Body Builder Sentenced for Stealing Money from VA
A VA OIG investigation found that Zachary Barton, a South Florida veteran and self-proclaimed bodybuilder, exaggerated his mental and physical impairments and received more than $245,000 in VA benefits to which he was not entitled. Barton admitted he lied on a mental health test by reporting to VA that he had been in combat, qualifying him for posttraumatic stress disorder benefits. He also reported that he could not lift more than 10 to 20 pounds or walk without a cane; however, surveillance footage and social media evidence showed Barton had no such limitations. Based on his lies, Barton was found to be 100 percent disabled by VA. He was sentenced to one year in prison and more than $245,000 in restitution.
- Helicopter Flight Instructor Training Company and Community College Agreed to Pay $7.5 Million to Settle False Claims Act Allegations
From 2013 to 2018, Universal Helicopters Inc., a private helicopter flight instructor training company, and Dodge City Community College allegedly made false statements to VA regarding enrollment in the their helicopter flight instructor program in order to obtain VA funding. As part of the Post-9/11 GI Bill program, VA provides tuition and fee payments to qualifying schools on behalf of eligible veterans. To qualify for the program, a school is required to certify to VA that no more than 85 percent of the students for any particular course are receiving VA benefits. This requirement, commonly referred to as the “85/15 rule,” is intended to prevent abuse of Post-9/11 GI Bill funding by ensuring that VA is paying fair market value tuition rates since at least 15 percent of the enrolled students would be paying the same rate with non-VA funds. The settlement resolves the following allegations: (1) the training company and community college falsely certified compliance with the 85/15 rule when the flight instructor program included certain expensive classes that were taken almost exclusively by veterans, and (2) to reach the required 15 percent threshold, the community college counted part-time students enrolled in only one online class per semester as full-time students, in violation of VA rules. The VA OIG assisted in this multiagency investigation.
- Owner of Mississippi Barber College Sentenced for Fraudulently Obtaining GI Bill Funds from VA
Anthony Kelley of Jackson, Mississippi, the owner of Trendsetters Barber College, was sentenced to one year in prison, three years of supervised release, and more than $402,000 in restitution after pleading guilty to wire fraud. From October 2016 to March 2019, Kelley offered a master barber course that was not an accredited course of study approved by the state’s Board of Barber Examiners. Kelley fraudulently represented that this course was an approved course of study and as a result was allowed to collect GI Bill money from veterans enrolled in the program. At least two veterans were enrolled in the course using their GI Bill benefits and, as a result, the VA made interstate wire transfers of federal funds to Kelley based on his fraudulent representations. The VA OIG investigated this case.
- Rhode Island Woman Admits to Falsifying Military Service and Fraudulently Collecting More than $250,000 in Veteran Services and Charitable Contributions
Sarah Jane Cavanaugh, 31, admitted that she falsely claimed to be a wounded veteran who had been awarded the Purple Heart and Bronze Star, and that she used those claims, the stolen identities of actual veterans, and fraudulent documents that she created to obtain charitable services intended for injured veterans. Additionally, while employed at the Providence VA Medical Center, she used her position as a licensed social worker to gain access to medical records belonging to a marine who was battling cancer. Cavanaugh then used this information to create fraudulent documents and medical records in her own name, indicating that she was an honorably discharged marine stricken with cancer. A search of Defense Department records indicates Cavanaugh never served in any branch of the military. Cavanaugh is scheduled to be sentenced on November 10, 2022.
- VA Medical Center Employee Charged with Possession of Child Pornography
Kevin Divoll, of Royalston, Massachusetts, was charged with one count of possession of child pornography. According to the charging document, investigators identified the internet protocol address of a device distributing child pornography and determined the device was using the public Wi-Fi at the Edward P. Boland VA Medical Center in Leeds. Further investigation identified that Divoll, an employee at the VA medical center, as the owner and user of the device. It is alleged that during a search of Divoll’s residence, a laptop, external hard drive, and cell phone were found to contain child pornography.
- New York Woman Indicted for Theft and Misappropriation of Funds as a Fiduciary
Trina Gigliotti, of Utica, New York, was indicted for misappropriating the funds of the legally incompetent spouse of a deceased veteran, as well as stealing from the VA. The charges filed against Gigliotti carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to three years. The indictment also seeks forfeiture of $36,129.08, representing the amount allegedly stolen. This case is being investigated by the VA OIG.
- Rhode Island Woman Pleads Guilty to Stealing Public Funds
Lisa Heino, of Newport, Rhode Island, pleaded guilty to two counts of theft of public funds for stealing approximately $74,000 in VA and Office of Personnel Management (OPM) benefits from a veteran she was supposed to be protecting. In May 2014, Heino was appointed by the Massachusetts state court to serve as the conservator for the victim who was a veteran and retired federal employee. Later, in October 2014, Heino became the OPM representative payee for the victim as well. In these roles, Heino had access to the benefit payments that were directly deposited into the victim’s bank account. She then transferred these payments to her own bank account and used the funds for her own expenses. Sentencing is scheduled for December 2, 2022.
- Florida Man Pleaded Guilty to Producing and Possessing Child Sexual Abuse Material
Thomas Zayas, of Orlando, Florida, has pleaded guilty to enticing a minor to produce sexually explicit videos and to possessing child sexual abuse material. Zayas faces a minimum mandatory penalty of 15 years, and up to 30 years, in federal prison for production of child sexual abuse material and up to 10 years’ imprisonment for possession of child sexual abuse material. He faces a potential life term of supervised release on all counts. A sentencing date has been set for October 26, 2022. This case was investigated by the FBI, VA OIG, and the Orange County Sheriff’s Office.
- New York Woman Charged with Theft and Misappropriation of Funds by a Fiduciary
JoAnne Natalie of Saratoga Springs, New York, was indicted earlier this month for misappropriating the funds of a veteran declared legally incompetent, as well as stealing from VA. The charges filed against Natalie carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to three years. The indictment also seeks forfeiture of more than $50000, representing the amount allegedly stolen. This case is being investigated by the VA OIG.
- Army Veteran Sentenced to Prison for Receiving Nearly $1 Million in Veteran Benefits for Fraudulent Service-Connected Disabilities
John Paul Cook of Marshall, North Carolina, was sentenced to 10 months in prison, five of which he will serve in home confinement, after pleading guilty to theft of public money. Cook defrauded VA by receiving nearly $1 million in veteran benefits based on fraudulent claims of service-connected disabilities. In November 1985, Cook enlisted in the Army and sustained an accidental injury while on duty six months later. Following the incident, Cook complained that a preexisting eye condition had worsened due to the accident. In 1987, following a medical evaluation, Cook was discharged, placed on the retired list, and began receiving VA disability-based compensation at a rate of 60 percent. Over the next 30 years, Cook’s disability-based compensation increased, following his repeated false claims of increased visual impairment and unemployability due to “severe visual deficit.” Based on these claims, VA declared Cook legally blind in 2005, and he began receiving disability-based compensation at the maximum rate. Cook’s monthly VA disability payments gradually increased from $1,411 per month in 1987 to $3,990 per month by 2017. In total, from 1987 through 2017, Cook received more than $978,000 in VA disability payments due to his claimed blindness, to which he was not lawfully entitled. The VA OIG investigated this case.
- The VA OIG Helped in Nationwide Coordinated Law Enforcement Action that Charged Dozens for $1.2 Billion in Healthcare Fraud
The Department of Justice (DOJ) today announced criminal charges against 36 defendants in 13 federal districts across the United States for more than $1.2 billion in alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) schemes. The action includes criminal charges against several medical professionals and the owners and executives of telemedicine companies, clinical laboratories, DME companies, and marketing organizations. The alleged schemes involved the payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the referral of patients by medical professionals working with fraudulent telemedicine and digital medical technology companies. The charges include some of the first prosecutions in the nation related to fraudulent cardiovascular genetic testing, a burgeoning scheme. One particular case involved the operator of several clinical laboratories, who was charged in connection with a scheme to pay over $16 million in kickbacks to marketers who, in turn, paid kickbacks to telemedicine companies and call centers in exchange for doctors’ orders. As alleged in court documents, orders for cardiovascular and cancer genetic testing were used by the defendant and others to submit over $174 million in false and fraudulent claims to Medicare—but the results of the testing were not used in the treatment of patients. Other defendants charged in this enforcement action allegedly controlled a telemarketing network, based both domestically and overseas, that lured thousands of elderly or disabled patients into a criminal scheme. The owners of marketing organizations allegedly had telemarketers use deceptive techniques to induce Medicare beneficiaries to agree to cardiovascular and other genetic testing. The VA OIG was one of several agencies that participated in this law enforcement action.
- Inform Diagnostics Agreed to Pay $16 Million to Resolve False Claims Act Allegations of Medically Unnecessary Tests
Between 2013 and 2018, Inform Diagnostics, Inc. (formerly Miraca Life Sciences)—a clinical laboratory headquartered in Irving, Texas, that provides anatomic pathology services to physician practices throughout the United States—routinely conducted tests on biopsy specimens prior to a pathologist’s review and without an individualized determination regarding whether tests were medically necessary. The laboratory submitted these medically unnecessary tests for payment, causing Medicare and other federal healthcare programs to pay for false claims. Inform Diagnostics has agreed to pay $16 million to resolve these allegations. The investigation was conducted by the VA OIG, US Attorney’s Office, Department of Health and Human Services OIG, Office of Personnel Management OIG, and FBI.
- Former Chief Of Cardiology at Palo Alto VA Medical Center Sentenced to Prison for Sexual Battery
Beginning in the fall of 2017, former VA cardiologist John Giacomini of Atherton, California, repeatedly subjected a subordinate electrophysiologist to unwanted and unwelcome sexual contact, to include hugging, kissing, and intimate touching while on VA premises. On November 10, 2017, the victim explicitly told Giacomini she was not interested in a romantic or sexual relationship with him. Nevertheless, Giacomini continued to subject his subordinate to unwanted sexual advances and touching, culminating on December 20, 2017, when Giacomini turned out the lights in an office, pulled the victim out of her chair, and fondled her until a janitor opened the office door and interrupted the encounter. The victim later resigned from her position at VA, citing Giacomini’s behavior as her principal reason for leaving. Giacomini was sentenced to eight months in prison after previously pleading guilty to abusive sexual contact.
- Former VA Social Worker to Admit to Falsifying Military Service and Identity Theft
Sarah J. Cavanaugh of East Greenwich, Rhode Island, used her position as a licensed social worker at the Providence VA Medical Center to gain access to documents, personal information, and medical records belonging to a Marine and an actual cancer-stricken Navy veteran. She allegedly used the information to create fraudulent documents and medical records in her name, claiming that she was an honorably discharged Marine stricken with cancer. She portrayed herself as a wounded veteran who received a Purple Heart and the Bronze Star, replicas of which she purchased and publicly displayed on a US Marine uniform she wore at public events. Cavanaugh allegedly used this assumed identity in various schemes to obtain more than $250,000 in cash, charitable donations, and services reserved for injured veterans. According to a signed plea agreement, Cavanaugh will plead guilty to charges of fraud, aggravated identity theft, forgery, and fraudulent use of medals. The investigation was conducted by the VA OIG, VA Police Service, and FBI, with the assistance of the Defense Criminal Investigative Service, Naval Criminal Investigative Service, US Postal Inspection Service, and Internal Revenue Service Criminal Investigations.
- Texas Woman Charged with Fraud and Kickback Scheme
Nora Alaniz of South Padre Island, Texas, was charged with conspiracy to pay and receive illegal kickbacks in exchange for the referral of prescriptions for compound drugs. Previously charged was Dr. Tajul Shams Chowdhury of McAllen, Texas. Alaniz is a registered nurse and the former owner of a home health care company located in Hidalgo County, while Chowdhury is a physician who operated a medical clinic in Edinburg. Alaniz allegedly received $70,000 in kickbacks disguised as employee salaries from a local pharmacy. In turn, she paid Chowdhury and employees of his medical clinic for the referrals. The indictment alleges Chowdhury wrote prescriptions and referred them to the pharmacy. As a result of the illegal kickback scheme, the pharmacy received more than $300,000 from healthcare benefit programs such as Medicare and Medicaid from January to July 2017. The VA OIG investigated this case with the U.S. Postal Service OIG, FBI, Defense Criminal Investigative Service, Department of Labor OIG, Texas Health and Human Services and the Department of Health and Human Services OIG, Texas Attorney General's Office - Medicaid Fraud Control Unit, and Texas Department of Insurance.
- Iowa Man Sentenced to 27 Months in Prison for Criminal HIPAA Violations
Dustin James Ortiz of Des Moines, Iowa, was sentenced to 27 months in prison after pleading guilty to wrongfully obtaining and disclosing individually identifiable health information. Ortiz, conspired with a then employee of the Des Moines VA Medical Center, to obtain individually identifiable health information of an individual without authorization required by law. Ortiz then disclosed the records to a third party. The VA OIG investigated the case.
- Fifteen Texas Doctors Agree to Pay over $2.8 Million to Settle Kickback Allegations
Fifteen more Texas doctors have agreed to pay a total of $2,831,280 to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law. The settlements resolve allegations that the doctors received thousands of dollars in remuneration from nine management service organizations in exchange for ordering laboratory tests from Little River Healthcare, True Health Diagnostics LLC, and/or Boston Heart Diagnostics Corporation. Little River Healthcare allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used the management service organizations to pay numerous doctors for their referrals. The payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals. As part of their settlements, the doctors have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law. The civil settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from the Health and Human Services OIG, the Defense Criminal Investigative Service, and the VA OIG. More than $32 million has been recovered relating to conduct involving Little River Healthcare, True Health Diagnostics LLC, and/or Boston Heart Diagnostics Corporation, including False Claims Act settlements with a total of 33 physicians, two healthcare executives, and one laboratory.
- Construction Company Owner Convicted of Fraudulently Obtaining More Than $240 Million in SDVOSB Contracts
Michael Angelo Padron, along with co-conspirators Michael Wibracht and Ruben Villarreal, conspired to obtain government contracts under programs administered by the Small Business Administration. Padron conspired to install Villarreal, a service-disabled veteran, as the supposed owner of a general construction company held as a service-disabled veteran-owned small business (SDVOSB). Then Padron and Wibracht exercised disqualifying financial and operational control over the company. They concealed that control to secure more than $240 million in contracts that were set aside for SDVOSBs to benefit their larger, nonqualifying businesses. Pardon is scheduled to be sentenced on October 19, 2022. The Department of Justice’s Antitrust Division’s Washington Criminal II Section prosecuted the case, which was investigated by the VA OIG, Small Business Association OIG, Army Criminal Investigation Division Major Procurement Fraud Unit, Defense Criminal Investigative Service, and General Services Administration OIG, with assistance by the U.S. Attorney’s Office for the Western District of Texas and the Army Audit Agency.
- California Mortgage Lender Agreed to Pay More than $1 Million to Resolve Fraud Allegations
American Financial Network, Inc., a mortgage lender based in Brea, California, has agreed to pay more than $1 million to resolve allegations that it improperly and fraudulently originated government-backed mortgage loans insured by the Federal Housing Administration (FHA), a component of the US Department of Housing and Urban Development (HUD). Between December 2011 and March 2019, the mortgage lender knowingly underwrote and approved for insurance certain mortgages that did not meet FHA requirements or qualify for insurance, resulting in losses to the United States when the borrowers defaulted on those mortgages. The settlement further resolves allegations that the lender knowingly failed to perform quality control reviews that it was required to perform. The settlement was the result of a joint investigation conducted by the VA OIG, HUD OIG, and the US Attorney’s Office for the Eastern District of Washington.
- Former Massachusetts Firefighter Pleaded Guilty to Possession and Distribution of Controlled Substances
Joshua Eisnor of North Reading, Massachusetts, pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute controlled substances. He conspired to distribute controlled substances, including oxycodone, suboxone, Klonopin, and Adderall to other members of the Malden, Massachusetts, Fire Department where he worked as a firefighter. The VA OIG, Food and Drug Administration OIG, and FBI conducted the investigation.
- Army Veteran Admitted to Sending Death Threats to VA Employees
Mark Williams Jr., an Army veteran receiving treatment at VA facilities, pleaded guilty to threatening employees at the Lake Jackson VA Outpatient Clinic. Beginning in June 2021, Williams began sending threats toward the staff at various VA facilities. These included calls to the Lake Jackson VA Outpatient Clinic, the White House VA Hotline, and the Veterans Crisis Line. As part of his plea, he admitted that during a call on October 25, 2021, he made repeated threats to kill employees at the Lake Jackson VA facility. The VA OIG conducted the investigation.
- Registered Nurse Guilty of Theft of Government Funds in COVID-19 Vaccination Scheme
Bethann Kierczak of Southgate, Michigan, a registered nurse at the John D. Dingell VA Medical Center in Detroit, pleaded guilty to charges related to COVID-19 vaccination record cards fraud. According to court records, Kierczak admitted to stealing or embezzling authentic COVID-19 vaccination record cards from the VA hospital—along with vaccine lot numbers necessary to make the cards appear legitimate—and then reselling those cards and information to individuals within the metro Detroit community. Kierczak began the scheme as early as May 2021 and continued through September 2021, selling the cards for $150 to $200 each. The VA OIG investigated this case with the VA Police and the Medicare Fraud Strike Force, a partnership among the Criminal Division, U.S. Attorney’s Offices, and the US Health and Human Services OIG.
- Michigan Woman Sentenced for Fraud in Benefits Scheme
Melissa Flores was sentenced to two years in prison and $110,000 in restitution for her role in a scheme to defraud VA. Flores and a codefendant allegedly created aliases and obtained or created fraudulent documents to make it appear they were the heirs of various individuals who had died. Between 2013 and 2019, the two codefendants defrauded VA out of more than $430,000 and the Michigan Department of Treasury out of more than $40,000 in unclaimed property. Flores pleaded guilty last May to two counts of false pretenses and one count of forgery.
- Georgia Man Pleaded Guilty to Fraud and Kickback Scheme Involving COVID-19 and Cancer Genetic Testing
Erik Santos of Braselton, Georgia, pleaded guilty to conspiracy to violate the Federal Anti-Kickback statute and conspiracy to commit healthcare fraud. Santos owned and operated a company that conducted business with medical testing companies. From 2019 to 2020, he and others engaged in a scheme to provide medical testing companies with qualified patient leads and tests for medically unnecessary cancer genetic screening tests for Medicare beneficiaries in exchange for kickbacks of approximately $1,000 to $1,500 for each test that resulted in a reimbursement from Medicare. Santos entered into a sham contract and utilized sham invoices to make it appear that he was being paid for legitimate services and to conceal his kickback scheme. In March 2020, Santos extended his scheme to incorporate COVID-19 tests, along with more expensive and medically unnecessary tests. This investigation was conducted by the VA OIG, Department of Health and Human Services OIG, and Defense Criminal Investigative Service.
- South Carolina Fiduciary Pleaded Guilty to Stealing Veterans’ Funds
Raymond Huffman of Varnville, South Carolina, pleaded guilty to stealing funds from 10 military veterans. Huffman was appointed to be a fiduciary to receive payments on behalf of these veterans who, as a result of wars, injury, disease, or infirmities of advanced age, could not manage their VA benefits. Instead, Huffman—through his company Huffman Fiduciary Services—stole more than $300,000 from them. The VA OIG investigated this case.
- Former Massachusetts Firefighter Charged with Possession and Distribution of Controlled Substances
Joshua Eisnor of North Reading, Massachusetts, was charged with conspiracy to distribute and to possess with intent to distribute controlled substances. According to an investigation by the VA OIG, Food and Drug Administration OIG, and FBI, while working as a firefighter at the Malden Fire Department, Eisnor distributed controlled substances to other members of the fire department. Eisnor is scheduled to plead guilty on June 23, 2022.
- Chicago Home Sleep Testing Company to Pay $3.5 Million to Settle Federal Healthcare Fraud Suit
Suburban Chicago diagnostics company, Snap Diagnostics, a nationwide provider of home sleep testing diagnostic services will pay $3.5 million to the United States to settle a civil lawsuit accusing the company of defrauding Medicare and four other federal healthcare programs. Snap Diagnostics founder Gil Raviv and its vice president Stephen Burton violated the False Claims Act and the Anti-Kickback Statue by fraudulently billing federal healthcare programs for medically unnecessary services that were occasioned by the kickbacks. In addition to the settlement, Raviv will pay $300,000 and Burton will pay $125,000. The investigation was conducted by the VA OIG, Railroad Retirement Board OIG, Office of Personnel Management OIG, Department of Health and Human Services OIG, Defense Criminal Investigative Service, and FBI.
- Veteran Sentenced to Prison for Defrauding VA for Disability Benefits
Barry Wayne Hoover of Tampa, Florida, was sentenced to 27 months in federal prison and ordered to pay more than $429,000 in restitution for theft of government funds and for false statements to VA. Hoover, a Navy veteran, exaggerated the extent of his visual impairment to receive VA disability benefits to which he was not entitled. Hoover manipulated the results of subjective tests of his peripheral vision and was declared legally blind because of these tests. VA found Hoover 100% disabled and awarded him significant monetary benefits and other valuable services. VA OIG agents surveilled Hoover and discovered that he drove a car, a three-wheeled motorcycle, an ATV, and a boat, as well as engaged in hunting, fishing, and scuba diving all without assistance. This case was investigated by the VA OIG.
- Former VA Travel Clerk Pleaded Guilty to Stealing Almost $500,000 in Government Funds
Bruce Minor of Philadelphia, Pennsylvania, pleaded guilty in connection with his scheme to embezzle money from his former employer, the Philadelphia VA Medical Center. In April 2022, Minor was charged with theft of government funds stemming from his theft of more than $487,000 in VA travel reimbursement funds, which he helped administer as part of his official duties as a travel clerk. To perpetrate the theft, Minor created fraudulent travel reimbursement claims in the names of at least three other VA employees and then diverted the fraudulently obtained funds into bank accounts he controlled. According to court documents, in an email to medical center management, Minor admitted to stealing approximately $13,000 in travel funds, though a subsequent investigation showed that he stole upwards of $487,000 between December 2015 and September 2019. The VA OIG conducted this investigation.
- Louisiana Fiduciary Charged with Misappropriating Veteran’s Funds
Sloane Signal-Debose of Slidell, Louisiana, was charged with misappropriating funds from a veteran while she was his fiduciary. From 2016 until 2018, Signal had control over the veteran’s finances and bank accounts. During that time, she took over $100,000 from the veteran’s accounts and used it as the down payment on a home in her name and used additional funds from the veteran to pay contractors working on the home. Signal then submitted false records to VA to hide her misuse of the veteran’s funds. If convicted, she faces up to five years in federal prison, three years of supervised release, and restitution. The VA OIG conducted this investigation.
- Former VA Employee Sentenced for Stealing from VA and Veterans
Dennis Gene Godbolt of Buckeye, Arizona, was sentenced after previously pleading guilty to one count of theft of government property. While employed by the VA Phoenix Health Care System, Godbolt stole property, mostly consisting of home furnishings, that had been donated by Walmart to VA for use by homeless and destitute veterans. Godbolt typically picked up donated items from the Walmart distribution center in Buckeye, Arizona, and transported the donations in a truck belonging to Voluntary Services. On numerous occasions, instead of taking the donations to VA facilities in Phoenix, Godbolt stole the items and placed them in his personal storage lockers. He was sentenced to five years of supervised probation and ordered to pay $95,000 in restitution to VA. The VA OIG conducted this investigation.
- Former Pharmacy Technician Pleaded Guilty to Multimillion-Dollar Kickback Conspiracy
Alisa Catoggio of Boca Raton, Florida, a former pharmacy technician and high-level executive assistant, has pleaded guilty to her role in a multimillion-dollar kickback conspiracy that defrauded TRICARE and CHAMPVA through a South Florida compounding pharmacy. Catoggio admitted that she was involved in a scheme that paid approximately $40 million in kickbacks to patient recruiters in exchange for their referring prescriptions issued to TRICARE and CHAMPVA beneficiaries to a Broward compounding pharmacy. The prescriptions were for expensive pain creams, scar creams, vitamins, and other medically unnecessary compound drugs, which were reimbursed at amounts of up to $15,000 for a one month’s supply. In addition, the Broward pharmacy did not charge the beneficiaries the mandatory copayments for the drugs, which constituted another form of illicit kickback. The coconspirators used phony charities to conceal this “no-copayment” kickback activity. The VA OIG, the Department of Defense Inspector General’s Defense Criminal Investigative Service, and the FBI Miami Field Office investigated this case.
- Self-Proclaimed Body Builder Pleaded Guilty to Theft of Government Funds
A VA OIG investigation found that Zachary Barton, a South Florida veteran and self-proclaimed bodybuilder, exaggerated his mental and physical impairments to increase the disability payments he received from VA. Barton admitted he lied on a mental health test by reporting to VA that he had been in combat, qualifying him for posttraumatic stress disorder benefits. He also falsely reported that he could not lift more than 10 to 20 pounds or walk without a cane. Based on these lies, VA found Barton was 100% disabled, when in fact Barton would routinely drive, walk his pet, go shopping, and perform strenuous weight-lifting with no difficulty. As a result of his misrepresentations, Barton received approximately $245,000 in VA benefits to which he was not entitled.
- Houston-Area Pharmacy Owners, Pharmacists, and Doctor Charged in Kickback Scheme
Six Texas men were indicted on multiple charges related to a healthcare fraud scheme involving two local pharmacies and a pain clinic. The defendants include the owners of the two pharmacies, one of whom also owned the pain clinic; one doctor employed at the pain clinic; two pharmacists; and one other coconspirator whose role was to recruit and refer federal employee patients to the clinic. The defendant doctor would see these patients and prescribe them unnecessary drugs at the request of the clinic’s owner, who paid him kickbacks. The charges also allege that the two pharmacist defendants would also be paid in kickbacks to fill compounded drug prescriptions. The pharmacies allegedly billed the Department of Labor Federal Employee Compensation Program, and once they received the funds, the two owners would disburse it among the coconspirators. If convicted, the defendants face up to five years in federal prison for the conspiracy and up to 10 years for the related healthcare fraud charges. The two owners were also charged with conspiracy to launder money and face another 10 years-in prison. The VA OIG, Department of Labor OIG, and US Postal Service OIG conducted the investigation, with the assistance of the FBI and Defense Criminal Investigative Service.
- Florida Man Sentenced to 120 Months in Prison for Role in $50 Million Healthcare Fraud and Kickback Scheme
Pat Truglia of Parkland, Florida, was sentenced to 120 months in prison for his role in a healthcare fraud and kickback scheme. Truglia and his coconspirators defrauded healthcare benefit programs by offering, paying, soliciting, and receiving kickbacks and bribes in exchange for completed doctors’ orders for durable medical equipment, namely orthotic braces. Truglia previously pleaded guilty to conspiracy to commit healthcare fraud. Two codefendants, Nicholas Defonte and Christopher Cirri, both of Toms River, New Jersey, previously pleaded guilty to the same conspiracy and are awaiting sentencing. In addition to the prison term, Truglia was sentenced to three years of supervised release, restitution of close to $34 million, and forfeiture of approximately $9.5 million.
- Missouri Man Sentenced for Fraud Scheme
Stephon Ziegler of Weatherby Lake, Missouri, was sentenced in federal court to 12 months in prison without parole for falsely claiming ownership in a firm that fraudulently received hundreds of millions of dollars in government contracts set aside for service-disabled veterans and certified minorities. Ziegler, an African American service-disabled veteran, admitted that he falsely claimed to be the owner of Zieson Construction Company, a Missouri corporation whose primary business was obtaining federal construction contracts set aside for award to qualified small businesses. Zieson used Ziegler’s status to compete for federal contracts designated for businesses owned by service-disabled veterans and minorities. Between 2009 and 2018, Zieson was awarded approximately 199 federal contracts for which the government paid Zieson approximately $335 million. The VA OIG helped in this multiagency investigation.
- Georgia Man Sentenced to 40 Months in Federal Prison for Defrauding Nonprofit Group
Kentey Ramone Fielder of Augusta, Georgia, was sentenced in federal court to 40 months in prison and three years of supervised release for defrauding a nonprofit group. According to a multiagency investigation, Fielder and his company, Clean Contracting Services (CCSI), fraudulently obtained a contract to perform janitorial services at the Army’s Yakima Training Center, despite being disqualified from federal contracting in 2014. After obtaining the contract, Fielder posed as a government contracting official and contacted Yakima Specialties, a Yakima-based nonprofit group, and claimed that it had been awarded the contract. Yakima Specialties then performed the work but was unable to obtain payment because it did not have the real contract. Fielder then billed for and received payment for the work under CCSI. This contract was one of many that Fielder received using this fraudulent scheme. Fielder pleaded guilty to wire fraud and aggravated identity theft.
- Massachusetts Man Indicted for Sending Threatening Communications
Drummond Neil Smithson was indicted on one count of use of interstate communications to transmit a threat to injure. On or about July 19, 2020, Smithson, an Army veteran, mailed a threatening communication from Ayer, Massachusetts, to VA threatening to injure members of Moms Demand Action, a grassroots organization advocating for the end to gun violence. The charge provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of $250,000. This investigation was conducted by the VA OIG, FBI, and Federal Medical Center, Devens.
- Texas Pharmacist Pleaded Guilty for Role in Healthcare Fraud Conspiracy
Jada Gilbert, the pharmacist-in-charge at Blue Ribbon Pharmacy in Harris County, Texas, billed healthcare insurance programs for high-adjudication pharmaceutical medications without dispensing them to beneficiaries. When pharmacy benefit managers conducted audits of the pharmacy, Gilbert conspired with a wholesale pharmaceutical company to produce forged documentation to prevent the recovery of at least $330,000. The owner of the wholesale pharmaceutical company was previously charged with false statements related to healthcare matters, wire fraud, conspiracy to defraud the United States, and hoarding designating scarce materials. Gilbert pleaded guilty in the Southern District of Mississippi to conspiracy to commit healthcare fraud. The investigation was conducted by the VA OIG, FBI, and the Food and Drug Administration’s Office of Criminal Investigations.
- Jacksonville Man Sentenced to Federal Prison for Stealing His Twin’s Identity to Obtain Veterans Benefits
Wayne Bowen of Jacksonville, Florida, was sentenced to two years in federal prison after pleading guilty to aggravated identity theft. He was also ordered to reimburse various federal agencies close to $64,000 for government benefits that he had received in connection with his identity theft scheme. According to court documents, in 2014, Bowen used the name, Social Security card, and military discharge papers of his estranged twin brother to apply for federally subsidized housing benefits. The specific subsidy—intended for indigent military veterans—was funded under a joint program administered by VA and the Department of Housing and Urban Development (HUD). Unlike his twin, Bowen is not a military veteran. This case was investigated by the VA OIG, HUD OIG, and the US Department of Agriculture OIG.
- Two Louisiana Men Sentenced for Fraud
Joseph Campo of New Orleans, Louisiana, and Mario Deluca of Metairie, Louisiana, were sentenced for their roles in a healthcare fraud conspiracy. From about March 2014 to October 2016, the two defendants knowingly and willfully executed a scheme and artifice to defraud TRICARE and other healthcare benefit programs. Campo was sentenced to 28 months of imprisonment and $3 million in restitution; Deluca was sentenced to 36 months of probation and $777,000 in restitution. The VA OIG helped in this multiagency investigation.
- The VA OIG Helped in Nationwide Coordinated Law Enforcement Action to Combat COVID-19 Fraud
The Department of Justice (DOJ) today announced criminal charges against 21 defendants in nine federal districts across the United States for their alleged participation in various health care–related fraud schemes that exploited the COVID-19 pandemic. These cases allegedly resulted in over $149 million in COVID-19-related false billings to federal programs and theft from federally funded pandemic assistance programs. In connection with the enforcement action, DOJ seized over $8 million in cash and other fraud proceeds. Several cases announced today involve defendants who allegedly offered COVID-19 testing to induce patients to provide their personal identifiable information and a saliva or blood sample. The defendants then allegedly used the information and samples to submit false and fraudulent claims to Medicare for unrelated, medically unnecessary, and far more expensive tests or services. Today’s announcement also included charges against manufacturers and distributors of fake COVID-19 vaccination record cards who, according to the allegations, intentionally sought to obstruct the Department of Health and Human Services and Centers for Disease Control and Prevention in their efforts to administer the nationwide vaccination program and provide Americans with accurate proof of vaccination. The VA OIG was one of several agencies that participated in this law enforcement action.
- Two Texas Marketers Sentenced for Kickback Scheme
Johnathon Yates Boyd III of Katy, Texas, was sentenced to 12 months of probation and more than $391,000 in restitution, and Bryan Fred Woodson of Beach City, Texas, was sentenced to 12 months of probation and more than $553,000 in restitution for helping orchestrate a kickback scheme. The scheme involved physicians who were recruited to receive kickback payments in exchange for writing and referring expensive compounded drug prescriptions to OK Compounding, a company controlled and operated by two other defendants. Boyd and Woodson, who both pleaded guilty to conspiracy to pay kickbacks, were responsible for forming R&A Marketing Group LLC, a company that recruited the physicians and introduced them to OK Compounding.
- Owner and Operator of Insurance Agency Convicted of Stealing Government Benefits
Patrick Quinn of Arlington, Massachusetts, was convicted of two counts of theft of public funds and two counts of making false statements. Since January 2012, Quinn stole more than $420,000 in veteran and social security benefits by falsely telling VA and the Social Security Administration (SSA) that he was unable to work due to a disability, when he owned and operated Quinn Insurance Group, Inc. The investigation was conducted by the VA OIG and the SSA OIG.
- Prolific Fraudster Sentenced to 18 Months in Prison
Ramón Julbe-Rosa was sentenced to 18 months in prison and close to $271,000 in restitution after pleading guilty to theft of government property and introducing unapproved new drugs into the United States. He defrauded the Social Security Administration and Medicare by receiving Social Security Disability Insurance Benefit payments while working. He also committed fraud against VA for fraudulently receiving unemployability benefits and against the Small Business Administration in connection with Major Disaster or Emergency Benefits related to Hurricane María. The VA OIG participated in this multiagency investigation.
- Physician Partners of America to Pay $24.5 Million to Settle Allegations of Unnecessary Testing
Rodolfo Gari, founder of Physician Partners of America LLC, headquartered in Tampa, Florida, and its former chief medical officer, Dr. Abraham Rivera, have agreed to pay $24.5 million to resolve allegations that they violated the False Claims Act by billing federal healthcare programs for unnecessary medical testing and services, paying unlawful remuneration to its physician employees, and making a false statement in connection with a loan obtained through the Small Business Administration’s Paycheck Protection Program. The VA OIG helped with this multiagency investigation.
- Former VA Pharmacist Sentenced for Stealing Painkillers Meant for Veterans
Matthew Camera, a resident of Erie, Pennsylvania, was sentenced in federal court to two years of probation for violating federal drug laws. According to information presented to the court, from January 2017 to June 2020, while Camera was employed as the pharmacy chief at the Erie VA Medical Center, he unlawfully obtained multiple dosage units of hydrocodone and oxycodone from pill bottles awaiting delivery to VA patients. The VA OIG investigated this case.
- Doctor Pleaded Guilty to Workers’ Comp Fraud Conspiracy
Robert Clay Smith, a Louisiana physician, pleaded guilty to conspiracy to commit healthcare fraud, wire fraud, and illegal remunerations (taking kickbacks). According to court documents, the scheme, which ran from 2013 until 2017, involved individuals associated with a medical supply and billing company recruiting Smith to dispense pain creams and patches to his workers’ compensation patients by offering him a split of the profits. The company acted as the billing agent for Smith, handling all the paperwork and submitting the allegedly fraudulent claims to the US Department of Labor, Office of Workers’ Compensation Programs and to private insurers. In exchange, the company paid Smith 50 to 55 percent of the profits collected from successfully billing insurers, at markups of 15 to 20 times what the medications cost.
- New York Man Charged with Lying to Federal Aviation Administration
Noah Felice of Fayetteville, New York, was arraigned after being charged in an indictment with lying to the Federal Aviation Administration (FAA). According to the indictment, in September 2017, Felice made false statements to the FAA on a Form 8500-8, which is an application pilots submit to the FAA to renew their medical certifications. The indictment alleges that Felice stated on the form that he had no history of criminal convictions and had never received medical disability benefits, when he knew that he had been convicted of multiple prior misdemeanor offenses and was receiving disability benefits from VA. This case is being investigated by the VA OIG and Department of Transportation OIG.
- Pharmacy President Admitted to Role in $34 Million Compound Medication Scheme
Robert Schneiderman of Langhorne, Pennsylvania, admitted to participating in a massive compounded-medication kickback scheme that he and others ran out of a pharmacy in Clifton, New Jersey. Schneiderman pleaded guilty in federal court to one count of conspiracy to commit healthcare fraud and one count of conspiracy to violate the Anti-Kickback Statute. From 2014 through 2016, Schneiderman and his coconspirators used Main Avenue Pharmacy, a mail-order pharmacy with a storefront in New Jersey, to run a fraud and kickback scheme involving compounded drugs like scar creams, pain creams, migraine mediation, and vitamins. Schneiderman was the president of Main Avenue Pharmacy and was a founder and CEO of its corporate parent. On compounded medications alone, Main Avenue Pharmacy received over $34 million in reimbursements from healthcare benefit programs. Approximately $8 million of that total was paid by federal payers. Schneiderman himself earned over $400,000 through the course of the scheme. This case was investigated by the VA OIG, FBI, Department of Defense OIG, Defense Criminal Investigative Service, and Department of Health and Human Services OIG.
- Pennsylvania Doctor Agreed to Pay $3 Million to Resolve Alleged Violations of the False Claim Act
Dr. Harry Doyle, a psychiatrist from Philadelphia, Pennsylvania, and his wife, Sonya Doyle, have agreed to pay a total of $3 million to resolve alleged violations of the False Claims Act. The alleged violations include submitting false billing to the US Department of Labor Office of Workers’ Compensation Programs (OWCP) for psychiatric services that were not provided, as well as upcoding and double-billing patient claims. As part of the settlement, the Doyles have also agreed to be voluntarily excluded from federal healthcare programs for a period of 25 years. This is the largest recovery against a single psychiatrist in the history of the OWCP. A multiagency investigation of Dr. Doyle’s practice revealed that from January 2013 through April 2021, the Doyles allegedly billed for services not rendered, some of which occurred when they were not physically present in the United States. This case was investigated by the VA OIG, the Department of Labor OIG, and the United States Postal Service OIG.
- Ten Texas Doctors and a Healthcare Executive Agreed to Pay over $1.68 Million to Settle Kickback Allegations
Ten Texas doctors and a healthcare executive have agreed to pay more than $1.68 million to resolve False Claims Act allegations involving illegal remuneration in violation of the Anti-Kickback Statute and Stark Law. According to a multiagency investigation, from 2015 to 2018, the doctors allegedly received thousands of dollars in illegal remuneration from eight management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital doing business as Little River Healthcare, True Health Diagnostics LLC, and Boston Heart Diagnostics Corporation. Little River funded the illegal remuneration to the doctors in the form of volume-based commissions paid to independent contractor recruiters, who used the MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals. As part of their settlements, the defendants have agreed to cooperate with the Department of Justice’s investigations of other parties involved in the alleged violations of law. To date, a total of 17 doctors and two healthcare executives involved in this scheme have agreed on settlements totaling more than $2.7 million. The civil settlements were the result of a coordinated effort between the VA OIG, Department of Health and Human Services OIG, Defense Criminal Investigative Service, and the US Attorney’s Office for the Eastern District of Texas.
- Michigan Woman Defrauded VA Using Two Fictitious Children
From 2002 to 2019, Terrie Lynn Christian of Newaygo, Michigan, engaged in a fraudulent scheme that targeted children’s benefits programs administered by VA and the Social Security Administration (SSA). This scheme, which involved obtaining benefits for two fictitious children, resulted in government losses of over $660,000, including approximately $110,000 for VA. Christian was sentenced in US District Court to 30 months in prison, three years of supervised release, and restitution of over $660,000. The VA OIG and SSA OIG investigated this case.
- Georgia Man Sentenced for Role in Identity Theft Scheme
According to a multiagency investigation, multiple individuals in Jamaica engaged in a scheme that involved redirecting the monthly benefit payments of veterans and Social Security recipients to alternate bank accounts. The stolen funds were then allegedly loaded onto prepaid credit cards and mailed to coconspirators in the Miami and Atlanta areas. These individuals also participated in telemarketing scams that targeted elderly US citizens, including veterans. One defendant was sentenced in the Southern District of Florida to 78 months of incarceration and restitution of over $900,000. The VA OIG, Homeland Security Investigations, and US Postal Inspection Service conducted the investigation. To date, 18 coconspirators have been indicted in connection with this scheme, 15 of whom have been sentenced to a combined 637 months of incarceration, 456 months of supervised release, 36 months of probation, and over $4 million in restitution. The loss to VA is more than $7 million.
- Rhode Island Woman Arrested for Falsifying Military Service and Fraudulently Collecting Donations Intended for Wounded Veterans
Sarah Jane Cavanaugh of Warwick, Rhode Island, was arrested on charges of using forged or counterfeited military discharge certificates, wire fraud, fraudulently holding herself out to be a medal recipient with intent to obtain money, property, or other tangible benefit, and aggravated identity theft. It is alleged that Cavanaugh claimed to be a wounded US Marine Corps veteran and recipient of a Purple Heart and Bronze Star and schemed to collect hundreds of thousands of dollars in veteran benefits and charitable contributions from organizations that provide monetary aid to veterans in need.
- Jury Convicts Two Texas Men on Federal Fraud and False Statements Charges
Nick L. Medeiros and Bobby D. Greaves, both of San Antonio, Texas, were found guilty of federal fraud and false statements charges by a jury in Albuquerque, New Mexico. A federal grand jury indicted Medeiros and Greaves on June 13, 2018, charging the two men with conspiracy, major fraud against the United States, and two counts of false statements. On March 10, 2020, a federal grand jury returned a four-count superseding indictment charging Medeiros and Greaves with unlawfully obtaining more than $3 million in government contracts by falsely and repeatedly representing to the United States that Medeiros, a service-disabled veteran, was operating independently from Greaves, his brother-in-law. The indictment alleged that instead Medeiros relied on Greaves, who is not a veteran, to complete all his government contract work by providing the labor and equipment. “Conspiring to gain federal contracts set aside for service-disabled veterans is reprehensible,” said Special Agent in Charge Jeffrey Breen of the VA OIG’s South Central Field Office. “These guilty verdicts send a clear message that anyone who attempts to do so will be held accountable. We thank the U.S. Attorney’s Office and our other law enforcement partners for their efforts in this case.”
- Connecticut Man Admits Defrauding the VA to Receive Benefits
Derrick Brewer, of Enfield, Connecticut, pleaded guilty to one count of theft of government funds. In March 2018, Brewer submitted paperwork to the VA offices in Hartford as part of an application for service-connected disability benefits. Specifically, he submitted form DD-214, which indicated that his discharge from his former service in the U.S. Coast Guard was characterized as “Honorable.” However, the form had been altered prior to its submission. According to official Coast Guard records, Brewer’s discharge was characterized as “Other Than Honorable Conditions” following his convictions under the Uniform Code of Military Justice. There is no record of the discharge characterization ever being upgraded. As a result of this submission, Brewer collected nearly $70,000 in VA benefits from March 2018 through September 2020. Sentencing is scheduled for May 27, 2022.
- Former Chief of Cardiology at Palo Alto VA Hospital Pleads Guilty to Sexual Battery
Former VA cardiologist John Giacomini, of Atherton, California, pleaded guilty to one count of felony abusive sexual contact. Beginning in the fall of 2017, Giacomini repeatedly subjected a subordinate electrophysiologist to unwanted and unwelcome sexual contact, to include hugging, kissing, and intimate touching while on VA premises. On November 10, 2017, the victim explicitly told Giacomini she was not interested in a romantic or sexual relationship with him. Nevertheless, Giacomini continued to subject his subordinate to unwanted sexual advances and touching, culminating on December 20, 2017, when Giacomini turned out the lights in an office, pulled the victim out of her chair, and fondled her until a janitor opened the office door and interrupted the encounter. The victim later resigned from her position at the VA, citing Giacomini’s behavior as her principal reason for leaving. Sentencing is scheduled for July 12, 2022.
- Two Arkansas Men Indicted on Fraud Charges
Hunter Matthew Burroughs and Stephen Keith Andrews were indicted by a federal grand jury in Fort Smith, Arkansas, for their roles in three separate conspiracies to defraud the US government and private workers’ compensation insurers. Their alleged crimes include a billing and kickback fraud scheme with multiple physicians and medical clinics and separate fraud schemes involving the shipment of medications from Arkansas to two Louisiana physicians, who then distributed those medications from their clinics in violation of Louisiana laws. Additionally, Burroughs was charged with wire fraud for allegedly falsifying emails he provided in a civil lawsuit involving his sale of the company.
- Massachusetts Woman Sentenced for Stealing Veterans Affairs Funds
Robin Calef, of Brockton, Massachusetts, was sentenced to one month in prison followed by three years of supervised release after previously pleading guilty to one count of theft of public funds in November 2021. She was also ordered to pay restitution in the amount of $102,289 to the VA. In December 2006, Calef’s sister, who was receiving VA monthly benefits, passed away. She failed to inform the VA of her sister’s death, and the VA continued to deposit monthly benefits into a joint bank account held by Calef and her sister until September 2017. Bank records revealed that Calef made monthly withdrawals of approximately the exact amount of VA benefit funds deposited into the joint account.
- Government Contractor to Pay Record $48.5 Million Settlement
TriMark USA—a contractor based in Mansfield, Massachusetts, that provides kitchen and food service equipment to federal customers—has agreed to pay $48.5 million to resolve allegations that its fraudulent actions led to federal agencies improperly awarding small business set-aside contracts to three small business with which TriMark worked. The settlement constitutes the largest-ever False Claims Act recovery based on allegations of small business contracting fraud. Between 2011 and 2021, TriMark identified federal set-aside contract opportunities for the small businesses to bid on using their set-aside status; instructed them on how to prepare their bids and what prices to propose; “ghostwrote” emails for those companies to send to government officials to make it appear as though the small businesses were performing work that TriMark was performing; and affirmatively concealed TriMark’s involvement in the contract. The case began in May 2019, when a whistleblower, a company known as Fox Unlimited Enterprises, filed a qui tam complaint under seal in the US District Court for the Northern District of New York. Per the False Claims Act, such complaints require the United States to investigate the allegations and elect whether to intervene and take over the action. In this case, the United States elected to intervene in the action in December 2021 and subsequently reached this settlement. Pursuant to the settlement agreement, Fox Unlimited Enterprises will receive $10.9 million of the settlement amount paid by TriMark. The VA OIG helped to investigate this case.
- New Jersey Man Sentenced to 42 Months in Prison for Stealing Government Property
Wagner “Wanny” Checonolasco of Lyndhurst, New Jersey, who previously pleaded guilty to conspiring to steal government property, was sentenced to 42 months in prison for his role in a scheme to steal more than $8 million worth of prescription HIV medication. According to an investigation by the VA OIG and FBI, from August 2017 to November 2019, Checonolasco conspired with Lisa M. Hoffman, a former pharmacy technician at the East Orange VA Medical Center, to steal HIV medication belonging to VA. Hoffman stole the medication from her employer and then sold it to Checonolasco for cash. In addition to the prison term, he was sentenced to three years of supervised release and ordered to pay restitution in the amount of $8.2 million. Hoffman, who previously pleaded guilty to her role in the scheme, is awaiting sentencing.
- Fiduciary Indicted for Misappropriating Funds
According to a VA OIG investigation, from March 2017 to March 2018, Robert Bruce Ralston of Evans City, Pennsylvania, who was the appointed fiduciary for a disabled veteran, caused 44 unauthorized withdrawals by check from the disabled veteran’s beneficiary account. The unauthorized checks totaled more than $34,000, which Ralston allegedly transferred to himself to pay phone bills, medical bills, and mortgage payments. Ralston was indicted by a federal grand jury on a charge of misappropriation by a fiduciary.
- Doctor Pleaded Guilty to Role in Compounded Drugs Scheme
Jerry May Keepers, 68, of Kingwood, Texas, pleaded guilty for writing and referring compounded drug prescriptions in return for illegal kickback payments. Keepers admitted that OK Compounding—a pharmacy controlled by two other defendants—solicited him to write prescriptions for his patients that would be filled by the pharmacy. On January 22, 2014, Keepers knowingly received $25,000 from representatives of OK Compounding, a payment he accepted to refer prescriptions for expensive compounded drugs. OK Compounding filled the medications and filed claims with several federal healthcare programs, including TRICARE, Medicare, CHAMPVA, and the Federal Employees Compensation Act Program. If his plea agreement is accepted, Keepers will serve 36 months of supervised probation and pay no more than $1.5 million in restitution. The investigation was conducted by the VA OIG, the Department of Labor OIG, IRS Criminal Investigation, US Postal Service OIG, FBI, the Department of Health and Human Services OIG, and Defense Criminal Investigative Service.
- Ten Individuals Indicted for $300 Million Healthcare Kickback Scheme
According to a multiagency investigation, the founders of several lab companies, including Unified Laboratory Services, Spectrum Diagnostic Laboratory, and Reliable Labs LLC, allegedly paid kickbacks to induce medical professionals to order medically unnecessary lab tests, which they then billed to Medicare and other federal healthcare programs. The medical professionals accepted the bribes and ordered millions of dollars’ worth of tests. Meanwhile, Unified, Spectrum, and Reliable disguised the kickbacks as legitimate business transactions, including as medical advisor agreement payments, salary offsets, lease payments, and marketing commissions. As a result of these kickbacks, the laboratories were able to submit more than $300 million in billing to federal government healthcare programs. Between 2015 and 2018, one doctor received more than $400,000 in kickbacks for ordering more than $4 million worth of lab tests, while another doctor received more than $300,000 in kickbacks for ordering more than $12 million worth of lab tests. Ten individuals, including the two doctors, have been indicted in connection with this scheme. If convicted, they face up to 55 years or more in federal prison. The investigation was conducted by the VA OIG, FBI, the US Department of Health and Human Services’ Office of Investigations, and the Defense Criminal Investigative Service.
- Rhode Island Pharmaceutical Sales Director Sentenced to Time Served
Robert A. Ronzio of North Providence, Rhode Island—the national sales director of the now-defunct New England Compounding Center (NECC)—was sentenced to time served for his role in conspiring to defraud the Food and Drug Administration (FDA). Ronzio and his coconspirators created numerous work-around methods to make it appear to federal and state regulators that NECC was dispensing drugs pursuant to valid patient-specific prescriptions, when in fact it operated as a manufacturer distributing drugs in bulk. The NECC criminal case arose from the nationwide outbreak of fungal meningitis that was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC. In 2012, 753 patients across 20 states were diagnosed with fungal infections after receiving these MPA injections, with more than 100 patients dying as a result. The outbreak was the largest public health crisis ever caused by a contaminated pharmaceutical drug. In December 2014, Ronzio and 13 other owners, employees, and associates of NECC were charged in a 131-count indictment. In December 2016, Ronzio pleaded guilty to one count of conspiring to defraud the FDA. He cooperated with the government and testified at the trials of three other NECC defendants.
- Florida Man Sentenced to 15 Years for Consecutive Healthcare Fraud Conspiracies
Patsy Truglia of Parkland, Florida, was sentenced to 15 years in federal prison for his role in two consecutive conspiracies to commit healthcare fraud. According to a multiagency investigation, from January 2018 to April 2019, Truglia and his coconspirators generated medically unnecessary physicians’ orders via a telemarketing operation for durable medical equipment (DME). Through the telemarketing operation, the personal and medical information of Medicare beneficiaries was harvested to create the unnecessary DME orders. The orders were then forwarded to purported “telemedicine” vendors that, in exchange for a fee, paid illegal bribes to physicians to sign the orders, often without ever contacting the beneficiaries. Truglia’s telemarketing operation used the orders as support for millions of dollars in false and fraudulent claims submitted to the Medicare program. To avoid Medicare scrutiny, Truglia spread the fraudulent claims across five DME storefronts operated under his ownership and control. The scheme led to about $25 million in fraudulent DME claims submitted to Medicare, resulting in approximately $12 million in payments. In April 2019, Truglia’s storefronts were subject to search warrants and a civil action under which, among other ramifications, enjoined Truglia and his five storefronts from engaging in any further healthcare fraud conduct. Undeterred, Truglia and other conspirators carried out a similar conspiracy using three new DME storefronts and different “telemedicine” vendors. This second conspiracy caused approximately $12 million in additional fraudulent DME claims to be submitted to Medicare, resulting in approximately $6.3 million in payments. In addition to his prison sentence, Truglia was ordered to pay $18.3 million in restitution.
- Prolific Fraudster Pleaded Guilty to Theft of Government Property
Ramón Julbe-Rosa pleaded guilty to 12 counts including theft of government property and introducing unapproved new drugs into the United States. His multiple fraud schemes included defrauding the Social Security Administration and Medicare by receiving Social Security Disability Insurance benefit payments while working; fraudulently receiving unemployability benefits from VA; and falsely stating that his primary residence—purported to be in Morovis, Puerto Rico—was damaged by Hurricane Maria, leading to the fraudulent approval of a Small Business Administration Disaster loan. In addition, Julbe-Rosa established and operated a website through which he promoted and sold various products intended as treatments for serious medical conditions without Food and Drug Administration approval. Julbe-Rosa was ordered to pay close to $217,000 in restitution, including approximately $119,000 to VA.
- Florida Man Pleaded Guilty to Stealing Twin’s Identity for VA Benefits
Wayne Bowen of Jacksonville, Florida, has pleaded guilty to aggravated identity theft for using his estranged identical twin brother’s name, Social Security card, and military discharge papers to apply for federally subsidized housing benefits. Due to his fraudulent use of his twin’s identity, Bowen received more than $32,000 in medical services from VA; close to $19,000 in housing subsidies from the Department of Housing and Urban Development; and more than $12,000 in nutritional benefits from the Department of Agriculture. Bowen’s brother confirmed that he did not apply for any of these benefits and that he never gave his twin permission to use his name. Bowen faces a mandatory sentence of two years in federal prison. He has agreed to repay approximately $64,000.
- Florida Pharmacy Executive Pleaded Guilty to $88 Million Healthcare Fraud
Matthew Smith of Palm Beach, Florida, has pleaded guilty to his role in a compounding pharmacy scheme that defrauded the Department of Defense’s Tricare and VA’s CHAMPVA benefit programs of approximately $88 million. Smith admitted to his role in fraudulently billing the two insurance providers for expensive, medically unnecessary compound drugs. To further the scheme, Smith and his coconspirators paid approximately $40 million in kickbacks to patients, patient recruiters, and doctors in exchange for them ordering expensive pain creams, scar creams, and vitamins without regard to the patients’ medical needs. He faces up to 10 years in federal prison.
- Seven Doctors to Pay Settlement over Kickback Allegations
Seven Texas doctors have agreed to pay more than $1.1 million to resolve False Claims Act allegations involving illegal remuneration in violation of the Anti-Kickback Statute and Stark Law. According to a multiagency investigation, from 2015 to 2018, the doctors allegedly received thousands of dollars in illegal remuneration from eight management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital doing business as Little River Healthcare, True Health Diagnostics LLC, and Boston Heart Diagnostics Corporation. Little River funded the illegal remuneration to the doctors in the form of volume-based commissions paid to independent contractor recruiters, who used the MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals. As part of their settlements, the physicians have agreed to cooperate with the Department of Justice’s investigations of other parties involved in the alleged violations of law.
- Louisiana Woman Sentenced for Role in Healthcare Fraud Scheme
Bonnie Jean Lawless Diaz of Slidell, Louisiana, was sentenced to 36 months of probation after pleading guilty in federal court relating to her role in a healthcare fraud conspiracy. According to a multiagency investigation, Diaz’s employer, Prime Pharmacy Solutions, colluded with physicians to provide compounding medication to CHAMPVA and TRICARE beneficiaries, even though the medication was not medically necessary or no doctor–patient relationship existed. The company billed CHAMPVA close to $619,000 for five VA beneficiaries and the TRICARE program for approximately $14 million. As the office manager for Prime Pharmacy Solutions, Diaz had knowledge of the fraud scheme and concealed it by knowingly submitting payment requests for the unnecessary compounded medications. She pleaded guilty to misprision (or knowing concealment). In addition to her probation sentence, Diaz was ordered to pay $180,000 in restitution.
- Four Anchorage Individuals Sentenced for Scheme to Defraud VA
Donald Garner, Richard Vaughan, Yalonda Moore, and Dale Johnson—all from Anchorage, Alaska—were sentenced for their involvement in a bribery and fraud scheme to obtain service-disabled veteran-owned small business (SDVOSB) government contracts with VA. Garner was a government contractor who, through his company Veteran Ability, provided various services to the US government, including VA. Vaughan worked at the Anchorage VA as a contract officer representative responsible for awarding and managing numerous contracts. Between 2015 and 2017, Garner directed Moore, his bookkeeper, to deliver over $29,000 in bribe payments to Vaughan. In exchange, Vaughan would select Veteran Ability to complete dozens of “purchase card” jobs, totaling more than $100,000. Vaughan also approved invoices submitted by Garner related to a snow removal contract for work that was either unnecessary or never performed, causing the government about $347,000 in losses. Additionally, between 2014 and 2016, Johnson, who was the owner of ADALECO General LLC, conspired with Garner to perpetrate a “pass-through” scheme in which Johnson allowed Garner to use ADALECO’s name to obtain SDVOSB set-aside contracts for which Garner’s company was not eligible, including the VA snow removal contract. Garner and Vaughan each pleaded guilty to one count of bribery involving a public official and were sentenced to one year and one day in federal prison, followed by three years of supervised release. They each must also pay $347,000 in restitution. Johnson pleaded guilty to one count of conspiracy to defraud the United States and was sentenced to five years’ probation and ordered to pay over $54,000 in restitution. Moore pleaded guilty to one count of obstruction of justice and was sentenced to three years’ probation.
- Owner of Diving School Sentenced to 27 Months in Prison for Wire Fraud
From January 2012 through July 2018, Tamara Brown of Haddon Heights, New Jersey, owned a private, for-profit commercial diving school that offered educational programs in commercial diving. As a for-profit institution, the diving school was required to be accredited through an approved accreditation body to be eligible to receive tuition funds from the Department of Education’s Higher Education Act programs. VA also relies upon the accreditation in evaluating the eligibility of veteran students to receive student aid funding. When renewing the diving school’s accreditation in 2012, Brown submitted fraudulent information to the accrediting authority regarding employment rates of the school’s graduates and wholly fabricated meeting minutes for advisory board meetings purportedly held by the school, which are required for accreditation. Brown was sentenced to 27 months in prison, three years of supervised release, a fine of $50,000, and $1.1 million in restitution.
- Georgia Man Who Stole VA and Social Security Benefits Sentenced to Federal Prison
According to a multiagency investigation, from 2012 to 2017, Jamare Mason of Snellville, Georgia, and his coconspirators obtained the personal information of disabled veterans and Social Security beneficiaries and used this information to fraudulently open bank accounts and prepaid debit cards in the victims’ names. They also forged documents that directed VA and the Social Security Administration to deposit benefit payments into those fraudulent accounts. The defendant’s scheme attempted to redirect over $1.8 million in benefits from more than 100 disabled veterans and Social Security beneficiaries, resulting in the actual loss of over $1 million. Mason was sentenced to 78 months in federal prison, five years of supervised release, and $1.3 million in restitution.
- Former Biloxi VA Employee Sentenced to Prison for Stealing VA Property
Chad Jacob of Saucier, Mississippi, was sentenced to 12 months in federal prison for stealing government property, including personal protective equipment, electronics, and medical equipment, while working as the assistant chief of supply chain management for the Gulf Coast Veterans Health Care System. In 2019 and 2020, Jacob stole items belonging to VA and resold them to local pawn stores and on his personal eBay account. In total, Jacob made more than $50,000 selling the stolen N95 masks and over $9,000 selling stolen iPads and iPhones. He was also ordered to pay a $40,000 fine and more than $23,000 in restitution to VA.
- California Man Indicted for Stealing Identity of Army Veteran
Kevin Middleton of Los Angeles, California (formerly of Brooklyn, New York), was indicted on multiple charges for allegedly using the identity of a veteran to apply for government benefits. Starting in 2018, Middleton posed as the veteran to obtain multiple identification cards, including a DMV identification card, Social Security card, and New York State identification card, and used these fraudulent identification cards to obtain a replacement VA card, which allowed him to receive social services from VA. In September 2018, VA social workers assisted Middleton with his application for Section 8 housing in the veteran’s name, which the New York City Housing Authority expedited because of his status as a military veteran. The Department of Housing and Urban Development paid more than $35,000 to subsidize the defendant’s rent. Using the veteran’s identity, Middleton also received $1,000 in benefits from the Supplemental Nutrition Assistance Program. Middleton was indicted for identity theft, criminal impersonation, grand larceny, welfare fraud, and a host of other charges.
- Albany Woman Charged with Burglarizing VA Property
Jamie Varieur of Albany, New York, was arrested for allegedly burglarizing a dwelling located at the Albany Stratton VA Medical Center. According to the complaint, Varieur broke into and entered the Fisher House—a home on VA property where military and veteran families can stay while a loved one is in the hospital—and stole various items from the kitchen. The case is being investigated by the VA OIG, Albany Police Department, and VA Police Service.
- Business Owner Sentenced for Fraud Scheme
Matthew C. McPherson of Olathe, Kansas, was sentenced to two years and four months in federal prison without parole for defrauding the government. From September 2009 to March 2018, McPherson participated in a conspiracy to obtain contracts set aside by the federal government for award to small businesses owned and controlled by veterans, service-disabled veterans, and certified minorities. McPherson, who is neither a certified minority nor a veteran, owned and operated construction companies that used the veteran and/or minority status of coconspirators to obtain federal contracts to which the companies would otherwise not be entitled. The companies received approximately $346 million in federal contracts. On June 3, 2019, McPherson pleaded guilty to one count of conspiracy to commit wire fraud and major program fraud. In addition to his prison sentence, McPherson has forfeited to the government more than $5.5 million, which represents his share of the fraud proceeds.
- Montana Vascular Surgeon to Settle Healthcare Fraud Claims for $3.7 Million
Dr. David Bellamah, a vascular surgeon who operates vein and surgery centers in Missoula and Kalispell, Montana, has agreed to pay the federal government $3.7 million to settle alleged False Claims Act violations. According to the civil complaint, from January 1, 2015, to March 31, 2017, Bellamah performed medically unnecessary surgeries based on improper techniques and submitted fraudulent bills for payment to four federal healthcare programs, including Medicare, Medicaid, TRICARE, and CHAMPVA. The settlement agreement between Bellamah and the US Attorney’s Office for the District of Montana, Department of Health and Human Services OIG, Defense Health Agency, VA, and a third party directs Bellamah to pay approximately $1.9 million in restitution and $1.8 million in additional damages.
- North Carolina Home Health Services Company to Settle False Claims Act Allegations Related to Death of a Veteran
Professional Family Care Services, Inc. (PFCS), a home health services company based in Fayetteville, North Carolina, has agreed to pay more than $45,000 to settle civil False Claims Act allegations related to fraudulent billings for work by a recently convicted felon under their employ. During 2015 and 2016, PFCS billed VA for home health services provided to W.R., an Army veteran, even though, at that time, W.R. was residing with the company’s employee, Certified Nurse Aide Tracey McNeill. PFCS based its billing for those services on falsified timesheets provided by McNeill, who failed to provide both the time and quality of care required under the VA program. After several months living with McNeill, purportedly receiving home health services provided by McNeill through PFCS, W.R. had to be admitted to the hospital. He was extremely malnourished and ultimately died within a few days of his admission. Earlier in 2021, McNeill was convicted of wire fraud for her misconduct related to W.R., sentenced to 12 months and one day in federal prison, and ordered to pay over $90,000 in restitution.