Chicago’s Sacred Heart Hospital Owner, Executive, and Four Doctors Arrested in Alleged Medicare Kickback www.privateofficer.com
U.S. Attorney’s Office
CHICAGO IL April 17 2013—The owner and another senior executive of Sacred Heart Hospital and four physicians affiliated with the west side facility were arrested today for allegedly conspiring to pay and receive illegal kickbacks, including more than $225,000 in cash, along with other forms of payment, in exchange for the referral of patients insured by Medicare and Medicaid to the hospital, announced U.S. Attorney for the Northern District of Illinois Gary S. Shapiro.
Agents from the FBI and the U.S. Department of Health and Human Services Office of Inspector General today also began executing search and seizure warrants in connection with an ongoing investigation of alleged Medicare and Medicaid fraud schemes at the hospital involving emergency room evaluation, testing, and observation services that were not medically necessary, as well as medically unnecessary sedation, intubation, and tracheotomy procedures performed on patients. Approximately $2 million in Medicare reimbursement payments was seized today from various bank accounts.
Arrested were Edward J. Novak, 58, of Park Ridge, Sacred Heart’s owner and chief executive officer since the late 1990s; Roy M. Payawal, 64, of Burr Ridge, executive vice president and chief financial officer since the early 2000s; and Drs. Venkateswara R. “V.R.” Kuchipudi, 66, of Oak Brook, Percy Conrad May, Jr., 75, of Chicago, Subir Maitra, 73, of Chicago, and Shanin Moshiri, 57, of Chicago.
Sacred Heart Hospital is a 119-bed acute care facility located at 3240 West Franklin Blvd. in Chicago. Approximately 40 in-patients were in the hospital this morning, and representatives of the HHS Centers for Medicare and Medicaid Services (CMS) were on site and coordinating with the Illinois Department of Healthcare and Family Services to ensure continuity of patient care.
“These charges and the affidavit’s other allegations outline a kickback conspiracy to bribe doctors to refer patients to Sacred Heart where they would be treated in in an environment in which the quality of care and appropriate medical analysis were less important than maximizing the numbers of patients funneled into the hospital,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.
“The payment of kickbacks or bribes in exchange for the referral of Medicare or Medicaid patients, regardless of the form in which they are paid, is a crime,” said Lamont Pugh, III, Special Agent in Charge of the Chicago Region of HHS-OIG. “The Office of Inspector General will continue to work closely with our law enforcement partners to aggressively investigate alleged illegal patient referral schemes and hold accountable those who seek to exploit vulnerable patients and the Medicare and Medicaid programs.”
“Today’s arrests demonstrate our commitment to enforcing the laws intended to prevent abuses of the Medicare and Medicaid programs and to preserve the ability of those programs to provide appropriate medical services to the elderly and the needy,” said Cory B. Nelson, Special Agent in Charge of the Chicago Office of the Federal Bureau of investigation.
The defendants were charged in a complaint that was filed yesterday and unsealed today after the arrests. All six defendants were scheduled to appear beginning at 3 p.m. before U.S. Magistrate Judge Daniel Martin in Federal Court.
A 90-page affidavit in support of the criminal complaint and search and seizure warrants states that former Sacred Heart Physician A began cooperating in the investigation in October 2011, and Administrator A and Administrator B began assisting in January 2013 and February 2012, respectively. Each of them made consensual recordings of meetings and telephone conversations with other executives, administrators, physicians, and employees that are described in the affidavit.
According to the complaint—at Novak’s direction and with his approval and Payawal’s assistance—Sacred Heart implemented a scheme to pay kickbacks to physicians in return or referrals of Medicare and Medicaid patients. Novak and Payawal allegedly tried to conceal the scheme by masking payments as fictitious rental payments; paying the salaries of physicians’ employees; providing physicians ghost contracts for duties without any real responsibilities; creating alternative billing arrangements; and purporting to pay physicians to supervise and teach non-existent medical students.
In a conversation that Administrator A recorded on February 28, 2013, Novak and Payawal allegedly identified Drs. Moshiri, Maitra and May as physicians receiving regular kickback payments who Administrator A should pay.
Between January 2010 and February 2013, May allegedly received $74,000 in the form of 37 checks, for $2,000 each, disguised as “rental payments”; Moshiri, a podiatrist, allegedly received $86,000 in 38 checks pursuant to a purported contract to teach podiatry students; and Maitra allegedly received $68,000 in 34 checks pursuant to a purported teaching contract—and the $228,000 total in alleged kickbacks were all in exchange for their referral of patients to Sacred Heart, the charges allege.
In a recorded conversation last month, Maitra allegedly explained to Administrator A that he used to make Novak “so much money” performing almost daily penile implant procedures on patients, but that he no longer performed as many of those procedures because Medicare had decreased its rates of reimbursement for the procedure. Maitra did not comment on whether the patient need for the procedure had somehow changed, according to the affidavit.
Regarding Dr. Kuchipudi, Administrator A told agents that he was one of Sacred Heart’s most prolific patient referral sources and, according to Physician A, was known within the hospital as the “king of nursing homes.” According to Administrator A, Sacred Heart paid Kuchipudi for Medicare patient referrals in two ways: first, by paying most of the salaries of a physician’s assistant and a registered nurse who were effectively employed by Kuchipudi, and second, by paying Physician B for treating Kuchipudi’s patients at Sacred Heart, despite the fact that Kuchipudi, and not the hospital, billed insurers for the services Physician B provided to those patients. These arrangements allegedly benefited Kuchipudi as a result of the hospital absorbing employee salary costs that Kuchipudi would normally have to pay himself.
The investigation is also probing claims that Sacred Heart Physician D, a pulmonologist, allegedly performs a high number of unnecessary intubations and prolongs them by directing heavy sedation of his patients, often resulting in tracheotomies being performed by Sacred Heart surgeons that may not have been medically necessary. Administrator A told agents that during a lunch with Novak and Payawal in December 2012, they both explained that tracheotomy cases provide substantial insurance reimbursement income for the hospital. On March 1, 2013, Administrator A recorded Novak stating that tracheotomies are Sacred Heart’s “biggest money maker” and the hospital can make $160,000 for a tracheotomy if the patient stays 27 days. On March 7, 2013, the Intensive Care Unit case manager told Administrator A that she must often “stretch” a tracheotomy patient’s stay to 28 days to maximize Medicare reimbursements “to make Novak happy.”
Novak’s Business Interests
According to the affidavit, Novak has direct or indirect ownership interest in various related entities, including Superior Home Health LLC, a home health care company; the Golden L.I.G.H.T. clinics, which are family practice/internal medicine clinics operated as divisions as Sacred Heart; the Chen Medical center; the Garfield Kidney Center LLC, an outpatient dialysis center; and the Bentley Insurance Group, a medical malpractice insurance company. Novak also owns various real estate and corporate management holding companies, and prior to June 2012, he operated the Chicago R.E.A.C.H Foundation, a purported non-profit, senior citizen program financed by the state of Illinois.
In a series of recorded conversations over the last two months, Payawal told Administrator A that a substantial part of Sacred Heart’s revenue comes from Medicare and Medicaid reimbursements and explained various ways in which revenue generated from the hospital is transferred to and among Novak’s other corporate interests.
Conspiracy to violate the federal anti-kickback statute carries a maximum penalty of five years in prison and a $250,000 fine and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Joel Hammerman, Terra Reynolds, and Ryan Hedges.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The case falls under the umbrella of the Medicare Fraud Strike Force, which expanded operations to Chicago in February 2011, and is part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. More than five dozen defendants have been charged in health care fraud cases since the strike force began operating in Chicago.
To report health care fraud to learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to http://www.stopmedicarefraud.gov.
Source: The Tennessean
Bensalem investigation leads to arrest of 20 people in theft of more than $1.5 million www.privateofficer.com
Bensalem PA Feb 14 2013 A year-long corruption investigation culminated in the arrest of 20 people associated with the theft of more than $1.5 million from the Bensalem School District, police announced Tuesday morning.
Bensalem investigators made the arrests after they launched two separate investigations into alleged misdoings involving district staff. One investigation focused on “ghost employees,” the other on theft and illegal distribution of vehicles and related parts, township Public Safety Director Fred Harran said.
District Attorney David Heckler and Harran both said the investigation is not finished and more arrests are possible.
Jack Myers, the retired Bensalem School District business manager, was among those arrested in the corruption probe. He is charged with misapplication of entrusted property. Law enforcement said the 63-year-old Philadelphia resident knew of the many thefts occurring in the district and even participated in some of the activity.
The district’s current facilities manager, Robert Moseley, 61, of Bensalem was arrested and charged with misapplication of entrusted property for his part in the ghost employee investigation. In that case, police said multiple ground crew workers were getting paid for shifts they did not work. One employee did not report for work for up to three years, police said.
Head mechanic Fred Lange, 68, of Croydon was charged in August after it was uncovered he led the theft scheme being operated out of the bus garage, police said. Authorities called Lange the operations mastermind.
District mechanics Martin Chappell and Patrick Hammond were also arrested along with Lange.
Detectives told Patch that Chappell’s home garage was found to have a large surplus of vehicle parts suspected of being purchased with taxpayer money. One box of headlights was even addressed to the school district.
Hammond is suspected to have played a smaller role in the thefts. A search of his personal garage uncovered several small items believed to have been purchased using district funds.
One aspect of the crime involved ordering equipment through the district’s discounted consortium rates and then selling them out the figurative back door for less, keeping all the profits. Between nearly 7,000 bus tires and close to 2,200 batteries, the thieves are said to have swindled the district of over $1 million, police said. More money is alleged to have been spent on windshield wipers, oil filters and engine fluids, Harran explained during a late morning press conference.
Another angle involved Myers and Lange turning over the titles of 30 district buses, vans and pick-up trucks to Joel Zober, who owns a junkyard in Pipersville, police said. The vehicles were given to the junkyard and a group of classic car enthusiasts were able to pick other vehicles at the junkyard for free. Police called the group “The Breakfast Club,” due to their regular breakfast trips.
“All their people, their friends got to go to that junkyard and get parts free of charge,” Harran said. “There was a definite monetary value back.”
Harran called the group “very organized.”
Joseph Bound, owner of Bound Beverages on Bristol Pike in Bensalem, told police he bought items to maintain his vehicle fleet from Lange for the past 10 years. He said he paid cash for tires, synthetic transmission oil and transmission filters order by the school district, according to an affidavit.
“When gone unchecked for years, [the suspects] continued to do it. Those days are over,” Harran told reporters.
All of the suspects arrested on Wednesday were lead from the police station to District Justice Leonard Brown’s courthouse where they were arraigned.
Below is a list of the people arrested by authorities on Wednesday:
Current and Former District Employees
Former 28-year district business manager Jack Myers, 63, Hendrix Street, Philadelphia: misapplication of entrusted property
Facilities manager Robert Moseley, 61, Byberry Road, Bensalem: misapplication of entrusted property.
District bus mechanic Patrick Hammon, 53, of West Bensalem Avenue, Bensalem: theft and receiving stolen property
Mechanic Roland “Tex” Angle, 72, of Mildred Avenue, Bensalem: conspiracy, theft and receiving stolen property
Former Groundskeeper Supervisor Joseph Dyer, 43, of West Bensalem Avenue, Bensalem: theft and criminal conspiracy
Former Groundskeeper Shannon Dyer, 39, of West Bensalem Avenue, Bensalem: theft and criminal conspiracy
Groundskeeper Anthony Ruggiero, 38, of Ogden Avenue, Bensalem: theft and criminal conspiracy
Stolen Property Receivers and Distributors
William “Gill” Slowe, 73, of Crescent Avenue, Bensalem: criminal conspiracy, theft and receiving stolen property
Alfred Venturino, 59, of Fourth Avenue, Croydon: criminal conspiracy, theft and receiving stolen property
Robert Lord Sr., 64, of Dunksferry Road, Bensalem: criminal conspiracy, theft and receiving stolen property
Bound Beverages owner Joseph Bound, 65, of Ford Avenue, Middletown: criminal conspiracy, theft and receiving stolen property
Smith’s Auto Repair owner Elwyn Smith, 56, of Ritter Avenue, Bristol: criminal conspiracy, theft and receiving stolen property
Classic car club member William Klosz, 63, of Hawthorne Avenue, Bensalem: criminal conspiracy, theft and receiving stolen property
Classic car club member Leo Cannon, 65, of Hampton Court, Newtown: criminal conspiracy, theft and receiving stolen property
Classic car club member Wiliam O’Hara, 56, of Ash Avenue, Bensalem: criminal conspiracy, theft and receiving stolen property
Classic car club member Ronald Stoud, 69, of Cliff Road, Bensalem: criminal conspiracy, theft and receiving stolen property
Upper Bucks County junkyard owner Joel Zober, 70, of Magnolia Drive, Croydon: criminal conspiracy, theft and receiving stolen property
Tow truck operator Wilson Lopez, 29, of Lincoln Avenue, Bristol: criminal conspiracy, theft and receiving stolen property
Source: Bensalem Patch
LOUISVILLE, KY Sept 8 2012 - We are learning more about the victim’s families and the church where Thursday’s deadly dispute took place. One family is planning a funeral while another is keeping a vigil at the hospital.
We now know who the victims are. David Merritt, 73, was killed. Neighbors said he was the Home Owner’s Association President. The other victim, Marvin Fisher, was in the hospital in critical condition Friday evening. Neighbors said he is the Homeowner’s Association Vice President.
The nightmare was still painfully real for Merritt’s nephew, Shaun.
“We lost a very good man last night,” he said.
Thursday night, police said suspect Mahmoud Yousef Hindi walked into a Homeowners Association meeting of about nine people inside the Springdale Community Church and when he shot the two men. By the time the suspect was subdued by a retired police officer, Shaun’s uncle, Merritt, was dead.
“Dave, he was a gentle man. A very caring man,” Shaun said. “He was willing to give back to the community in any way he could.”
An uncle he said enjoyed several things, “We went up to a Reds ball game about 6-8 weeks ago. He enjoyed baseball. Loved baseball,” said Shaun.
Neighbors said Fisher was taken to University Hospital.
“And is in very critical condition at this point. Life threatening injuries,” Louisville Metro Police Homicide detective, Lt. Barry Wilkerson said in a press conference Friday afternoon.
“Thoughts and prayers need to be with him also and his family because they’re struggling just as bad as we are,” Shaun said.
Faith is at the forefront at Springdale Community Church after such tragedy in a place of worship and a community deeply cared for.
“The hardest part is just for the victims and their families. That’s always the hardest part of any kind of tragedy. And in response to it is trying to minister to them and show love to them and care for them,” Jason Autry, Lead pastor at Springdale Community Church said. “Precautions. We’re working on that. There’s nothing in the immediate that we could do. It was a meeting that’s held here. It’s held here monthly.”
Weekend services will go on as usual. Through the pain.
“There’s another family that’s affected by this. That’s the shooter’s family. Don’t have any hard-will against them,” Shaun said. “It’ll take a while to get back to normal,” Shaun said.
Funeral arrangements for Merritt are pending.
It happened just before noon Saturday, October 1 near the entrance of the store on Brightleaf Blvd.
Benjamin Moye, of Newport News, Virginia, allegedly told investigators he mistakenly hit the accelerator instead of the brake.
Moye’s Chevrolet Silverado pickup truck tore through the crowd at the store entrance.
Lois Shannon, 73, Debra Holmes, 53, and Jeanna Holley, 35, all of Smithfield, were taken to Johnston County Memorial Hospital.
Shannon later died. Holmes and Holley were released from the hospital two days after the crash.
Police said Moye was issued a criminal summons and released Tuesday. He is to appear in Smithfield District Court on November 8.
LAS VEGAS NV Nov 25 2010 — The Nye County Sheriff’s Office has arrested a teacher, her aides and the school’s principal on four charges of child abuse.
Police said special education teacher Sarah Jane Hopkins, 52, at Floyd Elementary School in Pahrump had been physically punishing her mentally and physically disabled students for at least the past two years.
Police also said that Hopkins’ aides, Phyllis La Von DuShane, 73, and Kathryn Ann Cummings, 56, also participated in the physical punishment of the children.
An unnamed individual had alerted officers to the abuse, saying the teacher and her aides were using unreasonable physical punishment on the children, which spurred an investigation, police said.
During the investigation, police learned that Floyd Elementary Principal Holly Ann Lepisto, 53, was told of the allegations of Hopkins’ abuse during the last school year but did a poor investigation and then didn’t follow up, police said.
The investigation also revealed that Lepisto may have given the impression that the abuse was tolerated and failed to notify authorities.
Four children were identified in the abuse charges and have disabilities that include visual impairment, cerebral palsy, speech challenges and hearing impairment.
The Pahrump Disability Outreach Program released a letter admonishing the “betrayal of trust,” adding that the charges are “a devastation felt not only by you and your families but by all of us as a community.”