Medicare fraud trial ends with 4 convictions

A federal jury in Florida has convicted four people for their participation in a Medicare scheme involving nearly $70 million in fraudulent billings by a mental health care hospital, the Justice Department said.

Acting Assistant Attorney General Mythili Raman, who heads the Justice Department’s Criminal Division, said the defendants participated in a massive scheme that attempted to defraud the U.S government and take advantage of Medicare beneficiaries.

“By paying bribes to a network of patient recruiters and falsifying documents, the defendants created the illusion of providing intensive psychiatric care to qualifying patients, when in reality they provided no care of substance,” said Ms. Raman, adding that the guilty verdicts illustrated the “success of the interagency Medicare Fraud Strike Force, which is dedicated to stamping out Medicare fraud.”

Since its inception in March 2007, the Medicare Fraud Strike Force — now operating in nine cities across the country — has charged more than 1,500 defendants who collectively have billed the Medicare program for more than $5 billion.

In the Florida case, Karen Kallen-Zury, 59, of Lighthouse Point, Fla., and Daisy Miller, 44, of Hollywood, Fla., were each found guilty of one count of conspiracy to commit wire fraud and health care fraud, five counts of wire fraud and two substantive counts of health care fraud.

Michele Petrie, 64, of Fort Lauderdale, Fla., was found guilty of one count of conspiracy to commit wire fraud and health care fraud and three counts of wire fraud. Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of Miami Beach, Fla., were also convicted of one count of conspiracy to pay bribes in connection with Medicare.

The defendants were charged in an indictment returned in October. Evidence at trial demonstrated that the defendants and their conspirators caused the submission of false and fraudulent claims to Medicare through Hollywood Pavilion (HP), a state-licensed psychiatric hospital that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care. The defendants paid bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment.

The evidence showed that the defendants then submitted claims to Medicare for those patients who were procured illegally.

Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered.

Evidence at trial established that Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients.

Trial evidence also demonstrated that Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and that he supervised the creation of false documents to conceal the scheme.

From at least 2003 through at least August 2012, HP billed Medicare nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients who were procured through bribes and kickbacks.