August 24, 11

NEWS / Owner of Miami-Area Mental Health Care Corporation Convicted on All Counts for Orchestrating $205 Mi

Defendant Found Guilty of Multiple Fraud and Money Laundering Charges

WASHINGTON – A federal jury today convicted a Miami-area owner of a mental health care company, American Therapeutic Corporation (ATC), for orchestrating a fraud scheme that resulted in the submission of more than $205 million in fraudulent claims to Medicare, announced the Department of Justice, FBI and Department of Health and Human Services (HHS).



After a six-day trial, a jury in the Southern District of Florida found Judith Negron, 40, guilty of 24 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements. Negron was charged in a superseding indictment unsealed on Feb. 15, 2011.



“Judith Negron and her co-conspirators masterminded one of the largest fraud schemes ever prosecuted by the Medicare Fraud Strike Force,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “They brazenly submitted more than $200 million in fraudulent claims to the Medicare program. Ms. Negron may have thought she could scam the American taxpayer with impunity. Today a Miami jury showed her otherwise, and now she has found out that the price of Medicare fraud is extremely high.”



“Through bribery, kickbacks, and the creation of false patient files and other documents, Negron and her co-conspirators submitted hundreds of millions of dollars in fraudulent claims to Medicare for community mental health treatments for ineligible patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “After a week-long trial, a jury convicted Negron of orchestrating this massive fraud scheme. She and her co-defendants now face the prospect of lengthy prison sentences. The U.S. Attorney’s Office will continue to lead the battle against Medicare fraud and abuse.”



Evidence at trial demonstrated that Negron, along with ATC co-owners Lawrence Duran and Marianella Valera, masterminded and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera pleaded guilty to all charges against them in April 2011. Evidence at trial established that the three owners submitted false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. Negron and her co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.



According to the evidence at trial, Negron, Duran, Valera and others paid bribes and kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs, so that ATC and ASI could bill Medicare for more than $200 million in unnecessary or illegitimate services.



According to the evidence, Negron and her co-conspirators used another company they owned and operated, Medlink Professional Management Group Inc., to conceal the fraud and kickbacks scheme from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred the money to Medlink. Evidence at trial showed that Negron and her co-conspirators used Medlink to pay millions of dollars in kickback payments by using an extensive money laundering scheme.



Evidence at trial demonstrated that Negron signed kickback checks to patient recruiters whose only jobs at ATC were to provide patients from halfway houses or assisted living facilities. Evidence at trial also established that Negron and others caused the alteration of patient files and therapist notes for the purpose of making it falsely appear that patients being treated by ATC qualified for PHP treatments and that the treatments provided were legitimate PHP treatments. For instance, evidence established that Negron would “robo-sign” patient files, meaning she would sign patient documents as a supervising therapist without having treated the patients. The evidence also showed that Negron signed files as though she had been in two places at once, in Boca and Homestead, Fla., at the same time. Evidence further revealed that Negron knew doctors were similarly signing patient files without reading them or seeing the patients. In some cases, Negron provided the doctors with the files for their signature. According to evidence presented at trial, Negron and her co-conspirators billed Medicare for PHP treatment, including group psychotherapy, provided to a patient who was in a neuro-vegetative state, who would not lift her head or respond. The evidence also showed that Negron and her co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.



According to evidence at trial, the defendant and her co-conspirators concealed the fraud scheme by, among other things, creating false medical records in patient charts, concealing kickback payments as “transportation” payments, and creating sham companies with fake employee files to launder money.



Following today’s verdict, U.S. District Judge James Lawrence King remanded Negron into custody. A sentencing date for Negron has not yet been scheduled.



Duran and Valera have been in federal custody since their arrests in October 2010 and are scheduled to be sentenced on Sept. 14, 2011, at 9:30 a.m. Negron, Duran and Valera each face a maximum of 10 years in prison for each count of conspiracy to commit health care fraud and each count of health care fraud; five years in prison for each count of conspiracy to pay and receive health care kickbacks; 20 years in prison for each count of conspiracy to commit money laundering; 10 to 20 years in prison for each count of money laundering; and 10 years in prison for each count of structuring to avoid reporting requirements. The defendants’ assets were frozen at the time of their arrests through civil forfeiture proceedings.



Co-conspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7, 2011, for her role in the fraud scheme and is also scheduled for sentencing on Sept. 14, 2011.



Today’s guilty verdict was announced by Assistant Attorney General Breuer; U.S. Attorney Ferrer; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.



The criminal case is being prosecuted by Trial Attorney Jennifer L. Saulino and Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.



Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants that collectively have billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG are taking steps to increase accountability and decrease the presence of fraudulent providers.



To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .

http://www.justice.gov/opa/pr/2011/August/11-crm-1074.html

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