The Fraud Division Announces Enforcement Actions

Summary

A Justice Department press release from the National Fraud Enforcement Division listing recent enforcement actions. It opens with two men sentenced to 151 months and 36 months in prison over $522 million in fraudulent claims for medically unnecessary genetic tests. Benefits cases include a 144-month sentence in the Middle District of Pennsylvania over $59 million in public benefits laundered to China, a VA disability benefits plea, a student loan fraud plea in Michigan and a Tennessee plea over a $159,900 CARES Act loan. Health care cases include a former NFL player sentenced to over 16 years over nearly $200 million, and other items cover $84 million in stolen Treasury checks, PPP loan applications in South Florida and a $148 million construction payroll case. It quotes Assistant Attorney General Colin McDonald.

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The Justice Department’s National Fraud Enforcement Division continued to advance its mission to fight fraud and protect taxpayers. Just on Monday, two men were sentenced to 151 months and 36 months in prison, respectively, for their roles in submitting over $522 million in fraudulent claims for medically unnecessary genetic tests in a scheme to defraud Medicare, Medicaid, and private health insurance companies.

"The Fraud Division continues to grow its footprint and aggressively prosecute fraud schemes, no matter the size,” said Assistant Attorney General Colin McDonald of the National Fraud Enforcement Division. “Every day, prosecutors and law enforcement partners across the country are working to protect Americans from fraudsters who want to steal citizens’ hard-earned prosperity.”

Benefits Program Fraud

A defendant was sentenced to 144 months in prison in the Middle District of Pennsylvania for fraudulently obtaining $59 million in public benefits and laundering the proceeds to China.

A defendant in Florida pleaded guilty to one count of receiving approximately $250,000 in stolen U.S. Department of Veterans Affairs (“VA”) disability compensation and benefits. The defendant falsely represented to the VA that he was legally blind and that his vision conditions prevented him from driving, working, and performing various daily functions.

A defendant pleaded guilty in Michigan to wire fraud and aggravated identity theft related to a decade-long, multi-million-dollar federal student loan fraud scheme. The defendant fraudulently caused more than $16 million in benefits to be awarded, with more than $10 million disbursed.

In Tennessee, a defendant pleaded guilty to wire fraud related to misrepresentations he made on his application for a $159,900 CARES Act loan, which was designed to provide emergency financial assistance to people affected by the COVID-19 pandemic. Instead he used the proceeds for personal expenses.

Health Care Fraud

A former NFL player was sentenced to over 16 years in prison for his role in a conspiracy to defraud Medicare and the Civilian Health and Medical Program of the Department of Veterans Affairs out of nearly $200 million. The defendant was ordered to pay over $110 million in restitution and to forfeit approximately $17 million that was seized from bank accounts and other assets.

An optometric physician pleaded guilty in Tennessee for her role in defrauding Medicare out of $6.9 million. Over three-and-a-half years, the defendant used her practice to submit false claims seeking reimbursements from Medicare for new wound care products she had not actually purchased or used.

A pharmacy technician in Michigan pleaded guilty to a $5.6 million health care scheme and illegal distribution of Oxycodone. The defendant billed benefit programs, including Medicare and Medicaid, for prescription medications that he never dispensed and provided unlawful prescriptions of oxycodone to drug traffickers in exchange for cash.

A defendant in Oklahoma City was sentenced to 20 months in prison for a $1.1 million health care fraud scheme. The defendant submitted, and caused to be submitted, thousands of false and fraudulent claims to private insurance for behavioral health counseling sessions purportedly provided to family members.

Government Fraud

Four defendants, including two former U.S. Postal Service Employees, pleaded guilty for their involvement in a conspiracy to steal $84 million in U.S. Treasury checks. During the scheme, conspirators stole thousands of envelopes containing U.S. Treasury checks from mail sorting machines and then sold them to buyers around the country.

Tax Fraud

In South Florida, a tax preparer pleaded guilty for submitting false tax forms to support more than 200 fraudulent loan applications under the CARES Act’s Paycheck Protection Program. The defendant and his co-conspirators used false records to seek more than $4.1 million in PPP loans.

Two defendants in Jacksonville, Florida, were sentenced to 57 months’ and 24 months’ imprisonment, respectively, for a $148 million construction payroll scheme that defrauded the IRS and workers’ compensation insurers. All told, the U.S. Treasury lost over $37 million in unpaid payroll taxes.

A tax preparer pleaded guilty in California to filing false tax returns to get substantial refunds for his clients and fraudulently including false information on COVID-19 business-relief loan applications, causing more than $ 25 million in losses to the government.

A Florida defendant was sentenced to 37 months in federal prison for filing a false tax return and was ordered to pay $103,646 in restitution.

Financial Fraud

A New York federal grand jury indicted six defendants in a financial fraud scheme impacting victims across the country. According to the indictment, the defendants obtained stolen United States Treasury tax refund checks that were payable to other persons, and then used fraudulent identification documents to open bank accounts in the names of the persons the tax refund checks were payable.

* * * *

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (“Fraud Division”). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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