Articles Posted in Insurance Fraud

Owner of “Serenity Ranch Recovery” Found Guilty in $38 Million Fraud Scheme

PGPd-1-300x144Fort Lauderdale, Florida (March 2020) – After a six-week jury trial Sebastian Ahmed42, of Delray Beach, Florida, was convicted of conspiracy to commit health care fraud and wire fraud, five counts of health care fraud, conspiracy to commit money laundering, and eleven counts of money laundering.  According to the U.S. Attorney’s Office, the co-conspirators took advantage of and exploited vulnerable drug addicts, the most of whom were only 18 to 26 years old; falsified paperwork; and entered into various kickback arrangements, so that they could pocket millions of dollars of falsely and fraudulently obtain fund for their own personal use and benefit.  Out of all the co-conspirators, Sebastian Ahmed profited the most, netting more than $2.8 million in just less than a three year period.

Sentencing is scheduled for August 6, 2020.  As for the health care fraud and wire fraud conspiracy and money laundering conspiracy convictions, Amhed defendant faces a statutory maximum of 20 years in prison per count.  As to the health care fraud and money laundering convictions, Amhed faces an additional maximum statutory sentence of 10 years in prison.

NEWARK, N.J. – Dr. Michael P. Stein, 63, a New Jersey doctor, was sentenced today to 24 months in prison for defrauding Blue Cross Blue Shield for approximately three-quarters of a million dollars by submitting false claims for services never performed.

Between August 2004 and September 2010 Stein owned and operated Randolph Otolaryngology. Stein purportedly treated a patient with the initials J.F. for nasal problems and billed Blue Cross Blue Shield for the services.

However, investigators determined that Stein submitted fraudulent claims with Blue Cross Blue Shield for procedures that were not performed. Evidence revealed that Stein submitted claims for approximately 900 nasal endoscopies he purportedly conducted, when only a few were actually performed. Stein also admitted he filed false claims for office visits and medical procedures that occurred while he was out of the country on vacation.


 Charles Schwartz Also Ordered to Pay $155 Million in Restitution and Forfeiture

NEWARK, N.J. – The former owner and president of Allied Health Care Services, Inc., an Orange, N.J., durable medical equipment corporation, was sentenced today to 195 months in prison for organizing and executing a $135 million phony lease scheme that caused losses of more than $80 million and victimized more than 50 financial institutions, U.S. Attorney Paul J. Fishman announced.
Charles K. Schwartz, 58, of Sparta, N.J., pleaded guilty on April 13, 2011, to one count of mail fraud. Schwartz was previously charged by Complaint and arrested by special agents of the FBI on September 2, 2010. He has been in federal custody since that time. Schwartz entered his guilty plea before U.S. District Judge Susan D. Wigenton, who also imposed the sentence today in Newark federal court.
“Charles Schwartz, who once bragged that victims fell for his fraud ‘hook, line and sinker,’ stole tens of millions of dollars from financial institutions and bankrupted his own company to float his Ponzi scheme and luxury lifestyle,” said U.S. Attorney Fishman. “It is particularly offensive that he claimed to be leasing medical equipment that is used by people with significant healthcare needs, and his deception justifies his 16-year sentence. The health care industry is a vital part of New Jersey’s fabric, and those who criminally exploit our success will not be tolerated.”
According to documents filed in this case and statements made in court:
From at least 2002 through July 2010, Schwartz, through Allied Health Care Services, Inc. (“Allied”), convinced financial institutions to pay more than $135 million by telling them that the money would be used to lease valuable medical equipment. In reality, the purported medical equipment supplier did not provide Schwartz and Allied with any equipment during that time. Instead, the “supplier” created phony invoices which appeared to reflect legitimate transactions.
As part of the scheme, Schwartz approached various financial institutions and informed them that Allied needed to lease particular medical equipment. Using the phony invoices from the “supplier,” Schwartz convinced the financial institutions to enter into leasing arrangements. Pursuant to these arrangements, the financial institutions purchased the medical equipment – which they immediately leased to Schwartz and Allied – and sent payment for the medical equipment to the purported supplier. The “supplier” then sent the money received from the financial institutions (minus his 3 to 5 percent payment) to an entity created by Schwartz to facilitate the fraud.
In addition to spending millions of dollars on properties in New Jersey and New York, including a horse farm, Schwartz used the money in Ponzi-scheme fashion to repay earlier bank loans that were a part of the scheme. By August 2010, several financial institutions from which Schwartz had obtained loans filed lawsuits against Schwartz and Allied, claiming he owed them at least $20 million. Allied and Schwartz were forced into involuntary bankruptcy in August 2010 and September 2010, respectively. Losses from the scheme now total at least $80 million. Schwartz admitted that more than 50 victim financial institutions lost a total of between $50 and $100 million as a result of the scheme.
Schwartz and the medical equipment “supplier” undertook efforts throughout the scheme to deceive bank examiners who wanted to inspect the non-existent medical equipment, which had been purchased by the financial institutions. Schwartz admitted that in advance of expected inspections by financial institutions, he directed others to alter serial numbers or create fraudulent serial numbers on existing ventilators to match fraudulent invoices he had supplied to the various financial institutions. At times, when financial institutions sought to review documentation regarding Allied’s leasing of the ventilators to its customers, Schwartz falsely told the financial institutions that the information was protected by Health Insurance Portability and Accountability Act regulations. At one point during an August 2010 conversation between Schwartz and the “supplier,” Schwartz commented that the financial institutions had fallen “hook, line and sinker” for the false explanation given to bank examiners who asked why the purported supplier used his home address on certain invoices.
In addition to the prison term, Judge Wigenton sentenced Schwartz to three years of supervised release and ordered him to pay $80 million in restitution. Judge Wigenton also ordered Schwartz to forfeit $75 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, for the investigation which led to today’s sentence.
The government is represented by Assistant U.S. Attorneys Jacob T. Elberg and Joseph Mack of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
Defense counsel: John Whipple Esq., Chatham, N.J.

Photobucket DAYTONA BEACH, FLORIDA (AUGUST 23, 2011) – Joseph Wagner, 61, can no longer practice in the State of Florida. The surgeon general for the Florida Department of Health, Dr. Frank Farmer, issued the emergency suspension order.

Wagner, billed insurance companies for services he never performed and treated two patients with controlled substances, exceeding the scope of his license. Wagner faked insurance reimbursement claims and called prescriptions into pharmacies using another doctor’s name without ever examining or meeting the patients. The license of the other doctor, John P. Christensen of West Palm Beach, was also suspended.

The FBI along with the Florida Department of Law Enforcement and other agencies raided Wagner’s clinic earlier in the month and confiscated patient records. In addition, Wagner’s son, a chiropractor at a separate clinic is under investigation for his role in the scheme.

Photobucket WHITTIER, CALIFORNIA – Clinical psychologist and co-founder of World Legion of Power bodybuilding organization Arnold P. Nerenberg, 69, was charged with seven counts of mail fraud in connection with workers’ compensation claims made to the U.S. Postal Service. Also charged with two counts of mail fraud and two counts of making false statements to obtain workers’ compensation were two co-conspirators and ex-postal workers Lois L. Washington, 47, from Inglewood and Cetric T. Fletcher, 51, from Long Beach.

Allegations contained in the indictment include that from June 2000 to April 2008, reimbursement for medical expenses arising from undiagnosed psychological conditions were claimed using fraudulent paperwork. The doctor also billed for treatment sessions performed while he was out of the country. An undercover Homeland Security Investigator posed as a patient and Nerenberg’s paperwork secured disability pay from the U.S. Department of Labor for the patient’s fear of dogs.

In total, Nerenberg billed the Postal Service for approximately $1 million in medical fees and received almost $500,000, as court documents state. Fletcher allegedly received over $200,000 and Washington allegedly received $145,000.

courtroom.jpgHAMMOND, INDIANA (May 13, 2011) – An Indiana doctor who remained a fugitive until finally caught in Italy in 2009, is set to go to trial next January. Mark Weinberger, a Merrillville nose doctor, faces 22 counts of health care and insurance fraud.

U.S. District Court Judge Philip Simon rejected a plea deal that stated Weinberger would plead guilty to the charges in exchange for a four-year prison sentence. The judge is concerned that Weinberger may be responsible for losses greater than the several hundred thousands of dollars contained in the 22 counts. One insurance company believes that figure is actually in the millions.

Weinberger filed patient insurance claims for surgeries he never performed. Weinberger even went so far as to put people under anesthesia without performing any procedures. In 2004, when patients began filing lawsuits, Weinberger fled the country which garnered him national attention as a fugitive until his arrest in Italy five years later.

PhotobucketORANGE COUNTY, FLORIDA – Three employees of an Orange County, Florida health clinic were arrested for allegedly scamming payments of more than $54,000 from Direct General Insurance. The trio, employed by Bethel Health and Rehabilitation Center, concocted a scheme of an intentional motor vehicle accident whereby an SUV of future patients rammed another vehicle. The scammers paid all vehicle passengers for their participation in the accident. Investigators also found that patients had been unaware of the insurance fraud because their signatures has been forged for supposed doctor visits.

Investigators are not certain as to whether or not more arrests will occur in the case as the investigation is ongoing. Presently all three initially-named defendants are free on bond.

Healthcare Fraud Blog Publisher, Attorney Robert Malove, is an expert criminal trial lawyer as recognized by The Florida Bar. Mr. Malove has extensive experience in the area of insurance fraud defense.

On October 10, 2007 Dmitry Rakovsky was sentenced by United States District Judge Marcia G. Cooke in Miami, Florida. Rakovsky was sentenced to a term of 59 months in prison, prisoner.jpgto be followed by a term of three years of supervised release. He was also ordered to forfeit property and pay restitution in the amount of $900,000.

Rakovsky, and co-defendants Boris Royzen and his wife Eva Royzen, were charged in a twenty-one (21) defendant, thirty-three (33) count health care fraud Indictment. The Indictment charged doctors, chiropractors, massage therapists, an office manager, and four medical clinics, Vista Mar Medical Rehab Corp., Plantation Medical Recovery Center, Inc., Romana Medical, Inc., and Dial Medical Rehab, Inc., with health care fraud. Rakovsky was the final defendant to be sentenced in this case.

Previously Boris Royzen was sentenced to 40 months in prison, followed by three years supervised release. He was also ordered to forfeit property and pay $1.8 million restitution. His wife, Eva, was previously sentenced to three years of probation, forfeit property and pay restitution in the amount of $1.8 million. The medical clinics were ordered to pay restitution as follows: Vista Mar: $70,674.08; Romana Medical: $20,641.85; Plantation Medical Recovery: $31,292.75; and Dial Medical: $13,818.06.

On April 20, 2007 New Jersey Attorney General and Criminal Justice Director announced that a Bergen County chiropractor has been sentenced after pleading guilty for his role in a health care insurance fraud.
According to prosecutors, Marc Centrelli, 46, of Sparta, was ordered by Superior Court Judge William C. Meehan in Bergen County to pay $14,805 in fines and restitution, and to serve one year probation. In addition, Centrelli’s chiropractic license was suspended for three years and he must successfully complete an ethics course before resuming practice. The sentence was imposed pursuant to Centrelli’s guilty plea to filing fraudulent health care claims.
At the guilty plea hearing before Judge Meehan, Centrelli, a licensed chiropractor with an office in Fair Lawn, admitted that between April 30, 2003, and Feb. 11, 2004, he recklessly submitted more than $9,725 in insurance claims to the Selective Insurance Company pursuant to the Personal Injury Protection (PIP) portion of automobile insurance policies provided by the several insurance carriers. Centrelli admitted that the insurance claims were submitted for undelivered services. Investigators determined that, for many of the dates on which Centrelli submitted the claims, he was out of the office and not seeing patients.

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