July 14, 2020
As whistleblower lawyers and former prosecutors, we have seen a lot. One of the most enjoyable aspects of both of those roles is the wide (and wild) variety of “fact patterns” that present themselves in the cases we have handled over the decades. A recent Medicaid home health care fraud prosecution offers some lessons to would-be criminals in what not to do.
After a while, one notices how cases have similar patterns but also their own unique signatures. You might have prosecuted eight previous bank robbery cases, but this one has the distinction of the bank robber having written the demand note on the back of his pay stub, complete with all his identifying information on it. Or another where a carefully planned bank robbery set to happen just at 1:55, five minutes prior to the bank’s closing, fails to materialize because the door has been locked (the bank had been tipped off), leaving three men in ski masks carrying empty gym bags curiously checking their watches and scratching their heads outside.
With a certain degree of truth to the statement, my criminal prosecutor colleagues would sometimes joke: “We don’t catch the smart ones.” Or to put it another way: “With all the idiotic things that criminals often do, who has time to go after the more intricate and subtle cases?”
As any fan of speeding on the highway can attest, certain behaviors greatly increase one’s chances of getting caught. There is a world of difference between going 67 mph in the middle lane and 82 mph in the left lane. And going 82 mph in a Red Porsche, well, you are just asking to be caught.
A few weeks ago, one of my colleagues passed me a press release from the Department of Justice about the arrest of a Las Vegas, Nevada couple for millions of dollars of fraud against the North Carolina Medicaid Program. Both individuals had previous felony convictions. But they decided, for reasons that seem to be based mostly in greed, to double down and go for a second round of criminality. And while they were at it, why bother with the small stuff – really go for the big bucks.
Searching local databases for recently deceased North Carolinians, they used the wife’s access to the North Carolina Medicaid data base to determine which of the decedents still appeared as eligible for Medicaid services (because the state’s data base had not caught up to the news). They then proceeded to bill North Carolina Medicaid – from Las Vegas and elsewhere – for more than $13 million worth of home health services – allegedly rendered in North Carolina — for these recently departed residents, backdating the services to make it appear that the services were rendered prior to their dates of death. That’s right. Two people holed up in a Las Vegas apartment with no actual home health care business operating in North Carolina just started sending in bills. Quite a few bills in fact.
According to the press release, by the time the state caught up to the scheme, the couple had spent $900,000 for the purchase of a British Aerospace Bae 125-800A private jet, hundreds of thousands of dollars in Tiffany & Co. and Brioni clothing and jewelry, thousands of dollars on Eastern North Carolina business properties, and thousands of dollars in gym equipment. The indictment also includes a forfeiture notice. It seeks forfeiture of, among other things, a 2017 Aston Martin DB 11 sports vehicle and a wine collection.
Ask yourselves whether you know, or have heard of, anyone legitimately employed in a small home health care operation who has done so well that they can live like this. I didn’t think so. If you are taking care of desperately ill/lonely/needy elderly patients, you don’t even have the time to be purchasing those kinds of toys, much less the money.
The point is that greed and stupidity often go hand in hand and provide a powerful combination to yield often spectacular crashes. Like the guy in the Red Porsche going 82 mph in the left lane. This couple, and many other characters we could describe, are practically screaming “Look at Me! Aren’t You Impressed By Our Success?!” Well, yes, we are impressed, and so is law enforcement.
At the Boston University Law School course on Health Care Fraud and Abuse taught first by me and now by my partner Erica Hitchings, in the very first class we go over the “Pay and Chase” model used by government health insurance programs. It works like this: Because there is a vital need for prompt payment to doctors and other providers, the government cannot verify every claim before paying it. Medicare and Medicaid pay the claims first (unless obviously problematic) and “chase” the fraud and abuse problems later (if they can find them). Hence the shorthand “Pay and Chase.”
It does not take an advanced degree to realize that opportunists can easily game such a system, at least up to a point. Congress has been told more than once that committing health care fraud is “incredibly easy.” So is tax evasion, as tax collection is another government program based largely on an honor system. Far less easy, though, is cheating and getting away with it.
Smart criminals are subtle; dumb criminals are not.
Both versions deserve prosecution. But the dumb ones, the ones who flash too much bling – real or metaphorical, seem to come up with special formulae for getting caught.
We don’t typically advise criminals how to do their jobs better, but here’s an exception:
We won’t charge for this advice. It should have been obvious anyway.