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Friday, September 30, 2016


Wednesday, September 28, 2016
Vibra Healthcare to Pay $32.7 Million to Resolve Claims for Medically Unnecessary Services

Vibra Healthcare LLC (Vibra), a national hospital chain headquartered in Mechanicsburg, Pennsylvania, has agreed to $32.7 million, plus interest, to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services, the Department of Justice announced today.

“Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions cause false claims for medically unnecessary services to be submitted.”

Vibra operates approximately 36 freestanding long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states.  LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care.  IRFs are intended for patients needing rehabilitative services that require hospital-level care.  The government alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.  Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care.  In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

“Pursuing and recovering fraudulent billing for unnecessary services is a priority of my office,” stated U.S. Attorney John E. Kuhn Jr. for the Western District of Kentucky.  “This significant case against Vibra Healthcare and today’s settlement agreement is but one example of the vigorous work against healthcare fraud taking place in the Western District of Kentucky and across the nation.”

As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

“Medical necessity is fundamental if health providers wish to claim taxpayer funds for medical care,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “OIG is committed to protecting precious Medicare dollars and ensuring that beneficiaries receive quality, necessary long term care.”

Part of the allegations resolved by this settlement were originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan.  Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located.  Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery.  Daniel will receive at least $4 million.  

This settlement illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal healthcare programs.


Thursday, September 29, 2016
Federal Court Shuts Down Abusive Tax Scheme Involving Improper Deductions for Donating Timeshares

A federal court in Helena, Montana has permanently barred Montana-based attorney James Tarpey, as well as two companies he founded, including Project Philanthropy Inc., a District of Columbia corporation which does business as Donate for a Cause, and Timeshare Closings Inc., a Colorado corporation which does business as Resort Closings Inc., from promoting an allegedly abusive timeshare donation scheme, the Justice Department announced today.  Tarpey and the two companies agreed to the injunction.

According to the complaint, based on false promises of generous tax savings, Tarpey, Donate for a Cause and Timeshare Closings encouraged timeshare owners to donate their unwanted timeshares to Donate for a Cause, a tax-exempt entity organized and operated by Tarpey.  The complaint alleges that the customers receive an appraisal that grossly overvalues the donated timeshare rights and customers use that appraisal to claim a large charitable donation deduction, even when the true market value of the timeshare right is a small fraction of the appraised value.

According to the complaint, the timeshare donation scheme was aggressively marketed via the Internet and through national and local media outlets, including ABC 7 News in Los Angeles, Fox 10 News in Phoenix, Arizona, the TODAY Show and Fox 4 News in Kansas City, Missouri.

The orders permanently bar Tarpey, Donate for a Cause and Timeshare Closings from promoting or marketing any arrangement that involves charitable contribution deductions claimed on federal tax returns.  The orders also bar Tarpey, Donate for a Cause and Timeshare Closings from preparing, or assisting others in preparing, any property appraisal that will be used in connection with federal taxes.  The orders require Tarpey, Donate for a Cause and Timeshare Closings to post a copy of the injunction on websites that they use to advertise timeshare donations, including but not limited to  The orders also require that Donate for a Cause notify all of its customers of the injunction and that Tarpey and Timeshare Closings notify their employees involved with timeshare donations of the injunction.

The United States also sued three individuals alleged to be Tarpey’s associates Ron Broyles of California, Curt Thor of Washington and Suzanne Tarpey of Montana.  According to the complaint, these individuals assisted Tarpey in facilitating the timeshare donation scheme.  Thor previously consented to an order permanently barring him from preparing timeshare appraisals and giving advice regarding charitable contribution deductions on federal tax returns.  The government’s claims against Broyles and Suzanne Tarpey remain pending with the court.

The Internal Revenue Service (IRS) warns taxpayers to be wary of scams that involve claiming inflated charitable contribution deductions and recommends anyone who may have improperly claimed such deductions to consult a tax professional.  Guidelines for valuing and deducting property donations to charity can be found in Publication 526 and Publication 561, available on

Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, thanked Revenue Agent Kate Lopez of the IRS, who conducted the investigation and Trial Attorneys Richard G. Rose, Harris J. Phillips and Gretchen E. Nygaard of the Tax Division, who are litigating this case.

In the past decade, the Tax Division has obtained injunctions against hundreds of tax return preparer and tax fraud promoters.

Thursday, September 29, 2016


Wednesday, September 28, 2016
New York City Resident Pleads Guilty to Using Sham Foreign Entity and Secret Foreign Accounts in Switzerland and Israel to Evade Taxes
Used Secret Foreign Accounts to Hide over $7 Million in Funds and Evade Taxes

A New York City man pleaded guilty today to a criminal information charging him with tax evasion for tax years 2003 through 2005 and 2007 through 2010, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Robert L. Capers of the Eastern District of New York.

“Mr. Hager concealed over $7.3 million in undeclared foreign accounts in Switzerland and Israel and used a sham British Virgin Island entity in order to evade over $650,000 in U.S. taxes,” said Principal Deputy Assistant Attorney General Ciraolo. “As this case demonstrates, the Department and the Internal Revenue Service (IRS), together with our global partners, are successfully working on a daily basis to locate such undeclared accounts, identify those responsible and hold them accountable.”

According to information presented in court, between 1987 through 2011, Markus Hager, 68, utilized a series of undeclared foreign financial accounts to evade his individual income taxes by concealing assets and income from the IRS in those accounts.  Between 1987 and 2008, Hager maintained several undeclared accounts at UBS, including two numbered accounts and an account held in the name of Contactus Partnership Associated S.A. (Contactus), a sham British Virgin Islands entity.  By the close of 2004, the value of Hager’s undeclared accounts at UBS exceeded $7.3 million.

Hager closed the UBS accounts in 2008 and transferred the assets to a newly opened account at Clariden Leu, which he controlled and held in the name of Contactus.  Shortly thereafter, Hager closed the Contactus account at Clariden Leu and transferred the assets to a newly opened account held in the name of the same sham entity at a different Swiss bank.  Hager caused that Swiss bank to falsely record Hager’s Belgian cousin as the owner of the assets in the Contactus account.  Approximately six months later, Hager closed the Contactus account at the Swiss bank and transferred the assets to an account at a bank in Israel that Hager caused to be opened in the name of a different Belgian cousin.

From 2005 to 2011, Hager also controlled an undeclared account at Bank Leumi in Israel, which he falsely held under the name of a relative who was not a U.S. person and who resided outside the United States.  In February 2010, after obtaining an Israeli Identity Card, Hager opened an account in his own name at Bank Leumi in Israel but falsely reported that he lived in the United Kingdom and signed a document, under the penalties of perjury, on which he falsely claimed that he was not a U.S. citizen.

According to the information filed, Hager repatriated funds from his undeclared foreign financial accounts by having an attorney draft a sham loan agreement between himself and Contactus and wiring funds from some of his undeclared foreign financial accounts into his attorney’s escrow account.

According to the information filed, Hager filed false federal and New York State income tax returns on which he failed to report the income from his foreign financial accounts and failed to pay tax on that income.  According to the information, Hager evaded approximately $652,580 in federal taxes for tax years 2003 through 2005 and 2007 through 2010.  Hager also failed to report his ownership and control of his foreign financial accounts to the Department of the Treasury on a Report of Foreign Bank and Financial Account even though an accounting firm had informed Hager of his obligation to do so and advised him of the civil and criminal penalties he could suffer for the failure to do so.

“In pleading guilty today, Markus Hager became another example of an individual who attempted to conceal the true source of his money‎ and was caught,” said Chief Richard Weber of  IRS-Criminal Investigation (IRS-CI).  “IRS-CI will continue to take every step necessary to ferret out those who attempt to avoid their reporting obligations under the law.”

Sentencing has been set for ­Jan. 4, 2017.  Hager faces a statutory maximum sentence of five years in prison, as well as a term of supervised release and monetary penalties.  According to the plea agreement, Hager agreed to pay restitution to the IRS.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Capers commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Senior Litigation Counsel Mark F. Daly and Assistant Chief Andrew Kameros of the Tax Division and Assistant U.S. Attorney Erik Paulsen of the Eastern District of New York, who are prosecuting this case.

Tuesday, September 27, 2016


Monday, September 26, 2016
Four Chinese Nationals and China-Based Company Charged with Using Front Companies to Evade U.S. Sanctions Targeting North Korea’s Nuclear Weapons and Ballistic Missile Programs

Company Allegedly Violated Sanctions by Facilitating U.S. Dollar Transactions on Behalf of a North Korean Bank with Ties to Weapons of Mass Destruction Proliferators

Four Chinese nationals and a trading company based in Dandong, China, were charged by criminal complaint unsealed today with conspiring to evade U.S. economic sanctions and violating the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR) through front companies by facilitating prohibited U.S. dollar transactions through the United States on behalf of a sanctioned entity in the Democratic People’s Republic of Korea (North Korea) and to launder the proceeds of that criminal conduct through U.S. financial institutions.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Assistant Director E.W. Priestap of the FBI’s Counterintelligence Division made the announcement.

On Aug. 3, 2016, a U.S. Magistrate Judge Joseph A. Dickson of the District of New Jersey signed a criminal complaint charging Ma Xiaohong (Ma) and her company, Dandong Hongxiang Industrial Development Co. Ltd. (DHID), and three of DHID’s top executives, general manager Zhou Jianshu (Zhou), deputy general manager Hong Jinhua (Hong) and financial manager Luo Chuanxu (Luo), with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and to defraud the United States; violating IEEPA; and conspiracy to launder monetary instruments.

Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also imposed sanctions on DHID, Ma, Zhou, Hong and Luo for their ties to the government of North Korea’s weapons of mass destruction proliferation efforts.

In addition, the department filed a civil forfeiture action for all funds contained in 25 Chinese bank accounts that allegedly belong to DHID and its front companies.  The department has also requested tha the federal court in the District of New Jersey issue a restraining order for all of the funds named in the civil forfeiture action, based upon the allegation that the funds represent property involved in money laundering, which makes them forfeitable to the United States.  There are no allegations of wrongdoing by the U.S. correspondent banks or foreign banks that maintain these accounts.

“The charges and forfeiture action announced today allege that defendants in China established and used shell companies around the world, surreptitiously moved money through the United States and violated the sanctions imposed on North Korea in response to, among other things, its nuclear weapons program,” said Assistant Attorney General Caldwell.  “The actions reflect our efforts to protect the integrity of the U.S. banking system and hold accountable those who seek to evade U.S. sanctions laws.”

“The charges unsealed today reflect our nation’s commitment to using all tools to deter and disrupt weapons of mass destruction proliferators,” said Assistant Attorney General Carlin.  “One of the strengths of our sanctions programs is that they prevent sanctioned wrongdoers from engaging in U.S. dollar transactions.  Denying the use of the U.S. financial system can greatly curtail illegal activities and disrupt efforts to provide weapons of mass destruction to terrorists and rogue nations.  Those who seek to evade our financial sanctions will be fully prosecuted, and we will be unflagging in our efforts to bring them to justice.”

“The FBI takes violations of these laws extremely seriously and will not hesitate to use our full investigative resources to stop this type of illegal activity,” said Assistant Director Priestap.  “In this case agents, analysts and forensic accountants from field offices in Phoenix and Newark, as well as FBI Headquarters, all contributed to a successful investigation.”

According to criminal and civil complaints, DHID is primarily owned by Ma and is located near the North Korean border.  DHID allegedly openly worked with North Korea-based Korea Kwangson Banking Corporation (KKBC) prior to Aug. 11, 2009, when the OFAC designated KKBC as a Specially Designated National (SDN) for providing U.S. dollar financial services for two other North Korean entities, Tanchon Commercial Bank (Tanchon) and Korea Hyoksin Trading Corporation (Hyoksin).  President Bush identified Tanchon as a weapons of mass destruction proliferator in June 2005, and OFAC designated Hyoksin as an SDN under the WMDPSR in July 2009.  Tanchon and Hyoksin were so identified and designated because of their ties to Korea Mining Development Trading Company (KOMID), which OFAC has described as North Korea’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons.  The United Nations (UN) placed KOMID, Tanchon and Hyoksin on the UN Sanctions List in 2006.  In March 2016, KKBC was added to the UN Sanctions List.

In August 2009, Ma allegedly conspired with Zhou, Hong and Luo to create or acquire numerous front companies to conduct U.S. dollar transactions designed to evade U.S. sanctions.  The complaints allege that from August 2009 to September 2015, DHID used these front companies, established in offshore jurisdictions such as the British Virgin Islands, the Seychelles and Hong Kong, and opened Chinese bank accounts to conduct U.S. dollar financial transactions through the U.S. banking system when completing sales to North Korea.  These sales transactions were allegedly financed or guaranteed by KKBC.  These front companies facilitated the financial transactions to hide KKBC’s presence from correspondent banks in the United States, according to the allegations in the complaints.

As a result of the defendants’ alleged scheme, KKBC was able to cause financial transactions in U.S. dollars to transit through the U.S. correspondent banks without being detected by the banks and, thus, were not blocked under the WMDPSR program.

A complaint is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The FBI is investigating the case.  Trial Attorneys Jennifer Wallis and Michael Parker of the Criminal Division’s Asset Forfeiture and Money Laundering Section, Trial Attorney Christian Ford of the National Security Division’s Counterintelligence and Export Control Section and Chief Barbara Ward and Assistant U.S. Attorneys Joyce Malliet and Sarah Devlin of the District of New Jersey are prosecuting the case.  The Criminal Division’s Office of International Affairs provided valuable assistance in this matter.

Friday, September 23, 2016


Department of Justice
Office of Public Affairs
Friday, September 23, 2016
Alabama Pill Mill Doctor Charged with Illegal Prescribing and Health Care Fraud

Federal prosecutors on Thursday charged a former north Alabama physician, who was the nation’s highest Medicare prescriber of opioid painkillers at the height of his practice, with illegally prescribing controlled substances and with a health care fraud involving $9.5 million in unneeded and unused urine tests, announced U.S. Attorney Joyce White Vance for the Northern District of Alabama and Special Agent in Charge Roger C. Stanton for the Federal Bureau of Investigations (FBI).

In a two-count information filed in U.S. District Court, the U.S. Attorney’s Office for the Northern District of Alabama charged Shelinder Aggarwal, 48, of Huntsville, Alabama, with one count of distributing a controlled substance outside the scope of professional practice and not for a legitimate medical purpose in July 2012 and with one count of conspiring to execute a health care fraud scheme against Medicare and Blue Cross Blue Shield of Alabama between Jan. 1, 2011, and March 31, 2013.

Prosecutors also filed a plea agreement with Aggarwal in which he agrees that he will plead guilty to the charges and forfeit his former clinic on Turner Street Southwest in Huntsville, along with $6.7 million.  Aggarwal earlier repaid $2.8 million to Medicare and $45,843 to Blue Cross following audits, according to his plea agreement.  The agreement stipulates a 15-year prison sentence.  A federal judge must accept the terms of the agreement before it is final.

Aggarwal surrendered his Alabama medical license in 2013, along with his Alabama and federal Drug Enforcement Administration certificates to prescribe controlled substances, after the Alabama Board of Medical Examiners initiated an investigation.

“Shelinder Aggarwal treated his medical license like a license to deal opiate drugs,” said U.S. Attorney Vance.  “He also defrauded Medicare and Blue Cross Blue Shield of more than $9 million dollars by performing drug tests he never used to treat his patients.  Thanks to this prosecution, Aggarwal is no longer a drug dealer masquerading as a doctor.  His pill mill is closed, he must repay the money he stole from health insurers and he will serve time for his crimes.  I am grateful to our prosecutors and the investigators who brought this individual to justice.”

“Aggarwal was trusted with resources to care for others and used that access to defraud the health care system, thus costing tax payers millions of dollars,” said Special Agent in Charge Stanton.  “In addition, he directly contributed to the opioid drug epidemic which is plaguing our nation, and potentially endangered the lives of his patients.  I applaud the work of my agents and our partners to shut down Aggarwal’s pill mill and hold him accountable for his actions.”

Aggarwal was a pain management doctor who operated Chronic Pain Care Services in Huntsville.  His medical practice was a pill mill, according to the charges and plea agreement.  The documents state that in 2012, about 80 to 145 patients a day visited Aggarwal’s clinic, with Aggarwal seeing the majority of the patients and writing all prescriptions.  Initial patient visits typically lasted five minutes or less, and follow-ups two minutes or less.  The documents state that Aggarwal did not obtain prior medical records for his patients, did not treat patients with anything other than controlled substances, often asked patients what medications they wanted and filled their requests, prescribed controlled substances to patients who he knew were using illegal drugs and did not take appropriate measures to ensure that patients did not divert or abuse controlled substances.  The plea agreement summarizes an interaction with a patient, which was captured on video.  In it, Aggarwal notes that the DEA viewed him as the “biggest pill-pusher in North Alabama” and that many of his patients were “dropping like flies, they are all dying.”

The documents cite the Prescription Drug Monitoring Program (PDMP) for Alabama, which tracks the dispensing of controlled substances, as well as Medicare data, to document Aggarwal’s prescribing practices.

According to the PDMP, Alabama pharmacies filled about 110,013 of Aggarwal’s prescriptions for controlled substances in 2012.  That would equal about 423 prescriptions per day if he worked five days a week, and resulted in about 12.3 million pills.  The PDMP rated Aggarwal as the highest prescriber of controlled substances filled in Alabama in 2012, with the next highest prescriber writing a third as many prescriptions.

Medicare data shows Aggarwal was the highest prescriber in the United States of Schedule II controlled substances under Medicare in 2012.  Schedule II substances include the opioid painkillers oxycodone, oxymorphone, hydromorphone and morphine.

As to Aggarwal’s health care fraud scheme, he is charged with requiring patients to undergo unreasonable and unnecessary urine drug tests that he did not need or use in their treatment.  According to the documents, the tests he ran depended not on patients’ treatment, but on how much he could bill for tests.  Aggarwal often ignored urine test results showing patients were using illegal drugs, the documents state.

Between January 2011 and March 2013, urine drug tests accounted for about 80 percent of paid claims Aggarwal submitted to Medicare and Blue Cross, for a total reimbursement of $9.5 million.  According to his charges and plea agreement, “Aggarwal’s primary motivation for testing patients’ urine specimens, and submitting those claims for payment, was financial gain.”

The FBI investigated the case, based partly on an investigation conducted by the ABME.  Assistant U.S. Attorneys Chinelo Dike-Minor and Russell Penfield are prosecuting.

Friday, September 2, 2016


Thursday, September 1, 2016
Romanian Hacker “Guccifer” Sentenced to 52 Months in Prison for Computer Hacking Crimes

Marcel Lehel Lazar, 44, of Arad, Romania, a hacker who used the online moniker “Guccifer,” was sentenced today to 52 months in prison for unauthorized access to a protected computer and aggravated identity theft.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, Director Bill A. Miller of the U.S. Department of State’s Diplomatic Security Service (DSS) and Special Agent in Charge Brian J. Ebert of the U.S. Secret Service’s Washington Field Office made the announcement.

Lazar pleaded guilty before U.S. District Judge James C. Cacheris of the Eastern District of Virginia on May 25, 2016.

According to admissions made in connection with his plea agreement, from at least October 2012 to January 2014, Lazar intentionally gained unauthorized access to personal email and social media accounts belonging to approximately 100 Americans, and he did so to unlawfully obtain his victims’ personal information and email correspondence.  Lazar’s victims included an immediate family member of two former U.S. presidents, a former member of the U.S. Cabinet, a former member of the U.S. Joint Chiefs of Staff and a former presidential advisor, he admitted.  In many instances, Lazar publically released his victims’ private email correspondence, medical and financial information and personal photographs, according to the statement of facts filed with his plea agreement.

The FBI, DSS and the Secret Service investigated the case.  Senior Counsel Ryan K. Dickey and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Maya D. Song and Jay V. Prabhu of the Eastern District of Virginia are prosecuting the case.  The Criminal Division’s Office of International Affairs provided significant assistance.  The Justice Department thanks the government of Romania for their assistance in this matter.

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