HALF WAY HOUSE OPERATORS GO TO PRISON FOR PART IN FRAUD SCHEME

December 20, 2011
“Pleads Guilty to Fraud and Kickback SchemeThree Other Halfway House Operators Sentenced to Prison
WASHINGTON – The manager and operator of a Fort Lauderdale, Fla.-area halfway house pleaded guilty yesterday for his role in a Medicare fraud kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI and the Department of Health and Human Services (HHS).

Butler Moultrie, 46, pleaded guilty before U.S. Magistrate Judge Barry L. Garber in Miami to one count of conspiracy to commit health care fraud.

According to court documents, most of the residents at Moultrie’s halfway house were recovering from drug and/or alcohol addictions.   Nevertheless, Moultrie agreed to refer Medicare beneficiaries who resided at his halfway house to ATC purportedly to receive intensive mental health services called partial hospitalization program (PHP) treatment in exchange for illegal health care kickbacks.   Moultrie knew that such kickbacks were illegal, and he knew that ATC fraudulently billed the Medicare program for the PHP services.   Moultrie knew that no doctor had prescribed PHP treatment for his patient referrals, and he knew that his residents required drug and/or alcohol addiction treatment rather than mental health services.

According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses, including Moultrie, and to patient brokers in exchange for delivering ineligible patients to ATC and its related company, the American Sleep Institute (ASI).   In some cases, the patients received a portion of those kickbacks.  Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services.   The ineligible beneficiaries attended treatment programs that were not legitimate so that ATC and ASI could bill Medicare more than $200 million in medically unnecessary services.

According to the plea agreement, Moultrie’s participation in the fraud resulted in approximately $1.9 million in fraudulent billing to the Medicare program.  At sentencing, scheduled for Feb. 21, 2012, Moultrie faces a maximum of 10 years in prison and a $250,000 fine.

Robert and Nikki Jenkins, two other managers and operators of halfway houses in Fort Lauderdale, were sentenced yesterday for referring beneficiaries to ATC in exchange for health care kickbacks.   U.S. District Chief Judge Federico A. Moreno in Miami sentenced Robert Jenkins to 24 months in prison and Nikki Jenkins to 15 months in prison.   Another halfway house operator, Irene Trematerra, was sentenced last week by U.S. District Judge Ursula Ungaro to 18 months in prison for her role in providing beneficiaries to ATC in exchange for kickbacks.

ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011.   ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial.  Other defendants are scheduled to begin trial on April 9, 2012, before U.S. District Judge Patricia A. Seitz.

The guilty plea and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

These cases are being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino of the Criminal Division’s Fraud Section.  The cases were investigated by the FBI and HHS-OIG and were 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 its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants that collectively have billed the Medicare program for more than $2.9 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.”