OWNER HEALTH CARE COMPANIES PLEADS GUILTY FOR ROLE IN $12.6 MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 13, 2015

Owner of Detroit Home Health Care Companies Pleads Guilty to $12.6 Million Fraud Scheme

The owner of two home health care companies pleaded guilty to Medicare fraud and tax fraud charges in connection with his role in a scheme to fraudulently bill Medicare for $12.6 million in home health services that were not provided or were obtained through illegal kickbacks.  Ten other individuals have been convicted at trial or pleaded guilty in this case.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod Koopman of the Internal Revenue Service Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

Mohammed Sadiq, 67, of Oakland County, Michigan, pleaded guilty today before U.S. District Judge Denise Page Hood of the Eastern District of Michigan to one count of health care fraud and one count of filing a false tax return.  A sentencing hearing is scheduled for June 18, 2015.

According to admissions in his plea agreement, Sadiq owned and directed operations at two home health care companies in Detroit.  Sadiq admitted that, working with co-conspirators, he created and operated the companies for the purpose of billing Medicare for home health services that he knew were not provided.  Sadiq also admitted to paying kickbacks to patient recruiters in order to obtain the information of Medicare beneficiaries, which he then used to bill Medicare for services that were not medically necessary or were not provided at all.

Sadiq further admitted that he created fake patient files to fool a Medicare auditor and make it appear as though home health services were provided and medically necessary.

Sadiq admitted that, as a result of the scheme, he received $12.6 million from Medicare.

Also according to Sadiq, he received proceeds of the fraud through bank accounts that he controlled, withdrew substantial sums for his personal use and failed to report these proceeds on his individual federal income tax return in 2008.  In total, Sadiq admitted that he currently owes approximately $1.5 million in taxes, interest and penalties for tax years 2008 through 2010.

This case was investigated by the FBI, HHS-OIG and IRS-CI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan.  The case is being prosecuted by Trial Attorneys William Kanellis, Christopher Cestaro, Brooke Harper and Elizabeth Young of the Criminal Division’s Fraud Section, as well as Assistant U.S. Attorney Patrick Hurford of the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.