TWO PSYCHOLOGIST INDICTED FOR ALLEGED ROLES IN $25 MILLION MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, October 22, 2015

Two Psychologists Charged in $25.2 Million Fraud Scheme Involving Psychological Testing in Gulf Coast States

Two clinical psychologists were charged with participating in a $25 million Medicare fraud scheme involving psychological testing in nursing homes in Gulf Coast states.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Regional Office made the announcement.

Beverly Stubblefield, Ph.D., 62, of Slidell, Louisiana, and John Teal, Ph.D., 46, of Jackson, Mississippi, were charged by a superseding indictment with conspiracy to commit health care fraud and conspiracy to make false statements related to health care matters.  Two other defendants, Rodney Hesson, Psy.D., 46, and Gertrude Parker, 62, both of Slidell, were charged in the initial indictment returned in June 2015 in connection with a large-scale Medicare Fraud takedown, and were also charged in today’s superseding indictment.

According to the superseding indictment, Hesson and Parker owned and controlled Nursing Home Psychological Service (NHPS) and Psychological Care Services (PCS), each of which operated in Louisiana, Mississippi, Florida and Alabama.  The superseding indictment alleges that NHPS and PCS contracted with nursing homes in these states to allow NHPS and PCS clinical psychologists, including Stubblefield, Teal and Hesson, to administer to nursing home residents psychological tests and related services that were not necessary and, in some instances, never provided.

According to the superseding indictment, between 2009 and 2015, NHPS and PCS submitted more than $25.2 million in claims to Medicare.  Medicare paid approximately $17 million on those claims.

The charges and allegations contained in an indictment are merely accusations.  The defendants are presumed innocent unless and until proven guilty.

The case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Louisiana.  The case is being prosecuted by Trial Attorneys William Kanellis and Antonio Pozos of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Patrice Harris Sullivan of the Eastern District of Louisiana.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 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.

NURSING HOME MAINTENANCE CONTRACTOR GETS 37 MONTHS IN PRISON FOR MAIL FRAUD/KICKBACK SCHEME

The following excerpt is from the Department of Justice website:

“WASHINGTON — A Virginia contractor was sentenced today to serve 37 months in prison for participating in a scheme to steer contracts to him for repair, maintenance and renovation work at healthcare and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced.

Edward T. Fodrey, a resident of Norfolk, Va., was sentenced in U.S. District Court in Norfolk by Judge Mark S. Davis and was ordered to pay $326,799 in restitution. Fodrey pleaded guilty on April 4, 2011, to one count of conspiracy to commit mail fraud in connection with his participation in a kickback scheme and one count of failing to file a tax return.

According to the charge filed on March 30, 2011, from about May 2006 until at least December 2006, Fodrey conspired with an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities in North Carolina and Virginia. The MFA employee steered contracts to Fodrey in return for kickbacks by creating fictitious competitor bids that were higher than the quotes submitted by Fodrey and other co-conspirator venders in order to create the appearance of competition. The MFA employee directed subordinates to solicit quotes only from Fodrey or other conspiring vendors and specified the amount Fodrey should quote to MFA as well as the amount of the kickback on each of the contracts.

Fodrey paid more than $160,000 in kickbacks to the MFA employee and received contracts and subcontracts totaling more than $750,000. The court document states that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. Fodrey was also charged with failing to file a tax return for 2006, which is the year in which Fodrey received payment on the MFA contracts.

Fodrey is the first to be sentenced of the four individuals charged to date in connection with the department's ongoing fraud investigation into the award of repair, maintenance and renovation contracts at facilities owned by MFA. The investigation is being conducted by the Antitrust Division's Philadelphia Field Office, the U.S. Attorney's Offices for the Eastern District of Virginia and the Western District of Virginia, the FBI in Roanoke, Va., and the Internal Revenue Service-Criminal Investigation in Roanoke.”