United States Drug Enforcement Administration

HOUSTON - Attorney General Loretta E. Lynch and Department of Health and Human (DHHS) Secretary Sylvia Mathews Burwell announced today an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and loss amount.  

“As this takedown should make clear, health care fraud is not an abstract violation or benign offense - It is a serious crime,” said Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people - many of them in need of significant medical care. They promise effective cures and therapies, but they provide none.  Above all, they abuse basic bonds of trust - between doctor and patient; between pharmacist and doctor; between taxpayer and government - and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them - and them alone.”

“The largest multiple defendant takedown of those who were involved in large scale health care fraud against the USA sends a tremendous message to the public of our vigilance. Such wrongdoing will be uncovered and prosecuted,” said U.S. Attorney Kenneth Magidson. “These cases are part of our continuing effort to combat greed in our health care system, not only in the Houston metropolitan area, but also in our other offices in South Texas. We are committed to a sustained effort to continue to root out health care fraud.”

In the Southern District of (SDTX), the United States Attorney’s (USAO) and the Department of Justice Medicare Fraud Strike Force charged 22 individuals in 11 cases involving over $136 million in alleged fraud.

One of these defendants is a physician with the highest number of referrals to home health services in the SDTX. Houston physician John Ramirez, 62, has been charged with participating in separate schemes to bill Medicare for medically unnecessary home health services that were often not provided. He is charged with four counts of conspiracy to commit health care fraud. In this $18 million Medicare fraud scheme, Ramirez allegedly authorized home-health services for Medicare beneficiaries when such services were not medically necessary, not provided by the home health agency or both. Medicare paid over $15 million to numerous companies that submitted claims to Medicare using the fraudulent home health referrals from the physician, according to the indictment. Also charged in this case is Susana Bermudez, 49, of Houston, the owner of Milten Clinic in Houston. She was indicted on one count of conspiracy to commit health care fraud for allegedly selling signed certifications to home health agencies. The agencies then would bill Medicare for purported home health services that were medically unnecessary, not provided, or both.

In a separate but related case, Ramirez, Ann Sheperd, 60, of Houston, and Yvette Nwoko, 27, of Houston, were indicted on one count of conspiracy to commit health care fraud and three counts of health care fraud. The charges stem from their alleged roles in an $20 million Medicare fraud scheme. Sheperd was the owner and operator of Amex Medical, while Nwoko was the manager. The indictment alleges Shepherd and Nwoko would make it appear as if Medicare beneficiaries qualified for home health services when, in fact, the beneficiaries did not need the services. Shepherd allegedly paid doctors to sign false certifications. In return, Shepherd and Nwoko would sell the certifications to home health agencies, according to the charges. These agencies would then bill Medicare for home health services that were not necessary, not provided, or both.

These cases are being jointly prosecuted by the USAO and the Strike Force.

In another case prosecuted by the USAO, Gwendolyn Arnetta Gibbs aka Gwendolyn Arnetta Guidry, 64, of Missouri City, and Justina Obumnador Uzowulu, 55, are charged in a 20-count indictment for their participation in a $15 million health care fraud conspiracy. Gibbs is the owner and operator of Daybreak Rehabilitation Center. The indictment alleges she paid kickbacks to Uzowulu, who operates a group home in Houston, who would then bring her residents to Gibbs’ partial hospitalization program for group therapy. Gibbs could then bill Medicare for treatment, according to the indictment. Gibbs is also charged with billing group therapy sessions under a doctor who no longer worked at Daybreak. 

In McAllen, the owner of a Rio Grande Valley area durable medical (DME) company and six others have been charged in a 16-count indictment for allegedly submitting false and fraudulent claims to Texas Medicaid for DME equipment that was not provided and/or was not authorized by a physician. Maria Garza, 41, of McAllen, is an owner of DME company Hacienda DME. Also charged were employees Bertha Lopez, 61, of Sullivan City, who served as a marketer and vendor for the company; Miriam Aguilar, 31, of Rio Grande City, a delivery driver and recruiter; and Nancy Rangel, 30, of Mission, who was a biller and recruiter. Veronica Cruz, 32, of Donna, Angelica Saenz, 44, of Mission, and Yolotzi Lara, 28, of Penitas, were charged for their roles as recruiters for Hacienda DME. According to the indictment, the defendants forged and/or caused others to forge the signatures of physicians on the required prescription forms. They also allegedly billed for larger, higher-paying sizes of pull-ups and diapers regardless of whether those sizes were needed or provided in order to receive higher reimbursements from Texas Medicaid. Further, the defendants also paid illegal kickbacks in exchange for patient information, according to the indictment. 

Additionally, the Strike Force has returned seven additional indictments and informations in the SDTX, charging nine more defendants in cases involving over $80 million.

The operations announced today are part of the Health Care Fraud Prevention & Enforcement Action (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion. 

Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings. Today’s announcement marks the second time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.

The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the Drug Enforcement Administration, FBI, DHHS-Office of Inspector General, Defense Criminal Investigative Service and state Medicaid Fraud Control Units.

The court documents for each case will be posted online, as they become available. An indictment or information is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.