Miami forensic accountant - Rachlin Fraud on the Fraud...incredible

A federal judge has sharply criticized a Miami forensic accountant overseeing a massive forfeiture stemming from a health care fraud, saying she placed her firm's financial interests ahead of her role as court-appointed receiver.

U.S. District Court Judge B. Avant Edenfield in Savannah, Ga., also criticized Miami-based Rachlin, saying the firm purposely refused to file tax returns until it was paid, racking up fines and penalties.

Marta Alfonso, a partner in the firm's advisory services division, was appointed receiver after Edenfield ordered convicted officials of Miami-based Bio-Med Plus to pay forfeiture, fines and restitution following their convictions for bilking state and federal agencies on expensive AIDS and hemophilia treatments that were never administered.

Alfonso became involved in the case early, testifying as a defense expert, and made the unusual transition to receiver. She did well, recovering $54.1 million thus far on the forfeiture order.

She hired Miami attorney Thomas Tew, one of Tew Cardenas' name partners, as her lawyer in the receivership and farmed out the tax services to her firm.

Alfonso ran into trouble with the judge after filing an emergency motion Feb. 4 to pay Rachlin. The motion was filed after a court-appointed monitor overseeing the forfeiture refused to pay the bill for tax preparation. The monitor cited cost overruns and late filings.

Alfonso told the court that Rachlin should be paid $191,354, of which $127,397 is outstanding. The monitor had set a $76,500 budget cap for the tax returns prepared by Rachlin.

In an April 7 order to show cause, Edenfield said that Alfonso demonstrated a clear conflict of interest by lobbying the monitor on behalf of her firm. "The receiver's conflict has burdened the receivership not only by enabling an excessive budget overrun and the incurrence of unnecessary expenses, but also by causing additional receiver's fees, monitor's fees and attorney fees," the judge wrote.

The judge issued the order after asking both the receiver and monitor to file detailed explanations. Edenfield said the monitor's response was supported by affidavits and other documentation while the receiver's filing by Tew Cardenas attorney Dennis Nowak "was both untimely and unresponsive."

A call to Rachlin for comment was not returned by deadline.

Alfonso is a salaried Rachlin employee who does not share in the firm's profits. She did not return phone calls for comment.

In his order, the judge noted that Alfonso defended her firm, acknowledging mistakes may have been made but saying it was an internal Rachlin issue. She also said the services were reasonably priced even though invoices were $100,000 over budget and late.

Speaking on her behalf, Tew said this is the first dispute between Alfonso and the monitor in three years since she was appointed. He said the receivership would respond to the show cause order by Friday.

Tew said it is commonplace for receivers to tap their own firms for tax services.

Attorneys who are appointed receivers regularly hire their own firms as legal counsel.

"There has been no wrongdoing," Tew said. "We do not believe there is a conflict."

The judge set a hearing for next Tuesday, April 21, so Alfonso can show cause why she should not be removed as receiver and why the court should not seek to recover any wasted assets.

Rachlin bills itself as one of the largest independent public accounting and advisory service firms in the Southeast with 25 partners and more than 225 professionals in South and Central Florida.

Bio-Med Plus was a medical supply company based in Miami and Savannah with about 100 employees. It was acquired by Novis Pharmaceuticals in 2007 after three top Bio-Med officials were accused of cheating users of life-saving blood products. The officials were prosecuted for health care fraud in Georgia, Florida and California.

In his order, Edenfield chastised Alfonso for submitting several bills from Rachlin, ranging from $98,992 to $171,379 for the same tax services. Rachlin filed late tax returns for the receivership for 2006 and 2007, incurring $231,226 in interest and penalties.

The monitor, Madison Associates of Woodbridge, Va., raised questions about the bills after a routine review from April through mid-September 2008.

"Through e-mails, memoranda, revised, re-revised and thrice-revised invoices, the receiver and Rachlin offered a stream of unresponsive and obfuscatory answers to the monitor's inquirers reminiscent of the 'Who's on First?' Abbott and Costello comedy routine," Edenfield wrote in his order.

In a series of e-mails last year, Alfonso declared "we have been paid nothing" for the 2007 tax services after giving blanket approval for a series of misstated and miscalculated Rachlin invoices. She later conceded invoices had been paid, Edenfield said.

Edenfield concluded Rachlin did little from April to July 2008.

"This inactivity suggests that Rachlin negligently allowed late penalties and interest to accrue while it waited for the receiver's collection of its fees in excess of the [$76,500] cap," Edenfield wrote.

The monitor suggested last September that an outside arbiter be engaged in resolving the conflict over the tax return issue with Rachlin, but Alfonso declined the recommendation, the judge's order said.

Alfonso proposed an independent review earlier this month of Rachlin's work to render an opinion on reasonable fees, Tew said.

Edenfield responded in his order, "The opportunity for such review, however, has come and gone."

Wachovia recommended that CHS take part in a securities-lending program. 2003

CHS determined that the securities-lending program was proving too risky,

Wachovia Corp Sued by Carolinas Health Care System for More than $19 Million in “Bad” Investments

Posted On: January 19, 2009 by Shepherd Smith & Edwards
Wachovia Corp Sued by Carolinas Health Care System for More than $19 Million in “Bad” InvestmentsCarolinas Healthcare System (CHS) is suing Wachovia Corp for alleged bad investments that resulted in losses valued at over $19 million. CHS is also accusing the bank of “directly misleading” it, misrepresenting the risks associated with the investments, and failing to follow the hospital system's orders that it be withdrawn from the securities-lending program. Wachovia spokesperson Mary Eshet says that the company disagrees about the allegations, was always in compliance, and only made appropriate investments for CHS.

In 2003, according to the investment fraud lawsuit, Wachovia recommended that CHS take part in a securities-lending program. As a participant, a third party would borrow securities from CHS's portfolio in return for collateral that would be invested by Wachovia until the securities were returned. This would also hopefully result in additional returns.

Per the agreement, Wachovia was only supposed to invest in safe, liquid, quality securities. Any time CHS opted to withdraw from the program, the hospital system was supposed to get all of its investments back within five business days. Also, Wachovia would be allowed to keep 40% of the profits on one account and 35% on the other account.

Last summer, CHS determined that the securities-lending program was proving too risky, especially with the markets collapsing. In September, CHS notified Wachovia to return all borrowed securities right away.

Wachovia couldn’t return all of the securities immediately. Wachovia had invested for CHS $14.9 million in Sigma Finance Corp-issued floating rate notes (now worth $750,000) and $5 million in Pricoa Global Funding floating-rate notes (now worth $4.95 million).

The lawsuit contends that Wachovia never notified Carolinas HealthCare System that the investments were not appropriate until CHS decided to end its participation in the securities-leading program. 5 days after Sigma went into receivership last October, Wachovia told the hospital system for the first time that its investment was, at that time, worth just $1.8 million. CHS says there is no market for the Pricoa notes.

CHS contends that Wachovia gained 40% of the profits but did not suffer any of the losses. The hospital system is solely responsible for returning the lost collateral to its securities borrowers.

CHS sues Wachovia over investment advice, Charlotte Observer, January 15, 2009

CHS files suit vs. Wachovia over losses on investments, Charlotte Business Journal, January 9, 2009


Related Web Resources:
Carolinas HealthCare System

Wachovia Corp

Call or e-mail Shepherd Smith Edwards and Kantas LLP today.

United Health Group, Cuomo goes after United Health

Cuomo goes after United Health
Updated: 01/13/2009 09:26 PM
By: Erin Billups

NEW YORK STATE -- "I'm putting all the other healthcare insurance companies on notice today. This is the first step today with United," said Attorney General Andrew Cuomo.

After an investigation into allegations of unfair insurance reimbursement rates, United Health Group, one of the country's largest health insurers, has agreed to shut down its subsidiary, Ingenix, the nation's largest provider of health care billing information. Cuomo says Ingenix intentionally skewed the rates used when patients saw a doctor out of their coverage network.

"The system basically forced consumers to write a blank check to the doctor. They had no other guidance," Cuomo said.

Many large and small insurance providers use Ingenix, giving the company customer's billing information and all receiving the same reimbursement rate.

"Everyone bought into the system, everyone agreed, everyone has the same numbers. It was very difficult to detect," Cuomo said.

So customers would go to out-of-network doctors thinking they'd get, say, 80 percent back of what they were billed, only to find out that Ingenix would give back 10 to 28 percent less, calling that, the quote, usual and customary cost.

Mary Jerome, is being treated for advanced stage ovarian cancer. After she discovered her reimbursements were too low, she reported it to Cuomo's office.

"I felt like I had to battle twice, I had to battle cancer and I then felt I had to battle my insurance company,” said Jones. “It was almost too much to bear."

Now fewer people will have to bear that burden. United has also agreed to pay $50 million to a qualified nonprofit organization that will create a new independent database and reimbursement system. It will also develop a website where customers can find out, in advance, how much they'll pay before they go to the doctors.

But the investigation continues. Cuomo says one by one, they'll be investigating other insurance companies.

"I believe all these companies that have been involved with Ingenix, that there's a very strong case that they were perpetrating consumer frauds. And we are going to aggressively pursue those cases," Cuomo said.

In a press release, United Health's president said they're confident "the agreement will enhance the transparency of information" for consumers. But it seems this was just the tip of the iceberg.

"MARTIN ACT" PROPOSED TO CRACK DOWN ON MEDICAID FRAUD

"Martin Act was used by the Attorney General with great success in prosecutions of fraud by investment banks, mutual funds and insurance companies. Those efforts led to the recovery of more than $6 billion for investors, businesses and the government. "


"MARTIN ACT" PROPOSED TO CRACK DOWN ON MEDICAID FRAUD

New Legislation Would Improve Prosecutors’ Ability to Fight Fraud
Attorney General Spitzer today proposed new Medicaid fraud legislation modeled after the statute he used to bring far-reaching reform to the financial industry.

Spitzer’s proposal, dubbed the "Martin Act for Health Care," removes limitations that hamper prosecution of health care fraud.

"New York State has been a national leader in the recovery of fraudulently obtained Medicaid funds," Spitzer said. "We could do even better if we strengthened the ability of prosecutors to prosecute obvious crimes."

In today’s health care delivery system, approaches to cheating the system by committing fraud have surpassed the dated definitions of larceny. This proposal overcomes the hypertechnical obstacles imposed by current law, and would allow prosecutors to bring cases against Medicaid providers who steal money through half-truths, omissions and deceptions.

The proposal would also help speed investigations and recoveries by providing new investigative tools for law enforcement authorities. For example, one key provision would allow the Attorney General to conduct examinations of Medicaid providers under oath and use the providers’ answers in civil recovery actions.

The Martin Act was used by the Attorney General with great success in prosecutions of fraud by investment banks, mutual funds and insurance companies. Those efforts led to the recovery of more than $6 billion for investors, businesses and the government.
Without Martin Act powers, New York still led the nation in Medicaid fraud recoveries, with $219 million recovered last year. With such powers, the Attorney General believes recoveries would increase significantly.

Spitzer previously introduced several bills aimed at improving Medicaid fraud recoveries and deterring fraud. One would provide financial incentives to those who report incidents of fraud and protects whistle blowers. Another would stiffen penalties for health care-related fraud.


The Attorney General maintains a toll-free tip-line for aid in his fight against Medicaid fraud. To report incidents of fraud or nursing home abuse contact: 866-NYS-FIGHT or (866-697-3444).

'Going door to door to sniff out fraud' We must!

Rampant Medicare fraud suspected in Miami
Miami may be ground zero,however this has been going on for years!

By Julie Appleby, USA TODAY
Home health care costs charged to Medicare in the Miami area have risen 20 times the national average in the past five years, prompting a federal investigation of suspected fraudulent billing.
Miami-Dade County is on track to cost Medicare a projected $1.3 billion for home health care services this fiscal year, up 1,300% in just five years, government data show.

SLEUTHS: Going door to door to sniff out fraud
Investigators suspect that fraud is helping to drive the increase because the population of Medicare beneficiaries in the county grew only 10.2% between 2004 and 2007, the latest government data show.

"You definitely have a problem down here," says Randall Culp, an FBI supervisory special agent who oversees a team that works with a Medicare Fraud Strike Force in Miami.

In South Florida, investigators say, some agencies are billing Medicare for millions of dollars in services that are unnecessary, overused or not provided at all.

Investigators elsewhere are paying attention because South Florida is a bellwether for scams that later surface in other large cities, such as Los Angeles and Houston. Scams involving fake AIDS treatments, for example, popped up in Detroit and several other cities after a crackdown in Miami, Culp and others say.

"Typically, Miami is ground zero. Then we see it move to the other high-fraud areas," says Suzanne Bradley, an investigator with the Centers for Medicare and Medicaid Service's field office in Miami.

Home health agencies send nurses and aides to assist homebound elderly and disabled beneficiaries. Nationally, Medicare expects to spend $16.5 billion on home health care this year, up 65% from five years ago.

Medicare spent six times more on home health care services in Miami-Dade County during the first five months of this year than in Los Angeles County, where the Medicare population is three times larger, agency data show.

"It jumps off the page as out of proportion," says Kirk Ogrosky, deputy chief in the Criminal Division's Fraud Section of the Justice Department.

Today, acting Medicare chief Kerry Weems says he will announce new anti-fraud efforts, some targeted at home care agencies in Miami.

"It does affect everyone because everyone is paying into Medicare," says Peggy Sposato, a nurse investigator with the U.S. attorney in the Southern District of Florida, who combs through data looking for unusual billings.