License to Steal: How Fraud Bleeds America's Health Care System
Description: Fraud and abuse bleeds more than 100 billion dollars each year out of the U.S. health system. This detailed examination shows the problem is worse than almost anyone knows, mostly invisible, and still far from controlled. Sparrow reveals that current control systems fail by presenting fraud perpetrators with a safe, easy-to-hit target: fully automated check-printing systems, which only require thieves to bill correctly , regardless of whether or not any medical service is provided. This target attracts an extraordinary range of criminal entrepreneurs, from low-life hoods who sign on as Medicare or Medicaid providers equipped with nothing more than beepers and mailboxes, to drug trafficking organizations, organized crime syndicates, even major hospital chains. Sparrow's research examines the much-misunderstood effects of managed care on the problem, the government's recent attempts to grapple with fraud, and the campaign by various provider associations to undermine those efforts
Monday, November 12, 2007
Richard Rainwater....
A Kos diarist called NCDem has written a marvelous piece on the CIA-linked Gulfstream II which went down in Mexico laden with tons of cocaine.
In past stories, we've focused on the final owner of the drug plane -- the mysterious Clyde O'Connor. He was allowed to walk around free for two weeks after the crash -- and then was allowed to scoot off to the Azores after the media began to take note of him. But Clyde isn't the only interesting owner this jet has had. (He seems to have been just the designated fall guy; these planes always go through quick "on paper" ownership transfers just before a major drug run.) To recap:This same Adams once partnered up with a rather wild character named Michael Farkas. Among his many other noteworthy accomplishments, Farkas helped to found SkyWay Aircraft. SkyWay, you will recall owned that other coke-laden jet -- the DC9 captured in Mexico.
In that case, the pilot was allowed to get away scot free. In the more recent instance of the downed Gulfstream II, the pilot was captured, offered to bribe his way out of captivity...and we have not heard one further word as to his fate.
Such things do not occur by accident.
Both jets had Bush family connections; the Skyway jet spent a lot of time in a hanger owned by another Bush funder, Richard Rainwater. No owner of either jet ever has or ever will see the inside of a courtroom.
In past stories, we've focused on the final owner of the drug plane -- the mysterious Clyde O'Connor. He was allowed to walk around free for two weeks after the crash -- and then was allowed to scoot off to the Azores after the media began to take note of him. But Clyde isn't the only interesting owner this jet has had. (He seems to have been just the designated fall guy; these planes always go through quick "on paper" ownership transfers just before a major drug run.) To recap:This same Adams once partnered up with a rather wild character named Michael Farkas. Among his many other noteworthy accomplishments, Farkas helped to found SkyWay Aircraft. SkyWay, you will recall owned that other coke-laden jet -- the DC9 captured in Mexico.
In that case, the pilot was allowed to get away scot free. In the more recent instance of the downed Gulfstream II, the pilot was captured, offered to bribe his way out of captivity...and we have not heard one further word as to his fate.
Such things do not occur by accident.
Both jets had Bush family connections; the Skyway jet spent a lot of time in a hanger owned by another Bush funder, Richard Rainwater. No owner of either jet ever has or ever will see the inside of a courtroom.
Wednesday, November 7, 2007
$3 billion fraud scheme
05/23/06
Local man charged in $3 billion fraud scheme
FBI arrests Lance Poulsen at his Grassy Point home
PORT CHARLOTTE -- A former CEO of a medical finance firm was arrested by the FBI Monday at his Grassy Point home after a federal grand jury indicted him and several others in a $3 billion fraud scheme.
After a more than three-year investigation, Lance K. Poulsen was charged with six counts of securities fraud, 11 counts of mail fraud, 14 counts of wire fraud, seven counts of promotion of money laundering and concealment of money laundering, and one count of conspiracy and money laundering conspiracy.
Poulsen, 62, served as president, chairman and director of National Century Financial Enterprises from its inception in 1991 until it went bankrupt in 2002.
The Dublin, Ohio-based company provided billions of dollars for more than 60 health care providers nationwide. NCFE would buy the financially-challenged companies' unpaid insurance claims and then use those claims as collateral and sell bonds to finance other deals.
On May 19, a federal grand jury in Columbus, Ohio, announced the 60-count indictment, which seeks about $2 billion in forfeiture of property involved in the money laundering conspiracy.
The indictment also alleges that instead of using the investors' funds as promised, Poulsen and six other company employees diverted funds to make unsecured advances and loans to health care companies owned by National Century or National Century's owners: Poulsen, Rebecca Parrett, 57, of Arizona, and Donald Ayers, 70, of Fort Myers.
According to records, NCFE executives diverted the money into other companies they owned, used some of the money for operating expenses for NCFE and provided unsecured advances and loans to clients, third parties and others.
The FBI served the warrant on Poulsen Monday morning and took him to a Fort Myers federal court, where he stood before the federal magistrate just a few hours after his arrest.
"He was issued a $1 million bond with the agreement he would forfeit his home if he doesn't turn himself to the federal court in Columbus, Ohio, by Thursday," said Fred Alverson, spokesman for the United States Department of Justice Southern District of Ohio.
According to the Charlotte County Tax Appraisers Web site, Poulsen's home is assessed at nearly $1.1 million.
Alverson said Poulsen also had to turn in his passport and he cannot travel other than to Ohio. He was also ordered to not use his 58-foot yacht valued at $2 million.
"There is no room in the business world for the kind of multi-billion dollar fraud and money laundering alleged in the indictment against the National Century executives," said Assistant Attorney General Alice S. Fisher of the Criminal Division. "The Department of Justice will continue its policy of aggressive investigation and prosecution to deter such conduct and restore investor confidence in the marketplace."
Poulsen and his codefendants are accused of conspiring to conceal cash shortages from investors and trustees by using carefully timed transfers of funds between companies.
In one instance, Poulsen and the others allegedly ordered $148 million moved into one of their subsidiaries so the investments would appear sound. The next day, they moved the money back to create the same appearance for another subsidiary.
When NCFE was first being investigated, Poulsen denied the allegations, according to story that appeared in USA Today on Dec. 19, 2002.
The maximum penalty for each count of money laundering and money laundering conspiracy is 20 years in prison and a $500,000 fine. The other charges of wire fraud, mail fraud and securities fraud carries a five-year term in prison and a $250,000 fine.
The others indicted were:
* Roger S. Faulkenberry, 45, of Dublin, Ohio;
* Randolph H. Speer, 55, of Peachtree City, Ga.;
* James E. Dierker, 38, Powell, Ohio;
* Jon A. Beacham, 39, of Grosse Pointe, Mich.
You can e-mail Alyssa Schnugg at schnugg@sun-herald.com.
By ALYSSA SCHNUGG
Staff Writer
Local man charged in $3 billion fraud scheme
FBI arrests Lance Poulsen at his Grassy Point home
PORT CHARLOTTE -- A former CEO of a medical finance firm was arrested by the FBI Monday at his Grassy Point home after a federal grand jury indicted him and several others in a $3 billion fraud scheme.
After a more than three-year investigation, Lance K. Poulsen was charged with six counts of securities fraud, 11 counts of mail fraud, 14 counts of wire fraud, seven counts of promotion of money laundering and concealment of money laundering, and one count of conspiracy and money laundering conspiracy.
Poulsen, 62, served as president, chairman and director of National Century Financial Enterprises from its inception in 1991 until it went bankrupt in 2002.
The Dublin, Ohio-based company provided billions of dollars for more than 60 health care providers nationwide. NCFE would buy the financially-challenged companies' unpaid insurance claims and then use those claims as collateral and sell bonds to finance other deals.
On May 19, a federal grand jury in Columbus, Ohio, announced the 60-count indictment, which seeks about $2 billion in forfeiture of property involved in the money laundering conspiracy.
The indictment also alleges that instead of using the investors' funds as promised, Poulsen and six other company employees diverted funds to make unsecured advances and loans to health care companies owned by National Century or National Century's owners: Poulsen, Rebecca Parrett, 57, of Arizona, and Donald Ayers, 70, of Fort Myers.
According to records, NCFE executives diverted the money into other companies they owned, used some of the money for operating expenses for NCFE and provided unsecured advances and loans to clients, third parties and others.
The FBI served the warrant on Poulsen Monday morning and took him to a Fort Myers federal court, where he stood before the federal magistrate just a few hours after his arrest.
"He was issued a $1 million bond with the agreement he would forfeit his home if he doesn't turn himself to the federal court in Columbus, Ohio, by Thursday," said Fred Alverson, spokesman for the United States Department of Justice Southern District of Ohio.
According to the Charlotte County Tax Appraisers Web site, Poulsen's home is assessed at nearly $1.1 million.
Alverson said Poulsen also had to turn in his passport and he cannot travel other than to Ohio. He was also ordered to not use his 58-foot yacht valued at $2 million.
"There is no room in the business world for the kind of multi-billion dollar fraud and money laundering alleged in the indictment against the National Century executives," said Assistant Attorney General Alice S. Fisher of the Criminal Division. "The Department of Justice will continue its policy of aggressive investigation and prosecution to deter such conduct and restore investor confidence in the marketplace."
Poulsen and his codefendants are accused of conspiring to conceal cash shortages from investors and trustees by using carefully timed transfers of funds between companies.
In one instance, Poulsen and the others allegedly ordered $148 million moved into one of their subsidiaries so the investments would appear sound. The next day, they moved the money back to create the same appearance for another subsidiary.
When NCFE was first being investigated, Poulsen denied the allegations, according to story that appeared in USA Today on Dec. 19, 2002.
The maximum penalty for each count of money laundering and money laundering conspiracy is 20 years in prison and a $500,000 fine. The other charges of wire fraud, mail fraud and securities fraud carries a five-year term in prison and a $250,000 fine.
The others indicted were:
* Roger S. Faulkenberry, 45, of Dublin, Ohio;
* Randolph H. Speer, 55, of Peachtree City, Ga.;
* James E. Dierker, 38, Powell, Ohio;
* Jon A. Beacham, 39, of Grosse Pointe, Mich.
You can e-mail Alyssa Schnugg at schnugg@sun-herald.com.
By ALYSSA SCHNUGG
Staff Writer
Tuesday, November 6, 2007
Raid of WellCare prompted by Medicaid fraud concerns
A recent raid by federal and state authorities on Tampa, Fla.-based health insurer WellCare was prompted by allegations that the company inflated mental health care spending so it could keep funds it should have refunded to the state's Medicaid program, according to a person familiar with details of the investigation, the Wall Street Journal reports (Won Tesoriero/Francis, Wall Street Journal, 11/3).
Agents from FBI, HHS and the Florida Medicaid Fraud Control Unit on Oct. 24 raided the headquarters of the insurer. Almost all of WellCare's $4 billion in revenue comes from federal and state governments. WellCare has been under scrutiny for several months. Georgia's Department of Community Health -- which administers Medicaid and PeachCare, the state's SCHIP -- also is investigating WellCare. It has been auditing payments to medical providers for the insurer, in addition to Amerigroup and Peach State Health Plan (Kaiser Daily Health Policy Report, 10/25).
Under Florida's Medicaid program, the state pays HMOs a fixed monthly rate for each beneficiary, regardless of the amount of medical services they receive. However, managed care providers are penalized if they do not spend at least 80% of the funds they receive for mental health care on treatment and are expected to refund remaining funds to the state, according to the Journal.
WellCare allegedly defrauded Florida Medicaid of more than $35 million over five years, a person with knowledge of the investigation said. The company has not been charged with any wrongdoing. According to the person, the investigators are examining ways WellCare might have improperly collected money for mental health services, such as by lowering beneficiaries' ages to receive a higher payment from Medicaid. Investigators also are looking into whether WellCare's dealings with a Cayman Islands subsidiary might have allowed the company to keep money for mental health services that it was not entitled to by inflating expenses, the person said (Wall Street Journal, 11/3).
Agents from FBI, HHS and the Florida Medicaid Fraud Control Unit on Oct. 24 raided the headquarters of the insurer. Almost all of WellCare's $4 billion in revenue comes from federal and state governments. WellCare has been under scrutiny for several months. Georgia's Department of Community Health -- which administers Medicaid and PeachCare, the state's SCHIP -- also is investigating WellCare. It has been auditing payments to medical providers for the insurer, in addition to Amerigroup and Peach State Health Plan (Kaiser Daily Health Policy Report, 10/25).
Under Florida's Medicaid program, the state pays HMOs a fixed monthly rate for each beneficiary, regardless of the amount of medical services they receive. However, managed care providers are penalized if they do not spend at least 80% of the funds they receive for mental health care on treatment and are expected to refund remaining funds to the state, according to the Journal.
WellCare allegedly defrauded Florida Medicaid of more than $35 million over five years, a person with knowledge of the investigation said. The company has not been charged with any wrongdoing. According to the person, the investigators are examining ways WellCare might have improperly collected money for mental health services, such as by lowering beneficiaries' ages to receive a higher payment from Medicaid. Investigators also are looking into whether WellCare's dealings with a Cayman Islands subsidiary might have allowed the company to keep money for mental health services that it was not entitled to by inflating expenses, the person said (Wall Street Journal, 11/3).
NCFE “money laundering is my business” and that he could set up offshore accounts for her.
‘Witness A’ for the prosecution
As if preparing to stand trial on Federal charges of conspiracy, fraud and money laundering wasn’t bad enough, now Lance Poulsen is accused of trying to convince a witness to have an attack of amnesia at his trial.
Oh boy. Mr. Poulsen, former chief executive of now-defunct National Century Financial Enterprises of Dublin, Ohio, was indicted last month on new charges of conspiracy, obstruction of justice and witness tampering.
His trial on the other charges is slated for February, when he’ll battle prosecutors’ claim that he participated in a massive fraud involving the diversion of $2 billion-plus of investors’ funds, fraudulent investor reports, and the shuffling of money among accounts to conceal shortfalls at National Century. Along with Mr. Poulsen, seven other former execs have pleaded innocent in the case; four more have admitted to playing a role in the alleged fraud that culminated in the 2002 collapse of the company. One of them was CFO John Snoble, who pleaded guilty to money laundering and was ordered to begin serving a four-year prison sentence last January.
As serious a case as it is, these new charges against Mr. Poulsen really make things interesting. In a nutshell, prosecutors allege that Mr. Poulsen enlisted the help of a pal earlier this year to pay off a former National Century executive scheduled to testify during his trial.
The feds claim the friend, Karl Demmler, approached “Witness A,” who had already pleaded guilty in the case. Mr. Demmler allegedly told her that Mr. Poulsen wanted to make her “whole.” And he wasn’t talking about giving her an extra kidney or running away with her.
Rather, prosecutors allege, Mr. Poulsen wanted to pay her a good chunk of cash—an amount eventually pegged at $500,000—in exchange for her promise to suffer mental lapses on the witness stand when asked about what she saw or did at National Century.
Apparently, though, the FBI was eavesdropping on all these juicy conversations. They claim that Mr. Demmler assured Witness A that “money laundering is my business” and that he could set up offshore accounts for her. Conversations between Messrs. Demmler and Poulsen that focused on handling the deal with Witness A were also taped, according to the indictment.
Attorneys for both Messrs. Poulsen and Demmler failed to return calls seeking comment.
Incidentally, of the four execs who have pleaded guilty, only one was female. So unless the feds are pulling a fast one in the indictment, chances are she is the mysterious Witness A.
As if preparing to stand trial on Federal charges of conspiracy, fraud and money laundering wasn’t bad enough, now Lance Poulsen is accused of trying to convince a witness to have an attack of amnesia at his trial.
Oh boy. Mr. Poulsen, former chief executive of now-defunct National Century Financial Enterprises of Dublin, Ohio, was indicted last month on new charges of conspiracy, obstruction of justice and witness tampering.
His trial on the other charges is slated for February, when he’ll battle prosecutors’ claim that he participated in a massive fraud involving the diversion of $2 billion-plus of investors’ funds, fraudulent investor reports, and the shuffling of money among accounts to conceal shortfalls at National Century. Along with Mr. Poulsen, seven other former execs have pleaded innocent in the case; four more have admitted to playing a role in the alleged fraud that culminated in the 2002 collapse of the company. One of them was CFO John Snoble, who pleaded guilty to money laundering and was ordered to begin serving a four-year prison sentence last January.
As serious a case as it is, these new charges against Mr. Poulsen really make things interesting. In a nutshell, prosecutors allege that Mr. Poulsen enlisted the help of a pal earlier this year to pay off a former National Century executive scheduled to testify during his trial.
The feds claim the friend, Karl Demmler, approached “Witness A,” who had already pleaded guilty in the case. Mr. Demmler allegedly told her that Mr. Poulsen wanted to make her “whole.” And he wasn’t talking about giving her an extra kidney or running away with her.
Rather, prosecutors allege, Mr. Poulsen wanted to pay her a good chunk of cash—an amount eventually pegged at $500,000—in exchange for her promise to suffer mental lapses on the witness stand when asked about what she saw or did at National Century.
Apparently, though, the FBI was eavesdropping on all these juicy conversations. They claim that Mr. Demmler assured Witness A that “money laundering is my business” and that he could set up offshore accounts for her. Conversations between Messrs. Demmler and Poulsen that focused on handling the deal with Witness A were also taped, according to the indictment.
Attorneys for both Messrs. Poulsen and Demmler failed to return calls seeking comment.
Incidentally, of the four execs who have pleaded guilty, only one was female. So unless the feds are pulling a fast one in the indictment, chances are she is the mysterious Witness A.
Mental health care firm settles Medi-Cal fraud lawsuit
A statewide chain of mental health centers for adolescents will pay $1 million for allegedly charging Medi-Cal for treatment at a San Leandro clinic on days when the youths were home with their families, under a settlement announced Monday.
The agreement resolved a suit filed under seal in 2003 by the former regional director of Stars Behavioral Health Group accusing the company of defrauding the government. The former employee, Joseph Krzesni of Eureka, will receive $200,000 of the settlement, and the state and federal governments will get $400,000 each, lawyers said.
Stars, headquartered in Oakland, provides mental health services for youths referred by the juvenile court system in criminal cases and by family courts in cases of abuse and neglect. Krzesni, a former Humboldt County mental health director, worked for the company from 1995 until October 2003, when he left in a dispute that he said was related to his lawsuit.
The suit alleged that Stars had billed Medi-Cal, the state's health care program for the poor, for treatment seven days a week at Stars Community Services in San Leandro, even though youths often spent weekends at home with their families.
Krzesni said the company owner had rejected his requests for an internal audit and instead banished him from the Oakland office, requiring him to work at home, and ordered him not to talk to any county or state officials. Krzesni said he called in a complaint on a Medi-Cal hot line in July 2003 and negotiated a severance agreement three months later.
He filed a federal court case in San Francisco in December 2003 under state and federal laws that allow private citizens to sue contractors for defrauding the government and collect a share of the proceeds. The federal and state governments later joined the suit. The company did not admit to any lawbreaking under the settlement.
The case "shows why whistle-blowers are important," said Mary Inman, a lawyer for Krzesni. "Without an insider coming forward, the government wouldn't necessarily be tipped off."
The company's lawyers said the case was overblown.
"As soon as (Krzesni) brought this to our attention, we conducted an audit, and have been prepared to pay that money back for a number of years," said Pat Hooper, an attorney for Stars.
Another lawyer for the company, Linda Kollar, said Stars' excessive billings were the result of sloppy staff work during a period when Medi-Cal was changing its reimbursement rules. "It was a very isolated incident," she said.
E-mail Bob Egelko at begelko@sfchronicle.com.
This article appeared on page B - 2 of the San Francisco Chronicle
The agreement resolved a suit filed under seal in 2003 by the former regional director of Stars Behavioral Health Group accusing the company of defrauding the government. The former employee, Joseph Krzesni of Eureka, will receive $200,000 of the settlement, and the state and federal governments will get $400,000 each, lawyers said.
Stars, headquartered in Oakland, provides mental health services for youths referred by the juvenile court system in criminal cases and by family courts in cases of abuse and neglect. Krzesni, a former Humboldt County mental health director, worked for the company from 1995 until October 2003, when he left in a dispute that he said was related to his lawsuit.
The suit alleged that Stars had billed Medi-Cal, the state's health care program for the poor, for treatment seven days a week at Stars Community Services in San Leandro, even though youths often spent weekends at home with their families.
Krzesni said the company owner had rejected his requests for an internal audit and instead banished him from the Oakland office, requiring him to work at home, and ordered him not to talk to any county or state officials. Krzesni said he called in a complaint on a Medi-Cal hot line in July 2003 and negotiated a severance agreement three months later.
He filed a federal court case in San Francisco in December 2003 under state and federal laws that allow private citizens to sue contractors for defrauding the government and collect a share of the proceeds. The federal and state governments later joined the suit. The company did not admit to any lawbreaking under the settlement.
The case "shows why whistle-blowers are important," said Mary Inman, a lawyer for Krzesni. "Without an insider coming forward, the government wouldn't necessarily be tipped off."
The company's lawyers said the case was overblown.
"As soon as (Krzesni) brought this to our attention, we conducted an audit, and have been prepared to pay that money back for a number of years," said Pat Hooper, an attorney for Stars.
Another lawyer for the company, Linda Kollar, said Stars' excessive billings were the result of sloppy staff work during a period when Medi-Cal was changing its reimbursement rules. "It was a very isolated incident," she said.
E-mail Bob Egelko at begelko@sfchronicle.com.
This article appeared on page B - 2 of the San Francisco Chronicle
Sunday, November 4, 2007
ACTS Retirement-Life Communities, Inc.; Ron Lusk
ACTS Retirement-Life Communities Inc Edit
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375 Morris Rd. P.O. Box 90
West Point, PA 19486
USA
Website: www.acts-retirement.org
Phone: (215) 661-8330
Fax: (215) 661-8320
This profile was automatically generated using information found on the Internet.
Summary
Revenues: $131.5 Million
Employees: 5,500
ACTS Retirement-Life Communities, Inc. is a not-for-profit corporation headquartered in West Point, Pa., that owns and operates 18 resort-lifestyle continuing care retirement communities (CCRCs) across five states including Georgia, Florida, North Carolina, South Carolina and Pennsylvania. ACTS communities are home to nearly 8,000 residents and more than 5,600 employees. All eligible ACTS communities are accredited by the Continuing Care Accreditation Commission (CCAC), an independent organization that sets recommended performance standards for the industry.
Ron Lusk
Application Architect
ACTS Retirement-Life Communities Inc
Ambler, PA
Is this your company?
Edit this profile
Don't work here?
Help us update this
375 Morris Rd. P.O. Box 90
West Point, PA 19486
USA
Website: www.acts-retirement.org
Phone: (215) 661-8330
Fax: (215) 661-8320
This profile was automatically generated using information found on the Internet.
Summary
Revenues: $131.5 Million
Employees: 5,500
ACTS Retirement-Life Communities, Inc. is a not-for-profit corporation headquartered in West Point, Pa., that owns and operates 18 resort-lifestyle continuing care retirement communities (CCRCs) across five states including Georgia, Florida, North Carolina, South Carolina and Pennsylvania. ACTS communities are home to nearly 8,000 residents and more than 5,600 employees. All eligible ACTS communities are accredited by the Continuing Care Accreditation Commission (CCAC), an independent organization that sets recommended performance standards for the industry.
Ron Lusk
Application Architect
ACTS Retirement-Life Communities Inc
Ambler, PA
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