Insurance Fraud Is Epidemic

Insurance fraud continually takes more money each year than it did the last from the insurance buying public. There is no certain number. Most attempts at insurance fraud succeed. Estimates of the extent of insurance fraud in the United States range from $87 billion to more than $300 billion every year.

Insurers and government backed pseudo-insurers can only estimate the extent they lose tot fraudulent claims. Lack of sufficient investigation and prosecution of insurance criminals is endemic. Most insurance fraud criminals are not detected. Those that are detected do so because they became greedy, sloppy and unprofessional so that the attempted fraud becomes so obvious it cannot be ignored.

A person commits the offense of insurance fraud by knowingly and with the intent to defraud any insurer presents or causes to be presented to any insurer any statement forming a part of, or in support of, a claim that contains any false, incomplete or misleading information concerning any fact or thing material to the claim.

The logarithmic growth of fraud against insurers and government based programs like Medicare and Medicaid, will eat away any chance insurers – and their shareholders – can operate successfully. In addition, medical fraud perpetrated on federal and state agencies, will increase the tax burden of those who pay taxes to support Medicare, Medicaid and the “Affordable Care Act” or Obamacare, will be insufferable.

This column will only report convictions for the crime of insurance fraud. Understanding how attempted insurance fraud has been defeated will help the reader understand the extent of the problem and how the effort to deter insurance fraud occurs.

Convictions

Pharmacist Sentenced to More Than Three Years in Federal Prison In Health Care Fraud Case

He Was Ordered to Pay Over $1 Million to Medicare and Medicaid

Jeffrey Scott Terry, 38, of Mangum, Oklahoma, was sentenced May 21, 2020 to 37 months in federal prison for his role in a health care fraud scheme.

According to an indictment filed in March 2019, Terry was a licensed pharmacist who began operating Bratton Drug at 109 S. Oklahoma in Mangum in August 2015.  Both the Oklahoma Health Care Authority—which administers Medicaid under the name SoonerCare—and Medicare reimbursed Bratton Drug for prescription drugs that it dispensed. The indictment alleged that from August 2015 to September 2018, Terry submitted false claims to SoonerCare and Medicare Part D for drugs that had not actually been prescribed or dispensed to patients.  Separately, the United States filed a civil action pursuant to the Anti-Fraud Injunction Statute and obtained an injunction to prohibit Terry from dissipating or alienating assets he accumulated as a result of the false claims. On August 12, 2019, Terry entered a guilty plea before Judge Palk to one count relating to Medicaid and one count relating to Medicare.

At a sentencing hearing today, Judge Palk sentenced Mr. Terry to 37 months in prison, along with three years of supervised released. Judge Palk also ordered Terry to complete 100 hours of community service. In announcing the sentence, Judge Palk cited to the nature and seriousness of the offense and the need to deter others from engaging in similar conduct. Terry was ordered to pay restitution of $328,836.18 to SoonerCare and $753,334.13 to Medicare, for a total of $1,082,170.31. Judge Palk also ordered Terry to forfeit real property in Greer County and a 2016 Dodge Challenger.

9 Years In Prison For Leading Conspiracy To Distribute Opioids Via Sham Clinics And Corrupt Doctors

Minas Matosyan, a.k.a. “Maserati Mike,” 40, of Encino, was sentenced to serve nine years in prison by United States District Judge Philip S. Gutierrez. Matosyan pleaded guilty in April 2019 to one count of conspiracy to distribute a controlled substance. He was sentenced for leading a conspiracy to distribute powerful prescription opioids via sham medical clinics that hired corrupt doctors who wrote fraudulent prescriptions to black market customers.

Matosyan was arrested in August 2017 pursuant to a federal grand jury indictment charging him and 12 other defendants with scheming to divert at least 2 million controlled prescription pills for sale on the black market. According to his plea agreement, Matosyan and his co-conspirators controlled the sham clinics and hired corrupt doctors who allowed their names to be used on fraudulent prescriptions in exchange for kickbacks. Matosyan also admitted that he and his co-conspirators stole the identities of other doctors and then issued prescriptions in those doctors’ names, either by personally acquiring prescription pads in the doctors’ names or by arranging for other co-conspirators to do so.

As part of the scheme, Matosyan staffed receptionists at the clinics who would falsely verify the phony prescriptions to pharmacists who called to check on their veracity. He also sold narcotic prescriptions to black market customers – either directly or through couriers – and bulk quantities of hydrocodone and oxycodone he had acquired from phony prescriptions filled at pharmacies by other customers.

In May 2016, Matosyan offered a doctor a “very lucrative position” where the doctor would “sit home making $20,000 a month doing nothing,” according to Matosyan’s plea agreement. After the doctor declined the offer, Matosyan stole the doctor’s identity, sending a co-conspirator a text message containing the doctor’s full name, medical license number and national provider identifier number that the co-conspirator used to order prescription pads in the doctor’s name. Over the next two months, Matosyan and his co-conspirators sold fraudulent prescriptions, purportedly issued by the victim doctor, for at least 9,450 pills of oxycodone and 990 pills of hydrocodone.

Matosyan also admitted in the plea agreement that he conspired with others, including a lawyer, Fred Minassian, 53, of Glendale, to obstruct justice, by providing falsifying medical records to police to thwart an investigation into the seizure of a load of Vicodin from one of the conspiracy’s major customers. This case so far has resulted in 11 convictions. Minassian is scheduled to go on trial on July 7.

Two Years In Prison for Stealing 113 IDs From Medical Clinics

Stacey Lavette Hendricks, 49, of Leesburg plead guilty to aggravated identity theft and wire fraud charges on January 30.

Hendricks, a Lake County woman who federal authorities say stole IDs while working at several Florida medical clinics was sentenced to 48 months in prison, according to the U.S. Attorney’s Office.

Federal prosecutors said Hendricks worked administrative jobs at the clinics to gain access to medical record, patient birthdates and Social Security numbers. They said she then sold the stolen identities for cash or used them for herself to defraud businesses.

Hendricks sold stolen patient IDs to an undercover officer in May 2019, the U.S. Attorney’s Office said, which led to a search of her home and car where authorities found 113 sets of stolen identities.

The case was investigated by United States Secret Service and prosecuted by Assistant United States Attorney William S. Hamilton with the U.S. Attorney’s Office Middle District of Florida. Hendricks was sentenced Tuesday by U.S. District Judge James D. Whittemore and will serve her time in a federal prison.