Detroit-Area Resident Pleads Guilty to Participating in $3.1 Million Medicare Fraud Scheme

WASHINGTON – A Detroit-area social worker pleaded guilty for his role in a $3.1 million Medicare fraud scheme, the Justice Department, FBI and Department of Health and Human Services (HHS) announced today. 

Gregory Lawrence, 54, of Detroit, pleaded guilty yesterday before U.S. District Court Judge Victoria A. Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.

On July 30, 2012, Lawrence’s co-conspirators Felicia Marsh, 54, and Jamie Moreau, 34, both of Detroit, each pleaded guilty before Judge Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud for their roles in the scheme.

According to plea documents, Lawrence, Marsh and Moreau were employees at New Century Adult Day Program Services LLC, a purported psychotherapy clinic in Flint, Mich.  From November 2009 to April 2012, New Century used Medicare beneficiary information to bill Medicare for more than $3.1 million in psychotherapy services that were not medically necessary and/or not provided.  Court documents reveal that New Century lured Medicare beneficiaries – many of whom were mentally or developmentally disabled – from adult foster care homes and off the street with the promise of seeing a doctor who would prescribe them prescription pain medication.  When they arrived at New Century, beneficiaries were told that they must sign up for its psychotherapy program in order to see the doctor.  New Century would use the signatures provided by these beneficiaries as a basis to bill Medicare for group and individual psychotherapy purportedly rendered to them.  In fact, no psychotherapy was provided.

Court documents show that Lawrence, Marsh and Moreau played key roles in this scheme.  Lawrence was a licensed social worker, who helped direct New Century’s operations and created documents that gave the impression that he had provided psychotherapy, when, in fact, he had not.  Lawrence’s provider identification number (PIN) was used by New Century to bill Medicare for group and individual psychotherapy services for approximately $1,247,059, of which Medicare paid approximately $395,060.

Plea documents show that, like Lawrence, Marsh used her training as a social worker to create documents for herself and others to give the impression that New Century had rendered psychotherapy that was not provided.  New Century submitted approximately $488,331 in claims using Marsh’s PIN, and Medicare paid New Century approximately $153,333 on these claims.

Court documents show that Moreau collected signatures of Medicare beneficiaries that would be used by New Century to defraud Medicare.  Moreau also prepared billing paperwork based upon these signatures.  Moreau knew that these signatures were being used at New Century to bill Medicare for psychotherapy services that were not provided.  From October 2011 through April 2012, Moreau was responsible for $615,751 of the amount New Century billed Medicare.  Medicare paid New Century approximately $192,001 on these claims.
 
At sentencing, Lawrence, Marsh and Moreau each face a maximum of 10 years in prison and a $250,000 fine.  Lawrence’s sentencing hearing is scheduled for Jan. 29, 2013.  The sentencing hearings for Marsh and Moreau are scheduled for Jan. 8, 2013.

Lawrence’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge of the FBI’s Detroit Field Office Robert D. Foley III, and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General (HHS-OIG), Chicago Regional Office. 

The case was prosecuted by Trial Attorney William G. Kanellis of the Justice Department Criminal Division Fraud Section and Fraud Section Assistant Chief Gejaa T. Gobena.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
 
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
 
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.