Former Springfield Business Owner Indicted for Alleged Medicaid Fraud Scheme

SPRINGFIELD, Ill. – A Springfield man whose business supplied incontinence products to Medicaid recipients made his initial appearance in federal court today on charges that he defrauded Illinois’ Medicaid program of more than $500,000. Kevin W. Schaul, 51, of the 3500 block of Tamarak Dr., appeared before U.S. Magistrate Judge Tom Schanzle-Haskins. Trial has been scheduled for Mar. 7, 2017, before U.S. District Judge Sue E. Myerscough. Schaul was released on his own recognizance with conditions.

According to the indictment, Schaul owned and operated Childrite Medical Supply, Inc., from a residence at 201 N. Natchez Trace. Childrite, registered as a corporation in May 2009, supplied incontinence products such as diapers, pull-ups and underpads, to recipients of Medicaid. The corporation was involuntarily dissolved on or about Oct. 10, 2014.

The indictment alleges that from August 2009 through at least September 2013, Schaul repeatedly submitted and caused false claims to be submitted to the Illinois Department of Healthcare and Family Services for delivery of incontinence products. Childrite allegedly represented that the products had been delivered to Medicaid recipients, specifically to special-needs adults and children, when he knew no products were delivered or not delivered in the amount claimed. During the period of the alleged scheme, Childrite submitted more than 19,000 claims for 4,000,000 units, measured as one unit equivalent to one diaper, pull-up, underpad, etc., provided. As a result of the claims submitted, Medicaid paid Childrite approximately $2.3 million.

The indictment alleges that Schaul used the fraudulent Medicaid payments for his personal use, including for clothing, food, entertainment, fuel, travel, mortgage payments and payments to a family member. The indictment estimates the amount of loss to the Medicaid program as more than $500,000.

If convicted, the maximum statutory penalty for each count of health care fraud (five counts) is up to 10 years in prison and fines of up to $250,000.

The charges are the result of investigation by the Illinois State Police Medicaid Fraud Control Bureau and the U.S. Department of Health and Human Services, Office of Inspector General. The Illinois Department of Healthcare and Family Services, Office of Inspector General provided assistance in the investigation. Assistant U.S. Attorney Timothy A. Bass is prosecuting the case.

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.