Powhatan man convicted of federal healthcare fraud

RICHMOND, Va. – A federal judge convicted a Powhatan man today on two counts of healthcare fraud.

According to court records and evidence presented at trial, Richard Davis, 51, was the sole owner and CEO of Innovative Family Services LLC (IFS), which he enrolled as a Medicaid provider in Virginia in 2012. IFS provided Therapeutic Day Treatment (TDT), a mental health program for children and adolescents often offered as an after-school program, and Intensive In-Home services (IIH), interventions for children at risk of being removed from their homes. To be eligible for Medicaid reimbursement, TDT and IIH services must be provided in person.

From December 2015 through July 2019, Davis directed IFS employees to bill the maximum allowable service units per day by billing two or more hours per day for group planning, case documentation, excessive coordination of care with adults in the children’s lives, and transportation, even though Medicaid disallows these services from payment.  By doing so, Davis and his company routinely billed Medicaid for five hours of TDT when only two or three hours of actual care were provided. Davis’ company billed excessive hours for nearly every Medicaid recipient almost every day TDT was provided for the entire time IFS operated as a company.

Davis’ fraudulent billing scheme caused a loss to Medicaid of at least $218,392.

Davis faces up to 10 years in prison when sentenced on Feb. 7, 2025. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Field Office; and Jason Miyares, Attorney General of Virginia, made the announcement after Senior U.S. District Judge John A. Gibney Jr. entered the verdict.

Assistant U.S. Attorneys Shea Gibbons and Brian Hood are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:23-cr-135.