U.S. Attorney’s Office Collects More Than $236.9 Million For Taxpayers In Fiscal Year 2016

Tampa, FL - U.S. Attorney A. Lee Bentley, III announced today that the Middle District of Florida collected $236,927,010.74 for taxpayers this fiscal year (FY). In FY 2016, which ended on September 30, 2016, the Office’s Civil, Criminal, and Asset Forfeiture Divisions collected these monies through criminal and civil actions. 

The Office’s Civil Division, led by Randy Harwell, recovered $96,354,288.71 from affirmative civil enforcement cases, most alleging health care fraud. An additional $57,148,531.95 was recovered as a result of joint investigations with the Department of Justice’s Civil Division and other U. S. Attorneys’ Offices.

The Office’s Asset Recovery Division, led by Anita M. Cream, recovered more than $140.5 million, most of which was in the form of restitution, criminal fines, and special assessments. Providing restitution for victims of crime is a top priority of our office.  Working with partner agencies, the Division’s Asset Forfeiture Section recovered an additonal $26.7 million in criminal and civil forfeitures. Depending on the type of case, forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund or the Department of Treasury’s Assets Forfeiture Fund. Consistent with Departmental policy, in cases where a defendant lacks the means to pay restitution, assets can be forfeited from that defendant and restored to crime victims. In addition, $1.6 million in forfeited funds was shared with state and local law enforcement agencies.

Attorney General Loretta E. Lynch announced today that the Justice Department collected $15.3 billion in civil and criminal actions this fiscal year. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $3 billion budget for the 94 U.S. Attorneys’ Offices and the main litigating divisions of the Justice Department combined in that same period.

“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch.  “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment.  I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”

“Recovering monies from convicted criminals and others who have defrauded the government is critical in enforcing our nation’s laws,” said U.S. Attorney Bentley. “Working together with our law enforcement partners, and other federal, state, and local agencies, our efforts ensure that criminals and others committing fraud are held fully accountable for their offenses. Through these coordinated efforts, we are able to help victims recover from their losses, wherever possible, and replenish public resources.”

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.

In measuring collections recovered in FY 2016, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2016.    

Middle District of Florida Case Highlights

Affirmative Cases

United States ex rel. Martin v. Life Care Centers,

Case no. 1:08cv251 (M.D. Tenn.)

The Middle District of Florida was one of seven United States Attorney’s Offices tasked with litigating the government’s civil health care fraud claims in the captioned qui tam case against one of the nation’s largest providers of Medicare subsidized rehabilitation therapy. After a lengthy investigation, the United States intervened in two overlapping cases in the Middle District of Tennessee that alleged a wide spread practice of up-coding rehabilitation services provided to skilled nursing facilities around the country.  Some of the worst offending facilities with regard to the practices at issue were located in the Middle District of Florida, and our district took a significant role in the discovery process that sought to establish the factual record for the fraud alleged as it concerned those facilities.  Years of litigation ensued, and the case was eventually settled on an ability-to-pay basis for $145 million.

 

United States ex rel. Ting v. 21^st Century Oncology, Inc., et al.,

Case no. 2:14-civ-1405-FtM-29MCM

A radiation physicist employed by a nationwide provider of oncology services filed a qui tam complaint alleging that the provider had defrauded Medicare through claims for reimbursement of an allegedly unnecessary service called GAMMA radiation therapy.  The service supposedly measures the strength and precise location of the radiation used to bombard cancerous tumors in oncology patients.  The relator alleged that the service was over-utilized, at best, and, at worst, provided no tangible benefit to patients who received it.  We launched a comprehensive investigation that determined the test to be of dubious medical utility and opened negotiations with the defendant that concluded with a settlement of the clhttps://www.justice.gov/usao-mdfl/pr/united-states-settles-false-claims-act-allegations-against-21st-century-oncology-nearlyaims in the case for $34.685 million.

 

United States ex rel. Barnes v. Spellberg, et al.,

Case no. 2:13-civ-228-FtM-99DNF

A former employee of a nationwide provider of oncology services alleged that an oncologist had defrauded Medicare through claims submitted for medically unnecessary oncology services called FISH tests.  Our investigation revealed that three oncologists in the Ft. Myers area were responsible for an extremely high percentage of the expensive tests billed to Medicare on a nationwide basis.  We confronted the physicians and the umbrella organization with our findings, and ultimately settled with the nationwide provider for $19.75 million, with one of the individual physicians, David Spellberg, M.D., for $1.05 million, and with a second physician, Robert Scappa, on an ability-to-pay basis for $250,000. 

 

United States ex rel. Schimke v. Rose Radiology Centers, Inc.,

Case no. 8:12-civ-2576-T-35MAP;

United States ex rel. Miller v. Rose Radiology, Inc.,

Case no. 8:12-civ-2757-T-35EAJ

A current and former employee of one of the largest providers of diagnostic services in the Tampa Bay area filed two overlapping qui tam cases alleging that the provider had engaged in a number of schemes to defraud federal health programs, including payment of kickbacks to induce Medicare referrals, performing unsupervised dye contrast procedures in violation of Medicare reimbursement rules, submission of Medicare claims for reimbursement of services not ordered by physicians, and submission of claims performed at locations that were not enrolled with the Medicare program.  All claims in the two cases were settled on an ability-to-pay basis for $8.7 million.

 

United States ex rel. Doe v. Institute of Cardiovascular Excellence,

Case no. 5:11-civ-406-Oc-10KRS

United States ex rel. Taylor v. Qamar,

Case no. 8:14-civ-1454-T-35EAJ

The United States intervened in two overlapping qui tam cases filed against an Ocala cardiologist, Dr. Asad Qamar, and his practice, the Institute of Cardiovascular Excellence. A complaint was filed alleging that these defendants had billed Medicare, Medicaid, and TRICARE for medically unnecessary procedures and had paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship.  Medicare copayments provide beneficiaries with an incentive to be smart health care consumers and avoid unnecessary procedures.  By waiving the required copayments indiscriminately, Dr. Qamar and his practice induced patients to undergo unnecessary and invasive procedures.  This conduct made Dr. Qamar the highest paid Medicare cardiologist in the United States in 2012 and 2013.  These allegations were settled for $7.3 million.

 

Compounding Pharmacy Fraud Initiative

The Middle District of Florida continued to lead the nation in its work on a series of direct referrals from the TriCare health program to address crippling fraud aimed at that program by a web of unscrupulous compounding pharmacies, “teledoc” Internet-based physicians, and marketers.  These individuals and entities banded together to market, prescribe, and fill prescriptions for lucrative pain and scar creams.  Nationwide, the TriCare reimbursement for these cream medications was roughly $122 million in 2012; by May 2015, reimbursement had skyrocketed to $1.8 billion, a trend that threatened the solvency of the program.  Our investigations of the most prolific pharmacies in the Middle District of Florida uncovered a variety of schemes, notably the pharmacies’ payment of enormous commissions to marketers who located physicians and TriCare beneficiaries to whom medically unnecessary creams would be prescribed; improper referral relationships; payment of kickbacks to physicians in return for referrals; use of bogus philanthropies to circumvent co-payment obligations; and an array of violations of state laws pertaining to prescriptions and pharmacy practice.

In FY 2016, the Middle District of Florida entered into a host of civil settlements with compound pharmacies and their principals that addressed these issues.  These settlements included:

 

OHM Pharmacy, Inc., $4.1 million

At issue in OHM was the filling of prescriptions that were not based upon a bona fide patient/doctor relationship.

 

Well Health, Inc., $3,781,566; Topical Specialists, $2,228,455; Mehul Parekh $510,00, Sayed Assad $520,000, Marisol Arcila $400,000, Manish Bansal $2,270,236

This series of related settlements involved compounding pharmacies and their principals engaged in improper referral relationships and illegal recruitment of prescribing physicians through bogus research-study arrangements.

 

Andy and Tracy Miller, $7.75 million

This resolved claims against the principals of a compound pharmacy for their role in the payment of illegal compensation to marketers and the filling of prescriptions for pain creams written outside of the ordinary course of medical practice.

 

Durbin Pharmacy, $2.1 million; $1.6 million

This matter involved two separate agreements addressing illegal incentive-based commissions to marketers and filling prescriptions that were not based upon a bona fide patient/doctor relationship.

 

Advanced Dermatology 

This was a direct referral from the TriCare program regarding the billing practices of a Jacksonville dermatology practice.  Following a comprehensive investigation, we found the practice group had engaged in systemic abuse of CPT Modifier 25, which resulted in unbundled billings to federal payers for services that should have been billed with the claim for the office visit.  The practice paid $3,666,711 to resolve these claims.

 

Hospice of Citrus County

This was a direct referral from the HHS Office of the Inspector General concerning a local hospice provider’s practice of billing Medicare for hospice services that were provided to patients who did not qualify for the service, i.e., who were not within 6 months of death.  Services were provided to patients often for years in duration.  The provider paid $3.022 million to settle these claims.

 

United States ex rel. Caputo v. Bay Area Partners,

Case no. 8:13-cv-2591-T-33EAJ

A former technician employee of a provider of lithotripsy services filed a qui tam complaint alleging that the defendant had improperly billed Medicare for reimbursement of lithotripsy performed by technicians that lacked the proper certification required by Medicare reimbursement regulations.  The defendant settled these claims under an agreement that paid the United States $793,887.

 

Asset Forfeiture Cases

United States vs. Leonard Potillo,

Case No. 6:14-cr-128-Orl-40GJK

Potillo was the manager/owner of United Credit Recovery, LLC (UCR), a debt collection company.  From 2007 through 2012, Potillo bribed a bank official so that UCR could purchase “charged-off” consumer debts from the bank through an auction process. These charged-off debts are extremely valuable because they can be purchased for pennies on the dollar and resold for huge profits. Potillo paid $1 million in bribes to an officer from U.S. Bank in exchange for inside information on the auctions. He then successfully purchased debt portfolios with a face value of $820 million.  Potillo’s company generated gross proceeds of more than $28 million on this debt.  With the illegal proceeds, Potillo purchased prime real estate holdings in the United States and abroad, as well as luxury vehicles, motorcycles, and jewelry. In October 2015, a superseding indictment was returned by the grand jury, charging Potillo with conspiracy to commit bribery of a bank official and tax evasion. He pleaded guilty to the charges and agreed to the forfeiture of $2 million in assets, as well as a $28 million forfeiture money judgment.  The assets forfeited include, among other things, 9 luxury vehicles, 2 motorcycles, a boat and trailer, real property, 17 pieces of high-valued jewelry, and numerous bank accounts. Potillo agreed to pay $1 million to the IRS in restitution – he also agreed to satisfy this restitution through income generated through UCR’s legitimately obtained debt portfolios.  In January 2016, Potillo was sentenced to 46 months in federal prison.

 

United States v. Lohr,

Case No. 8:15-cr-510-T-23MAP

This case involved the sale of illegal prescription drugs and herbal Viagra that had been smuggled into the United States.  Two bank accounts, cash from a safe deposit box, and cash found at the store during the execution of a search warrant were seized by the United States. In all, approximately $926,466.35 was seized as proceeds of the smuggling scheme. Lohr pleaded guilty and was sentenced to 21 months in federal prison. As part of his plea agreement he agreed to the forfeiture of the seized funds.

 

U.S. v. Edward & Kim Feldman,

Case No. 8:14-cr-521-T-27AEP    

The United States seized approximately $700,000 in assets during the arrests and execution of various warrants associated with the drug trafficking investigation of Edward Feldman, a doctor who had illegally distributed prescription pain pills, resulting in the deaths of three of his patients.  The Feldmans committed various financial transactions that involved money laundering and structuring violations.  A federal jury found them guilty in February 2016. In May 2016, Edward Feldman was sentenced to 25 years in federal prison, his wife was sentenced to a term of four years. The Feldmans were ordered to forfeit their home, a Mercedes Benz, an Infinity EX35, approximately $489,000 seized from safe deposit boxes as well as bank and investment accounts, all of which were traceable to proceeds of the offenses.  They were also ordered to forfeit jewelry, gold coins, and a 2011 Porsche 911 as substitute assets for criminal proceeds that they had spent.  Lastly, the Feldmans were ordered to forfeit the building that housed Feldman Orthopedic and Wellness Center, as a property that facilitated their crimes.