Athens County Home Health Care Agency Owner Pleads Guilty to $2M in Fraud

COLUMBUS, Ohio – Cheryl McGrath, 49, of Guysville, Ohio, pleaded guilty today in U.S. District Court to health care fraud and willful failure to pay over tax.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Office and Ohio Attorney General Mike DeWine announced the plea entered into before Chief U.S. District Edmund A. Sargus, Jr.

According to the Statement of Facts in this case, McGrath owned and operated Home Health Care of Southeast Ohio in Guysville, Ohio since 1993.

From 2009 until 2015, McGrath executed a scheme to defraud the Ohio Medicaid Program by billing on behalf of Home Health Care of Southeast Ohio for home health nursing services that were never rendered. The defendant routinely changed the claim information in the billing software to falsely reflect that additional hours of nursing services had been provided and falsely increased the number of nursing visits from one visit per week to between three and five visits per week.

McGrath also submitted claims for nursing services of Medicaid patients who were ineligible because they were either residing in private nursing homes or deceased.

In total, her scheme included fraudulent claims in the amount of approximately $2.2 million.

From 2009 until 2013, McGrath maintained the books and records regarding payroll for the home health care business. During that time, she submitted Forms 941 to the IRS but did not pay over the federal employment taxes that were due, causing a loss of $366,825 to the IRS.

Health care fraud carries a potential maximum sentence of 10 years in prison and willful failure to pay over tax is punishable by a potential maximum of five years’ imprisonment.

As part of her plea agreement, McGrath has agreed to pay more than $2.2 million in restitution to the Ohio Medicaid Program and nearly $367,000 to the IRS.

“The conduct detailed in this case is egregious. These programs were designed to help the sick and infirm, and this defendant defrauded them out of millions of dollars,” said Ryan L. Korner, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office. “Business owners have a significant responsibility to collect and turn over all IRS withholding taxes. Employment tax fraud can also impact employees, who may see future benefits such as Social Security, Medicare or Unemployment Compensation reduced or eliminated because of their employers not complying with the law.”

“Billing for services not rendered, manipulating electronic claims information to falsify services provided, and billing for ineligible or deceased beneficiaries all adds up to health care fraud at taxpayer expense”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to work with our Federal, State and local law enforcement partners to ensure that those who commit such crimes are held accountable.”

“This defendant took millions in taxpayer dollars by blatantly lying about the services her agency provided,” said Ohio Attorney General DeWine. “Health care fraud will not be overlooked in Ohio. My office works every day with our state, local, and federal partners to identify this type of fraudulent activity and ensure that those who unlawfully take taxpayer money are held responsible.”

U.S. Attorney Glassman commended the investigation of this case by the IRS Criminal Investigation, U.S. Department of Health and Human Services OIG, FBI and the Ohio Attorney General’s Office Medicaid Fraud Control Unit, as well as Assistant United States Attorneys Jessica W. Knight and Kenneth F. Affeldt and Special Assistant United States Attorney Maritsa Flaherty with Ohio Attorney General Mike DeWine’s Office, who are representing the United States in this case.

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