Office Manager/Medical Biller in Devine, TX, Sentenced to 17 Years Imprisonment for $3.5 Million Health Care Fraud Scheme

In Del Rio late yesterday afternoon, a federal judge sentenced 46-year-old DTS Medical Supply Company (DTS) Office Manager/Medical Biller Kathleen Kelly-Tuorila to 17 years in federal prison for her role in an estimated $3.5 million Health Care Fraud scheme announced United States Attorney Richard L. Durbin, Jr., FBI Special Agent in Charge Christopher Combs, San Antonio Division, and Texas Attorney General Ken Paxton.

In addition to the prison term handed down, United States District Judge Alia Moses ordered Kelly-Tuorila to pay $3,269,300.11 in restitution and be placed on supervised release for a period of three years after completing his prison term.

“The prison terms handed down in this case against three defendants total more than 51 years. These sentences reflect the seriousness of the defendants’ actions and our commitment to hold accountable anyone who would rob, steal, or illegally take without just cause Medicaid and Medicare funds,” stated United States Attorney Richard L. Durbin, Jr.

On June 28, 2016, a federal jury convicted Kelly-Tuorila and DTS Medical Supply owner, 55-year-old Daniel Thomason Smith, of one count of conspiracy to commit Health Care Fraud, one count of aiding and abetting Health Care Fraud, eleven counts of aiding and abetting aggravated identity theft and eight counts of aiding and abetting false statements related to a Health Care matter.

Both Medicare and Medicaid provide qualified beneficiaries with financial remuneration for the purchase of prescribed and necessary medical equipment. Such medical equipment would include powered wheelchairs, powered scooters and accessories related to those two devices. Medicare and Medicaid set a rate of compensation for each of these devices and the rate of compensation differed between devices and was to be based on the type of device that was prescribed for the beneficiary and delivered to the beneficiary.

Evidence presented during trial revealed that between May 2006 and January 2010, the defendants conspired to submit numerous false and fraudulent benefit claims to Medicaid and Medicare seeking compensation for powered wheelchairs. Smith employed Robin Renee Haigler, a third defendant in this case, on a commission basis to recruit customers primarily in the Waco area. Kelly-Tuorila used the collected customer information from Haigler to generate and submit fraudulent claims for reimbursement to Medicaid and Medicare for powered wheelchairs. According to court testimony regarding the aggravated identity counts, names of physicians were used to support claims for reimbursement when the named physician never prescribed a powered wheelchair for the customer and, in some instances, did not even know the customer and had never had them as a patient. Evidence also revealed that even though DTS billed for powered wheelchairs, they delivered less-expensive powered scooters to customers, which resulted in a larger payment from Medicaid/Medicare and a larger percentage of profit for DTS and Smith.

“Those who commit Health Care Fraud often harm the most vulnerable in our society by misappropriating limited healthcare dollars intended for the care of the elderly, children and disabled,” said Special Agent in Charge Christopher Combs. “This case demonstrates the FBI's commitment to work with our partners and the public to stop fraud and ensure that limited healthcare funding is used to help those who need it, and not line the pockets of criminals.”

Defendants Smith and Kelly-Tuorila have remained in federal custody since the jury verdict in June 2016. On February 23, 2017, Smith was sentenced to 324 months in federal prison. Haigler, age 60 of Waco, TX, pleaded guilty to the conspiracy charge on August 17, 2015. She was sentenced on November 7, 2016, to 87 months of federal imprisonment. Judge Moses ordered all three to pay—joint and severally—a total of $3,269,300.11 restitution in this case.

“Prosecution of these crimes helps deter fraud and holds health care providers accountable when they steal from the American taxpayers,” Attorney General Paxton said. “I commend the hard work of all involved on this case. My office will continue to go after criminals who attempt to steal from programs that help vulnerable Texans.”

Agents with the Federal Bureau of Investigation together with investigators from the Texas Attorney General’s Medicaid Fraud Control Unit conducted this investigation. Assistant United States Attorney Greg Surovic and Special Assistant United States Attorney Rex Beasley prosecuted this case on behalf of the Government.