New Enforcement Team Starting to Pay Dividends for Department of Justice in Chicago
As we previously covered, last year the United States Attorney’s Office for the Northern District of Illinois announced the formation of a new “Healthcare Fraud Section” in the district that would focus on investigating and prosecuting healthcare fraud. Shortly following the creation of the Healthcare Fraud Section a number of high-profile indictments were filed that illustrate the types of cases federal prosecutors are now again pursuing with vigor. Just this past month, a federal grand jury in Chicago returned an indictment charging Burhan Mirza and Kashif Iqbal, both Pakistani nationals, with participating in a $10 million scheme to fraudulently bill Medicare and private insurers for healthcare services that were allegedly never actually provided. As part of the scheme, Mirza allegedly obtained the identifying information of individuals, providers, and insurers without their knowledge and used it to file false claims through shell companies. Iqbal, based in Lavon, Texas, was allegedly connected to multiple durable medical equipment companies that submitted fraudulent claims and laundered the proceeds, ultimately transferring significant amounts of money overseas to Pakistan. “Every fraudulent submission in this case diverts much needed monies from senior citizens and disabled persons who rely on Medicare to fund critically important health needs,” said U.S. Attorney Boutros. “The defendants didn’t just steal from a government program; they did damage to the promise of healthcare in this country and the peace of mind that comes with it….We will work tirelessly with our law enforcement partners to stop bad actors from draining public and private programs—especially those in the healthcare space that make it harder for legitimate patients to receive care.” The charges were possible as a result of earlier efforts by the DOJ to root out fraud, with three co-schemers, Mir Akbar Khan, Fasiur Rahman Syed, and Navaid Rasheed having already been indicted and plead guilty to their role in the alleged conspiracy and/or participating in fraud schemes. Such prosecutions are sending a clear signal from the DOJ and federal government on the whole that they are investing significant structural and prosecutorial resources into healthcare fraud, and they have demonstrated the willingness to pursue, investigate, and prosecute both large-scale operations spanning multiple jurisdictions to individual prosecutions for anyone they believe is engaging in fraudulent activity with federal programs.
HHS Freezes Over $10 Billion in Grants Across Five States
Earlier this year, the U.S. Department of Health and Human Services (“HHS”) announced a new policy freezing access to federal childcare and family assistance funds in California, Colorado, Illinois, Minnesota, and New York in light of widespread accusations of fraud in these and other states. HHS stated that it had identified serious concerns about widespread fraud and misuse of taxpayer dollars in the state-administered programs, and that there were also concerns that benefits meant for American citizens and lawful residents may have been improperly extended to ineligible individuals. In announcing the policy change, HHS Deputy Secretary Jim O’Neill said, “Families who rely on childcare and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose. This action reflects our commitment to program integrity, fiscal responsibility, and compliance with federal requirements.” This enforcement action is notable for its scale, with over $10 billion in funding being implicated across the states at issue, and the a larger messages this action signals about the current government’s focus, with HHS simultaneously announcing the launch of a dedicated fraud reporting portal at childcare.gov to allow parents, providers, and community members to report suspected fraud. “We have a responsibility to protect taxpayer dollars and ensure these programs serve the families they were created to help,” said Assistant Secretary for Children and Families Alex J. Adams. “When there are credible concerns about fraud or misuse, we will act.” For individuals operating in these spaces that may be implicated in potential funding freezes or could be under investigation for past practices, these developments and new enforcement programs underscore the seriousness with which federal officials are approaching compliance with federal standards and practices. Given the pervasiveness of some form of federal assistance or subsidies across virtually all areas of industry in healthcare and childcare, this renewed focus could bring more companies and individuals into government crosshairs.
