Wrong Turn

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If it weren’t for GPS, we’d all be making more wrong turns. Unfortunately, the guidance system that a New Mexico medical transport company’s owners used was flawed. Their immoral consciences led them to make a wrong turn into a Medicaid fraud scheme that cost the government healthcare program nearly $2 million.

The owners – a man and a woman – created and operated the Farmington medical transportation company, which provided non-emergency medical transportation for Arizona Medicaid recipients. (The company received reimbursement payments through the Arizona Health Care Cost Containment System, the state health care benefit program.) The company collected more than $1.9 million in Medicaid reimbursements over two years by submitting more than 18,760 claims that were either totally, or mostly false.

In addition to Medicaid fraud, the female co-conspirator who was the company’s claims processor, was also charged with aggravated currency structuring. The charge was related to multiple financial transactions she made involving the fraudulent proceeds from the Medicaid scam.

The claims processor made 200+ cash withdrawals in the amount of several thousands of dollars each, but always less than $10,000, so she would not have to file a Currency Transaction Report (CTR).) (Currency Transaction Reports (CTR) must be filed by financial institutions when transactions of more than $10,000 are made. This provides a red flag for law enforcement officials who are looking for a wide-range of illegal activities such as money laundering.)

The 33-year-old Farmington man and his 48-year-old co-defendant were originally indicted on nine healthcare fraud charges. The man pleaded guilty to one charge of healthcare fraud and struck a plea deal that dismissed the other eight counts against him.

Even though the man withdrew a total of $800,000 from bank accounts, the aggravated currency structuring charge was dropped because all of the transactions were under $10,000. He was sentenced to 30 months in prison to be followed by three years of supervised release and must also pay $1,218,165 in restitution. The claim’s processor pleaded guilty to her role in the Medicaid fraud scheme and will be sentenced at a later date.

These two fraudsters from New Mexico took both their patients and the government on a ride. While they thought they would be coasting with all that extra income from the government, it looks like they’ve been forced to make a U-turn that will lead them right to prison.

Today’s “Fraud of the Day” is based on an article entitled, NM man sentenced in almost $2MIL health care fraud,” published by Albuquerque Journal on September 6, 2017.

ALBUQUERQUE, N.M. – A New Mexico man was sentenced in federal court in Albuquerque to 30 months in prison Wednesday and ordered to pay $1,218,165 in restitution for his role in defrauding Arizona health care benefit of almost $2 million.

Cory Werito, 33 of Farmington, also was sentenced to three years of supervised release following his prison term, Acting U.S. Attorney James D. Tierney and Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations in El Paso said in a joint news release.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.