Driving Thousands of Fake Miles

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Criminals will go to great lengths to steal money, even if they have to drive tens of thousands of fake miles to carry out a scam. (So, how does one drive fake miles?) The husband and wife owners of a Texas laboratory company settled a lawsuit against them involving the submission of excessive mileage claims to Medicare.

A qui tam lawsuit was filed against the lab and its owners by a former employee. (Qui tam lawsuits allow whistleblowers to recover a portion of the funds collected by the U.S. government.) The former employee claimed that the company used questionable billing practices, alleging that mileage claims for the collection of lab specimens over four years were inflated. She approached the couple with her concerns, but when the issues were not resolved, she submitted her resignation. The U.S. government intervened at that point to settle the lawsuit.

The couple and their company admitted to submitting false claims to Medicare that included inflated mileage calculations. They now owe the health care program $3.75 million to settle the False Claims Act lawsuit. (It’s hard to fake your way out of being guilty when someone on the inside has overwhelming evidence. The whistle blower’s take is $787,500 for alerting the government.) The settlement also includes another lawsuit where the government sought to forfeit funds and property held by the owners and their company as a result of their fraudulent acts.

Thanks to the whistle blower in this case, the company and the woman are excluded from participating in Medicare for eight years, while the man is excluded for 10 years. (These two fraudsters have effectively been stopped from driving away with funds intended for the nation’s elderly, who have paid into the government health care system so that they could have vital health care services.)

Source:Today’s “Fraud of the Day” is based on a Department of Justice press release entitled, “East Texas Laboratory Company and Owners Agree to $3.75 Million Payment for False Medicare Claims” released on December 13, 2016.

TYLER, Texas –  Elite Lab Services, LLC, along with its husband-and-wife owners Gerard and Suzanne Dengler, will pay the United States $3.75 million after billing Medicare for tens of thousands of miles that were never driven by Elite Lab’s personnel, announced Acting United States Attorney Brit Featherston.

“The United States Attorney’s Office for the Eastern District of Texas continues to combat white-collar fraud at every turn,” said Acting U.S. Attorney Featherston.  “Medicare is designed to ensure that this country’s elderly have access to vital health care services.  Unfortunately, some providers fraudulently raid these limited public funds for purely personal gain—misconduct that our office will tirelessly prosecute.”

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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.