Partners in Fraud

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45839714 - doctor and businessman shaking hands

Starting a business is a risky venture, especially when you need to have several partners to pull it off. Arguably, one of the most important qualities to look for in a business partner is integrity. A couple from Louisa, Kentucky lacked that extremely important characteristic much to the chagrin of their business partner, a physician who almost got sunk by their Medicaid fraud scheme.

The couple, who owned and operated a family medical center with a physician, submitted bogus bills to the Medicaid program for nearly $10,000. They did so over a three-year period by claiming that their physician business partner was present when the services were rendered in their Louisa office. (There’s just one problem, he wasn’t there. And, Medicaid doesn’t pay unless an approved provider is present to administer the medical services.) The couple forged prescriptions for controlled substances, hydrocodone and oxycodone.  (The couple signed the physician’s name on the prescriptions.)

It turns out that the physician had not been in said office for about a year because his primary job was at a hospital in Huntington. Up until the point of being placed in handcuffs, the doctor’s role had been to answer any questions that his partners had about medical issues. (It appears that the doc should have been asking a few questions about how his partners ran the business.)

The 49-year-old husband and his 47-year-old wife, both from Louisa, pleaded guilty to Medicaid fraud. The husband received a five-year sentence, which was probated. (That means if he behaves and doesn’t get into any more trouble, he will not have to serve time behind bars.) However, he must pay $17,000 in restitution, $10,000 jointly with his wife.

The convicted fraudster’s wife received a three-year sentence for each felony count to be diverted for a period of three years. In addition to the $10,000 she’ll pay in restitution with her hubby, she must forfeit her nursing license during the diversionary period. (How about forfeiting it forever since she committed a crime?)

In addition to the Medicaid program, the real winner is the doc partner who was erroneously accused of Medicaid fraud. The charges against him were dropped and he has returned to his primary job, while the medical clinic where he is a partner remains closed. (Word to the wise – even though you think you know someone you really don’t. Be extra careful when choosing a business partner, or you might end up responsible for something you didn’t do.)

Today’s “Fraud of the Day” is based on an article entitled, Couple sentenced for Medicaid Fraud,” posted on WSAZ.com on March 9, 2018.

A couple from Lawrence County was sentenced Friday on multiple felony counts of Medicaid fraud, Kentucky Attorney General Andy Beshear’s office says.

Kevin Gauze, 49, and Janice Gauze, 47, both of Louisa, had pleaded guilty in Lawrence Circuit Court Feb. 9 and were sentenced Friday.

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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.