Practice to Deceive

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All schemes to defraud the government involve deception in some way, shape or form, but some people just don’t know when to quit. Mycentraljersey.com reports on one such case, in which a New Jersey health care company owner intentionally sent uncertified health aides to patients’ homes, laundered money through aides’ personal checking accounts, falsified company records to drive down her corporate tax rate and twice bribed a state employee, who was working undercover with federal agents. The defendant even incriminated herself in a sting with a ”prospective home health aide,” who actually was cooperating with federal agents. (Talk about a tangled web…)

According to the report, this health care company owner defrauded Medicaid of $7 million through an elaborate scheme involving money laundering, tax evasion and bribery. (No itsy bitsy spider, this one.) She began by hiring people as home health aides—some of whom were not legally entitled to work in the United States—and charged them hundreds of dollars to obtain the necessary certifications, but never actually had them certified. Then she submitted to the New Jersey Board of Nursing—which issues home health aide certifications—documents that falsely represented the aides’ required levels of training and testing, and pocketed the money she had charged the aides for their certifications. (Spinning out of control now.)

The owner went on to misrepresent home health aides in claims she submitted to Medicaid for services that they had provided, to make it appear as though they were certified, when they were not. She sent non-certified aides to patients’ home in an official capacity, but some decided that even this was too much of an effort. So those aides falsified records, to make it seem as though they had provided services during a home visit, while they actually were at another job, on vacation or in an entirely different part of New Jersey. Some even paid off patients! (”Sorry, sir. We know you are incapacitated, but we just can’t be bothered to send even a con-man over for a visit. Will ‘Mr. Lincoln’ suffice?”)Other times, she instructed patients not eligible for Medicaid to make their checks payable to her company, then she split the money with an unnamed conspirator, who had cashed the checks for her.

She even convinced some of the aides to open up personal bank accounts, which she used to launder the money Medicaid paid her for the claims. She took the Medicaid money that had been deposited into the company’s account, transferred some of it into the aides’ accounts and then ”reinvested” it, by purchasing personal property and real estate across three different states. (Gotta have someplace to stash all that cash.)

The company owner also took steps to drive down her corporate tax rate. She issued company checks to ”no show” employees, who simply returned the money to her. Then she deducted it from her tax filings, even though it was still in her possession, thus bringing down the amount of her corporate tax rate. She failed to pay nearly $1 million in taxes she owed between 2007-2011.

The web of deceit was finally unraveled after a tip-off, which accused the company owner of underpaying employee wages (add it to the list), the New Jersey Department of Labor (NJDOL) demanded that she produce related documentation. Instead she offered a NJDOL employee $10,000 and, later, another $15,000 to help her evade the investigation. But, as it turns out, investigators had already gotten to the employee, who captured both bribes on video. (Her spidey senses failed her that time.)

Ultimately, she pleaded guilty to bribery, tax evasion, conspiracy to commit health care fraud and conspiracy to commit money laundering, and was sentenced to 60 months in prison (she’s a shoe-in for those basket weaving classes) followed by three years of supervised release. In addition, she was ordered to pay $7 million in restitution and forfeit $7 million in property.

Source: Today’s ”Fraud of the Day” is based on, ”Home health aide care agency owner gets 5 years,” submitted by the U.S. Attorney’s New Jersey district office and published by myCentralJersey.com on March 22, 2016.

NEWARK – The owner of a home health agency was sentenced Tuesday to 60 months in prison for her role in a $7 million scheme to defraud Medicaid and engage in bribery, money laundering, and tax evasion, U.S. Attorney Paul J. Fishman said.

Irina Krutoyarsky, 62, of Springfield, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to conspiracy to commit health care fraud, bribery, conspiracy to commit money laundering, and tax evasion. Hayden imposed the sentence Tuesday in Newark federal court.

According to documents filed in this case and statements made in court, Krutoyarsky owned HHCH Health Care Inc., of Linden, which provided home health aides and health care services to New Jersey residents. Home health aides visit patients at their homes and provide a variety of health care services, such as assistance with eating, dressing, and grooming.

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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.