Western District of Kentucky

– Proceeds from sale of house will go toward restitution for the Crusade for Children

LOUISVILLE, Ky. – The United States District Court Clerk located in Louisville, Kentucky will receive payment this week from the sale of the former home of former McMahan Fire Chief, Paul Charles Barth, in the amount of $130,410.56, to be applied toward the restitution owed the WHAS Crusade for Children and the McMahon Fire Protection District, announced David J. Hale, United States Attorney for the Western District of Kentucky. In addition, another $66,198.01 from the sale will be deposited in the Court Clerk’s registry account and may also be available for restitution.

“This is a significant first step toward making the Crusade for Children whole again,” stated U.S. Attorney Hale. “We will pursue further measures to collect additional funds from Barth for restitution beyond today’s payment until every dollar has been restored to the charity. In fact, we will request that the Court apply the $66,198.01 toward restitution, which will leave very little restitution outstanding.”

Barth, the former McMahan Fire Department Chief, began serving a 41 months sentence in federal prison followed by three years of supervised release on December 20, 2013. He was sentenced on November 19, 2012 in federal court by U.S. District Judge John G. Heyburn, II. On June 21, 2012, Barth pleaded guilty to one count of mail fraud, two counts of wire fraud, and 12 counts of money laundering. He was ordered to pay restitution to his victims, the WHAS Crusade for Children and the McMahon Fire Protection District (MFPD). The restitution order in favor of the Crusade was $190,000, and the order in favor of MFPD was $8,277, for a total of $198,277.

According to the United States Attorney’s Office, the private sale and transfer of Barth’s real estate property located in Jeffersontown, Kentucky was completed yesterday. The United States and American Alternative Insurance Corporation, insurer of McMahon Fire District, have released liens and claims to the real estate. In addition to the $130,410.56 to be paid directly for restitution, an additional $66,198.01 from the proceeds from the sale of the property will be paid into a registry account held by the United States District Court Clerk’s Office in Louisville, Kentucky. The United States Attorney’s Office will move the Court to apply these additional funds to the restitution owed by Barth. American Alternative Insurance Corporation may also assert an interest in the additional proceeds. However, if the United States’ motion is successful, a total of $196,608.57 will have been applied toward the outstanding $198,277 restitution obligation, excluding interest.

This case was prosecuted by Assistant United States Attorneys David Weiser and Bryan Calhoun. The restitution collection efforts were led by Assistant United States Attorney Joe Ansari. The case was investigated by the United States Secret Service - Kentucky Electronic Crimes Task Force, which includes the University of Louisville Police Department, the United States Postal Inspection Service, and the Criminal Investigation Division of the Internal Revenue Service.

– Received benefits for 20 years by alleging he was disabled

PADUCAH, Ky. – A federal grand jury meeting in Paducah, Kentucky today charged a Caldwell County, Kentucky resident with failure to report to Social Security Administration his ability to work and fraudulently received disability and Medicaid benefits for 20 years announced David J. Hale, United States Attorney for the Western District of Kentucky.

Travis L. Vickery, age 47, was charged in a two count federal indictment that alleges between September 1991 and October 2011, Vickery, who was not disabled from working, knowingly and willfully concealed and failed to disclose to the Social Security Administration that he was able to work and not disabled. The indictment further alleges that Vickery knowingly and willfully executed a scheme and artifice to defraud the Medicaid Program, by falsely representing he was disabled from working, and thereby received health care benefits, items, and services to which he was not entitled.

If convicted at trial, Vickery faces no more than 15 years in prison, a fine of $500,000 plus restitution, and a period of no more than three years of supervised release.

Vickery is scheduled for arraignment on the charges before U.S. Magistrate Judge Lanny King on January 17, 2013, in United States District Court located in Paducah, Kentucky.

This case is being prosecuted by Assistant United States Attorney James H. Barr and was investigated by the Social Security Administration’s Office of Inspector General.

PADUCAH, Ky. – Jessie Haskins of Christian County, Kentucky, plead guilty to possession and distribution of cocaine in United States District Court before Senior Judge Thomas B. Russell on January 10, 2013. According to the plea agreement, on December 30, 2009 and January 2010 and February 11, 2012, Haskins was recorded selling cocaine to a confidential informant. The amounts sold were 2.371 grams, 2.35 grams and 2.985 grams. Two of the transactions took place at the defendant’s home. At sentencing Haskins faces a combined maximum sentence of 90 years in prison and a $3,000,000 fine. He is scheduled for sentencing on April 24, 2013 at 11:30am in U.S. District Court.

Torrino Edwards, of Paducah, Kentucky, was sentenced to 70 months in federal prison, followed by three years of supervised release, on January 10, 2013, by Senior Judge Thomas B. Russell on January 10, 2103 for possession and distribution of crack cocaine. According to court records, Torrino admitted to selling and possessing crack cocaine on four separate occasions in November and December of 2010, and February of 2011. Sales were made in Paducah, Kentucky to a confidential informant. Edwards has two prior felony convictions in McCracken County Court.

Christopher Watkins, of Christian County, Kentucky, was sentenced to 100 months in prison followed by four years of supervised release, by Senior Judge Thomas B. Russell on January 10, 2013 for possession and distribution of cocaine and possession of a firearm in furtherance of a drug trafficking crime and for being a felon in possession of a firearm. According to court records, Watkins admitted to selling crack cocaine in April and May of 2009. The crack cocaine was sold to a confidential informant. The amounts were 11.8 grams, 57.6 grams and 36.5 grams of crack cocaine. Further, Watkins admitted to being a felon in possession of a firearm and selling a Bryco Arms 9mm semiautomatic pistol to a confidential informant.

Melvin Stamps Moore of Christian County, Kentucky was sentenced in U.S. District Court by Senior Judge Thomas B. Russell on January 10, 2013 to 92 months in prison followed by four years of supervised release, after pleading guilty to possession and distribution of cocaine base also known as crack cocaine. According to court records, Moore admitted in August and 2010 on two occasions that he sold crack cocaine. The sales to a confidential informant were recorded and were greater than 28 grams.

Donnell Brodie of Christian County, Kentucky was sentenced by Senior Judge Thomas B. Russell on January 10, 2013 to 120 months in federal prison followed by three years of supervised release. Brodie plead guilty in United States District Court on September 18, 2012 to possession and distribution of crack cocaine on four occasions in April, 2011.

Reginald R. Buchanan, Jr. of Christian County, Kentucky plead guilty before Senior Judge Thomas B. Russell, in U.S. District Court on January 10, 2013 to a single count of possession of a firearm and ammunition by a convicted felon. At sentencing, Buchanan faces a maximum sentence of 10 years in prison and a fine of $250,000.

Brandon S. Walker was sentenced by Senior Judge Thomas B. Russell on January 10, 2013 to 51 months in federal prison followed by two years of supervised release, after entering a guilty plea to a single count federal indictment charging him with possession of a firearm by a felon. According to the court documents, on February 22, 2011, in Paducah, Kentucky, Walker possessed and sold a Glock GMBH, Model 22, .40 caliber semiautomatic pistol and 9 rounds of Smith & Wesson .40 caliber ammunition. The weapon was forfeited to the United States Government. Walker had previously been convicted of felony crimes in Jefferson County and McCracken County in 2000 and 2002.

All cases were prosecuted by Assistant United States Attorneys for the Western District of Kentucky and the cases were investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Western Kentucky Gun Crimes, Hopkinsville Police Department, the Paducah Police Department, Christian County Sheriff’s Department and the U.S. Drug Enforcement Administration (DEA).

– Obtained illegal prescription pain pills from Florida “pill mills”

LOUISVILLE, Ky. – Two more defendants charged in a conspiracy to distribute oxycodone in Jefferson County and Bullitt County, Kentucky pleaded guilty in United States District Court this week announced David J. Hale, United States Attorney for the Western District of Kentucky. Teresa Sandlin, age 49, and Jerry Sandlin, age 43, both from Louisville, entered guilty pleas before U.S. District Judge John G. Heyburn II, on January 7, 2013.

According to information provided in multiple plea agreements, between January 2009 and February 2012 the ten defendants traveled to a minimum of one pain clinic in Florida and obtained prescriptions for oxycodone and/or oxycodone tablets and returned with the ill-gotten medications to the Western District of Kentucky where they distributed, individually, between 5.13 and 19.23 grams of the prescription pain medication.

"The illicit sale of prescription pain medications is one of the greatest health and safety threats to our families and our communities,” stated U.S. Attorney David J. Hale. “Fighting the scourge of illicit prescription drugs is a priority of my office, and I applaud the efforts of the Drug Enforcement Administration and our state and local partners for their efforts in pursuing Kentucky drug dealers and shutting down the source of their supply.”

All ten defendants were charged with a single count of conspiracy to distribute a controlled substance in a federal grand jury indictment returned on June 22, 2011. Between May 7, 2012 and January 7, 2012 all but one of the ten defendants has entered a guilty plea in U.S. District Court. Two defendants were charged in a second count with money laundering. Those charged along with Teresa Sandlin and Jerry Sandlin were Mark Wolfe, 30 of Louisville; Steven Breeding, 26 of Bullitt County; Whitney Summitt, 22 of Louisville; Crystal Summitt, 30 of Louisville; Robert Randolph, 34 of Louisville; Michael Johnston, 34 of Louisville; Bobbie Maddox, 50 of Louisville; and Tylena Randolph, 58 of Louisville. Randolph entered a not guilty plea and has a status conference scheduled in March before Judge Heyburn.

According to the investigation by Drug Enforcement Administration (DEA) agents working in Louisville and the Southern District of Florida, the prescriptions were obtained from so called pain clinics located in Broward and Palm Beach counties. In August, 2011 a grand jury charged 32 defendants, associated with these pain clinics, with operating “pill mills.” (USA v. George et al.) All but four of the defendants have entered guilty pleas and the clinics were closed.

Teresa Sandlin and Bobbie Maddox plead guilty to a separate charge of money laundering for conspiring to conduct an unlawful financial transaction between December, 2009 and January, 2010. According to the plea agreement, Sandlin and Maddox took approximately $75,000.00 in U.S. currency, which were proceeds from count one’s drug trafficking charge, from Louisville, Kentucky to Jeffersonville, Indiana and presented it as a partial payment at the closing for the purchase of property in Shepherdsville, located in Bullitt County, Kentucky. Sandlin and Maddox presented a fraudulent gift letter which stated that Glenn Dovak, alleged to be Maddox’s uncle, had given Maddox the $75,000.00 in U.S. currency as a gift. The fraudulent gift letter was dated as being signed on January 5, 2010, but death records show Dovak had died on February 22, 2007.

At sentencing the defendants face a maximum 20 year term in prison, a maximum fine of one million dollars and supervised release of at least three years and up to any number of years, including life. Maddox and Teresa Sandlin face an addition 20 year term in prison and an additional $500,000.00 dollar fine for count two of the federal indictment.

This case is being prosecuted by Assistant United States Attorney Laura Hall and is being investigated by the United States Drug Enforcement Administration (DEA).

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– Hugh “Stan” Curtis charged with stealing $183,354 in donations and failing to report $553,891.67 in personal income from USA Harvest
– Curtis used funds to allegedly pay for personal expenses including meals, entertainment, and travel

LOUISVILLE, Ky. – USA Harvest, Kentucky Harvest, and Blessings in a Backpack founder, Hugh “Stan” Curtis was charged in a seven-count federal indictment today, with one count mail fraud, two counts money laundering and four counts filing false income tax returns with the Internal Revenue Service, announced David J. Hale, United States Attorney for the Western District of Kentucky.

According to the indictment returned today by a federal grand jury meeting in Louisville, from September 2005 through September 2007, defendant Curtis, 63, of Louisville, Kentucky, allegedly stole approximately $183,354 in donations that he solicited on behalf of USA Harvest, a non-profit, I.R.C. 501 (c) organization. Of these stolen donations, Curtis deposited $164,620 into his personal account and personally cashed donation checks totaling $18,734 – and thereafter used the funds for his personal benefit. The $164,620 includes an August 29, 2007, donation for $20,000 from Play Like the Pros, LLC and a September 5, 2007, donation for $25,000 from Richemont North America, Inc. In addition, Curtis did not report the $183,354 as income with the Internal Revenue Service.

Further, from 2005 through 2008, it is alleged in the federal indictment, that Curtis failed to report to the Internal Revenue Service approximately $553,891.67 in personal income he received from USA Harvest. The amount includes the $183,354 in stolen donations and $370,537.67 in personal travel expenses that he charged to USA Harvest. More particularly, Curtis used approximately $370,537.67 in USA Harvest funds to pay for personal meals, personal entertainment expenses, and personal travel. In addition, Curtis fraudulently deducted approximately $353,165 in unreimbursed USA Harvest travel expenses on his 2005 through 2007 returns.

Counts four through seven of the indictment charge Curtis with filing false returns with the Internal Revenue Service. In 2005, Curtis failed to report approximately $160,549.56 in income and falsely deducted approximately $134,623 in unreimbursed travel expenses from USA Harvest on his 2005 federal income tax return filed on April 15, 2006. For the year 2006 Curtis failed to report approximately $217,085.18 income and falsely deducted approximately $130,739 in unreimbursed travel expenses from USA Harvest on his 2006 federal income tax return filed on May 9, 2007. For the year 2007 Curtis failed to report approximately $97,264.48 and falsely deducted approximately $87,803 in unreimbursed travel expenses from USA Harvest on his federal income tax return filed on April 15, 2008. For the year 2008 Curtis failed to report approximately $78,992.45 in income from USA Harvest on his 2008 federal income tax return filed on October 16, 2009. The return was filed by Curtis and signed under the penalty of perjury.

At sentencing, Curtis faces a combined maximum term of 52 years in prison, a combined maximum fine of $1,150,000, and a three-year term of supervised release.

This case is being prosecuted by Assistant United States Attorney Bryan Calhoun and was investigated by the Internal Revenue Service, Criminal Investigations Division.

– Sleep diagnostic tests were performed by individuals who lacked required credentials

LOUISVILLE, Ky. – The United States Department of Justice, the United States Attorney’s Office for the Western District of Kentucky, and the Office of Inspector General of the Department of Health and Human Services, today announced a $15,301,341 settlement with American Sleep Medicine, LLC (ASM) to resolve claims that the company improperly billed Medicare and other federal healthcare programs for sleep diagnostic services that were not eligible for payment.

“Pursuing health care fraud is a priority of my Office and the Department of Justice. We will continue to work with the Department of Health and Human Services and the public to ensure that fraudulent claims are investigated and those responsible are required to pay,” stated David J. Hale, United States Attorney for the Western District of Kentucky. “Medical providers who overbill Medicare defraud the taxpayers and drive up the cost of health care for us all. Recovering taxpayer dollars lost to fraud helps keep strong those critical public health care programs so many people depend on,” stated Hale.

“Medicare patients and military families deserve to be treated by appropriately credentialed professionals when seeking medical care,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “When companies providing those services seek to skirt the rules, there will be a steep price to pay.”

According to the agreement between ASM and the United States, ASM agreed to pay and has paid $15.3 million to settle claims arising from reimbursement requests for sleep diagnostic testing services, which ASM submitted or caused to be submitted to Medicare Part B, TRICARE, and the Railroad Retirement Medicare Programs. The United States contended that the reimbursement claims submitted during this period were false because the diagnostic testing services were performed by technicians who lacked the required credentials and/or certifications. The alleged improper billing covered by the settlement agreement occurred between January 1, 2004, and December 31, 2011.

ASM, headquartered in Jacksonville, Florida, owns and operates 19 diagnostic sleep testing centers throughout the United States, including Kentucky. The company’s primary business is to provide testing for patients suffering from sleep disorders such as obstructive sleep apnea (OSA). The most common tool used to diagnose sleep disorders, particularly OSA, is polysmnographic diagnostic sleep testing. Federal program requirements for the reimbursement of sleep disorder testing require that initial sleep studies be conducted by technicians who are licensed or certified as sleep test technicians. As a result of ASM’s conduct, Medicare and other federally funded healthcare programs were routinely billed for, and paid, technical and professional fees for diagnostic sleep study services that were not properly payable.

In agreeing to the settlement, ASM made no admission of liability. No issues concerning quality of patient care were raised as part of this settlement.

This matter arose as a complaint for damages and other relief under the qui tam provisions of the Federal False Claims Act. The relator, Daniel Purnell, a former employee of ASM, filed a qui tam action on February 4, 2010, in the United States District Court for the Northern District of California. In April, 2011, the lawsuit was transferred to the United States District Court for the Western District of Kentucky. Purnell will receive $2,601,228 as part of today’s settlement.

The matter was handled by Assistant United States Attorney L. Jay Gilbert of the U.S. Attorney’s Office for the Western District of Kentucky, and the Department of Justice Commercial Litigation Branch. The investigation was conducted by the Office of Inspector General of the U.S. Department of Health and Human Services with assistance from the Federal Bureau of Investigation, Defense Criminal Investigative Service and the Office of Inspector General of the Railroad Retirement Board.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.9 billion.