Middle District of Tennessee
Press releases recorded for this federal judicial district.
United States and Tennessee File Suit Against Comprehensive Pain Specialists and Principal Physician OwnersRead the Press Release
NASHVILLE, Tenn. – July 22, 2019 - The United States and Tennessee today filed a consolidated complaint in intervention alleging violations of the False Claims Act and the Tennessee Medicaid False Claims Act by Anesthesia Services Associates, PLLC, d/b/a Comprehensive Pain Specialists (CPS), announced U.S. Attorney Don Cochran for the Middle District of Tennessee and Tennessee Attorney General Herbert Slatery III. The complaint also names as defendants Dr. Peter B. Kroll, of Goodlettsville, Tennessee; Dr. Steven R. Dickerson, of Nashville; and Dr. Gilberto A. Carrero, of Nashville, three of the principal owners of CPS, as well as John Davis, of Franklin, Tennessee, the former CEO, who was convicted by a jury in April of this year of violating the Anti-Kickback Statute; and Russell S. Smith, a chiropractor from Cleveland, Tennessee. The complaint also states claims for violation of the Federal Priority Statute and common law claims, including unjust enrichment and fraud.
As set forth in detail in the complaint, beginning in 2011 under the direction of John Davis, CPS instituted policies to maximize profits through medically unnecessary and excessive testing, including a standing order to automatically conduct quantitative drug testing, specimen validity testing, genetic blood testing and psychological testing on virtually all patients, without regard to individual patient risks or need. In July 2012, CPS began operating its own testing facility in Franklin, Tennessee. To ensure more revenue was generated, CPS required providers to send all urine specimens and blood work to its lab for testing. The reimbursement rate for lab testing is nearly five times the rate of on-site testing.
In addition, John Davis was aware that CPS had submitted false claims and received over $130,000 for non-reimbursable acupuncture, including for services rendered by the physician owner defendants. Yet, Davis made the decision not to refund the overpayment to Medicare.
The physician owners, Drs. Dickerson, Kroll, and Carrero, knew about each of these unlawful practices, as they personally engaged in the submission of false claims relating to this conduct.
John Davis also engaged in a practice of upcoding, altering the claims submitted by providers to maximize the amount of reimbursement from the government.
The complaint also alleges separately that Dr. Peter Kroll was responsible for submitting claims to the United States falsely indicating that he was the Rendering Provider. In one particularly egregious example of this fraudulent conduct, Dr. Kroll caused over 2,500 claims to be submitted to Medicare, for which CPS was paid almost $350,000 for procedures and testing on patients during a period of time when Dr. Kroll was out of the country on vacation. As a result of this conduct, Medicare has revoked Dr. Kroll’s billing privileges.
Despite the governments’ investigation, CPS continued to submit false claims until 2018, when it began the process of dissolution. The governments allege that the scheme defrauded Medicare and TennCare of at least $25 million, and the United States and Tennessee are seeking to recover treble damages, plus penalties for the thousands of false claims submitted, pursuant to the False Claims Act and the Tennessee Medicaid False Claims Act.
The governments began investigating the wrongdoing alleged in today’s complaint in response to lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act and the Tennessee Medicaid False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery.
The matter was investigated by the Department of Health and Human Services, Office of Inspector General, and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Kara F. Sweet represents the United States, and Assistant Attorney General Philip Bangle represents Tennessee.
The claims alleged by the United States and Tennessee are allegations only, and there has been no determination of liability. The lawsuit is captioned United States and the State of Tennessee ex. Rel. Suzanne Alt, et al. v. Anesthesia Services Associates, PLLC, et al., Case No. 3:16-cv-00549 (M.D. Tenn.).
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Methamphetamine Distribution Conspiracies Result in Lengthy Prison SentencesRead the Press Release
NASHVILLE, Tenn. – July 15, 2019 – Twenty individuals have been sentenced for their role in a series of methamphetamine distribution conspiracies which resulted in as much as 21 kilograms of methamphetamine and one kilogram of fentanyl being trafficked into the Middle Tennessee area and the arrest and indictment of two dozen individuals on drug trafficking charges, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Filmon Mehtsentu, 33, of Clarkston, Georgia, was sentenced Friday to 20 years in prison for his role as the leader of a Drug Trafficking Organization that brought and distributed multi-kilograms of methamphetamine and fentanyl into the mid-state, beginning in early 2017. Mehtsentu pleaded guilty in December 2018, following a year-long investigation, dubbed “Operation Street Tax,” which resulted in the indictment of 13 other persons, nine of whom have pleaded guilty and were previously sentenced, including: Guled Mohamed, 33, of Snellville, Georgia, sentenced to 151 months in prison; Shawn Dial, 31, of Ashland City, Tennessee, sentenced to 110 months in prison; Shane Watts, 33, of LaVergne, Tennessee, sentenced to 100 months in prison; Anthony Hampton, 39, of Shelbyville, Tennessee, sentenced to seven years in prison; Joel Stockham, 27, of Antioch, Tennessee, sentenced to four years in prison; Juan Carranza, 39, of Nashville, sentenced to 41 months in prison; Eddie Shaw, 53, of Nashville, sentenced to three years in prison; Zelalam Lloyd, 30, of Clarkston, Georgia, sentenced to 28 months in prison; and Randell Chaney, 35, of Murfreesboro, Tennessee, sentenced to time served.
Reginald Crump, 51, and Darrell Lockridge, 31, both of Nashville, previously pleaded guilty and will be sentenced later this year. Rocky Jones, 38, of Joelton, Tennessee, was convicted at trial in May and is awaiting sentencing. Arone Haile, of Atlanta, Georgia, has pleaded not guilty and is awaiting trial. He is presumed innocent until proven guilty in a court of law.
Ten other persons were charged in 2017 in a separate methamphetamine distribution conspiracy, which began in December 2015 and continued until the end of May 2017. All have pleaded guilty and were sentenced, including: Liam Glenn, 25, of Hermitage, Tennessee, sentenced to 14 years in prison; Pascal Pasha, 35, of Kennesaw, Georgia, sentenced to 150 months in prison; Todd White, 49, of Atlanta, Georgia, sentenced to 136 months in prison; Daniel Demore, 44, of Atlanta, Georgia, sentenced to 2 years in prison; Jason White, 39, of Portland, Tennessee, sentenced to 160 months in prison; Williams Ryan Macintyre, 35, of Nashville, Charles Henderson, 31, of Lebanon, Tennessee, and Autumn Swindle, 41, of Nashville, were each sentenced to five years in prison; Charvel Roberson, 27, of Nashville, was sentenced to 26 months in prison; Dakota Boyles, 22, of Portland, Tennessee, most recently of Franklin, Kentucky, was sentenced to 12 months and a day in prison.
Of particular interest during the investigation, agents intercepted a parcel shipped from Arizona, which was suspected to contain a kilogram of heroin. DEA Lab analysis later determined the contents to be fentanyl – a quantity lethal enough to kill thousands of people. Other parcels intercepted during the investigation contained kilograms of incredibly pure methamphetamine, including 2.232 kilograms with 95% purity; 2.233 kilograms with 98% purity; 0.516 kilograms with 93% purity; and 141.16 grams of a substance containing heroin and fentanyl.
These cases were investigated by the U.S. Drug Enforcement Administration; the U.S. Postal Inspection Service; the Bureau of Alcohol, Tobacco, Firearms & Explosives; the United States Secret Service; the Internal Revenue Service-Criminal Investigation; the Metropolitan Nashville Police Department; the Columbia Police Department; the Rutherford County Sheriff’s Office; and the Williamson County Sheriff’s Department. Assistant U.S. Attorneys Amanda Klopf and Brent Hannafan are prosecuting the cases.
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Tennessee Prison Inmate Facing Federal Charges for White Powder Mailing HoaxRead the Press Release
NASHVILLE, Tenn. – July 11, 2019 – Jeffery Durance, 36, of Gatlinburg, Tennessee, and an inmate of the Tennessee Department of Correction, was indicted yesterday by a federal grand jury, charging him with mailing a threatening communication and conveying false information while threatening to use a Weapon of Mass Destruction (WMD), announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
The indictment alleges that on September 6, 2018, Durance mailed an envelope containing a white powder to the Commissioner of the Tennessee Department of Correction, Tony Parker. The indictment also alleges that the envelope was sent through the U.S. Mail and contained a threatening letter, which caused a reasonable belief that the powder contained a biological agent or toxin, which would constitute a WMD. The receipt of the envelope at the Tennessee Tower State Office Building in Nashville caused a disruption in services until the powder was determined to be an inert material.
If convicted, Durance faces up to 10 years in prison for mailing a threatening communication and up to five years in prison for threatening to use a WMD.
This case was investigated by the FBI; the Tennessee Highway Patrol; the Tennessee Department of Correction; the Metropolitan Nashville Police Department; and the Metropolitan Nashville Fire Department. Assistant U.S. Attorney Robert S. Levine is prosecuting the case.
The defendant is presumed innocent until proven guilty in a court of law.
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Six Sentenced to Federal Prison in Deadly Fentanyl Distribution ConspiracyRead the Press Release
NASHVILLE, Tenn. – July 2, 2019 – Six individuals have been sentenced for their role in a fentanyl distribution conspiracy which caused a massive number of overdoses and resulted in at least one death, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. The July 2016 episode also left more than 20 persons hospitalized in the Murfreesboro, Tennessee area.
Joedon Bradley, 31, of Nashville, Tennessee, was sentenced yesterday to 30 years in prison and Jonathan Barrett, 31, of Murfreesboro, Tennessee, was sentenced to 23 years in prison. Johnny Williams, 33, also of Murfreesboro was sentenced in December 2018 to 20 years in prison. A federal jury convicted the trio in March 2018, after an eight-day trial.
Also sentenced yesterday were Eric Falkowski, 37, of Kissimmee, Florida, 266 months in prison; and Davi Valles, Jr., 26 of Nashville, Tennessee, seven years in prison. Falkowski and Valles pleaded guilty in 2017.
Sentenced today was LaKrista Knowles, 27, of Nashville, Tennessee, who pleaded guilty in May 2017, 100 months in prison.
The remaining defendants, Preston Davis, 25, of Madison, Tennessee, and Jennifer Dogonski, 35, of Farmington, Michigan, formerly of Murfreesboro, previously pleaded guilty and will be sentenced in September.
During the course of sentencings, U.S. District Judge Jack Zouhary, sitting by special designation, said that this was “one of the saddest cases” he had seen in his time on the bench and “it was as if [the defendants were] putting a gun to someone’s head.”
This investigation began in July 2016, when law enforcement and medical personnel in the Murfreesboro, Tennessee area were overwhelmed by a series of overdoses caused by pills that appeared to be prescription Percocet pills. The pills were counterfeit and contained fentanyl, alprazolam, and acetaminophen, and had been produced by Joedon Bradley and Eric Falkowksi.
According to testimony at trial, in May 2016, Eric Falkowski moved his illicit pill operation to Madison, Tennessee, after law enforcement conducted a search of his home in Florida and seized his pill presses. Following the seizure, Falkowski obtained more fentanyl through the internet from China and purchased a new pill press through Amazon.com.
Beginning on July 4, 2016, Joedon Bradley and Eric Falkowski mixed together a combination of inert pill binder, alprazolam (“Xanax”), acetaminophen (sold as Tylenol), and fentanyl. Over the course of approximately 24 hours, Joedon Bradley helped produce thousands of pills, using a pill mold that imprinted “A333” onto the finished product: a white, oblong pill that was almost identical to a prescription A333 Percocet pill.
On July 5, 2016, Johnny Williams obtained approximately 300 pills through the chain of distribution. Williams arranged to sell 150 of those pills for $1,050, to Jonathan Barrett through Jennifer Dogonski, a woman who acted as a broker.
During the period of July 5-6, 2016, Jonathan Barrett, Johnny Williams and Joedon Bradley all distributed counterfeit Percocet pills containing fentanyl, with the markings “A333,” that were produced by Falkowski and Bradley. On July 6, 2016, Barrett learned that some individuals who had purchased the counterfeit pills had overdosed, and that one had possibly died, but he continued to distribute the counterfeit pills.
Law enforcement later searched a home in Madison, Tennessee, pursuant to a federal search warrant, and found, among other things, the pill press, multiple molds used for embedding text onto pills, including a mold for “A333,” a pill grinder, fentanyl, alprazolam and other drug manufacturing equipment. Testing later confirmed that the mold found at the house was the same mold used to make some of the pills seized from overdose victims during the investigation.
This case was investigated by the Drug Enforcement Administration; the Tennessee Bureau of Investigation; the Murfreesboro Police Department; the Rutherford County Sherriff’s Office; and the Food and Drug Administration. The case was prosecuted by Assistant U.S. Attorneys Amanda J. Klopf and Brent A. Hannafan.
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Nashville Man Sentenced to Federal Prison for Human Trafficking CrimesRead the Press Release
NASHVILLE, Tenn. – June 20, 2019 – Brittan Ezekiel Kettles, aka “Low Low,” 27, of Nashville, Tennessee, was sentenced yesterday to 15 years in federal prison for conspiracy to sex traffic a person under the age of 14 and sex trafficking a person under the age of 14, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. Kettles was convicted by a federal jury in June 2018 after a three-day trial in U.S. District Court.
Evidence at trial established that on or about June 15, 2016, Kettles met a woman by the name of Stormy Whittemore after contacting her through Instagram, a photo and video-sharing social networking site. Within approximately 24 hours of meeting with Whittemore, Kettles disclosed information to her regarding his prostitution enterprise. Using promises of a money, cars, mansions, and other materialistic things, Kettles recruited Whittemore into working for him as a prostitute. Shortly thereafter, Whittemore began prostituting for Kettles in the Nashville area. At the time, Whittemore was 18 years old, and prior to meeting Kettles, she had never prostituted herself before.
To facilitate Whittemore’s prostitution activities, Kettles rented a room at a motel by the Nashville International Airport from June 16, 2016, through June 19, 2016. Kettles also utilized the website www.Backpage.com to advertise her services. The advertisements on Backpage.com sometimes displayed photographs of other female individuals and sometimes of Whittemore. When clients, commonly referred to as a “johns” responded to the advertisement, Kettles would arrange the sexual encounter with Whittemore. Following the encounter, Whittemore provided the money she made to Kettles, typically between $150 and $200 for each encounter.
Between June 16 and June 19, 2016, during the same time that Kettles was prostituting Whittemore in Nashville, he met a 13-year old friend of Whittemore’s. Shortly after meeting the 13-year-old, Kettles, through Whittemore, recruited and enticed her to engage in commercial sex acts. Over the course of the next couple of days, the 13-year-old prostituted herself on behalf of Ketttles and Whittemore. Following each sexual encounter, she provided the money she earned to Whittemore and Kettles, usually by handing the money directly to Whittemore, who would then give the money to Kettles.
During the course of the weekend, Kettles purchased clothing, food, and beverages for Whittemore and the 13-year-old female and also paid for them to receive nail services at a salon, using the money that they had earned to pay for these items and services. At the end of the weekend, Whittemore and Kettles dropped the 13-year-old off at her residence. She later contacted Whittemore and Kettles via text message, asking for $200 of the $800 that she had earned for them. They agreed to give her $60, but in fact only left $15 in the mailbox at her house.
Shortly after these events, the 13-year-old’s mother contacted a non-governmental organization and reported that her daughter had been a victim of human trafficking. This information was relayed to the Metropolitan Nashville Police Department, which then conducted an investigation into the allegations. The 13-year-old subsequently identified Kettles and Whittemore as the individuals who trafficked her between June 16 and June 19, 2016.
Whittemore pleaded guilty in August 2017 and will be sentenced on July 3, 2019.
This case was investigated by the FBI and the Metropolitan Nashville Police Department. Assistant U.S. Attorneys Katy Risinger and Siji Moore prosecuted the case.
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Nashville Heroin Distributor Sentenced to 30 Years in Federal PrisonRead the Press Release
NASHVILLE, Tenn. – June 14, 2019 – Brandon Bradford, 40, of North Chicago, Illinois, was sentenced yesterday in U.S. District Court to 30 years in prison for conspiring to distribute a kilogram or more of heroin, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Bradford was convicted by a federal jury in November 2018, following a four-day trial.
Bradford, along with Terrell Pierson, aka, Tank, 33, and Justin Joplin, aka, Fat Boy, 35, both from the Chicago area, and Krystin Pape, 33, of Nashville, were indicted in May 2016 and later pleaded guilty. Pierson and Joplin were previously sentenced to 10 years in federal prison and Pape will be sentenced next week.
“I commend our prosecution team and our law enforcement partners at the Metropolitan Nashville Police Department and the FBI for working to build a strong case and disrupt the supply of heroin coming to our community,” said U.S. Attorney Cochran. “This case is just one of many that these dedicated individuals undertake on a daily basis and I’m grateful for their commitment to do all they can to make Nashville and Middle Tennessee a safer place.”
The prosecution arose out of an investigation into heroin trafficking by the Metropolitan Nashville Police Department’s Gang Unit and the FBI in 2015, which identified Brandon Bradford as a heroin supplier who was obtaining large quantities of heroin from the Chicago, Illinois area. Bradford conspired with several others, including Pape, Pierson and Joplin, to obtain multiple kilograms of heroin from the Chicago area on a regular basis and to distribute that heroin in the Nashville area from around September of 2014 through April 20, 2016. Based on the evidence at trial, Bradford was conservatively responsible for more than 18 kilograms of heroin that were sold on the streets of Nashville.
The evidence at trial revealed that the amounts transported from the Chicago area for distribution in Nashville during the conspiracy ranged from approximately 50-100 grams and increased quickly to kilogram quantities as the conspiracy progressed. As the operation grew larger, Bradford directed Pierson and Joplin, his half-brother, to move from the Chicago area to Nashville to assist him in running the operation, along with Pape. Bradford and they shared a residence in the Bellevue area of Nashville where they frequently repackaged and prepared heroin for delivery to customers in Nashville. Bradford, as the leader of the operation, determined the pricing for the heroin and controlled the money.
Pape and Joplin were arrested when a search warrant was executed at the residence on Stacy Drive, on April 20, 2016, and Pierson was arrested shortly thereafter. Bradford was arrested 15 months later, in August 2017, at a hotel in New Albany, Indiana, after being actively sought by law enforcement. At the time of his arrest, Bradford was in possession of more than 300 grams of heroin.
“This sentencing is the culmination of a collective effort between federal and local law enforcement to combat heroin trafficking in our community," said Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation M. A. Myers. "We will continue to be relentless in our mission to disrupt and dismantle drug trafficking organizations and bring the criminals who run them to justice.”
“MNPD officers and our federal partners are so serious about interdicting heroin and holding traffickers accountable because people are dying,” Chief Steve Anderson said. “Nearly four times as many persons died in Nashville last year from drug overdoses than from the crime of murder. I am grateful for the relationship we share with the U.S. Attorney’s Office and other federal law enforcement agencies as we investigate cases like this.”
This case was prosecuted by Assistant U.S. Attorneys Phillip H. Wehby and Brooke K. Schiferle.
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Harrisburg Man Sentenced to over Twenty-One Years’ Imprisonment for Drug Trafficking and Firearms OffensesRead the Press Release
HARRISBURG—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Robert Hendrix, Jr., age 39, of Harrisburg, Pennsylvania, was sentenced on June 13, 2019, by United States District Court Judge Sylvia H. Rambo to 262 months’ imprisonment to be followed by six years of supervised release for drug trafficking and firearms offenses.
According to United States Attorney David J. Freed, Hendrix previously admitted to possessing with the intent to distribute crack cocaine and possessing multiple firearms as a previously convicted felon.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Harrisburg Police Bureau. Assistant U.S. Attorney Carlo D. Marchioli prosecuted the case.
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Florida Man Sentenced to Federal Prison in $28 Million Ponzi SchemeRead the Press Release
NASHVILLE, Tenn. – June 11, 2019 – Christopher B. Warren, 50, of Anthony, Florida was sentenced yesterday to nine years in federal prison for operating a multi-million dollar Ponzi scheme, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Warren was charged in a 12-count indictment in July 2018 and pleaded guilty to mail fraud and securities fraud in December 2018.
In sentencing Warren, U.S. District Judge Eli Richardson remarked that this was a “terrible crime with lies everywhere,” and that there was no excuse for this conduct. Judge Richardson also ordered Warren to pay $15,666,418.67 in restitution.
Warren was the founder and chief investment officer of Clean Energy Advisors (CEA), a company registered in Wyoming with offices in Nashville, Tennessee, Florida, and other locations. Beginning in November 2013 and continuing through September 2017, Warren devised and operated a scheme to defraud investors by offering investment opportunities in solar farm projects purportedly owned by CEA. To attract investors, Warren claimed that CEA owned working solar farms throughout the state of North Carolina and further claimed that Duke Power agreed to purchase the energy produced by CEA’s farms and that he would use the revenue to pay dividends to investors. Warren recruited 60 investors for its private investment funds: Utility Solar IV and Utility Income Fund and made numerous false misrepresentations, including that CEA owned several solar farms and made millions of dollars selling solar energy to utility companies, knowing at the time that CEA had no earnings, no profits, and had no contracts with any utility company. Warren also provided investors with a list of solar farms purportedly owned by CEA, many of which did not exist and others that were actually owned by other entities.
To hide the fraud, Warren created phone audited financial statements and made regular Ponzi payments to select investors. As the scheme was uncovered, Warren told investors he would repay the principal investments pending the imminent sale of the company to a foreign purchaser. In fact, no sale could have ever materialized.
During the course of the scheme, Warren raised approximately $28 million from investors, misappropriated a significant portion of those funds, including using almost $7 million for the personal benefit of himself and family members, and caused investors to lose more than $15 million.
Warren must report to the Bureau of Prisons by August 8, 2019. To begin serving his sentence.
This case was investigated by the FBI and was prosecuted by Assistant U.S. Attorney Stephanie N. Toussaint.
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LaVergne Man Sentenced to 15 Years in Federal PrisonRead the Press Release
NASHVILLE, Tenn. – June 10, 2019 – Jimmy Johnson, Jr., 45, of LaVergne, Tennessee, was sentenced Friday in U.S. District Court to 15 years in federal prison for being a convicted felon in possession of a firearm and possession with intent to distribute cocaine, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Johnson was indicted in March 2018 and pleaded guilty in February.
According to court documents, in February 2018, local, state and federal law enforcement agencies were conducting an investigation and executed a search warrant at Johnson’s home in Antioch, Tennessee. During the search, agents recovered 940 grams of cocaine and also recovered marijuana and crack cocaine. Agents also recovered evidence consistent with powder cocaine recently being cooked into crack cocaine. Two loaded semi-automatic handguns, a .40 caliber Smith & Wesson and a 9mm Sig Sauer, were also found during the search.
Johnson’s criminal history included prior convictions for possession with intent to sell cocaine; being a convicted felon in possession of a firearm; and aggravated assault. U.S. District Judge William L. Campbell, Jr., found that Johnson qualified as an Armed Career Criminal and subject to sentence enhancement.
The Bureau of Alcohol, Tobacco, Firearms & Explosives; the Tennessee Bureau of Investigation; the Metropolitan Nashville Police Department; and the Rutherford County Sheriff’s Office investigated this case. Assistant U.S. Attorney Joseph P. Montminy prosecuted the case.
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Deputy U.S. Marshal Impersonator Pleads Guilty to Federal ChargesRead the Press Release
NASHVILLE, Tenn. – June 10, 2019 – Tooraj Sohrabi Sedeh, 50, of Franklin, Tennessee, pleaded guilty Friday to three counts of impersonating a Deputy U.S. Marshal and making a false statement, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
On November 21, 2018, a Deputy U.S. Marshal was at the Home Depot on Powell Avenue, in Nashville, when he observed Sedeh walking out of the store wearing a shirt with U.S. Marshals Service (USMS) markings, including embroidered markings, patches and collar insignia. Sedeh was also observed to have a badge holder on a neck chain with a USMS patch attached to it and was wearing a holstered firearm and handcuffs on his hip.
The Deputy Marshal followed Sedeh from the store and asked him if he worked for the U.S. Marshals Service. Sedeh answered yes and stated he was assigned to the Nashville office. Sedeh was asked to produce his credentials and stated that he did not have them. The Deputy U.S. Marshal then identified himself and upon further inquiry, Sedeh stated he worked for the Williamson County Sheriff’s Department and was also a “freelance” bail bondsman and had worked for Grumpy’s Bail bonds. These claims were found to be false and Sedeh had no affiliation with these agencies or the USMS. The Deputy U.S. Marshal also observed Sedeh’s vehicle to have a law enforcement association sticker on it and shirts hanging inside with law enforcement insignias as well as ballistic vest carriers with U.S. Marshal insignias attached.
On November 28, 2018, the U.S. Marshals Service executed a federal search warrant at Sedeh’s home in Franklin, Tennessee and recovered a variety of clothing items marked with USMS insignias and other law enforcement tactical and service equipment.
Sedeh also impersonated a Deputy U.S. Marshal on other occasions, including between September 28, 2018 and October 4, 2018; on November 15, 2018; and between November 25, 2018 and December 10, 2018.
Sedeh faces up to three years in prison on each count of impersonation and up to five years in prison for making false statements and a $250,000 fine on each count when he is sentenced on October 21, 2019.
This case was investigated by the U.S. Marshals Service and is being prosecuted by Assistant U.S. Attorney Chris Suedekum.
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Murfreesboro Dentist Sentenced to 33 Months in Federal Prison for Healthcare Fraud SchemeRead the Press Release
NASHVILLE, Tenn. – June 7, 2019 - Richard N. Schott, 51, of Murfreesboro, Tennessee, was sentenced today to 33 months in federal prison for operating a scheme to defraud healthcare benefit programs, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Chief U.S. District Judge Waverly D. Crenshaw, Jr., also ordered Schott to pay $956,448.00 in restitution.
Schott, a licensed dentist, and his former practice administrator, Kendra Glenn, were charged in November 2018 with conspiracy to commit healthcare fraud. Schott pleaded guilty in November and Glenn, also facing seven counts of healthcare fraud, is scheduled for trial on December 3, 2019.
Schott owned and operated Dental Excellence, a dental practice with three locations in Murfreesboro and one location in Lebanon, Tennessee. Between November 2013 and January 2018, Schott caused the submission of false and fraudulent claims to healthcare benefit programs, including Delta Dental, Cigna, TennCare and DentaQuest, TennCare’s dental benefits program administrator. The fraudulent claims included billing for dental work that had not been completed or performed at all; falsifying dates of service to appear to comply with benefit programs’ timeframe and preauthorization requirements; falsifying claims to appear that services had been rendered by a benefits program credentialed dentist; falsifying supporting documents and adding false narratives to support the upcoding of claims; and others, including continuing to submit false claims after being advised by insurance companies that audits had determined a pattern of false claims and that the Tennessee Bureau of Investigation was conducting a criminal investigation into the company’s billing practices.
Schott took steps to conceal the fraud by discouraging employees from questioning billing practices; instructing employees to lie if questioned by insurance companies; and disciplining and even firing employees who questioned the legality of the billing practices. Schott used the proceeds from the fraudulent scheme for his own personal use and paid bonuses to Glenn based on the amount of money collected from the fraudulent scheme.
As a result of Schott’s fraudulent scheme, many patients were forced to wait months and even years in pain, to have necessary dental work completed by other dentists, while their insurance companies resolved the false claims.
As noted above, Schott was ordered to pay restitution to TennCare, Tennessee’s Medicaid program, which is funded by state and federal tax dollars and provides medical and dental care to certain minors and indigent individuals.
This case was investigated by the FBI and the Tennessee Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Kathryn W. Booth, Sarah K. Bogni and Byron Jones.
Kendra Glenn is presumed innocent until proven guilty in a court of law.
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Clarksville Man Sentenced to 15 Years in Federal PrisonRead the Press Release
NASHVILLE, Tenn. – June 5, 2019 – Willie Collins, 38, of Clarksville, Tennessee, was sentenced Monday in U.S. District Court, to 15 years in federal prison for being a convicted felon in possession of a firearm, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Collins was indicted in March 2017 and pleaded guilty in December 2017.
“This is yet another example of our commitment to work with our local law enforcement partners and remove dangerous and repeat offenders from the streets of our communities,” said U.S. Attorney Cochran. We will continue our aggressive enforcement efforts in partnership with the Clarksville Police Department and the ATF to ensure the safety and security of this community.”
According to charging documents and court records, Collins was arrested by Clarksville police officers on May 24, 2016, after responding to a call about shots being fired on Chapel St., in Clarksville. When responding officers arrived and encountered Collins, he walked away from them and placed what was later found to be a Beretta 9mm handgun on the top of the tire of a vehicle parked nearby. Officers also found several spent shell casings in close proximity and a car that had sustained damage from gunfire. Video surveillance later obtained also showed Collins firing a handgun toward an individual with whom he had been in an argument.
Collins had previously been convicted of several felonies, including possession with intent to sell cocaine, robbery, reckless endangerment with a deadly weapon, and other crimes.
In sentencing Collins, Chief U.S. District Judge Waverly D. Crenshaw, Jr., found that Collins’ criminal history qualified him as an Armed Career Criminal and subject to sentence enhancement.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Clarksville Police Department. The case was prosecuted by Assistant U.S. Attorney Joseph Montminy.
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Former Tennessee State University Employee Indicted for Federal Student Loan FraudRead the Press Release
NASHVILLE, Tenn. – June 4, 2019 – Renauld Clayton, 31, of Chicago Illinois, formerly of Nashville, was indicted last week on charges of student loan fraud, aggravated identity theft and wire fraud, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
A 12-count indictment returned Wednesday, alleges that during 2014-2015, Clayton was an employee in the admissions office of Tennessee State University (TSU). While acting in that capacity, the indictment alleges that Clayton gained access to the personal identifying information of TSU students and others, changed bank account information, and diverted students’ federal student aid payments to bank accounts under his control.
According to the indictment, in March 2015, TSU’s internal audit division conducted an investigation into students’ missing student aid refunds. Further investigation by the U.S. Department of Education determined that $84,506.00 had been misappropriated and that Clayton had fraudulently deposited more than $60,000.00 into his personal bank accounts.
On Friday, while federal agents were preparing to arrest him, Clayton was arrested by the Metropolitan Nashville Police Department on unrelated criminal charges.
If convicted, Clayton faces up to 20 years in prison and a $250,000 fine.
This case was investigated by the U.S. Department of Education and the United States Secret Service. Assistant U.S. Attorney Sara Beth Myers is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Second Nashville Man Indicted for 2016 Robbery/MurderRead the Press Release
NASHVILLE, Tenn. – May 23, 2019 – A superseding indictment returned yesterday charged Christopher Brazelton, 24, of Nashville, Tennessee, with conspiring to commit and committing Hobbs Act Robbery; using, carrying, brandishing and discharging a firearm resulting in death; conspiring to tamper with a witness; and being a convicted felon in possession of a firearm, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Brandon Hunt-Clark, 22, also of Nashville, was previously indicted last month in connection with this case.
According to the indictment, these charges resulted from the robbery and murder of Justin Lawton, who was found shot to death in Nashville on December 14, 2016. The indictment also charges that Hunt-Clark and Brazelton conspired with unnamed others to tamper with a witness who had knowledge of that robbery and murder.
Both defendants are in custody and if convicted, face up to life in prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Metropolitan Nashville Police Department. Assistant U.S. Attorney Sunny A.M. Koshy is prosecuting the case.
The charges in the indictment are merely accusations. Each defendant is presumed innocent until proven guilty in a court of law.
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Five Plead Guilty in Oxycodone ConspiracyRead the Press Release
NASHVILLE, Tenn. – May 23, 2019 – The final person charged last year in a in a conspiracy to obtain and distribute oxycodone in the Nashville area has pleaded guilty in U.S. District Court, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
AbdulNasar Nour, 25, of Antioch, Tennessee, pleaded guilty today to wire fraud and aggravated identity theft, after being indicted with four others in June 2018.
In January 2017, Nour and others devised a scheme to steal the personal identification information, including the DEA registration numbers, from four area medical providers, in order to create fraudulent prescriptions for oxycodone. Another defendant, William Afari, worked as an intern at a dental clinic in Nashville, and stole the personal information of 22 patients, which was then used to create the fraudulent prescriptions. These prescriptions were presented at pharmacies in the Nashville area and exchanged for oxycodone.
Others charged in this conspiracy have previously pleaded guilty and are awaiting sentencing. They include William Afari, 24, of Antioch, Tennessee; Simbarashe Kanjanda, aka Simba, 38, of Hermitage, Tennessee; Kudakawashe Mandishona, aka Kuda, 24, of Antioch, Tennessee; and Robert Pride, Jr., 32, of Nashville, Tennessee.
Each defendant faces a mandatory minimum term of two years in prison and up to 20 years, when they are sentenced later this year.
This case was investigated by the Drug Enforcement Administration; the Tennessee Office of Inspector General; and the Smyrna Police Department. The case is being prosecuted by Assistant U.S. Attorney Ahmed A. Safeeullah.
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Celina Physician Arrested on Federal Drug Distribution Charges While Preparing to Leave the United StatesRead the Press Release
NASHVILLE, Tenn. – May 17, 2019 – Gilbert Ross Ghearing, 65, of Livingston, Tennessee, a physician and owner of a family medical practice in Celina, Tennessee, was charged this morning in a criminal complaint with violating the Controlled Substances Act, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Ghearing was arrested at his practice in Celina, Tennessee this morning by federal agents and transported to Nashville to appear before a U.S. Magistrate Judge.
According to the complaint, Ghearing owns and operates a medical clinic in Celina, Tennessee and also provides medical services at other locations in Clay and Fentress Counties. The complaint alleges that between August 2016 and February 2019, Ghearing repeatedly violated the Controlled Substances Act by prescribing Schedule II and Schedule IV drugs, including benzodiazepines and opiates, outside the usual course of practice and not for a legitimate medical purpose.
The complaint details allegations of prescribing these drugs to patients who exhibited a high potential for abuse and had a past medical history of abuse, including multiple instances of overdoses. The complaint also alleges that Ghearing prescribed combinations of benzodiazepines and opiates, despite a warning issued by the U.S. Food & Drug Administration that combined use of these drugs results in serious side effects, including death.
Records filed with the Court also reflect that on May 15, 2019, Ghearing, while under investigation for federal offenses, booked a flight to depart on May 19, 2019, with a final destination to the Marshall Islands.
U.S. Magistrate Judge Alistair Newbern ordered Ghearing detained this afternoon, pending a detention and preliminary hearing on May 22, 2019.
If convicted, Ghearing faces up to 20 years in prison and a $1 million fine.
This case is being investigated by the Drug Enforcement Administration; U.S. Department of Health & Human Services-Office of Inspector General; and the Tennessee Bureau of Investigation. Assistant U.S. Attorney Sarah Bogni is prosecuting the case.
A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Two Illegal Aliens Facing Federal Conspiracy, Drug Distribution and Firearms ChargesRead the Press Release
NASHVILLE, Tenn. – May 16, 2019 – A federal grand jury yesterday, returned an eight-count indictment charging two illegal aliens with conspiracy to distribute cocaine and marijuana; illegal possession of firearms; possession of a firearms in furtherance of drug trafficking crimes; and being illegal aliens in possession of firearms; announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Jose Calderon, 19, aka, JoJo, of Mexico, and Brian Paradez, aka Bryant Myers, aka Bryan Josue Paredes-Nataren, 21, of Honduras, were charged in the indictment after an investigation by the Drug Enforcement Administration, which began in June 2018.
According to the indictment and court records, on July 28, 2018, agents were conducting an investigation into illegal drug trafficking at a bar on Murfreesboro Pike in Nashville. At approximately 3:00 a.m., agents saw Paredes exit the bar and get into the back seat of a vehicle, which left at a high rate of speed. Agents followed the car to an apartment complex on Glengarry Drive and watched as the vehicle backed into a parking space and turned off the lights. As agents approached, the vehicle made an evasive maneuver and vaulted from a concrete ledge to escape. Though the vehicle was damaged, it continued erratically on Murfreesboro Pike without lights until stopping at an apartment complex on West End Avenue, after which, all occupants fled on foot. Paredes was found hiding under a parked car a short distance away and was taken into custody. Agents later determined that the car belonged to Paredes and recovered from it a Ruger AR-15 rifle, two loaded handguns, and bags of cocaine and marijuana packaged for resale. Further investigation resulted in this indictment and both of these individuals are in federal custody.
If convicted, Calderon and Peredes faces a minimum of 10 years and up to life in prison, and deportation from the United States.
This case was investigated by the U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms & Explosives; the U.S. Department of Homeland Security-Immigration and Customs Enforcement; and the Metropolitan Nashville Police Department Gang Unit. Assistant U.S. Attorney Ahmed Safeeullah and Department of Justice Trial Attorney Matthew Hoff are prosecuting the case.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.
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Illegal Alien MS-13 Member Sentenced to Nineteen Years in Federal Prison for Violent Crime and Drug DistributionRead the Press Release
NASHVILLE, Tenn. – May 16, 2019 – Gerson Serrano-Ramirez, aka Frijole, 31, an illegal alien and MS-13 gang member from El Salvador, was sentenced today to 19 years in prison, announced U.S. Attorney Don Cochran for the Middle District of Tennessee . At the completion of his sentence, Serrano-Ramirez will be deported from the United States.
Serrano-Ramirez was convicted by a federal jury in September 2018, of using physical force to tamper with a witness; being an illegal alien in possession of a firearm; illegally re-entering the United States after previously being deported; multiple counts of cocaine distribution; and multiple counts of other firearms violations.
According to evidence and testimony presented at trial, in July 2017, the activities of Seranno-Ramirez and other MS-13 Gang members were disrupting the normal operation and business of a local night club and this was brought to the attention of Serrano-Ramirez by an acquaintance, with a request to tone down their disruptive behavior. Serrano-Ramirez later invited the individual to his home in the Antioch, Tennessee area, where he subsequently assaulted him by pointing an assault rifle at him; strangling him with the rifle strap; spraying bleach into his eyes; and then attempted to suffocate him by placing a plastic bag over his head. Finally, while clamping the individual’s finger with a pair of pliers and holding an assault rifle on him, Seranno-Ramirez told the individual that if he told anyone about the assault that he would kill him and his mother.
Evidence introduced during the trial also included video of the assault which was captured on an in-home security system at Serrano-Ramirez’ house and videos of him packaging and selling cocaine from the residence. This video was discovered and seized during the subsequent execution of a search warrant. Also seized during this search was an AK-47 assault rifle; multiple rifle magazines; 582 rounds of ammunition; body armor; and a small amount of cocaine and marijuana.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Drug Enforcement Administration; Homeland Security Investigations – Immigration & Customs Enforcement; and the Metropolitan Nashville Police Department Gang Unit. Assistant U.S. Attorney Ahmed Safeeullah and Department of Justice Trial Attorney Matthew Hoff prosecuted the case.
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United States Files False Claims Act Complaint Against Arriva Medical, LLC, Alere, Inc., and ConsultantRead the Press Release
NASHVILLE, Tenn. – May 14, 2019 - The United States has filed a complaint under the False Claims Act against Arriva Medical, LLC (“Arriva”), its parent Alere, Inc. (“Alere”), and Ted Albin, of Stuart, Florida, a reimbursement consultant for Arriva and Alere, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. The complaint alleges that the defendants submitted or caused false claims to be submitted to the Medicare program for medically unnecessary glucometers and paid kickbacks to Medicare beneficiaries in the form of free glucometers and waivers of their copayments. The complaint also alleges that Arriva submitted false claims to the Medicare program for diabetic testing services shipped to deceased beneficiaries.
On February 19, 2019, the United States filed a notice of intervention in an action against Arriva and Alere that was commenced under the qui tam or whistleblower provisions of the False Claims Act. The notice informed the court that the United States intended to file a complaint against Arriva, Alere, and Albin.
Subsequently, on April 24, 2019, David Wallace and Timothy Stocksdale, the founders of Arriva who also worked as executives for Arriva for two years after its purchase by Alere, agreed to pay $500,000 each to settle False Claims Act allegations for their role in the alleged conduct.
This case is being handled by the United States Attorney’s Office for the Middle District of Tennessee and the Justice Department’s Civil Division, with assistance from the Office of the Inspector General of the Department of Health and Human Services and the Tennessee Bureau of Investigation. Assistant U.S. Attorney Ellen Bowden McIntyre and Trial Attorney Jake M. Shields of the Civil Division represent the United States.
The claims in which the United States has intervened are allegations only, and there has been no determination of liability. The lawsuit is captioned United States ex rel. Goodman v. Arriva Medical LLC; Alere, Inc., Case No. 3:13-cv-00760 (M.D. Tenn.).
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Former Jackson County Judicial Commissioner Charged in 48-Count IndictmentRead the Press Release
NASHVILLE, Tenn. – May 13, 2019 – a 48-count indictment handed down last week, charged Patrick Martin, 48, of Gainesboro, Tennessee, with two counts of federal program theft, 30 counts of wire fraud, one count of possession of a forged security of an organization, 12 counts of failure to collect or pay employment taxes, two counts of filing false tax returns, and one count of destruction of records in a federal investigation. Jeff Hynes, 51, of Gainesboro, Tennessee, was also charged in the destruction of records count.
Martin and Hynes were arrested on Friday by federal agents and appeared before U.S. Magistrate Judge Alistair Newbern. Hynes was held in custody pending further proceedings and Martin was released with conditions, pending trial.
According to the indictment, Martin embezzled funds belonging to the Community Prevention Coalition of Jackson County, an organization that had the stated mission of preventing and reducing underage alcohol abuse and illegal substance abuse among youth in Jackson County. Martin served as Executive Director of the Coalition while also serving as a Judicial Commissioner in Jackson County. Martin’s scheme resulted in fraudulent wire transfers totaling $375,000.
The indictment alleges that Martin embezzled funds the Coalition received from federal, state, and local sources by causing Coalition checks to be issued to him, which he used to pay personal expenses, including his electric bill, furniture and fixtures for his home and for the purchase of a Ford Mustang for another individual, among others. The indictment also alleges that Martin reimbursed himself for more than the amount of certain expenses, including on three occasions where he reimbursed himself more than $3,000 for the same expense. Then, in the midst of an audit by the Tennessee Comptroller of the Treasury, Martin and Hynes intentionally destroyed a large number of the Coalition’s records, including invoices and other financial records, by setting them on fire.
The indictment also alleges that Martin withheld quarterly taxes from Coalition employees’ wages, but never submitted the funds to the IRS as required, causing a tax loss of more than $82,000.
Finally, the indictment alleges that Martin under reported his income when he filed tax returns for 2014 and 2015.
If convicted, Martin faces up to 10 years on each count of federal program theft, 20 years on each count of wire fraud, 10 years for possession of a forged security, five years on each count of failure to collect or pay employment tax, and three years on each count of filing false tax returns. Martin and Hynes each face up to 20 years on the count for destruction of records in a federal investigation.
This case was investigated by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; the IRS - Criminal Investigation; and the Tennessee Comptroller of the Treasury. Assistant United States Attorney Robert Levine is prosecuting the case.
The charges are merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.
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Former Credit Union Teller and Accomplice Plead Guilty to Conspiracy and Identity Theft ChargesRead the Press Release
Nashville, Tenn. – May 10, 2019 - Nicole C. Walker, 40, of Clarksville, Tennessee, pleaded guilty today in U.S. District Court to conspiracy to commit bank fraud and aggravated identity theft, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. LaToya Chambers, 42, of Nashville, Tennessee, pleaded guilty to the same charges earlier this year.
Chambers, a former teller at NGH Credit Union, (now Cornerstone Financial Credit Union) and Walker were indicted on December 19, 2018, after an investigation determined that Chambers had used her position to obtain personal identifying information of credit union customers. During their plea hearings, Chambers and Walker admitted that from March 2018 through July 2018, Chambers shared the personal information that she had obtained with Walker, who used the identities to make fraudulent withdrawals from the victims’ credit union accounts without their knowledge. Chambers and Walker divided the proceeds of many of the fraudulent transactions between themselves. Several of the credit union customers were elderly and had accumulated assets. According to court records, the financial institutions involved in these transactions lost over $80,000.
Chambers and Walker each face up to 32 years in prison and up to a $1million fine when they are sentenced later this year.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Christopher C. Sabis. This case is supported by the Department of Justice’s Elder Justice Initiative, which coordinates the Department’s activities combatting elder abuse, neglect, and financial exploitation. This case is a product of the Elder Justice Task Force of the United States Attorney’s Office for the Middle District of Tennessee. For more information about the Department’s Elder Justice Initiative and the Elder Justice Task Force, see https://www.justice.gov/elderjustice/ and https://www.justice.gov/usao-mdtn/elder-justice-task-force.
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Georgia Investment Representative Pleads Guilty to Stealing over $1.4 Million from Elderly Brentwood WomanRead the Press Release
NASHVILLE, Tenn. - May 7, 2019 – Jay Costa Kelter, 49, of Alpharetta, Georgia pleaded guilty today in U.S. District Court, to wire fraud and securities fraud, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
According documents filed with the court, between March 2014 and August 2016, Kelter embezzled over $1.4 million from an elderly client who lives in Brentwood, Tennessee. As part of his scheme, Kelter convinced the victim to move her investments from a private investment company to a discount brokerage firm. Kelter used his access to the woman’s accounts to periodically sell securities held in those accounts to pay for transfers to his own pass-through company. On one occasion, Kelter impersonated the victim while confirming a trade in her accounts.
Kelter did not divulge ownership of the pass through company when confronted by the victim, but later admitted that he directed the withdrawals from the accounts to his company. Kelter used portions of the stolen funds to purchase luxury cars, custom jewelry, and vacations, and to repay losses owed to other investment clients.
Kelter faces a maximum sentence of 20 years in prison and a maximum fine of $5,000,000, when he is sentenced on August 28, 2019.
This case was investigated by the Federal Bureau of Investigation and the U.S. Securities and Exchange Commission. Assistant U.S. Attorney Stephanie N. Toussaint and U.S. Department of Justice Trial Attorney Andrew R. Tyler are prosecuting the case.
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Murfreesboro Man Sentenced to Federal Prison for Embezzling More Than $1 Million from Lasko ProductsRead the Press Release
NASHVILLE, Tenn. – May 3, 2019 –Randall Griffin, 46, of Murfreesboro, Tennessee, was sentenced today to 27 months in federal prison, for operating an embezzlement scheme, during which he stole more than $1 million from his former employer, Lasko Products, LLC., announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Griffin was charged in October 2018 with mail fraud, after an investigation determined that he had embezzled $1,006,293.58 through a scheme that began in 2009 and continued until August 2017, while he was employed as a maintenance technician for Lasko Products, a home appliance manufacturing and distribution company located in Franklin, Tennessee. Griffin pleaded guilty in November 2018.
According to the court documents, Griffin carried out the scheme by creating and falsifying purchase orders and invoices for equipment parts, causing Lasko checks to be sent to a series of post office boxes that he opened under various false business names. Griffin created fake business names that closely resembled legitimate vendors with whom Lasko conducted business. Griffin also created bank accounts for each business and ultimately deposited the funds sent to these accounts into his personal bank account.
In sentencing Griffin, U.S. District Judge Eli Richardson noted the seriousness of the offense and that Griffin deserved a long term of incarceration. Judge Richardson also remarked that this sentence should serve as a deterrent to others.
This case was investigated by the FBI and the U.S. Postal Inspection Service and was prosecuted by Assistant U.S. Attorney Sara Beth Myers.
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Murfreesboro Woman Facing Federal Charges for Wire Fraud & Tax EvasionRead the Press Release
NASHVILLE, Tenn. – April 30, 2019 – Barbara Butler, 59, of Murfreesboro, Tennessee, pleaded guilty last week to wire fraud and tax evasion, after embezzling more than $1.8 million from her employer, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Butler, the comptroller for D.S. Collaborative in Brentwood, Tennessee, was charged in a criminal information on April 5, 2019, and pleaded guilty to the charges on April 25, 2019.
According to documents filed with the court, Butler had been the comptroller for D.S. Collaborative for over 20 years and was responsible for all of the company’s financial affairs. Between December 2009 and July 2016, Butler wrote company checks to herself and used the company’s credit cards for personal use and for the use of her family members, without the knowledge or approval of the company’s owners. Butler also opened a company Costco credit card in the name of a family member and permitted that family member to use the card for personal use. In another instance, in March 2015, Butler used a company credit card to make a purchase from Jared Galleria Jewelry in Franklin, Tennessee, in the amount of $11,774.96. During the course of the scheme, Butler embezzled more than $1.8 million from the company.
In 2016, after learning that the company was subjected to an IRS audit, Butler provided false financial documents to the IRS auditor in an attempt to conceal the fact that she had written company checks to herself, and she altered general ledgers to make it appears as though the checks were written to legitimate vendors. During tax years 2010-2015, Butler failed to report to the IRS the income resulting from the embezzlement and caused a tax loss of $521,207.
According to the terms of the plea agreement, Butler faces up to 25 years in prison and will have to pay restitution. Butler also agrees to forfeit the contents from several bank accounts and proceeds from the sale of a house.
This case was investigated by the IRS-Criminal Investigation. Assistant U.S. Attorney Kathryn Booth is prosecuting the case.
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Two Former Arriva Medical Executives Agree to Pay $1 Million to Settle Diabetic Testing Supply Fraud AllegationsRead the Press Release
NASHVILLE, Tenn. – April 24, 2019 – David Wallace of Boca Raton, Florida and Timothy Stocksdale, of Ft. Lauderdale, Florida, two former executives of Arriva Medical, LLC (Arriva), agreed to pay $500,000 each to settle the United States’ allegations that they had violated the False Claims Act, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Arriva is a mail-order diabetic testing supply company based in Coral Springs, Florida, which, at one point, had operations including a customer call center in Antioch, Tennessee. Wallace and Stocksdale co-founded Arriva and after its November 2011 sale to Alere, Inc. (Alere), they remained employed as Arriva executives. Wallace served as Arriva’s president from November 23, 2011 through August 30, 2013, and Stocksdale served as Arriva’s vice president during the same period.
The settlement resolves the United States’ claims that Wallace and Stocksdale caused Arriva to submit false claims to Medicare that were tainted by kickbacks paid to beneficiaries in the form of free or no cost home blood glucose meters or waived or uncollected copayments during the period from November 23, 2011 through August 30, 2013. The settlement also resolves the United States’ claims that Wallace and Stocksdale caused Arriva to bill Medicare for medically unnecessary home blood glucose meters during the same period.
On February 8, 2019, the United States separately intervened in a False Claims Act case alleging that Arriva and Alere submitted and/or caused to be submitted false claims to the Medicare program for medically unnecessary glucometers and diabetic testing supplies that were tainted by the payment of kickbacks in the form of free home blood glucose meters and routine copayment waivers. Alere is a large medical device company based in Waltham, Massachusetts. Both Arriva and Alere were acquired by Abbott Laboratories in September 2017.
In October 2016, the Centers for Medicare & Medicaid Services (CMS) revoked Arriva’s billing number for billing Medicare for durable medical equipment that was shipped to a beneficiary more than 14 days after the beneficiary’s death. Arriva subsequently stopped operating in late 2017.
The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and investigated by the Tennessee Bureau of Investigation Medicaid Fraud Control Unit and the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States.
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Goodlettsville Man Sentenced to Federal Prison for Heroin Distribution ConspiracyRead the Press Release
NASHVILLE, Tenn. – April 22, 2019 - Brian Wimsatt, 31, of Goodlettsville, Tennessee, was sentenced Friday to 10 years in federal prison for conspiracy, possession and distribution of heroin which resulted in death, following an overdose death in May 2016, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Wimsatt was indicted in March 2017 and pleaded guilty to all counts in September 2018.
According to court documents, in April and May of 2016, Wimsatt was purchasing wholesale amounts of heroin and selling smaller amounts of heroin to users in and around the Goodlettsville, Tennessee area. On May 13, 2016, Wimsatt negotiated two separate heroin sales to an individual, with the latter sale occurring around 7:00 p.m. in the restroom of a local grocery store in Goodlettsville. Approximately eight hours later, the individual’s mother found him unresponsive in his car and it was later determined that he died from a heroin overdose. Four days after this death, Goodlettsville police officers stopped Wimsatt for a traffic violation and subsequently found him to be in possession of heroin and other drugs and contraband and also determined that Wimsatt had sold the heroin that caused the overdose death of the individual.
This case was investigated by the Drug Enforcement Administration; the 18th Judicial District Drug Task Force; and the Goodlettsville, Tenn. Police Department. The case was prosecuted by Assistant U.S. Attorney Ahmed A. Safeeullah.
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Dickson Attorney Sentenced to Federal Prison for Stealing over $1.36 Million from Trust Funds of ClientsRead the Press Release
NASHVILLE, Tenn. – April 22, 2019 - Jackie Lynn Garton, 54, of Dickson, Tennessee, was sentenced today to 92 months in prison for stealing more than $1.36 million from the trust funds of clients, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. U.S. District Judge Eli Richardson ordered Garton to be taken into custody immediately at the conclusion of the hearing.
Garton, a practicing attorney in Dickson, was charged in December 2018 with wire fraud, tax fraud and aggravated identity theft and pleaded guilty to all charges.
According to court documents, Garton served as the trustee for several estates, including the daughter of a Tennessee State Trooper who was killed in the line of duty in 2005. Beginning in 2009, Garton began withdrawing funds under false pretenses from her account and others, without the clients’ knowledge. Garton converted the funds into cashier’s checks and used the money to enrich his lifestyle, including purchasing luxury items including a Jaguar automobile, a boat and a house.
The deceased Trooper’s daughter was unaware of the account withdrawals until 2017, when at age 24, she wanted to open a bookstore, only to learn that her account had been depleted. Garton admitted that he stole approximately $1.2 million dollars from this client and a total of more than $1.36 million from her and other clients.
In conjunction with the preparation of his 2016 taxes, Garton under reported his income to the IRS, claiming his total income was $95,875, while he actually received at least $367,223, which included funds stolen from clients. Garton failed to report the stolen income from 2009 through 2016 and intended to defraud the IRS of more than $350,000.
This case was investigated by the FBI and the IRS-Criminal Investigation and was prosecuted by Assistant U.S. Attorneys Sara Beth Myers and Kathryn Booth.
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Nashville Man Facing Federal Charges Resulting from 2016 Robbery/MurderRead the Press Release
NASHVILLE, Tenn. – April 18, 2019 – Brandon Hunt-Clark, 22, of Nashville, Tennessee, was indicted yesterday by a federal grand jury and charged with conspiring to commit and committing Hobbs Act Robbery, using, carrying, brandishing and discharging a firearm resulting in death, and conspiring to tamper with a witness, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
According to the indictment, these charges resulted from the robbery and murder of Justin Lawton, who was found shot to death in Nashville on December 14, 2016. The indictment also charges that Hunt-Clark conspired with unnamed others to tamper with a witness who had knowledge of that robbery and murder.
Hunt-Clark is currently in federal custody after having been indicted last month for being a convicted felon in possession of a firearm and for stealing a firearm in October 2017. That indictment also alleges that Hunt-Clark stole that firearm during a robbery of a drug dealer.
If convicted, Hunt-Clark faces up to life in prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Metropolitan Nashville Police Department. Assistant U.S. Attorney Sunny A.M. Koshy is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Nine Middle Tennessee Medical Professionals Charges in Appalachian Regional Prescription Opioid Strike Force InvestigationRead the Press Release
NASHVILLE, Tenn. – April 17, 2019 – Federal indictments were unsealed today charging nine Middle Tennessee medical professionals, including four doctors, four nurse practitioners and a pharmacist, with various charges alleging their participation in illegally prescribing and dispensing opioids and other dangerous narcotics and health care fraud schemes, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Earlier this morning, federal agents across the region began arresting those named in the indictments.
U.S. Attorney Cochran joined Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division and nine other U.S. Attorneys in Cincinnati this morning to announce the results of the investigations conducted by the Appalachian Regional Prescription Opioid Strike Force (ARPO), a joint law enforcement effort that brings together the resources and expertise of the Health Care Fraud Unit in the Criminal Division’s Fraud Section, the U.S. Attorney’s Offices for ten federal districts in six states, as well as law enforcement partners at the Health & Human Services Office of the Inspector General (HHS-OIG), U.S. Drug Enforcement Administration (DEA) and the FBI.
“The indictments announced today are the culmination of many months of meticulous investigation and another example of our commitment to hold those accountable who perpetuate the opioid crisis in our nation,” said U.S. Attorney Don Cochran. “I commend our law enforcement partners and prosecutors for their extraordinary efforts in bringing these cases. Our work is not done and we will continue our enforcement efforts without regard for who a person is or what position they may hold.”
The enforcement actions announced today include charges against 60 defendants in six states, including Alabama, Kentucky, Ohio, Tennessee, Virginia and West Virginia, and included 54 medical professionals. Those charged in the Middle District of Tennessee include:
Dr. Darrell R. Rinehart, 63, of Indianapolis, Indiana, formerly of Columbia, Tennessee, was indicted on 19 counts of prescribing a Schedule II controlled substance outside the usual course of professional practice and without a legitimate medical purpose, between December 4, 2014 and January 21, 2016. According to the indictment, four patients died who were actively being seen by Dr. Rinehart. The indictment also alleges that on November 27, 2018, the Tennessee Board of Medical Examiners suspended Rinehart’s medical license until May 31, 2019, at which time his license will expire and he will be prohibited from renewing it or applying for a new license.
Dr. Bowdoin G. Smith, 64, of Carthage, Tennessee, was indicted on two counts of prescribing a Schedule II controlled substance outside the usual course of professional practice and without a legitimate medical purpose, in January and February 2019. The indictment alleges that in October 2012, Smith entered a consent order with the State of Tennessee Department of Health, Board of Osteopathic Examination based on stipulated facts that Smith, among other things, prescribed controlled substances “not in the course of professional practice, or not in good faith to relieve pain and suffering, or not to cure an ailment, physical infirmity or disease,” and Smith’s treatment “routinely included prescribing narcotics and other medications and controlled substances in amounts and/or for durations not medically necessary, advisable, or justified for a diagnosed condition.” Smith’s medical license was placed on probation for a period of not less than three years, beginning on October 11, 2012. According to the indictment, On November 4, 2015, the Board lifted the probation and Smith again began illegally prescribing highly addictive opioids, continuing through February 2019.
Dr. Lawrence J. Valdez, 50, of Hendersonville, Tennessee, was indicted on 18 counts of prescribing a Schedule II controlled substance outside the usual course of professional practice and without a legitimate medical purpose, between June 2016 and March 2017.
Dr. Timothy Abbott, 62, of Nashville, a Podiatrist, was indicted on seven counts of prescribing a Schedule II controlled substance outside the usual course of professional practice and without a legitimate medical purpose, between January 2015 and January 2019.
Heather Marks, 36, of Murfreesboro, Tennessee, a Nurse Practitioner, was indicted on four counts of prescribing a Schedule II controlled substance outside the usual course of professional practice and without a legitimate medical purpose, between December 2016 and February 2018.
Brian Richey, 37, of Cookeville, Tennessee, Daniel Seeley, 58, of Batesville, Mississippi, and Jonathan White, 49, of Tullahoma, Tennessee, all Nurse Practitioners, were indicted on three counts of healthcare fraud and one count of conspiracy to commit healthcare fraud. According to the indictment, Richey, Seeley and White were employed by MedManagement Inc., which managed Pain MD located in Franklin, Tennessee. Pain MD operated pain and wellness clinics throughout Middle Tennessee, North Carolina and Virginia. Between 2010 and continuing through 2015, the indictment alleges that Richey, Seeley and White provided services to patients, namely “Tendon Origin Injections,” which were neither medically necessary nor anatomically possible and provided medically unnecessary durable medical equipment and then submitted fraudulent claims to Medicare, Medicaid and TRICARE. These services were provided to further the company’s business model by increasing revenues and to personally enrich Pain MD providers and executives. The indictment further alleges that Richey, Seely and White trained other providers on methods to increase productivity, including methods on how to control the patient and allow them to treat patients with such medically unnecessary injections and threatening to dismiss them as patients and stop writing prescriptions for narcotic pain medication if they did not comply. According to the indictment, Richey, Seeley, White and others submitted more than $3.5 million in false claims to Medicare, Medicaid and TRICARE.
Finally, John Polston, 58, of Tompkinsville, Kentucky, was indicted on 21 counts of dispensing Schedule II and Schedule IV controlled substances, outside the usual course of professional practice and without a legitimate medical purpose, between April 27, 2017 and December 6, 2017. The indictment alleges that Polston was the Pharmacist-in-Charge of Oakley Pharmacy, Inc. d/b/a Dale Hollow Pharmacy in Celina, Tennessee. On March 6, 2017, Polston entered into an agreement with the DEA that required compliance with federal, state and local laws pertaining to the dispensation of controlled substances. The indictment alleges that until approximately February 2019, Polston repeatedly and consistently dispensed controlled substances, including highly addictive opioids, that were not for a legitimate medical purpose or in the usual course of professional practice.
“The Drug Enforcement Administration and our law enforcement partners remain committed to targeting unscrupulous medical practitioners who choose profits over patients,” said D. Christopher Evans, Special Agent in Charge of DEA’s Louisville Field Division. “We will never stop fighting for those who have been rendered helpless by America’s on-going opioid crisis.”
“Opioid fraud schemes have hit the Appalachian region particularly hard, resulting in staggering numbers of addiction, overdoses and deaths of individuals to include Medicare and Medicaid beneficiaries,” said Special Agent in Charge Derrick J. Jackson of the Department of Health and Human Services Office of Inspector General. “Working hand-in-hand with our law enforcement partners, our agents will continue to address this devastating epidemic by thoroughly investigating corrupt providers who contribute to the ongoing opioid crisis and threaten the health and well-being of patients, as alleged in these cases.”
"The efforts and cooperation among federal, state, and local partners make it possible to bring to justice those who put their greed over the health and wellbeing of their patients," said Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation M. A. Myers. "The FBI will continue to combine our resources and share our expertise with our law enforcement partners to identify and target those who would hope to commit similar crimes."
“The health and well-being of Tennesseans is of the utmost of importance to the TBI and our law enforcement partners,” said Director David Rausch. “It’s through efforts like this that we are able to further work toward attacking the opioid crisis and the effects it has on our residents.”
Cases brought under section 841 of Title 21 of the United States Code for the illegal prescribing or dispensing of Schedule II drugs carry a statutory maximum penalty of 20 years in prison and a $1million fine on each count; for Schedule IV drugs – up to five years in prison and a $250,000 fine. Cases brought under section 1347 of Title 21 of the United States Code for health care fraud carry a maximum penalty of 10 years in prison and a $250,000 fine on each count.
For any patients impacted by the law enforcement operations, DOJ, DEA, HHS-OIG, HHS’ Substance Abuse and Mental Health Services Administration, CDC’s Opioid Rapid Response Team and all 5 State Departments of Health are deploying federal and state-level strategies to address patient harm and ensure continuity of care. Additional information regarding available treatment programs in Tennessee and where patients can turn for assistance is available by calling 1-855-CRISIS-1.
The cases announced today were brought as part of the ARPO Strike Force, the U.S. Attorney’s Offices for ten federal districts in six states, as well as law enforcement partners at the HHS-OIG, the DEA and the FBI. The southern hub of the ARPO Strike Force operates out of Nashville. In addition, the operation includes the participation of the Tennessee Bureau of Investigation and multiple State Medicaid Fraud Control Units. Assistant U.S. Attorneys Sarah Bogni and Sara Beth Myers of the Middle District of Tennessee and Trial Attorneys from the Fraud Section of the Department of Justice’s Criminal Division are prosecuting the cases.
Additional documents related to this announcement are available here:
https://www.justice.gov/opa/documents-and-resources-april-17-2019-press-conference
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty in a court of law.
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Justice Department Honors Nashville Man with Special Courage AwardRead the Press Release
WASHINGTON – The Justice Department today presented James Shaw Jr. of Nashville, Tennessee, the Special Courage Award during the annual National Crime Victims’ Service Awards ceremony in Washington, D.C. This honor is awarded to victims or survivors who exhibit exceptional perseverance and determination in dealing with his or her own victimization, or who acted bravely to prevent victimization.
“Risking his own life, Mr. Shaw acted swiftly and bravely after a gunman killed four people early one morning at a diner, saving the lives of many others. He then followed up his courageous action by delivering comfort and aid to wounded and traumatized victims,” said Attorney General William P. Barr. “None of us knows how we would react in such a dangerous situation, but we can all be inspired by Mr. Shaw’s selflessness.”
On April 22, 2018, Shaw, an electrical technician, was eating at a restaurant when a gunman opened fire on the patrons. Despite being grazed by a bullet, a Nashville police spokesman said “Mr. Shaw saved, obviously, many lives in his heroic action.” Later, he visited wounded victims in the hospital and helped support them in their recovery.
“The trauma of those who experience a violent crime is deep and real, and their restoration to physical and emotional health can be long and difficult,” said Office of Justice Programs Principal Deputy Assistant Attorney General Matt M. Dummermuth. “But Mr. Shaw encourages us as individuals and as a nation to strive to meet the needs of those struggling in the aftermath of crime.”
The Department’s Office for Victims of Crime, a component of OJP, leads communities across the country in observing National Crime Victims’ Rights Week and hosts an annual award ceremony. President Reagan proclaimed the first Victims’ Rights Week in 1981, calling for greater sensitivity to the rights and needs of victims. This year’s observance takes place April 7-13, with the theme “Honoring Our Past. Creating Hope for the Future.”
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Matt M. Dummermuth, provides federal leadership, grants and resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal justice system. More information about OJP and its components can be found at www.ojp.gov.
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Former CEO of Tennessee Pain Management Company Convicted for Role in Approximate $4 Million Medicare Kickback SchemeRead the Press Release
A federal jury sitting in Nashville, Tennessee found the former CEO of a Tennessee pain management company guilty today for his role in an illegal kickback scheme involving approximately $4 million in tainted durable medical equipment (DME) claims to Medicare.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Don Cochran of the Middle District of Tennessee, Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Atlanta region, Special Agent in Charge John F. Khin of the Department of Defense, Defense Criminal Investigative Service's (DCIS) Southeast Field Office, Special Agent in Charge Matthew D. Line of the IRS Criminal Investigation (CI) Charlotte Field Office – Nashville Division and Director David Rausch of the Tennessee Bureau of Investigation made the announcement.
After a seven-day trial, John Davis, 41, of Franklin, Tennessee, the former CEO of Comprehensive Pain Specialists (CPS) of Gallatin, Tennessee, was convicted of all counts including, one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute, and seven counts of violating the Anti-Kickback Statute. Sentencing has been scheduled for later this year before U.S. District Judge William L. Campbell Jr. of the Middle District of Tennessee, who presided over the trial.
According to evidence presented at trial, Davis abused his position as CEO of CPS to arrange for referrals of Medicare DME orders to his co-conspirator Brenda Montgomery and her company, CCC Medical, located in Camden, Tennessee. Evidence showed that Davis operated a shell company called ProMed Solutions (ProMed), which he had registered in the name of his wife. Despite having no involvement with ProMed and performing no work, Davis’ wife and ProMed received over $770,000 in illegal kickbacks. Together, Davis and Montgomery pocketed over $2.4 million dollars in improper reimbursement from Medicare. Davis used company funds from CPS to pay bonuses to CPS providers who ordered DME for Medicare beneficiaries and referred those orders to CCC Medical. Davis would receive 60 percent of the Medicare profit from those referrals, while the company he ran footed the bill.
Evidence at trial also showed that in April and May of 2015, concerned about the size of the kickback payments CCC Medical was making to Davis, he and Montgomery concocted the sham sale of ProMed. ProMed had no assets, no employees, no equipment, no office space and no customers other than CPS. Evidence further showed that Davis and Montgomery set the price for the sham sale based upon the average monthly kickbacks that Davis had been paid for the previous eight months. When CPS referrals slowed, Davis agreed to reduce the purported “purchase price” from $200,000 to $150,000. Once Davis had received the last check for the sham sale, he went about cutting off referrals to CCC Medical.
Brenda Montgomery pleaded guilty in January to one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute, and seven counts of violations of the Anti-Kickback Statute. She is currently scheduled to be sentenced on May 3, 2019.
This case was investigated by HHS-OIG, DCIS, Internal Revenue Service-Criminal Investigation and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Tennessee. The case was prosecuted by Trial Attorney Anthony Burba of the Fraud Section and Assistant U.S. Attorney Henry Leventis of the Middle District of Tennessee.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Former CEO of Tennessee Pain Management Company Convicted for Role in Approximate $4 Million Medicare Kickback SchemeRead the Press Release
NASHVILLE, Tenn. April 4, 2019 – A federal jury sitting in Nashville, Tennessee, found the former CEO of a Tennessee pain management company guilty today for his role in an illegal kickback scheme involving approximately $4 million in tainted durable medical equipment (DME) claims to Medicare, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Joining in making the announcement were Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Atlanta region, Special Agent in Charge John F. Khin of the U.S. Department of Defense Criminal Investigative Service’s (DCIS) Southeast Field Office, Special Agent in Charge Matthew Line of the IRS-Criminal Investigation, Charlotte Division-Nashville Field Office, and Director David Rausch of the Tennessee Bureau of Investigation.
After a seven-day trial, John Davis, 41, of Franklin, Tennessee, the former CEO of Comprehensive Pain Specialists (“CPS”) of Gallatin, Tennessee, was convicted of all counts including, one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute, and seven counts of violating the Anti-Kickback Statute. Sentencing will be scheduled for later this year before U.S. District Judge William L. Campbell Jr., who presided over the trial.
According to evidence presented at trial, Davis abused his position as CEO of CPS to arrange for referrals of Medicare DME orders to his co-conspirator Brenda Montgomery and her company, CCC Medical, located in Camden, Tennessee. Evidence showed that Davis operated a shell company called ProMed Solutions (“ProMed”), which he had registered in the name of his wife. Despite having no involvement with ProMed and performing no work, Davis’ wife and ProMed received over $770,000 in illegal kickbacks. Together, Mr. Davis and Montgomery pocketed over $2.4 million dollars in improper reimbursement from Medicare. Davis used company funds from CPS to pay bonuses to CPS providers who ordered DME for Medicare beneficiaries and referred those orders to CCC Medical. Davis would receive 60% of the Medicare profit from those referrals, while the company he ran footed the bill.
Evidence at trial also showed that in April and May of 2015, concerned about the size of the kickback payments CCC Medical was making to Davis, he and Montgomery concocted the sham sale of ProMed. ProMed had no assets, no employees, no equipment, no office space, and no customers other than CPS. Evidence further showed that Davis and Montgomery set the price for the sham sale based upon the average monthly kickbacks that Davis had been paid for the previous 8 months. When CPS referrals slowed, Davis agreed to reduce the purported “purchase price” from $200,000 to $150,000. Once Davis had received the last check for the sham sale, he went about cutting off referrals to CCC Medical.
Brenda Montgomery pleaded guilty in January 2019 to one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute, and seven counts of violating the Anti-Kickback Statute. She is currently scheduled to be sentenced on May 3, 2019.
This case was investigated by HHS-OIG; Defense Criminal Investigative Service; the Internal Revenue Service-Criminal Investigation; and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Attorney’s Office for the Middle District of Tennessee and the Criminal Division’s Fraud Section. The case was prosecuted by Assistant U.S. Attorney Henry Leventis of the Middle District of Tennessee and Trial Attorney Anthony Burba of the Fraud Section.
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Local Medical Clinic Agrees to Settle Americans with Disabilities Act AllegationsRead the Press Release
NASHVILLE, Tenn. – April 2, 2019 - Murfreesboro Medical Clinic (MMC) has agreed to adopt a written Americans with Disabilities Act (ADA) nondiscrimination policy and pay $2,500 in compensatory damages to resolve ADA allegations, announced Don Cochran, United States Attorney for the Middle District of Tennessee. MMC has also agreed to provide ADA compliance training to its staff members who may interact with individuals with disabilities.
“The protections of the ADA are critically important to citizens with disabilities, particularly in obtaining necessary medical treatment,” said U.S. Attorney Cochran. “This is especially true of our senior population, and this office will continue its efforts to enforce the requirements of the ADA and its enacting regulations.”
MMC is a physician owned, multi-specialty clinic and an Accredited Surgery Center located in Murfreesboro, Tennessee, that provides a wide variety of medical and surgical procedures in over 20 specialties. MMC also operates five additional healthcare locations in Tennessee, including walk-in clinics in Murfreesboro and a spine, joint, and pain facility in Manchester.
The settlement resolves allegations made by a woman who is disabled and uses a wheelchair, who was denied medical treatment at the office of Dr. Joseph Boone due to her inability to transfer from her wheelchair to an examination chair. The woman alleged that MMC had informed her that she would need to bring someone with her to her appointment to help her transition to the examination chair, and then refused to make reasonable modifications to its practices in order to perform her examination. This forced her to seek care at a different medical facility further away from her home.
This case is a product of the Elder Justice Task Force of the United States Attorney’s Office for the Middle District of Tennessee, and part of the Department of Justice’s Elder Justice Initiative. For more information about the Elder Justice Task Force and the Department’s Elder Justice Initiative, visit their websites at https://www.justice.gov/usao-mdtn/elder-justice-task-force and https://www.justice.gov/elderjustice/.
Assistant United States Attorney Christopher C. Sabis handled the matter on behalf of the United States.
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Brentwood Based WellCity, Inc. Founder Sentenced to 20 Years in Federal Prison for Fraud SchemeRead the Press Release
NASHVILLE, Tenn. – March 18, 2019 – George David George, 64, of Franklin, Tennessee, and the former owner of WellCity, Inc. (“WellCity”) will spend the next 20 years in federal prison for operating a fraudulent investment scheme that bilked dozens of investors out of $3 million, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
George was sentenced today by visiting U.S. District Judge Billy Roy Wilson, sitting by designation, who also ordered George to pay $2,833,968.77 in restitution and ordered that he remain in custody to begin serving his sentence. George has been in federal custody since January, 4, 2019, when he was apprehended by U.S. Marshals in Florida after absconding from the Middle District of Tennessee in May, 2017.
“I commend our prosecutors, law enforcement partners and the many victims who persevered throughout the life of this case,” said U.S. Attorney Cochran. “Because of their tenacity, Mr. George will have little to no chance of inflicting his many deceitful scams upon anyone else as he spends the next 20 years in prison.”
George was initially charged in May 2015 with securities fraud, mail fraud, wire fraud, and money laundering and was charged with additional counts of wire fraud in February 2017. George was later indicted in May 2017 for failing to appear in U.S. District Court, after he failed to appear for a bond revocation hearing and prior to the start of his trial scheduled for May 16, 2017.
Today, during a plea hearing, George pleaded guilty to seven counts of wire fraud, and one count of mail fraud, securities fraud and money laundering. George admitted that he represented himself as the founder and CEO of WellCity, Inc., a company based in Brentwood, Tennessee, that purported to operate a social network devoted to wellness. George solicited millions of dollars from investors by making misrepresentations regarding the revenue and assets of the company, misrepresentations regarding collateral to secure investors’ loans, and misrepresentations regarding the status of a supposed WellCity initial public offering.
George concealed from investors the facts that WellCity had earned very little revenue and had not successfully attracted significant corporate sponsorship; that WellCity had breached investment contracts with dozens of investors and owed millions of dollars to prior investors; that George had made repeated but unfulfilled promises, over the course of several years, that shares of WellCity stock would imminently start trading publically; and that George continued to offer supposed shares in WellCity stock even after the Tennessee Securities Division of the Department of Commerce and Insurance issued a Cease & Desist Order prohibiting him from doing so.
At the conclusion of the plea hearing, the Court moved immediately to the sentencing phase and several witnesses testified about George’s conduct during his time on the run, including video testimony from a victim in Florida. According to testimony, during this time, George lived in multiple jurisdictions and used two different aliases to conceal his identity and to avoid apprehension.
First, George lived in Houston, Texas, under the alias “David Brown,” using fake identity documents, including a fake International Driver’s License bearing George’s photo. While living in Houston, George solicited investments in a sports membership business he operated, causing significant loss to investors. George next lived in Huntsville, Alabama, where he adopted the alias “Stephen Olivier,” using stolen identity documents from a neighbor whom he had befriended. While living there, George worked at a Mercedes dealership in Huntsville and leased a $70,000 Mercedes using that stolen identity.
Finally, George went to Ponte Vedra Florida, where he represented himself as a Harvard-educated psychiatrist named Stephen Olivier. As Dr. Olivier, George “treated” patients in Ponte Verde. A video testimonial from a witness was played today’s hearing, during which the witness said she paid George, whom she knew as “Dr. Stephen Olivier,” $750 to “treat” her 16-year old son, who was suffering from depression. George conducted “therapy sessions” with her son and ultimately gave her an envelope containing Clonazepam for her son to take. George had previously taken this medication from a woman he met on Match.com and with whom he was having a romantic relationship with, while deceiving her as well. After her son took the medication, he became suicidal and had to be hospitalized. George was apprehended and arrested by the U.S. Marshals shortly thereafter in January 2019.
When pronouncing the sentence, Judge Wilson remarked that George had “larceny in his heart” and he felt it was his foremost duty to protect the public from George and his propensity to continue his pattern of fraud and deceit.
This case was investigated by the FBI; the United States Postal Inspection Service; the United States Marshals Service; and the IRS-Criminal Investigation. Assistant United States Attorneys Kathryn W. Booth, Miller A. Bushong, and Henry C. Leventis prosecuted the case.
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IRS Employee Facing Federal Theft and Fraud ChargesRead the Press Release
NASHVILLE, Tenn.- March 11, 2019 – Tracey R. Allison, 47, of Antioch, Tennessee, was indicted last week by a federal grand jury and charged with theft of government property; five counts of wire fraud; and five counts of aggravated identity theft, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Allison, employed by the IRS at its Franklin, Tennessee office, is accused of faking military duty orders in order to receive paid leave from her employer.
According to the indictment, Allison was discharged from the U.S. Army Reserve in August 2012 and enlisted in the Tennessee National Guard on July 5, 2018. The indictment alleges that while employed by the IRS, between November 2013 and October 2018, Allison regularly submitted forms used by the Department of the Army, to the Payroll and Personnel Systems Unit of the IRS, to record reserve duty and receive payment. Each form submitted bore the forged signature and Department of Defense identification number of Allison’s former commanding officer, who was actually retired and ceased supervising Allison in July 2013.
During the five-year scheme, the indictment alleges that Allison submitted approximately 70 fraudulent forms and collected paid military leave and other benefits totaling $22,864.24, even though she had no authorized military duty status for those dates.
If convicted, Allison faces up to 20 years in prison for each count of wire fraud; up to 10 years in prison for theft of government property; and a mandatory minimum of two years in prison for each count of aggravated identity theft; and a $250,000 fine.
This case was investigated by the Treasury Inspector General for Tax Administration. Assistant U.S. Attorney Stephanie N. Toussaint is prosecuting the case.
An indictment is merely an accusation. A defendant is presumed innocent until proven guilty in a court of law.
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Clarksville Man Sentenced to 20 Years in Federal Prison for Firing Weapon at Police OfficersRead the Press Release
NASHVILLE, Tenn. – March 11, 2019 – Levi West, 35, of Palmyra, Tennessee, was sentenced Friday to 20 years in federal prison, as the result of an incident in February 2018, during which he fired a handgun at Clarksville police officers, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
West was indicted by a federal grand jury in April 2018 on charges of being a convicted felon in possession of a firearm and being a violent felon in possession of body armor. He pleaded guilty to the charges on December 3, 2018.
“Assaults against our law enforcement officers will be reviewed by the U.S. Attorney’s Office and when appropriate, as in this case, we will bring federal charges and vigorously pursue lengthy prison sentences as we have here,” said U.S. Attorney Don Cochran.
According to court documents, on February 3, 2018, West was involved in a high-speed pursuit in Clarksville while attempting to elude police officers. Officers later located West’s vehicle parked in a residential area and saw West standing outside the car. West refused the officer’s directives to comply with arrest commands and fired three shots at them, before fleeing into a nearby wooded area. West was apprehended by a police K-9 a short time later.
In addition to past convictions for robbery, aggravated assault and aggravated burglary, West also has a history of violent interactions with law enforcement dating back to 2001, when at age 17, he assaulted and threatened to kill arresting officers; in 2005 West assaulted a Virginia State Trooper; in 2006 West assaulted another Virginia police officer; at age 25, after violating a protective order, West assaulted a sheriff’s deputy and threatened to kill his family and dog; at age 33, while a member of the Outlaws Gang, West and two others beat an inmate to death; at age 34, West assaulted a probation officer; and while incarcerated awaiting trial in this case, he struck two sheriff’s deputies in the face multiple times. For these and other convictions, West received mostly probationary sentences in the state system, with relatively short sentences over the past decade.
Although West was facing 10 years in prison, in sentencing him, U.S. District Court Judge William L. Campbell, Jr., found that West qualified as an Armed Career Criminal and was subject to enhanced punishment and sentenced him to 20 years in prison.
This case was investigated by the Clarksville, Tennessee Police Department and the Bureau of Alcohol, Tobacco, Firearms & explosives. The case was prosecuted by Assistant U.S. Attorney Thomas Jaworski.
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Thirteen Members of Middle Tennessee Drug Trafficking Organization IndictedRead the Press Release
NASHVILLE, Tenn. - March 5, 2019 – Two indictments unsealed today charged thirteen Middle Tennessee individuals with various crimes relating to a conspiracy to unlawfully possess and distribute heroin, cocaine and methamphetamine in the Middle Tennessee area, and federal firearms violations, announced U.S. Attorney Don Cochran.
Earlier today, local, state and federal law enforcement officers began arresting those charged and all but one are in custody. Robert Bell, 41 of Murfreesboro, Tennessee, remains at large.
The indictments allege the criminal activity occurred between June 1, 2017, and February 6, 2019. Those charged in the indictments are:
Mark McElwee, 50, of Nashville, conspiracy to possess and distribute heroin, methamphetamine and cocaine; unlawful possession with intent to distribute heroin methamphetamine and cocaine; unlawful distribution of more than 50 grams of methamphetamine; and possession of a firearm in furtherance of a drug crime.
Ramell Webster, 34, of Nashville, conspiracy to possess and distribute heroin, methamphetamine and cocaine; unlawful possession and distribution of heroin and possession with intent to distribute more than 100 grams of heroin; being a convicted felon in possession of firearms; and possession of a firearm in furtherance of a drug crime.
Michael Bedwell, 40, of Lewisburg, Tennessee, conspiracy to possess and distribute heroin, methamphetamine and cocaine; possession with intent to distribute 500 grams or more of methamphetamine; being a convicted felon in possession of firearms; and possession of a firearm in furtherance of a drug crime.
John Hayes, 36, of Nashville, conspiracy to possess and distribute heroin, methamphetamine and cocaine; possession with intent to distribute heroin, methamphetamine and cocaine.
Jesse Weston, 38, of Nashville, conspiracy to possess and distribute heroin, methamphetamine and cocaine; unlawful possession with intent to distribute methamphetamine.
Robert Bell, 41, of Murfreesboro, Tennessee, conspiracy to possess and distribute heroin, methamphetamine and cocaine; and unlawful possession with intent to distribute heroin and methamphetamine.
Chelsea Brassell, 28, of Nashville, conspiracy to possess and distribute heroin, methamphetamine and cocaine; possession with intent to distribute heroin and methamphetamine and cocaine.
Laura Hayes, 31, of Nashville, conspiracy to possess and distribute heroin, methamphetamine and cocaine; and possession with intent to distribute methamphetamine.
Caddius House, 42, of Murfreesboro, unlawful possession with intent to distribute Xanax.
Kirk Carroll, 41, of Westmoreland, Tennessee, conspiracy to possess and distribute heroin, methamphetamine and cocaine; unlawful possession with intent to distribute methamphetamine; being a convicted felon in possession of ammunition.
Jennifer Neal, 38, of Westmoreland, conspiracy to possess and distribute heroin, methamphetamine and cocaine; unlawful possession with intent to distribute methamphetamine.
Joshua Parsons, 37, of Nashville, conspiracy to possess and distribute heroin, methamphetamine and cocaine; unlawful possession with intent to distribute methamphetamine; being a convicted felon in possession of firearms; and possession of a firearm in furtherance of a drug crime.
Matthew Anderson, 31, of Nashville, being a convicted felon in possession of firearms.
If convicted, the following penalties apply:
McElwee and Webster, 10 - 45 years in prison and a $5,000,000 fine;
Michael Bedwell, 10 years, up to life in prison and a $10,000,000 fine;
John Hayes, Weston, Bell, Brassell, Laura Hayes, House, Carrol, and Neal, up to 20 years in prison and a $1,000,000 fine;
Joshua Parsons, 5 - 25 years in prison and a $1,000,000 fine; and
Matthew Anderson, up to 10 years in prison and a $250,000 fine.
This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives; The Metropolitan Nashville Police Department; the Smyrna, Tennessee Police Department; the Macon County, Tennessee Sheriff’s Department; the Marshall County, Tennessee Sheriff’s Department; and the Putnam County, Tennessee Sheriff’s Department. Assistant U.S. Attorney Siji Moore is prosecuting the case.
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty in a court of law.
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Four Nashville Men Sentenced to More Than 75 Years Collectively, in Prison for Reign of Violence in Public Housing AreasRead the Press Release
NASHVILLE, Tenn. – March 1, 2019 – Four Nashville men were sentenced this week, by Chief U.S. District Judge Waverly D. Crenshaw, Jr., to more than 75 years in federal prison, collectively, for their violent conduct during an 8-month violent crime spree in 2014-2015, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Terrance Christopher Kimbrough, aka Lil Chris, aka Rampage, 22, was sentenced on Wednesday to 42 years in prison. He pleaded guilty in August 2018 to two counts of using, carrying and brandishing a firearm during and in relation to a crime of violence resulting in death; Hobbs Act robbery; and other federal firearms offenses.
According to court documents, beginning in November 2014, Kimbrough was one of two individuals who robbed two men in the J.C. Napier area. During this robbery, the men targeted were ordered to strip and were then robbed of their clothing, drugs, money and identification.
On November 16, 2014, Kimbrough attempted to rob another individual, known to be a street-level drug dealer in the J.C. Napier area and shot the individual as he attempted to flee. Kimbrough chased the individual through the neighborhood and fired several rounds at him, causing him to seek treatment at a local hospital for gunshot wounds and other injuries sustained while fleeing.
On November 26, 2014, Kimbrough participated in the robbery of Brendon Leggs, at a market near the J.C. Napier area. During this robbery, Kimbrough and Calvin Starks approached Leggs as he sat in his car and demanded drugs and money. As Leggs attempted to drive away, Kimbrough and Starks fired a total of 18 rounds at Leggs, striking him twice and killing him. Calvin Starks was sentenced in August 2017 to 35 years in prison.
A week later, on December 3, 2014, Kimbrough and a juvenile shot and killed Monte Watson, near the intersection of Lewis and Robertson Streets, in the J.C. Napier area. Kimbrough was aware that Watson had witnessed him murder Leggs and had been searching for him in order to silence him.
On February 23, 2015, Kimbrough fired multiple rounds into the engine compartment of an occupied car, in the J.C. Napier neighborhood, because the driver refused to give him a ride.
Kimbrough also shot a member of the Bloods Gang on July 4, 2015, on Porter Road in Nashville and on July 17, 2015, Kimbrough participated in a shootout between two rival groups, in the J.C. Napier neighborhood. During this shootout, two women were stuck by gunfire and were treated for gunshot wounds at a hospital.
Ricky Watkins, 25, was also sentenced on Wednesday to 107 months in prison, for providing the .38 caliber revolver to the juvenile who participated with Kimbrough in the murder of Monte Watson and for helping Kimbrough rob the two men in November 2014. Watkins pleaded guilty to these charges in 2017
Michael Calloway, Jr., 24, was sentenced yesterday to 15 years in prison for being a convicted felon in possession of ammunition, charges which resulted from an incident on November 23, 2014, where he shot into a vehicle occupied by three adults and a young child in the J.C. Napier area. Calloway pleaded guilty in August 2018 and is currently serving a separate 15-year sentence resulting from federal charges relating to another shooting in the J.C. Napier neighborhood in April 2015.
Brandon Starks, 23, also sentenced yesterday received the statutory maximum sentence of 10 years in prison for being a convicted felon in possession of ammunition and providing Terrance Kimbrough with the gun and ammunition, which he used in the February 2015 shooting. While released on bond, Starks also committed an armed robbery of a U.S. Soldier stationed at Fort Campbell in July 2017. Starks pleaded guilty in February 2017.
A fifth man, Javonta Campbell, 25, was sentenced to five years’ probation, with a requirement that he complete 400 hours of community service focused on reaching youth in the JC Napier/South Nashville areas, and preventing those youth from participating in firearms and violent crimes such as those committed by all five of these defendants. Campbell pleaded guilty to participating in the November 2014 incident with Michael Calloway, where he shot into a vehicle occupied by three adults and a young child, and also participated in the February 2015 incident with Terrance Kimbrough, where Kimbrough shot multiples times into the engine compartment of an occupied car.
Over 50 defendants have been charged and convicted in a series of cases in an intensive, ongoing, effort to address violence in the J.C. Napier/Tony Sudekum and James Cayce public housing developments in South Nashville.
These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Metropolitan Nashville Police Department. Assistant U.S. Attorney Sunny A.M. Koshy prosecuted the cases.
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Federal Jury Finds Nashville Man Guilty of Drug and Firearm OffensesRead the Press Release
NASHVILLE, Tenn. – March 1, 2019 – Jacquise Miller, aka, “Boo Boo,” 20, of Nashville, Tennessee, was convicted today, following a four-day trial in U.S. District Court, of possessing cocaine and marijuana with the intent to distribute and possessing a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
According to evidence and testimony at trial, in July 2017, Metropolitan Nashville Police Department (MNPD) officers saw Miller get out of his car and leave it blocking an alley in the Cheatham Place Public Housing in North Nashville. After smelling marijuana coming from the car and seeing a marijuana cigarette in the ashtray, officers searched the car and discovered approximately $12,000 worth of cocaine, multiple bags of marijuana, digital scales, and a loaded semi-automatic handgun. Miller was later arrested by MNPD and a federal grand jury indicted Miller in November 2017.
Miller faces a mandatory minimum sentence of five years and up to life in prison, when he is sentenced later this year by U.S. District Court Judge Aleta A. Trauger.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Drug Enforcement Administration; and the Metropolitan Nashville Police Department North Precinct Flex Team. Assistant U.S. Attorneys Ahmed Safeeullah and Robert Levine prosecuted the case.
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Vanguard Healthcare Agrees to Resolve Federal and State False Claims Act LiabilityRead the Press Release
NASHVILLE, Tenn. –February 27, 2019– U.S. Attorney Don Cochran and the Department of Justice announced today that Brentwood, Tennessee-based Vanguard Healthcare, LLC, and related Vanguard companies (“Vanguard”) agreed to pay more than $18 million in allowed claims to resolve a lawsuit brought by the United States and the State of Tennessee for billing the Medicare and Medicaid programs for grossly substandard nursing home services. Vanguard Healthcare and several related Vanguard companies that have reorganized in bankruptcy agreed to pay more than $5.1 million towards the settlement, and two Vanguard entities that are liquidating in bankruptcy have agreed to $13.5 million in allowed claims in bankruptcy. The settlement agreement, approved by U.S. District Court Judge Terrance Berg, sitting by special designation, also resolves claims brought by the United States against Vanguard’s majority owner and CEO, William Orand, and Vanguard’s former director of operations, Mark Miller, who agree to pay $250,000 as part of this settlement.
“Simply stated, our elderly and vulnerable citizens who can’t care for themselves deserve far better treatment than what they were subjected to by Vanguard,” said U.S. Attorney Don Cochran. “The substandard care that many of these facilities’ residents endured while the companies were raiding the public coffers is deplorable. This settlement holds them accountable and the ensuing Corporate Integrity Agreement should ensure that this conduct is not repeated going forward.”
The United States and Tennessee filed suit against several Vanguard companies, Miller, and Orand, alleging that they were responsible for five Vanguard-owned skilled nursing facilities submitting false claims to Medicare and Medicaid for nursing home services that were grossly substandard or worthless. In particular, the United States and Tennessee alleged that the five facilities failed to administer medications as prescribed; failed to provide standard infection control, resulting in urinary tract infections and wound infections; failed to provide wound care as ordered; failed to take prophylactic measures to prevent pressure ulcers, such as turning and repositioning patients; used unnecessary physical restraints on residents; and failed to meet basic nutrition and hygiene requirements of residents. The lawsuit further alleged that the defendants were responsible for the submission of hundreds of preadmission forms by these facilities to TennCare, Tennessee’s Medicaid Program, which contained forged nurse or physician signatures.
“Seniors rely on the Medicare and Medicaid programs to provide them with quality care and to ensure that they are treated with dignity and respect,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department will not tolerate nursing home operators that put their own economic gain ahead of the needs of their residents, and will continue to aggressively pursue those operators who bill Medicare and Medicaid for substandard nursing services.”
Vanguard is a holding company that owns a chain of subsidiary skilled nursing facilities, including Boulevard Terrace Rehabilitation and Nursing Center in Murfreesboro, Tennessee; Glen Oaks Health and Rehabilitation in Shelbyville, Tennessee; and Manchester Health Care Center in Manchester, Tennessee. Vanguard previously operated three additional facilities in Tennessee, including Crestview Health and Rehabilitation in Nashville; Imperial Gardens Health and Rehabilitation in Madison; and Poplar Point Health and Rehabilitation in Memphis. In addition, Vanguard Healthcare owned Elderscript Services, LLC, in Tupelo, Mississippi, which provided pharmacy services to the Vanguard skilled nursing facilities.
The United States’ claims were brought under the False Claims Act, which imposes treble damages and penalties on those who submit false claims for federal funds. The settlement resolves the governments’ claims that Vanguard, Orand, and Miller caused the Boulevard, Crestview, Glen Oaks, Imperial, and Poplar Point facilities to improperly bill Medicare and Medicaid for worthless nursing home services during the period from 2010 to 2015. The settlement also resolves the governments’ claims that Vanguard, Orand, and Miller caused the Boulevard, Crestview, Glen Oaks, Imperial, and Poplar Point facilities to submit preadmission forms with forged signatures to TennCare in order to be reimbursed by Medicaid from 2012 to 2014. Tennessee’s claims were brought and settled under the Tennessee Medicaid False Claims Act, which prohibits conduct similar to the False Claims Act.
“This nursing home chain allegedly neglected its patients and billed worthless services to Medicare and Medicaid in order to pad their bottom line,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “This settlement should send a clear message to health care providers that we will do everything in our power to protect our most vulnerable citizens from corporate greed.”
"This office appreciates the hard work of U.S. Attorney Don Cochran and his office,” said Tennessee Attorney General Herbert H. Slatery III. “The size and scope of this settlement sends the important message that nursing home facilities that fail to provide proper care to residents and fraudulently bill Medicaid and Medicare will be held accountable.”
“Investigations like these are important to ensure that the most vulnerable members of our community receive the quality of care they need and deserve,” said David Rausch, Director of the Tennessee Bureau of Investigation. “Indifference by providers like this can greatly impact the lives of those who must depend on service providers-even for their most basic needs. We are fortunate to have this strong partnership between state and federal agencies in the pursuit of false claims.”
Due to the filing of bankruptcy proceedings by the Vanguard entities, the United States anticipates that the total government recovery in this case will ultimately exceed $6 million. Contemporaneous with the settlement announced today, the reorganized Vanguard corporate defendants and Orand further agreed to enter into a chain-wide, quality of care Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of Inspector General, which will remain in effect for five years. The CIA requires a government-selected quality of care monitor to be retained by Vanguard, along with other heightened compliance obligations that are designed to ensure that Vanguard implements and maintains systems to address the quality of resident care.
The case was handled by Assistant U.S. Attorney Ellen Bowden McIntyre of the United States Attorney’s Office for the Middle District of Tennessee and Trial Attorney Susan Lynch of the Department of Justice Civil Division, Fraud Section, and the Tennessee Attorney General’s Office. The case was investigated by the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit and the Department of Health and Human Services, Office of Inspector General. This case was supported by the Department of Justice’s Elder Justice and Nursing Home Initiative, which coordinates the Department’s activities combatting elder abuse, neglect, and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid, and other federal health care programs. This case is a product of the Elder Justice Task Force of the United States Attorney’s Office for the Middle District of Tennessee that launched two years ago. For more information about the Department’s Elder Justice Initiative and the Elder Justice Task Force, see https://www.justice.gov/elderjustice/ and https://www.justice.gov/uaso-mdtn/elder-justice-task-force.
The case is docketed as United States v. Vanguard Healthcare, LLC, et al., No. 3:16-cv-02380 (M.D. Tenn.). The claims in the complaint are allegations only, and there has been no determination of liability.
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Nashville Man Convicted of Distributing More Than 50 Grams of MethamphetamineRead the Press Release
NASHVILLE, Tenn. – February 22, 2019 – Travis Lamont Suggs, 43, of Nashville, Tennessee, was convicted yesterday, after a three-day trial in U.S. District Court, of distributing more than 50 grams of methamphetamine, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
According to evidence and testimony at trial, in March 2018, Suggs communicated with a cooperating individual (CI) about selling methamphetamine. During the course of several days, Suggs and the CI exchanged several text messages and ultimately agreed on the quantity, price and meeting place for the exchange. On March 21, 2018, Suggs met the CI at the Park-and-Ride lot near Interstate 24, in Clarksville, Tennessee. As the deal was being consummated, agents from the Tennessee Bureau of Investigation; DEA; and detectives from the Clarksville Police Department moved to arrest Suggs, at which time he jumped from his rental car and fled on foot. The officers chased and apprehended Suggs and found approximately $3,100 in his pocket and more than one-half pound of methamphetamine in his car.
Suggs faces a mandatory minimum sentence of 10 years in prison when he is sentenced later this year by U.S. District Court Judge William L. Campbell, Jr.
This case was investigated by the DEA; the Tennessee Bureau of Investigation; and the Clarksville Police Department. Assistant U.S. Attorneys Miller Bushong, Juliet Aldridge and Phillip Wehby prosecuted the case.
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Former Executive Director of Mississippi River Corridor-Tennessee Inc. Facing Federal Fraud ChargesRead the Press Release
NASHVILLE, Tenn. – February 20, 2019 – An indictment was unsealed today, charging Diana Threadgill, 66, of Memphis, Tennessee, with three counts of mail fraud, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Threadgill was arrested by federal agents this morning and will appear before a U.S. Magistrate Judge in Memphis later today.
According to the indictment, Threadgill was the Executive Director of Mississippi River Corridor – Tennessee Inc. (MRCT), a Memphis-based non-profit organization whose mission was to “identify, conserve and enhance the region’s natural, cultural and recreational resources to improve the quality of life and prosperity in West Tennessee.”
The indictment alleges that beginning in October 2011 and continuing until March 29, 2017, Threadgill obtained grants on behalf of MRCT from federally funded government agencies, such as the Tennessee Department of Transportation (TDOT), the Tennessee Department of Environment & Conservation (TDEC), and the Tennessee Valley Authority (TVA). In 2013, Threadgill applied for and received one such grant from TDOT in the amount of $1,512,000 for the purpose of building an interpretive visitor center at Reelfoot Lake. The Tennessee State Building Commission (SBC) provided an additional matching grant in the amount of $372,000. Threadgill submitted reimbursement requests for expenses, which had previously been sought or reimbursed and obtained more than $133,000 in additional reimbursement, which she used for her own personal benefit.
The indictment further alleges that Threadgill submitted fraudulent checks to TDOT, seeking and receiving reimbursements by representing that the checks had been cashed by vendors when, in reality, they had never been provided to the vendors.
Finally, the indictment alleges that Threadgill sought funding from TVA in March 2017, knowing that the MRCT Board of Directors had previously voted to dissolve the organization. She obtained $41,749.94 in addition to the duplicated funds that she had previously received from the federally funded agencies. The total loss amount in federal funds was $174,921.84.
If convicted, Threadgill faces up to 20 years in prison and a $250,000 fine on each count.
This case was investigated by the U.S. Department of Transportation, Office of Inspector General; the TVA, Office of Inspector General; and the Tennessee Comptroller’s Office. Assistant U.S. Attorney Sara Beth Myers is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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United States Joins False Claims Act Lawsuit Against Arriva Medical, LLC and Alere Inc.Read the Press Release
NASHVILLE, Tenn. – February 19, 2019 - The United States has intervened in a False Claims Act case alleging that Arriva Medical, LLC (Arriva) and its parent Alere Inc. (Alere) submitted or caused false claims to the Medicare program for medically unnecessary glucometers and paid kickbacks to Medicare beneficiaries in the form of free glucometers and copayment waivers, the Justice Department announced today. Additionally, the government has informed the court that it is adding Ted Albin, a reimbursement consultant for Arriva, as an additional defendant in the action.
Arriva is a mail-order diabetic testing supply company based in Coral Springs, Florida, which, at one point, had operations in Antioch, Tennessee. Alere is a large medical device company based in Waltham, Massachusetts, which acquired Arriva in 2011. Both Arriva and Alere were acquired by Abbott Laboratories in September 2017, after the alleged conduct occurred. In October 2016, the Centers for Medicare & Medicaid Services (CMS) revoked Arriva’s billing number for billing Medicare for durable medical equipment that was shipped more than fourteen days after a beneficiary’s death. Arriva subsequently stopped operating in December 2017.
The False Claims Act lawsuit alleges, among other things, that Arriva, with the oversight and approval of Alere, offered “free upgrades” of glucometers to Medicare beneficiaries. Because Arriva required all new customers to receive a new meter, regardless of whether they already had a functioning meter, Arriva allegedly routinely submitted false claims to Medicare for medically unnecessary meters. Arriva also allegedly made no meaningful effort to collect copayments from beneficiaries for the meters or diabetic testing supplies subsequently purchased from Arriva for use in connection with the meters. The waiver of patient copays or provision of other benefits to induce patients to purchase a company’s items or services is prohibited by the Anti-Kickback Statute.
“When medical equipment companies scheme to enrich themselves by unlawfully increasing the sales volume of durable medical equipment, they place our federal health care programs in jeopardy,” said U.S. Attorney Cochran. “The restrictions imposed by federal statutes exist to prevent improper practices, including providing unnecessary medical equipment and billing Medicare for it. We will continue to enforce the laws that protect the integrity of federal health care programs.”
“We will seek to hold accountable health care providers that attempt to profit by providing illegal inducements and by billing for unnecessary items,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will continue to take appropriate legal measures to protect Medicare funds and to ensure a fiscally sound program that can serve all of our senior citizens.”
“Medicare rules bar payment for medically unnecessary services and supplies,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General. “Such schemes only benefit suppliers billing for products that patients neither want nor need.”
The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private parties to file suit on behalf of the United States for false claims and to receive a share of any recovery. The act permits the United States to intervene and take over responsibility for litigating these cases, as it has done here in part. A defendant who violates the act is subject to three times the government’s losses, plus applicable penalties.
This case is being handled by the Justice Department’s Civil Division and the United States Attorney’s Office for the Middle District of Tennessee, with assistance from the Office of Inspector General of the Department of Health and Human Services. The case is captioned United States ex rel. Goodman v. Arriva Medical LLC; Alere, Inc., Case No. 3:13-cv-00760 (M.D. Tenn.).
The claims in which the United States has intervened are allegations only, and there has been no determination of liability.
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United States Joins False Claims Act Lawsuit Against Arriva Medical LLC and Alere Inc.Read the Press Release
The United States has intervened in a False Claims Act case alleging that Arriva Medical LLC (Arriva) and its parent Alere Inc. (Alere) submitted or caused false claims to the Medicare program for medically unnecessary glucometers and paid kickbacks to Medicare beneficiaries in the form of free glucometers and copayment waivers, the Justice Department announced today. Additionally, the government has informed the court that it is adding Ted Albin, a reimbursement consultant for Arriva, as an additional defendant in the action.
Arriva is a mail-order diabetic testing supply company based in Coral Springs, Florida, which, at one point, had operations in Antioch, Tennessee. Alere is a large medical device company based in Waltham, Massachusetts, which acquired Arriva in 2011. Both Arriva and Alere were acquired by Abbott Laboratories in September 2017, after the alleged conduct occurred. In October 2016, the Centers for Medicare & Medicaid Services (CMS) revoked Arriva’s billing number for billing Medicare for durable medical equipment that was shipped more than fourteen days after a beneficiary’s death. Arriva subsequently stopped operating in December 2017.
The False Claims Act lawsuit alleges, among other things, that Arriva, with the oversight and approval of Alere, offered “free upgrades” of glucometers to Medicare beneficiaries. Because Arriva required all new customers to receive a new meter, regardless of whether they already had a functioning meter, Arriva allegedly routinely submitted false claims to Medicare for medically unnecessary meters. Arriva also allegedly made no meaningful effort to collect copayments from beneficiaries for the meters or diabetic testing supplies subsequently purchased from Arriva for use in connection with the meters. The waiver of patient copays or provision of other benefits to induce patients to purchase a company’s items or services is prohibited by the Anti-Kickback Statute.
“We will seek to hold accountable health care providers that attempt to profit by providing illegal inducements and by billing for unnecessary items,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will continue to take appropriate legal measures to protect Medicare funds and to ensure a fiscally sound program that can serve all of our senior citizens.”
“When medical equipment companies scheme to enrich themselves by unlawfully increasing the sales volume of durable medical equipment, they place our federal health care programs in jeopardy,” said U.S. Attorney Cochran. “The restrictions imposed by federal statutes exist to prevent improper practices, including providing unnecessary medical equipment and billing Medicare for it. We will continue to enforce the laws that protect the integrity of federal health care programs.”
“Medicare rules bar payment for medically unnecessary services and supplies,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General. “Such schemes only benefit suppliers billing for products that patients neither want nor need.”
The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private parties to file suit on behalf of the United States for false claims and to receive a share of any recovery. The act permits the United States to intervene and take over responsibility for litigating these cases, as it has done here in part. A defendant who violates the act is subject to three times the government’s losses, plus applicable penalties.
This case is being handled by the Justice Department’s Civil Division and the United States Attorney’s Office for the Middle District of Tennessee, with assistance from the Office of Inspector General of the Department of Health and Human Services. The case is captioned United States ex rel. Goodman v. Arriva Medical LLC; Alere, Inc., Case No. 3:13-cv-00760 (M.D. Tenn.).
The claims in which the United States has intervened are allegations only, and there has been no determination of liability.
North Carolina Man Convicted of Traveling to Nashville Tennessee to Have Sex with 15 Year-OldRead the Press Release
NASHVILLE, Tenn. – February 14, 2019 – A federal jury returned guilty verdicts today on all counts against James Frei, 50, of Union Mills, North Carolina, after a trial on child pornography related offenses, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Frei was indicted in March 2017 and charged with child pornography offenses, including production and transportation of child pornography, on-line enticement of a minor and traveling to have sex with a minor.
According to evidence and testimony at trial, in July 2016, the National Center for Missing and Exploited Children (NCMEC) received a cyber-tip from Facebook regarding an adult male engaging in sexually explicit conversations with a minor female, later identified as a 15 year-old living in Nashville. The conversations indicated that the adult may have already traveled to Nashville to have sex with the minor female. This information was relayed to the Metropolitan Nashville Police Department (MNPD) for further investigation.
A MNPD detective interviewed the minor and learned that she had met the man, later identified as Frei, in May 2016 through a teen chat room on Facebook and that he had traveled to Nashville multiple times in May 2016 and went to her house after her father had left for work, where they engaged in sexual activity. The minor female was then driven to a nearby park where they again engaged in sexual activity. Frei returned to Nashville for a few days in June 2016 and on two occasions, he took the minor to a hotel near the airport and engaged in sexual activity. The detective also learned that Frei had recorded the sexual encounters with his cell phone.
A subsequent search warrant served at Frei’s North Carolina home resulted in the seizure and forensic examination of his cell phone, which was found to contain numerous images and videos of him engaging in sex with the minor female.
Frei faces up to life in prison when he is sentenced on May 20, 2019. The production of child pornography charge carries a mandatory minimum sentence of 15 years in prison.
This case was investigated by the Metropolitan Nashville Police Department and is being prosecuted by Assistant U.S. Attorneys Katy Risinger and Christopher Suedekum.
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Nashville Man Facing Federal Charges for Setting Fires to the Music City GarageRead the Press Release
NASHVILLE, Tenn. – February 14, 2014 – James Hayward Williams, aka Spanky, 42 of Nashville, Tennessee, was charged today with 11 federal offenses relating to the burning of the Music City Garage in East Nashville in December 2018 and for firing multiple rounds from a semi-automatic pistol at On the Go Tires in East Nashville on January 5, 2019, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
A criminal complaint obtained today charges Williams with using Instagram messages to threaten to burn the Music City Garage and vehicles located on the property, with the intent to extort money from the owner; four counts of using fire to commit a federal felony; four counts of maliciously damaging a building used in interstate commerce, by means of fire; and being a convicted felon in possession of a firearm.
According to the complaint, after threatening the owner with burning the business, Williams set fire to the Music City Garage two times during the early morning hours on December 22, 2018, and again set fire to the building on December 24th and on December 26th, in an effort to extort $30,000 from its owner. During each incident, the Metropolitan Nashville Fire Department (MNFD) responded and extinguished blazes at the business, including vehicles which had been set on fire. The complaint also charges Williams with possessing a .40 caliber Smith & Wesson pistol after having been convicted of a felony and firing multiple rounds from that pistol at On the Go Tires, in furtherance of an extortion attempt to collect $20,000 from a person associated with that business. As alleged in the complaint, multiple rounds were fired at the business and at a vehicle that was occupied by a young girl, narrowly missing her.
If convicted, Williams faces more than 100 years in prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives; the MNPD Gang Unit and recently formed Crime Gun Unit; and the MNFD Fire Marshal’s Office. Assistant U.S. Attorney Sunny A.M. Koshy is prosecuting the case.
The charges in the criminal complaint are merely accusations. The defendant is presumed innocent until proven guilty in a court of law.
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Columbia, Tennessee Man Facing Federal Firearms Charges After Shooting at Police OfficersRead the Press Release
NASHVILLE, Tenn. – February 14, 2019 – Jamal J. Gardner, 47, of Columbia, Tennessee, was charged today in a criminal complaint with being a convicted felon in possession of a firearm, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
“As I have said many times, when a law enforcement officer in this district is assaulted, we will bring federal charges whenever possible,” said U.S. Attorney Cochran. “This was an extremely violent encounter and we are grateful that lives were not lost. We will hold this defendant accountable for his actions.”
According to the criminal complaint, a Columbia Police Officer initiated a traffic stop of a vehicle matching the description of a report of a reckless driver. As the officer approached the vehicle, he observed the driver holding a rifle and the driver immediately began firing at the officer. As the officer took cover and returned fire, the driver, later identified as Jamal Gardner, fled into a nearby residence and continued firing at responding officers. Gardner fired approximately 80 rounds, from at least four firearms, before escaping from the house.
On February 8, 2019, Gardner surrendered to police in Detroit, Michigan and is awaiting transfer to the Middle District of Tennessee.
If convicted, Gardner faces a minimum sentence of 15 years and up to life in prison.
This case was investigated by the Columbia Police Department; the 22nd Judicial District Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms & Explosives. Assistant U.S. Attorney Thomas J. Jaworski is prosecuting the case.
A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Justice Department Files First of its Kind Action to Stop Tennessee Pharmacies’ Unlawful Dispensing of OpioidsRead the Press Release
The Justice Department announced an action today to stop two pharmacies, their owner, and three pharmacists from dispensing controlled substance medications, including powerful opioids that have been linked to abuse and diversion. The action is part of a coordinated effort by the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to reverse the tide of opioid overdoses in the United States. Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division, U.S. Attorney Don Cochran for the Middle District of Tennessee, D. Christopher Evans, Special Agent in Charge of the U.S. Drug Enforcement Administration’s (DEA) Louisville Field Division, and Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services (HHS), Office of Inspector General made the announcement.
In a civil complaint unsealed today in the Middle District of Tennessee, the United States alleges that Celina, Tennessee, pharmacies, Oakley Pharmacy, Inc., d/b/a Dale Hollow Pharmacy (Dale Hollow) and Xpress Pharmacy of Clay County (Xpress), the pharmacies’ owner, Thomas Weir, and pharmacists John Polston, Michael Griffith, and Larry Larkin were dispensing, and billing Medicare for, prescriptions in violation of the Controlled Substances Act and the False Claims Act. According to the United States’ complaint, the defendants’ unlawful dispensing of opioids has been tied to the deaths of at least two people and numerous others have been treated at hospitals for serious overdoses within a short time of obtaining controlled substances from the pharmacies.
“Pharmacies and pharmacists have a legal obligation to dispense controlled substances properly, so as not to put patients’ health at risk,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “The Department of Justice will use every available tool to stop individuals and entities responsible for the improper distribution of controlled substances.”
The complaint alleges that the pharmacies and pharmacists filled numerous prescriptions for controlled substances outside the usual course of professional practice and in violation of the pharmacists’ corresponding responsibility to ensure that prescriptions were written for a legitimate medical purpose. Specifically, the complaint alleges that the defendants routinely dispensed controlled substances while ignoring numerous “red flags” or warning signs of diversion and abuse, such as unusually high dosages of oxycodone and other opioids, prescriptions for opioids and other controlled substances in dangerous combinations, and patients travelling extremely long distances to get and fill prescriptions. The complaint further asserts that the pharmacies falsely billed Medicare for illegally dispensed prescriptions.
Judge Aleta A. Trauger of the U.S. District Court for the Middle District of Tennessee issued the temporary restraining order. Along with injunctive relief, the United States seeks civil monetary penalties and treble damages.
“The civil complaint unsealed today contains disturbing allegations of high-risk dispensing practices by the defendants,” said U.S. Attorney Don Cochran. “Given the national public health emergency resulting from the opioid crisis in our nation, the U.S. Attorney’s Office will use every resource at our disposal, including seeking injunctive relief and civil monetary penalties as we have here, to stop pharmacies and pharmacists from continuing to abuse their dispensing authority to fuel this epidemic.”
“The action supported today by the Drug Enforcement Administration should serve as a warning to those in the pharmacy industry who choose to put profit over customer safety,” said D. Christopher Evans, Special Agent in Charge of DEA’s Louisville Field Division, which covers Tennessee, Kentucky, and West Virginia. “Pharmacists serve on the front lines of America’s opioid epidemic and they share responsibility with physicians to protect those whom they serve from the dangers associated with prescription medications. We will be vigilant in holding them accountable,” Evans added.
“The opioid epidemic has been devastating for Tennessee and neighboring states,” said Derrick L. Jackson, Special Agent in Charge at the HHS Office of Inspector General. “Physicians and pharmacists have a dual responsibility to ensure that these medications are only prescribed and dispensed when they are medically necessary.”
The United States is represented by Trial Attorneys Ross Goldstein and Donald Lorenzen of the Justice Department’s Consumer Protection Branch, Assistant U.S. Attorney Ellen Bowden McIntyre for the Middle District of Tennessee, and Attorney Scott Dahlquist for the DEA’s Office of Chief Counsel. This investigation is being conducted by the DEA and the HHS Office of Inspector General.
A complaint is merely an allegation and there has been no determination of liability.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Middle District of Tennessee, visit its website at https://www.justice.gov/usao-mdtn.
Justice Department Files First of its Kind Action to Stop Tennessee Pharmacies' Unlawful Dispensing of OpioidsRead the Press Release
NASHVILLE, Tenn. – February 8, 2019 - The Justice Department announced action today to stop two pharmacies, their owner, and three pharmacists from dispensing controlled substance medications, including powerful opioids that have been linked to abuse and diversion. This action is part of a coordinated effort by the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to reverse the tide of opioid overdoses in the United States. U.S. Attorney Don Cochran for the Middle District of Tennessee, Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division, D. Christopher Evans, Special Agent in Charge of the U.S. Drug Enforcement Administration’s (DEA) Louisville Field Division, and Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services (HHS), Office of Inspector General made the announcement.
In a civil complaint unsealed today in the Middle District of Tennessee, the United States alleges that Celina, Tennessee, pharmacies, Oakley Pharmacy, Inc., d/b/a Dale Hollow Pharmacy (Dale Hollow) and Xpress Pharmacy of Clay County (Xpress), the pharmacies’ owner, Thomas Weir, and pharmacists John Polston, Michael Griffith, and Larry Larkin were dispensing, and billing Medicare for, prescriptions in violation of the Controlled Substances Act and the False Claims Act. According to the United States’ complaint, the defendants’ unlawful dispensing of opioids has been tied to the deaths of at least two people and numerous others have been treated at hospitals for serious overdoses within a short time of obtaining controlled substances from the pharmacies.
“The civil complaint unsealed today contains disturbing allegations of high-risk dispensing practices by the defendants,” said U.S. Attorney Don Cochran. “Given the national public health emergency resulting from the opioid crisis in our nation, the U.S. Attorney’s Office will use every resource at our disposal, including seeking injunctive relief and civil monetary penalties as we have here, to stop pharmacies and pharmacists from continuing to abuse their dispensing authority to fuel this epidemic.”
The complaint alleges that the pharmacies and pharmacists filled numerous prescriptions for controlled substances outside the usual course of professional practice and in violation of the pharmacists’ corresponding responsibility to ensure that prescriptions were written for a legitimate medical purpose. Specifically, the complaint alleges that the defendants routinely dispensed controlled substances while ignoring numerous “red flags” or warning signs of diversion and abuse, such as unusually high dosages of oxycodone and other opioids, prescriptions for opioids and other controlled substances in dangerous combinations, and patients travelling extremely long distances to get and fill prescriptions. The complaint further asserts that the pharmacies falsely billed Medicare for illegally dispensed prescriptions.
Judge Aleta A. Trauger of the U.S. District Court for the Middle District of Tennessee issued the temporary restraining order. Along with injunctive relief, the United States seeks civil monetary penalties and treble damages.
“Pharmacies and pharmacists have a legal obligation to dispense controlled substances properly, so as not to put patients’ health at risk,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “The Department of Justice will use every available tool to stop individuals and entities responsible for the improper distribution of controlled substances.”
“The action supported today by the Drug Enforcement Administration should serve as a warning to those in the pharmacy industry who choose to put profit over customer safety,” said D. Christopher Evans, Special Agent in Charge of DEA’s Louisville Field Division, which covers Tennessee, Kentucky, and West Virginia. “Pharmacists serve on the front lines of America’s opioid epidemic and they share responsibility with physicians to protect those whom they serve from the dangers associated with prescription medications. We will be vigilant in holding them accountable,” Evans added.
“The opioid epidemic has been devastating for Tennessee and neighboring states,” said Derrick L. Jackson, Special Agent in Charge at the HHS Office of Inspector General. “Physicians and pharmacists have a dual responsibility to ensure that these medications are only prescribed and dispensed when they are medically necessary.”
A complaint is merely an allegation and there has been no determination of liability.
The United States is represented by Assistant U.S. Attorney Ellen Bowden McIntyre for the Middle District of Tennessee; Trial Attorneys Ross Goldstein and Donald Lorenzen of the Justice Department’s Consumer Protection Branch; and Attorney Scott Dahlquist for the DEA’s Office of Chief Counsel. This investigation is being conducted by the DEA and the HHS Office of Inspector General.
A complaint is merely an allegation and there has been no determination of liability.
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Skilled Nursing Facility Management Company Agrees to Settle False Claims Act AllegationsRead the Press Release
NASHVILLE, Tenn. – February 5, 2019 - Tennessee Health Management, Inc. (“THM”) has agreed to pay $9,764,107.98 to settle allegations that it violated the False Claims Act, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. The alleged conduct involved the submission of false claims for payment to TennCare, Tennessee’s Medicaid Program, related to nursing facility services to TennCare beneficiaries.
"Enforcement of the False Claims Act remains a priority of the Department of Justice and this Office,” said U.S. Attorney Cochran. “When violations are discovered, corporations should seek to immediately cooperate and resolve the allegations and minimize future risks, as THM has done here.”
TennCare requires that a placement evaluation be conducted and certified by a physician for each patient entering a nursing home. This settlement resolves allegations by the United States and the State of Tennessee that during the period of January 1, 2010 through December 31, 2017, THM submitted pre-admission evaluations with photocopied or pre-signed physician signatures on the required certifications for claims rendered to TennCare beneficiaries at its associated Tennessee skilled nursing and rehabilitation facilities. THM operates 27 skilled nursing facilities in the State of Tennessee.
"The cooperation between our Medicaid Fraud Control Unit and our federal partners in investigations such as this is critical in the pursuit of false claims, to ensure the vulnerable members of our community receive the quality of care they need and deserve," says TBI Director David Rausch.
Under the terms of the settlement, the United States will receive $5,455,207.13 and the State of Tennessee will receive $4,308,900.85. THM will also enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services-Office of Inspector General.
This matter was investigated by the Tennessee Bureau of Investigation-Medicaid Fraud Control Unit and the United States Attorney’s Office for the Middle District of Tennessee. The United States is represented by Assistant U.S. Attorney Sarah K. Bogni. The claims settled by this agreement are allegations only and there has been no determination of liability.
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