Department of Justice

U.S. Attorney’s Office

Eastern District of Texas

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FOR IMMEDIATE RELEASE

Thursday, September 15, 2016

Texas Doctor Resentenced to Prison Following Appeal

TYLER, Texas – A 65-year-old Dallas County, Texas, physician, has been resentenced to federal prison for health care fraud and identity theft violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales. 

In July 2014, Tariq Mahmood, of Cedar Hill, Texas, was found guilty by a jury of conspiracy to commit health care fraud, seven counts of health care fraud, and seven counts of aggravated identity theft following a four-day trial before U.S. District Judge Michael Schneider.  Mahmood had been indicted by a federal grand jury on April 11, 2013.

According to information presented in court, Mahmood, a general practitioner, owned and operated several hospitals in the state of Texas, including Cozby Germany Hospital in Grand Saline, Renaissance Terrell Hospital in Terrell, Central Texas Hospital in Cameron, Community General Hospital in Dilley, and Lake Whitney Medical Center in Whitney.  From January 2010 to April 2013, Mahmood and others carried out a scheme to defraud Medicare and Medicaid through the submission of false and fraudulent claims.  Mahmood and others added, changed, and incorrectly sequenced diagnostic codes in a way that did not reflect the actual diagnoses and conditions of the patients and often did so without reviewing the medical records.  They submitted false and fraudulent claims to Medicare and Medicaid based on the added, changed, and incorrectly sequenced diagnostic codes.  Mahmood and others also unlawfully used Medicare beneficiaries’ names and Medicare numbers in order to commit health care fraud. 

Following his appeal, Mahmood was resentenced to 135 months in federal prison and ordered to pay restitution in the amount of $145,358.23 to Medicare, Medicaid, and Blue Cross Blue Shield of Texas.

The case was investigated by the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), and the U.S. Postal Inspection Service (USPIS).  This case was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and Frank Coan and Special Assistant U.S. Attorney Ken McGurk.

Any individuals with knowledge of these or other health care fraud violations are encouraged to contact the Department of Health and Human Services’ fraud hotline at 1-800-HHS-TIPS (447-8477)

Department of Justice

U.S. Attorney’s Office

Southern District of Texas

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FOR IMMEDIATE RELEASE

Thursday, September 15, 2016

Two Doctors from Mexican Clinic Sentenced in Scheme to Commit Wire Fraud

McALLEN, Texas ‐ Two physicians from a family medicine clinic in Mexico have been ordered to prison for their role in a scheme to submit false and fraudulent insurance claims, announced U.S. Attorney Kenneth Magidson.

Dr. Mayolo Melchor, 59, and Dr. Bertha Hernandez-Melchor, 61, both of Reynosa, Tamaulipas, Mexico, pleaded guilty June 1, 2016, to conspiring with policyholders of the American Family Life Assurance Company (AFLAC) to fax fraudulent claim forms and accident reports to AFLAC for accidents and injuries that never occurred.

Today, U.S. District Judge Micaela Alvarez handed both Melchor and Herndandez-Melchor sentences of 34 months in federal prison. They were further ordered to pay $2,585,219.50 in restitution. In handing down the sentences, Judge Alvarez noted the large number of fraudulent claims submitted and the time period involved in the conspiracy. Both are expected to face deportation proceedings following release from federal prison.

The defendants admitted AFLAC policyholders paid them to prepare and sign fictitious reports for accidents and injuries that never occurred. AFLAC policyholders filled out the fictitious claim forms in the McAllen area and delivered them to the defendants’ family medicine clinic in Mexico where Melchor and Hernandez-Melchor prepared and signed corresponding accident reports for each fake accident and injury. The policyholders then faxed the fictitious claim and accident forms to AFLAC headquarters in Columbus, Georgia. 

The defendants admitted the fraudulent claim forms and accident reports that were faxed to AFLAC from September 2001 to August 2010 resulted in the disbursement of approximately $2,585,219.50 in fraudulent benefit checks to the policyholders.

Both will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI investigated. Assistant U.S. Attorneys Michael Day and Tina Ansari are prosecuting the case.

Department of Justice

U.S. Attorney’s Office

Middle District of Florida

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FOR IMMEDIATE RELEASE

Wednesday, September 14, 2016

United States Settles False Claims Act Allegations Against Compound Pharmacy Owners For $7.75 Million

Jacksonville, FL – United States Attorney A. Lee Bentley, III announces today that Andy Miller, Tracy Miller, and the Healthmark Investment Trust have agreed to pay to the government $7.75 million to resolve allegations that they violated the False Claims Act.

The United States contends that QMedRx, a compound pharmacy in Maitland, Florida, knowingly billed federal healthcare programs for services that were not reimbursable.  Specifically, the government contends that from January 1, 2013, until January 22, 2014, QMedRx submitted to federal healthcare programs, compounded prescriptions that were tainted within the meaning of the Anti-Kickback Statute. Because Healthmark Investment Trust was a partial owner of QMedRx, the government sought penalties and fines from the owners who participated in the fraud. The government is still pursuing penalties and fines from other owners and participants within QMedRx. 

“The United States Attorney’s Office is committed to protecting TRICARE and other federal health care programs from fraud,” said U.S. Attorney Bentley.  “Those who violate the Anti-Kickback Statute to generate business will be held accountable.” 

This case was developed through an initiative to track and prosecute compound pharmacies that submitted millions of dollars in improper claims to the TRICARE program.  The government estimates that up to $2 billion of tainted and unnecessary compound prescriptions were submitted and paid by the government.  In the Middle District of Florida, the government has recovered almost $60 million in fines and penalties over the past 18 months. 

“We appreciate the support from the Department of Justice in protecting the TRICARE benefit from fraud and helping to ensure the benefit continues to exist for our service members, families, and retirees,” said Vice Admiral R. Bono, Director, Defense Health Agency.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.5 billion through False Claims Act cases, with more than $18.4 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by the Defense Criminal Investigative Service (DCIS) and the Federal Bureau of Investigation (FBI). It was prosecuted by Assistant United States Attorney Jason Mehta.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.