Detroit-area residents Baskaran Thangarasan, Sandeep Aggarwal and Wayne Smith pleaded guilty this week for their roles in connection with several Detroit-area health care fraud schemes, Assistant Attorney General Lanny Breuer of the Criminal Division, U.S. Attorney for the Eastern District of Michigan Terrence I. Berg, Special Agent in Charge Andrew G. Arena of the FBI's Detroit Field Office and Daniel Levinson, Inspector General for the U.S. Department of Health and Human Services (HHS) announced today.
Thangarasan, 37, pleaded guilty on Dec. 9, 2009, to one count of conspiracy to commit health care fraud before U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Aggarwal, 38, pleaded guilty Dec. 9, 2009, before Judge Cox to one count of conspiracy to launder money. Smith, 47, pleaded guilty yesterday to one count of conspiracy to commit health care fraud before Chief U.S. District Judge Gerald E. Rosen. At sentencing, Thangarasan and Smith face a maximum sentence of 10 years in prison and a $250,000 fine; Aggarwal faces a maximum sentence of 20 years in prison and a $500,000 fine.
According to information contained in plea documents, Thangarasan, a licensed physical therapist, admitted that he began working in approximately September 2003 as a contract therapist for a co-conspirator. This co-conspirator owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries. Thangarasan admitted that he, the co-conspirator and others created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by Thangarasan's co-conspirators.
Thangarasan admitted that his role in creating the fictitious therapy files was to sign documents and progress notes indicating he had provided physical therapy services to particular Medicare beneficiaries, when in fact he had not. Thangarasan was paid approximately $50 by co-conspirators per file that he falsified in this manner. Thangarasan also admitted that in the course of the scheme charged in the indictment, he signed approximately 1,011 fictitious physical therapy files, falsely indicating he had provided physical therapy services to Medicare beneficiaries. Thangarasan admitted he knew that the files he helped falsify were used to justify fraudulent billings to Medicare.
In addition, Thangarasan admitted that between approximately September 2003 and May 2006, his co-conspirators submitted claims to the Medicare program totaling approximately $5,055,000 for files that were falsified by Thangarasan. Medicare actually paid approximately $2,325,000 on those claims. Thangarasan admitted that throughout the conspiracy, he was fully aware that Medicare was being billed for occupational therapy services he had falsely indicated he had performed.
In his plea in the same case, Aggarwal admitted to assisting co-conspirator Suresh Chand in laundering the proceeds of Chand's Medicare fraud scheme. Chand, who pleaded guilty in September 2009 to conspiracy to commit health care fraud and conspiracy to launder money, admitted to conspiring to submit approximately $18 million in fraudulent physical and occupational therapy claims to the Medicare program. Aggarwal, who admitted working at Chand's office, acknowledged that his role in the scheme was to set up sham entities at Chand's direction, with the purpose of using those entities to distribute the proceeds of the fraud to the various co-conspirators. According to plea documents, one such entity was called Global Health Care Management Services. Aggarwal admitted that Global Health Care Management Services, which he helped create, provided no health or management services of any type, but existed solely as a mechanism to conceal the location of fraudulently obtained Medicare proceeds. Aggarwal admitted in his plea that he and Chand laundered approximately $393,000 through this sham entity.
Smith pleaded guilty to an indictment that charged he transported and paid Medicare beneficiaries to attend Sacred Hope Center, a Southfield, Mich.-infusion clinic. According to the indictment, the beneficiaries he paid and transported were paid to sign paperwork indicating that they had received infusions and injections of specialty medications that they did not in fact receive.
According to the indictment, Sacred Hope Center routinely billed the Medicare program for services that were medically unnecessary and/or never provided. The primary owners and operators of Sacred Hope Center have pleaded guilty and admitted purchasing only a small fraction of the medications that the clinic billed the Medicare program for providing. These co-conspirators have also stated that patients were prescribed medications at the clinic based not on medical need, but instead based on which medications were likely to generate Medicare reimbursements.
These cases are being prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division's Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The cases are being investigated by the FBI and the HHS Office of the Inspector General. Theses cases were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and U.S. Attorney's Office for the Eastern District of Michigan.
Since the inception of Strike Force operations in March 2007 - Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), and Houston (Phase Four) - the Strike Force has obtained indictments of more than 331 individuals and organizations that collectively have billed the Medicare program for more than $720 million. In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Each of the Strike Force teams across the separate phases are led by a federal prosecutor from the Criminal Division's Fraud Section or the U.S. Attorney's Office. Each team has an agent from the FBI and HHS-OIG.
U.S. Department of Justice