Dental Practice Operators Charged in $20 Million Medicaid Fraud Conspiracy

David B. Fein, United States Attorney for the District of Connecticut; Susan J. Waddell, Special Agent in Charge of U.S. Health and Human Services, Office of Inspector General for New England; William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England; and Kimberly K. Mertz, Special Agent in Charge of the Federal Bureau of Investigation, announced that Gary F. Anusavice, also known as “Gary Andrews,” “Gary Andrus” and “Gary Francis,” 59, of North Kingstown, Rhode Island; and Mehran Zamani, DDS, 47, of Pound Ridge, New York, were arrested today on federal charges related to their alleged involvement in a $20 million Medicaid fraud scheme.

“As alleged, these operators of dental practices throughout Connecticut defrauded the Medicaid program of more than $20 million over a two-year period,” said U.S. Attorney Fein. “We are committed to protecting American taxpayers from health care fraud, which can increase costs and jeopardize the integrity of our health care system. I want to commend HHS-OIG, IRS-Criminal Investigation, and the FBI for their investigative efforts and thank the Connecticut Attorney General’s Office, which provided invaluable assistance during the course of this investigation.”

“Although Gary F. Anusavice was barred from Medicare, Medicaid, and other government health programs back in 1998, he allegedly continued to defraud taxpayers by using an elaborate shield of companies and individuals—including Dr. Zamani—to hide his involvement,” said HHS-OIG Special Agent in Charge Waddle. “Working with federal and state partners, our investigators will penetrate such schemes and help bring suspects to justice.”

“To combat healthcare fraud, IRS Criminal Investigation provides the financial investigative expertise to follow the money trail from the crime to the culprit,” said IRS Criminal Investigation Special Agent in Charge Offord. “We are proud to work with our law enforcement partners to document the financial benefits derived from these fraudulent activities.”

“The FBI views health care fraud as a serious crime problem,” said FBI Special Agent in Charge Mertz. “It degrades the integrity of our health care system and legitimate patient care. Today’s arrests send a clear message to those persons who are defrauding our federal Medicare and Medicaid and private health insurance programs. The FBI remains committed to investigating health care fraud and bringing these individuals to justice. The FBI will continue to work aggressively with our law enforcement partners to investigate those who violate the public trust by stealing taxpayer money. We urge anyone with information regarding health care fraud activity to contact its nearest FBI field office.”

According to court documents, the Medicaid program is a joint federal-state program that provides funds for medical services to lower-income individuals who qualify for benefits. The program is jointly administered by the U.S. Department of Health and Human Services and supervised by the Centers for Medicare and Medicaid Services. In Connecticut, the Medicaid program is administered by the State of Connecticut Department of Social Services (DSS).

As alleged in court documents, Anusavice was previously a registered dentist in several states. In July 1997, Anusavice sustained a felony conviction in Massachusetts for submitting false health care claims. Based on that conviction, the U.S. Department of Health and Human Services notified Anusavice in April 1998 that he was being excluded from participation in Medicare and state health care programs, including Medicaid. As part of that notice, Anusavice was informed that, as an excluded individual, he may not “submit claims or cause claims to be submitted” for payment from the federal Medicaid program. Further, Anusavice was advised that Medicaid reimbursement payments are prohibited to any entity in which he serves as an “employee, administrator, operator, or in any other capacity....”

In November 2005, Anusavice surrendered his right to practice dentistry in Rhode Island, and the Massachusetts Board of Registration in Dentistry permanently revoked Anusavice’s license to practice dentistry in Massachusetts in 2006.

The criminal complaint alleges that Anusavice established several dental practices in Connecticut, which were operated by other dentists, including Zamani. These dental practices received millions of dollars in Medicaid reimbursements from the Connecticut Medicaid program, which payments were prohibited given Anusavice’s exclusion from the Medicaid program. The dental practices operated by Anusavice and Zamani included Landmark Dental in West Haven, Dental Group of Connecticut in Trumbull, and Dental Group of Stamford. Despite his permanent exclusion, Anusavice was involved in reviewing patient charts, suggesting dental procedures to be performed, reviewing billing records, reviewing income reports, interviewing and hiring dentists, and providing overall management direction to the offices.

It is alleged that Anusavice hired Zamani at Landmark Dental in October 2008 and that Zamani soon became aware of Anusavice’s disciplinary history. In January 2009, Zamani submitted a Medicaid Provider Enrollment Application with the DSS in order to obtain a Medicaid provider number for Mehran Zamani LLC, listing his group practice name as Landmark Dental. In May 2009, Zamani submitted an application with the DSS for a Medicaid provider number for Landmark Dental. In the applications Zamani submitted, he failed to disclose that Anusavice had an ownership or control interest in Landmark Dental, even though Zamani knew that Anusavice was running the practice and profited from it. From approximately February 2009 to March 2011, Mehran Zamani LLC and Landmark Dental received more than $12.9 million in Medicaid reimbursement payments.

It is further alleged that in April 2009, Zamani and “Haven Consulting,” an entity Anusavice created, entered into a Business Consultant Contract for the Dental Group of Stamford, a practice that Zamani had operated previously. Although the contract provided that Haven Consulting was a “business consultant” to the Dental Group of Stamford, Anusavice had an ownership interest in the practice and acted in an ownership and managerial capacity. Zamani’s DSS application in May 2009 failed to disclose Anusavice’s involvement in the practice and his disciplinary history. From approximately June 2009 to March 2011, the Dental Group of Stamford received more than $4.4 million in Medicaid reimbursement payments.

It is further alleged that Zamani’s April 2010 DSS application for a Medicaid provider number for the Dental Group of Connecticut also failed to disclose Anusavice’s involvement in the practice. From approximately August 2010 to March 2011, the Dental Group of Connecticut received more than $3.5 million in Medicaid reimbursement payments.

It is further alleged that on April 13, 2011, the DSS suspended Medicaid payments to Mehran Zamani, DDS, Landmark Dental, Dental Group of Stamford, and Dental Group of Connecticut based upon a pending investigation of a credible allegation of fraud. As a result, the last Medicaid payment to any of these entities occurred on or about March 22, 2011. By that time, it is alleged that the Anusavice-Zamani entities had collectively received nearly $21 million in Medicaid reimbursement funds. Further, according to Zamani’s accountant’s records, between February 2009 and March 2011, Anusavice-controlled entities received more than $3 million in payments from Zamani-related entities.

It is further alleged that Anusavice and another dentist are now operating a new set of dental clinics, doing business as Alpha Dental Group in Cromwell, Dental Group of New Britain, and Hartford Dental Care. Between November 2011 and March 2012, Arbor Dental has received more than $2.6 million in Medicaid funds. Anusavice also has recently reopened a dental practice at the former location of Dental Care of Connecticut in Trumbull.

Anusavice was arrested this morning at his home in North Kingstown, Rhode Island on a federal criminal complaint charging him with conspiring to commit health care fraud, committing health care fraud, and making false statements involving federal health care programs. Zamani was arrested today at his home in New York on a criminal complaint charging him with the same offenses. Both appeared this afternoon before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport.

In association with today’s arrests, investigating agencies conducted court-authorized searches of Anusavice’s Rhode Island residence and dental clinics he is allegedly operating in New Britain and Trumbull.

The government also has filed a civil forfeiture complaint against the real property located at 229 Potter Road, North Kingstown, Rhode Island, an 8,145 square foot home on 9.66 acres of land, where Anusavice resides. The forfeiture complaint alleges that this property was purchased in February 2011 for $695,000 by AMZ Consulting Inc., a nominee entity controlled by Anusavice and that proceeds used to purchase the property stem from Anusavice’s alleged Medicaid fraud scheme.

U.S. Attorney Fein stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Internal Revenue Service-Criminal Investigation; and the Federal Bureau of Investigation. The Connecticut Attorney General’s Office provided assistance and cooperation throughout the investigation.

This case is being prosecuted by Assistant United States Attorneys Susan Wines and Richard Molot, and Special Assistant United States Attorney Sean Beaty. The United States Attorney’s Office for the District of Rhode Island and Assistant United States Attorney Paul Daly have provided valuable assistance.

U.S. Attorney Fein encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at 203-777-6311 or 1-800-HHS-TIPS.