Shelby Woman Pleads Guilty to Defrauding Medicaid of $6.1 Million

Defendant “Rented Out” Her Provider Number and Used Proceeds to Purchase $500,000 in Jewelry and Vehicle

CHARLOTTE, NC—A Shelby woman pleaded guilty in U.S. District Court today for her involvement in a health care fraud scheme that defrauded Medicaid of at least $6.1 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.

Linda Smoot Radeker, 61, of Shelby, North Carolina, pleaded guilty today before U.S. Magistrate Judge David S. Cayer to one count of health care fraud conspiracy and two counts of money laundering. At today’s plea hearing, Radeker admitted that from 2008 to 2011 she obtained at least $6.1 million in fraudulent reimbursement payments from false claims submitted to Medicaid. According to filed court documents and statements made in court, Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, claimed in the fraudulent Medicaid billings that she was the attending clinician for these provided services, when, in fact, she provided no services to the claimed beneficiaries. Court records indicate that Radeker oversaw a network of co-conspirators, operating in Gaston and Cleveland Counties and elsewhere, who billed for false and fraudulent claims through Radeker’s provider number. In exchange for her willingness to “rent out” her Medicaid provider number, Radeker kept a percentage of the Medicaid reimbursements, sometimes as much as 50 percent.

Filed documents also indicate that the claimed Medicaid beneficiaries primarily were children recruited from the community, whose parents thought they were enrolling in after school programs owned and operated by Radeker’s co-conspirators and located in Shelby, Kings Mountain, and Bessemer City, North Carolina. Through those programs, Radeker and her co-conspirators obtained the children’s Medicaid information which they used to file the fraudulent claims.

According to court documents, Radeker made several large purchases using criminal proceeds including $21,500 to purchase a 2010 Ford Ranger and $44,440 to purchase a 2010 Lincoln MKS SUV. Radeker also used Medicaid money to purchase a recreational vehicle (RV) and at least $500,000 in jewelry.

In announcing today’s guilty plea, U.S. Attorney Tompkins said, “Radeker’s criminal conduct is an assault on health care resources meant to cover the needs of the poor, the sick and the elderly. In 2010, we formed the Western District of North Carolina Health Care Fraud Task Force to target criminals and illegal schemes like Radeker’s. I am proud of the work of the task force and the continued commitment of our federal, state, and local partners in identifying and prosecuting those who compromise the integrity of a health care system that provides much needed services to vulnerable North Carolinians.”

North Carolina Attorney General Roy Cooper stated, “Medicaid cheaters waste taxpayer money and drive up medical costs for everyone. We’ll continue our strong partnership with federal law enforcement to root out fraud and abuse in our health care system.”

“Radeker’s scheme targeted some of the most vulnerable families in North Carolina. She betrayed parents dependent on Medicaid for their children’s care. Health care fraud not only poses a potential risk to patients, it increases costs for everyone,” said FBI Special Agent in Charge Chris Briese.

IRS-CI Special Agent in Charge Hammett stated, “The abuse and misuse of Medicaid Programs impacts each of us as taxpayers and citizens. IRS-CI will continue to work jointly with the United States Attorney’s Office and other law enforcement agencies to ferret out those who might consider Medicaid fraud as a way to make easy money.”

At sentencing, Radeker faces a maximum term of 10 years in prison and a $250,000 fine for the health care fraud conspiracy charge, and a maximum term of 10 years in prison and a $250,000 fine or twice the value of the transaction for each count of money laundering. In her plea agreement, Radeker has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the court at Radeker’s sentencing hearing, which has not been scheduled yet.

The investigation into Radeker was handled by the FBI, MID, IRS, and HHS-OIG. Special Assistance to the task force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. The prosecution was handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The task force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The task force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The task force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud, please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at HHSTips@oig.hhs.gov.