Three Arrested in San Antonio Health Care Fraud Investigation

Investigation Focused on Fraudulent Medicare and Medicaid Billing Scheme

In San Antonio today, federal and state authorities arrested 38–year-old Andey Gray, of San Antonio, owner of Crown Consulting and Billing, as well as 54–year-old Michael Farris and 47–year-old Sherry Trouten, of Castroville, Texas, directors of Tejas Ambulance, Inc. (Tejas) in connection with an estimated $2.5 million fraudulent Medicare and Medicaid billing scheme, announced United States Attorney Robert Pitman, FBI San Antonio Division Special Agent in Charge, Armando Fernandez, HHS-OIG Dallas Regional Office Special Agent in Charge Mike Fields, and Texas Attorney General Greg Abbott.

The defendants are charged in a 13-count federal grand jury indictment returned on Wednesday and unsealed today. The indictment charges the defendants with 10 counts of health care fraud and two counts of theft or embezzlement in connection with health care fraud. In addition, Farris is charged with one count of making a false statement.

According to the indictment, Farris and Trouten worked for different ambulance companies—Farris, as director of Medina Valley Emergency Medical Services (Medina Valley), director of Tejas, and interim director for Community Emergency Medical Services, Inc. (Community); Trouten, as an administrator for Community, bookkeeper for Medina Valley, and business manager for Tejas. Gray, through his business, processed medical claims for Medina Valley, Community, and Tejas.

The indictment alleges that in March 2011, Farris and Trouten began surreptitiously diverting Medina Valley and Community incoming calls for service to Tejas Ambulance. Because Tejas Ambulance was not an authorized Medicare or Medicaid provider, the defendants began using numbers assigned to other entities, including Medina Valley and Community, to fraudulently submit claims for ambulance services either performed by Tejas, or not even performed at all. The indictment further alleges that the defendants then embezzled those Medicare and Medicaid funds from Medina Valley and Community, diverting them to Tejas Ambulance and ultimately, to themselves. As a result of the defendants’ scheme, Medicare and Medicaid paid just under $600,000 for claims that were not qualified for reimbursement from Medicare and Medicaid.

Upon conviction, the defendants face up to 10 years in federal prison per health care fraud related count. Farris is also subject to a maximum of five years in federal prison upon conviction of the false statement charge.

This case was investigated by the Texas Attorney General’s Medicaid Fraud Control Unit together with the Federal Bureau of Investigation, U.S. Department of Health and Human Services Office of Inspector General, and the U.S. Department of Labor, Employee Benefits Security Administration. Special Assistant United States Attorney Kimberly Johnson is prosecuting this case on behalf of the government.

An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.

Twenty-Seven Indicted as a Result of Massive Marijuana Plant Seizure

HOUSTON—A total of 27 people have been indicted as a result of the seizure of nearly 14,000 marijuana plants during enforcement actions conducted throughout the greater Houston area on August 21, 2012, United States Attorney Kenneth Magidson announced today. On that date, search warrants were executed on 60 properties located throughout Harris, Fort Bend, and Montgomery Counties. A total of 40 of these properties were allegedly active hydroponic marijuana grow houses and contained marijuana plants in various stages of the growth. At that time, 24 individuals were arrested and are currently now in custody.

The criminal indictment returned today charges the defendants with conspiring to possess with intent to distribute a controlled substance involving more than 1000 marijuana plants and conspiracy of maintaining a place for the purpose of manufacturing, distributing, and using controlled substances. The indictment also gives notice of forfeiture of several vehicles, U.S. currency, and assorted hydroponic equipment from the store front and warehouse.

Court records indicate that numerous houses located throughout Montgomery, Harris, and Fort Bend Counties were utilized to grow marijuana. The searches resulted in the seizure of at least 100 and up to more than 850 marijuana plants in each of the 40 grow houses, totaling approximately 13,907 marijuana plants. Also seized during the course of the enforcement action was the equipment allegedly used to grow the marijuana as well as additional equipment from a suspected hydroponic store front and warehouse.

Prior to the August 21 enforcement actions, 14 additional grow houses had previously been searched in relation to this organization, during which additional marijuana plants were seized. The total number of plants seized during the course of the overall investigation totaled approximately 19,000 plants.

The individuals arrested on August 21 and indicted today include: Thu Loan Dinh, 35; Hong Nhut Dang, 41; Anh Quang Nguyen, 52; Van Long Tran, 33; Tien Van Nguyen, 43; Minh Pham, 58; Truong Quang Lam, 37; Gioi The Nguyen, 55; Quy Ngoc Nguyen, 39; and Khac Hung Dinh, 45, all of Houston; Long Nguyen, 32; Long Do, 32; Tam Nguyen, 52; and Thang Van Doan, 35, of Conroe, Texas; Timmy Dang, 37;  Huu Trong Vu, 23; Ida Nga Pham, 33; Vinh Cong Le, 27; Hung Huy Nguyen, 48; Thiet Van Nguyen, 49; Trang Thi Kim Truong, 40; and Thi Ngo, 46, all of Spring, Texas; Yen Thi Do, 42, Richmond, Texas; and Tai Tan Nguyen, 29, of Tomball, Texas.

Also indicted were Dinh Le, 47, who is currently in state custody, and Hein Le and Johnny Ng, 51, both of Houston, who are fugitives.

A conviction for conspiracy to possess with the intent to distribute carries as possible punishment a term of no less than 10 years and up to life in federal prison as well as a $10 million fine. If convicted of conspiracy to maintain a place of manufacturing, each defendant also faces up to 20 years in prison and a maximum $500,000 fine.

The charges are the result of an Organized Crime Drug Enforcement Task Force investigation dubbed Green House Effect, which included federal, state, and local law enforcement agencies such as the DEA; sheriff’s offices in Harris, Fort Bend, and Montgomery Counties; Texas Department of Public Safety; Bureau of Alcohol, Tobacco, Firearms, and Explosives; FBI; Homeland Security Investigations; police departments in Houston; Katy, Pearland, Willis, Conroe, Huntsville, and Pasadena, Texas National Guard Joint Counter Drug Unit; and Cypress Creek Emergency Medical Services.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

Former Mayor of Melissa, Texas Indicted on Federal Charges

PLANO, TX—Two Collin County, Texas men, including the former mayor of the city of Melissa, have been indicted in connection with a bribery scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales.

David E. Dorman, 66, of Melissa, Texas, has been charged with extortion, while John Christie, 65, of Frisco, Texas, has been charged with misprision of a felony. The men were named in an indictment returned by a federal grand jury on Sep. 12, 2012.

According to the indictment, in 2007, Dorman, then mayor of the city of Melissa, solicited a $70,000 bribe from Christie in exchange for arranging for the city of Melissa to annex a portion of land from the city of McKinney, Texas, in order for Christie to develop and sell the land to potential customers. Based on a letter from Dorman, the cities of Melissa and McKinney approved the annexation and in exchange, Christie made one $10,000 cash payment and two $10,000 payments by check to Dorman.

If convicted, Dorman faces up to 20 years in federal prison. Christie faces up to three years in federal prison for his role in the scheme.

This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Shamoil T. Shipchandler.

A grand jury indictment is not evidence of guilt. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Lancaster Man Who Admitted Downloading and Sharing Child Pornography Files is Sentenced to Eight Years in Federal Prison

DALLAS—Terry Don Jackson, 55, of Lancaster, Texas, who pleaded guilty in January 2012 to one count of transporting and shipping child pornography, was sentenced today by U.S. District Judge Jorge A. Solis to 96 months federal prison, to be followed by a 10-year term of supervised release, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Jackson must surrender to the Bureau of Prisons on October 17, 2012

According to documents filed in the case, Jackson admitted using the Internet and peer-to-peer file-sharing software to share and transmit images of child pornography to undercover agents on at least four separate occasions in 2010. When FBI agents executed a federal search warrant at his home in March 2011, they seized his computer which he used to facilitate his possession, receipt, and distribution of child pornography. When interviewed, Jackson admitted that he has downloaded and shared approximately 800-1,000 files of child pornography, including images of children as young as 8 to 10 years old, engaged in sexual acts, and that he had approximately 100 “friends” with whom he was sharing files. He admitted knowing that some of the images and videos included images of prepubescent minors and material that portrayed sadistic and/or masochistic conduct.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”

The investigation was conducted by the FBI and the Plano, Texas Police Department. Assistant U.S. Attorney Lisa J. Miller was in charge of the prosecution.

Former Chief Investment Officer of Stanford Financial Group Sentenced to Three Years in Prison for Obstruction of Justice

WASHINGTON – Laura Pendergest-Holt, 39, the former chief investment officer of Houston-based Stanford Financial Group, was sentenced today to 36 months in prison for her role in obstructing a U.S. Securities and Exchange Commission (SEC) investigation into Stanford International Bank (SIB), the Antiguan offshore bank owned by convicted financier Robert Allen Stanford.

 Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Ronald T. Hosko of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell from the U.S. Postal Inspection Service (USPIS); and Chief Richard Weber, Internal Revenue Service-Criminal Investigation (IRS-CI).

 The sentence was imposed by U.S. District Judge David Hittner in the Southern District of Texas.  In addition to her prison term, Holt was sentenced to three years of supervised release. Judge Hittner noted that Holt did not have the ability to pay a fine. 

 In January 2009, the SEC sought testimony and documents related to SIB’s entire investment portfolio.  Although she was incapable of testifying about the vast majority of that portfolio, Holt nevertheless agreed to testify before the SEC.  In her guilty plea, Holt acknowledged that her eventual appearance and sworn testimony before the SEC was a stall tactic designed to frustrate the SEC’s efforts to obtain important information about SIB’s investment portfolio.  Holt admitted she took this action intentionally and corruptly, knowing that her testimony would impede the SEC’s investigation and help SIB continue operating.

 Holt was remanded into custody today.

 The investigation was conducted by the FBI’s Houston Field Office, USPIS, IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration.  The case against Holt is being prosecuted by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas, Deputy Chief Jeffrey Goldberg of the Criminal Division’s Fraud Section and Fraud Section Trial Attorney Andrew Warren.  Former Assistant U.S. Attorney Gregg Costa of the Southern District of Texas and Fraud Section Deputy Chief William Stellmach were also involved in this case.

 The Justice Department thanks the SEC for their assistance and cooperation in this matter.