Business Crimes Hotline

The charges were the result of efforts by the joint Medicare Fraud Strike Force, a collaborative effort between the DOJ and Department of Health and Human Services (HHS) that is also part of the Health Care Fraud Prevention & Enforcement Action Team.

NEW YORK

Former Financial Services Executives Indicted for
Alleged Conspiracies and Frauds Tied to Municipal Bonds

On July 27, 2010, the DOJ announced its filing of a 12-count indictment in the Southern District of New York against three former financial executives: Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm. The three are accused of acting as part of fraud schemes and conspiracies centered on investment agreement bids for municipal bonds and finance contracts from 1999 through 2006, including conspiring with a number of brokers in an effort to increase the number of awards to the provider companies at which they worked, as well as the profitability of those awards. To accomplish this, the three allegedly manipulated the bid process using a practice known as a “last look,” whereby they secured pricing information for competing providers' bids from co-conspirator brokers. According to the government, via the use of this “last-look” practice, Carollo, Goldberg, and Grimm secured a number of investment agreements and other municipal finance contracts for providers at artificially determined prices. In return for the “last-look” information, these three former executives organized and paid kickbacks to co-conspirator brokers, in addition to intentionally losing bids on investment agreements and contracts.

The indictment further claims that Carollo, Goldberg, and Grimm, along with their co-conspirators, impeded and obstructed the IRS and misrepresented the integrity of the bid process, in relation to U.S. treasury regulations, to municipal issuers and bond counsel.

The men each face differing combinations of wire fraud and conspiracy charges ' ranging from four-to-eight counts of conspiracy and one-to-two counts of wire fraud. If convicted, each of the conspiracy charges carries a maximum penalty of five years' imprisonment along with a fine of $250,000, while each wire fraud charge carries a maximum penalty of 20 years' imprisonment along with a $1-million fine. Further, the maximum fines for each of the charged offenses could potentially increase to twice the gain derived or loss suffered, in the event that either is greater than the statutory maximum fine for the charge(s).

DISTRICT OF COLUMBIA

Over $251 Million in Alleged Medicare False Billing

On July 16, 2010, the DOJ announced the unsealing of charges against 94 individuals, each accused of various Medicare fraud-related offenses. The charges, ranging from conspiracy to defraud the Medicare program and criminal false claims to violations of anti-kickback statutes and money laundering, included schemes in Baton Rouge, LA, Brooklyn, Detroit, Houston, and Miami. Collectively, these schemes resulted in the submission of more than $251 million in false claims to the Medicare program ' including claims for treatments that were not actually provided as well as those for medically unnecessary services. Included among the charges were claims that a number of beneficiaries received kickbacks in exchange for allowing a provider to submit forms for these non-provided or unnecessary services. Principally, the schemes involved claims for durable medical equipment, HIV infusion, home health care, and physical and occupational therapy.

The charges were the result of efforts by the joint Medicare Fraud Strike Force, a collaborative effort between the DOJ and Department of Health and Human Services (HHS) that is also part of the Health Care Fraud Prevention & Enforcement Action Team.

NEW YORK

Former Financial Services Executives Indicted for
Alleged Conspiracies and Frauds Tied to Municipal Bonds

On July 27, 2010, the DOJ announced its filing of a 12-count indictment in the Southern District of New York against three former financial executives: Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm. The three are accused of acting as part of fraud schemes and conspiracies centered on investment agreement bids for municipal bonds and finance contracts from 1999 through 2006, including conspiring with a number of brokers in an effort to increase the number of awards to the provider companies at which they worked, as well as the profitability of those awards. To accomplish this, the three allegedly manipulated the bid process using a practice known as a “last look,” whereby they secured pricing information for competing providers' bids from co-conspirator brokers. According to the government, via the use of this “last-look” practice, Carollo, Goldberg, and Grimm secured a number of investment agreements and other municipal finance contracts for providers at artificially determined prices. In return for the “last-look” information, these three former executives organized and paid kickbacks to co-conspirator brokers, in addition to intentionally losing bids on investment agreements and contracts.

The indictment further claims that Carollo, Goldberg, and Grimm, along with their co-conspirators, impeded and obstructed the IRS and misrepresented the integrity of the bid process, in relation to U.S. treasury regulations, to municipal issuers and bond counsel.

The men each face differing combinations of wire fraud and conspiracy charges ' ranging from four-to-eight counts of conspiracy and one-to-two counts of wire fraud. If convicted, each of the conspiracy charges carries a maximum penalty of five years' imprisonment along with a fine of $250,000, while each wire fraud charge carries a maximum penalty of 20 years' imprisonment along with a $1-million fine. Further, the maximum fines for each of the charged offenses could potentially increase to twice the gain derived or loss suffered, in the event that either is greater than the statutory maximum fine for the charge(s).