New York Physician Agrees to 5 Year Exclusion

New York Physician Agrees to 5 Year Exclusion

On December 9, 2016, Dr. Michael Esposito agreed to be excluded from participation in all Federal health care programs for a period of five years under 42 U.S.C. § 1320a-7(b)(7). OIG’s investigation revealed that Dr. Esposito forged the signature of another physician on prescriptions for medications for himself and another person that were paid for by the Medicare program. Senior Counsel David Blank and Associate Counsel Jennifer Leonardis represented OIG.


Our year in review

The Application Researchers team has made some exciting changes and introduced some new things in 2016!

To start off, we celebrated our 22nd year of business in 2016.

We have also introduced two new services we cant wait to share with you.

In June, we launched ExclusionALERT which is catered to the health care industry. This service offers monthly sanction screening for all health care providers to stay compliant with the Office of Inspector General (OIG).



In November, we embarked on our newest service, GradADVANTAGE, which is set to launch in 2017. This service will provide upcoming college graduates with the opportunity to have background checks done prior to employment; therefore, giving them an edge when it comes to applying for jobs.

From everyone at Application Researchers, we hope you have a Happy New Year!

In observance of the New Year, we will be closed on 01/02/17.

Detroit-Area Home Health Care Agency Owner Sentenced to 30 Years in Prison for $33 Million Medicare Fraud Scheme

The owner of several Detroit home health care companies was sentenced today to 360 months in prison for his role in a Medicare fraud scheme that caused approximately $33 million in losses.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.

Zafar Mehmood, 50, of Ypsilanti, Michigan, was sentenced by U.S. District Judge Judith E. Levy of the Eastern District of Michigan, who also ordered Mehmood to pay $40,488,106.98 in restitution.  Forfeiture will be determined at a hearing on Nov. 7, 2016.  On July 27, 2015, Mehmood was convicted of one count of conspiracy to commit health care fraud, four counts of health care fraud, one count of conspiracy to pay and receive health care kickbacks, one count of conspiracy to commit money laundering, two counts of money laundering and two counts of obstruction of justice.

According to evidence presented at trial, from 2006 through 2011, Mehmood participated in a scheme in which he obtained patients by paying cash kickbacks to recruiters, who in turn paid cash to patients to induce them to sign up for home health care with Mehmood’s companies: Access Care Home Care Inc., Patient Care Home Care Inc., Hands On Healing Home Care Inc. and All State Home Care Inc.  The evidence also showed that he paid kickbacks to physicians to refer patients to the companies for unnecessary home health care services.

In addition, trial evidence showed that Mehmood and his co-conspirators falsified records to make it appear as if the patients qualified for and received the services for which Medicare paid over $33 million during the course of the conspiracy.  Mehmood used a co-conspirator to launder the proceeds of the fraud through shell companies under Mehmood’s control, according to trial evidence.

Trial evidence also demonstrated that while visiting an HHS-OIG facility during pretrial release to review evidence with his attorney, Mehmood stole incriminating documents that law enforcement authorities had seized during the execution of search warrants at Mehmood’s companies.  Law enforcement agents subsequently recovered the missing documents in a search of Mehmood’s jail cell.

A co-defendant, Badar Ahmadani, was also convicted at trial of one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive health care kickbacks.  Ahmadani is scheduled to be sentenced on Nov. 7, 2016.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Fraud Section Trial Attorneys Niall M. O’Donnell and A. Brendan Stewart prosecuted the case.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to

New Jersey OB/GYN Settles Fraudulent Billing Allegations, Agrees to 20-Year Exclusion from Medicare, Medicaid

November 15, 2016

A New Jersey OB/GYN, Labib Riachi, agreed to be excluded from participation in Federal health care programs, including Medicare and Medicaid, for 20 years to settle allegations by the U.S. Department of Health and Human Services, Office of Inspector General (OIG), that Dr. Riachi submitted thousands of claims for Pelvic Floor Therapy (PFT) to Medicare and Medicaid for services that were either never provided or were otherwise false or fraudulent. The OIG exclusion follows a False Claims Act (FCA) settlement by Dr. Riachi in which he agreed to pay $5.25 million.

“Twenty years is a substantial period of exclusion and is a clear signal to physicians that they face significant consequences, beyond monetary penalties, for taking advantage of Federal health care programs and their beneficiaries,” said Gregory E. Demske, Chief Counsel to the HHS Inspector General. “In cases such as this, collecting money from a wrongdoer is not sufficient and OIG will pursue exclusion to protect our patients and programs.”

Dr. Riachi, who subspecializes in urogynecology, was the sole owner and chief operating officer of the Center of Advanced Pelvic Surgery (CAPS), a physician practice with multiple locations in New Jersey. Dr. Riachi focused part of his practice on the treatment of female incontinence, prolapse, and other pelvic floor dysfunction, often prescribing PFT for treatment.

OIG alleged that Dr. Riachi knowingly submitted claims to Medicare and Medicaid for PFT services that were not provided as claimed or were false or fraudulent for at least one the following reasons: (1) Dr. Riachi failed to personally perform or directly supervise PFT services while he was traveling outside the State of New Jersey or the United States; (2) Dr. Riachi failed to personally supervise the performance of anorectal manometry procedures performed by his medical assistants; (3) services were not actually provided; (4) physical therapy services were provided by unlicensed and unqualified individuals; (5) services were not documented; and (6) diagnostic services were not reasonable and necessary.

In some instances, Dr. Riachi’s claims were false for all six reasons.

“OIG is committed to using our administrative enforcement tools to exclude those who steal from our programs and put patients at risk of unnecessary or sub-standard care,” Mr. Demske said.

Under the Social Security Act, OIG is authorized to exclude individuals or entities that cause the submission of false or fraudulent claims to Federal health care programs. The exclusion law is applicable in nearly all conduct that forms the basis for a False Claims Act (FCA) action involving the Federal health care programs and serves to protect the integrity of these programs.

Dr. Riachi’s exclusion follows an FCA settlement agreement with the U.S. Attorney’s Office for the District of New Jersey for false billing. On February 12, 2016, Dr. Riachi agreed to resolve his FCA liability for $5.25 million.

Mr. Demske credited special agents and investigators from OIG’s Office of Investigations, New York Regional Office, under the direction of Special Agent in Charge Scott Lambert, with conducting the investigation leading to the resolution of this matter.

OIG is represented in the investigation and litigation of this matter by David M. Blank, Tamara T. Forys, and Jennifer A. Leonardis, with assistance from Paralegal Mariel Filtz.

In resolving this matter through settlement, Dr. Riachi has denied any liability.

Avoid the unknown & get checked!

Avoid the unknown & get monthly checks for Exclusion. It is better to be safe then sorry!

Applying for Reinstatement:

Reinstatement of excluded entities and individuals is not automatic once the specified period of exclusion ends. Those wishing to again participate in the Medicare, Medicaid and all Federal health care programs must apply for reinstatement and receive authorized notice from OIG that reinstatement has been granted.

To apply for reinstatement, send a written request to OIG at the address below. OIG will then provide Statement and Authorization forms that you must complete, have notarized and return. The information contained in these forms will be evaluated and a written notification of OIG’s final decision on reinstatement will be sent to you. Generally, this process requires up to 120 days to complete, but can take longer.

Excluded providers may begin the process of reinstatement 90 days before the end of the period specified in the exclusion notice letter. Premature requests will not be considered.

If reinstatement is denied, the excluded party is eligible to reapply after one year.

Former Non-Profit Health Clinics CEO Sentenced to 18 Years for Funneling Millions in Grant Money to Private Companies

BIRMINGHAM – A federal judge today sentenced the former chief executive of two non-profit health clinics for the poor and homeless to 18 years in prison for funneling millions in federal grant money to private companies he formed to contract with the clinics. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson announced the sentence.

U.S. District Judge Barbara Jacobs Rothstein sentenced JONATHAN WADE DUNNING, 53, of Hoover, for conspiracy, bank fraud, wire fraud and money laundering. The judge ordered Dunning to pay $13.5 million in restitution to the U.S. Department of Health and Human Services, the Health Resources and Services Administration, the Birmingham Financial Federal Credit Union and the non-profit health clinics Birmingham Health Care and Central Alabama Comprehensive Health.

Dunning orchestrated and led a criminal enterprise for his personal benefit that involved an extensive conspiracy and scheme to defraud HHS, HRSA, the non-profit clinics BHC and CACH, the credit union and others, out of more than $16 million over the course of seven years, the government said in its sentencing memorandum.

A federal jury in June convicted Dunning on 98 of 112 charged counts related to his involvement with BHC, CACH, BFFCU, and a group of for-profit businesses known as the “Synergy Entities.” Over the years, BHC and CACH received millions of dollars in federal grant funds through HRSA to further their missions of providing healthcare services to underserved populations.

“Jonathan Dunning formed Synergy Entities so he could bleed money away from non-profit clinics meant to provide medical care to the neediest of people and make himself rich by diverting millions of dollars into his personal accounts and businesses,” Vance said. “Motivated by greed, Mr. Dunning had no regard for the harm he caused others. He earned today’s prison sentence.”

“Heartless and appalling are just a few words to describe Jonathan Dunning’s actions,” Hyman-Pillot said. “The impact of his scheme extends beyond monetary loss. Citizens in need of medical attention were deprived of care due to his callous behavior. The judgment against Dunning is the consequence of his greed.”

“Stealing money away from programs that provided health care to poor and homeless people in order to live lavishly is an abominable crime,” Stanton said. “The FBI and its law enforcement partners are committed to joining forces and putting in the hours, and years if necessary, to stop this kind of crime.”

“This is one of the most outrageous fraud cases I have seen,” Jackson said. “Dunning embezzled millions of dollars in federal grant money that diverted desperately needed resources from those who need it most. Today’s sentencing sends a hard message to criminals like Dunning that they will be prosecuted to the fullest extent of the law, to include hard prison time and millions of dollars payable to U.S. taxpayers.”

Dunning was the chief executive officer of BHC and CACH for a period of time and left those jobs to run his for-profit businesses. Even after leaving his post as CEO, however, Dunning continued to exercise control over BHC and CACH. Between October 2008 and October 2011, Dunning served as president, board chairman and loan officer of the Birmingham credit union. From those various positions, he led the conspiracy that defrauded BHC, CACH, their funding agencies, and others.

“The need for medical care and clinical services for the homeless, indigent, and uninsured is well-known in this and other communities,” the government said in its sentencing memorandum. “Through the Synergy Entities, the defendant siphoned more than $16 million in money and property from two nonprofit health centers and the federal agency that funded them. He caused CACH to close its doors, drove BHC to the brink of bankruptcy, cost employees of CACH and BHC their jobs, precipitated the collapse of a credit union, and caused additional harm to others in the process. BHC and CACH had an essential mission of providing health care desperately needed by the communities they served. The defendant thwarted that mission and diverted the money and property to his personal benefit for one simple reason: greed.”

FBI, IRS-CID, and HHS-OIG investigated the case, which Assistant U.S. Attorneys Melissa K. Atwood, Tamarra Matthews-Johnson and John B. Ward prosecuted.

Fort Smith Man Pleads Guilty to Defrauding Investors and the Department of Health and Human Services

            Fort Smith, Arkansas – Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that William Jackson Moates, Jr., age 49, of Fort Smith, Arkansas, pled guilty today to two counts of Wire Fraud and one count each of Mail Fraud, Theft Concerning a Program Receiving Federal Funds, Money Laundering, and Theft or Embezzlement from an Employee Benefit Plan. The Honorable Chief Judge P.K. Holmes, III accepted the plea in the United States District Court in Fort Smith.

The defendant, WILLIAM JACKSON MOATES, JR., and others owned several businesses operating in Fort Smith, Arkansas.  Those businesses included: Trilennium Financial Alliance, an investment, tax and accounting firm; T3Vest, an investment arm of Trilennium; Burrito Brothers, which operated a restaurant called Blaze’n Burrito; and B3NWCR, a credit card processing company operating under the name “Guardian.”

MOATES, with the assistance of others, solicited and received monies from investment clients and employee benefit plans that MOATES represented he would use to invest in various products to include annuities, precious metals, businesses, precious stones, art, automobiles and real estate.

MOATES established bank accounts for the investments, which gave him signature authority on the account and allowed the accounts to be linked to one another utilizing banking software provided by the bank.  This software gave MOATES and others the ability to make online transfers from one account to another.

From early-to-mid 2010 to January 2015, MOATES received investments from at least 25 different client investors, which were not invested as represented by MOATES.  Instead, those monies were diverted by MOATES to his own personal use, to pay back other investors, and by MOATES and others to the use of the various businesses.  MOATES used investor funds to renovate his home, take vacations, make credit card payments, make payments to personal iTunes and Amazon accounts, make contributions to local charitable organizations, and make home mortgage payments.  MOATES and others also diverted investor funds to pay operating and other business expenses for the businesses.

MOATES was also an agent of another corporation, Physicians Alliance.  Physician’s Alliance was a company that was set up by MOATES and others and initially funded with money received through an Advance Payment Agreement with the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services.  The agreement provided for more than $2.5 million to be paid to Physicians Alliance beginning in February 2013, which could only be spent as authorized pursuant to an approved spending plan contained in the agreement.

As to Count Five, MOATES deposited $500,000 in investor funds in the form of a check, which caused an interstate wire to be sent from the Western District of Arkansas to the Federal Reserve Bank in St. Louis, Missouri, in order to settle the check.  MOATES did not invest those funds as he had represented to the client.

As to Count Eleven, MOATES sent an email from the Western District of Arkansas to an insurance brokerage firm in Topeka, Kansas, which had documents attached to it representing that an investment client had more than $7.5 million in annuities.  The documents were completely fabricated and were used to obtain an insurance policy for that client.

As to Count Twelve, MOATES obtained $200,000 in Federal monies given to Physicians Alliance pursuant to the advance payment agreement, which was not provided for in the approved spending plan.  This money was used to pay back an investment client that had given MOATES money that he never invested.

As to Counts Thirteen and Fourteen, MOATES mailed two annuity surrender requests for an investment client from the Western District of Arkansas to Austin, Texas, utilizing UPS, after representing to the client that he would invest the proceeds.  MOATES later received the proceeds from the surrender requests and never invested them as represented.  MOATES utilized $20,000 of those proceeds to make a credit card payment.

As to Count Twenty-Four, MOATES helped a small, family-owned pool company establish an employee benefit plan subject to ERISA.  The company initially funded the plan with a $150,000 check, which was given to MOATES.  MOATES established a bank account for the plan and provided the bank with a forged document purporting to have been signed by an agent of the company, which made T3Vest the plan sponsor.  This allowed MOATES to deposit the check into an account controlled by him, and he never invested the money on behalf of the plan.

The intended loss amount attributable to the defendant will be determined at a later date.  However, the defendant and the government agree that it is at least $3.5 million but less than $9.5 million.

Moates will be sentenced at a later date, and his sentence will be determined by the court after review of factors unique to this case, including his prior criminal record (if any), his role in the offense, and the characteristics of the violations. The sentence will not exceed the statutory maximum and in most cases will be less than the maximum. Each count of Wire Fraud carries a maximum penalty of 20 years imprisonment, a maximum fine of $250,000 or both; Mail Fraud carries a maximum penalty of 20 years imprisonment, a maximum fine of not more $250,000, or both; ; Theft Concerning ProgramsReceiving Federal Funds carries a maximum penalty of 10 years imprisonment, not more than $250,000 fine, both; Money Laundering carries a maximum penalty of 10 years imprisonment, a maximum fine of 250,000 or twice the value of the property involved in the transaction, or both; Theft or Embezzlement from Employee Benefit Plan carries a maximum penalty of 5 years imprisonment, not more than $250,000 fine, or both.

This case was investigated by the Federal Bureau of Investigation (FBI), Health and Human Services – Office of Inspector General, and the Department of Labor – Employee Benefits Security Administration.  Assistant United States Attorney Aaron Jennen is prosecuting the case for the United States.

Pharmacist in Crockett Co. Charged with 25 Counts of TennCare Fraud

NASHVILLE, Tenn. – A 76-year-old Crockett County pharmacist is charged with TennCare fraud involving billing the program for expensive medications that patients never received and the sale of bogus prescriptions for cash.

A Crockett County grand jury indicted Glen R. Bonifield after a six-month investigation involving the Office of Inspector General (OIG), the Tennessee Bureau of Investigation and the West Tennessee Drug Task Force – 28th District.

Bonifield is charged with 25 counts of TennCare fraud and one count of theft over $10,000.  He’s being held on $350,000 bond and is scheduled to appear in Crockett County Circuit Court on Friday, October 7, 2016.

“Law enforcement is working together across Tennessee to win the battle against TennCare fraud and prescription drug abuse, and this effort is a great example of that effort,” Inspector General Manny Tyndall said.

Johnie Carter, Special Agent in Charge of the 28th Drug Task Force, said the investigation began in 2015 with agents purchasing controlled pills and crack cocaine from pharmacy employees as well as passing bogus prescriptions with Bonifield in exchange for cash. A search of the pharmacy yielded approximately 35 pounds of controlled substances along with illegal weapons and alcohol. While processing that evidence, agents discovered large discrepancies in controlled substance accounting. Carter said some 195,000 controlled substance pills remain unaccounted for by inventory.

Agents received information that Bonifield was providing controlled substances to patients and billing TennCare for Abilify, an expensive antipsychotic which the patients say they never received.  Agents say that in one instance, TennCare was billed nine times for a total of $7,857.85 for Abilify, an antipsychotic medication used to treat schizophrenia. The patient was given a different medication and told that it was Abilify.

Carter says the investigation is continuing and branching out into other areas and people involved with the pharmacy and pharmaceutical diversion. The 28th Drug Task Force is made up of officers assigned full-time from the Crockett and Gibson County Sheriff’s Offices and the Humboldt, Milan and Trenton Police Departments.

The OIG, which is separate from TennCare, began full operation in February 2005 and has investigated cases leading to more than $3 million being repaid to TennCare, with a total estimated cost avoidance of more than $163.6 million for TennCare, according to latest figures. To date, 2,740 people have been charged with TennCare fraud.

Anyone can report suspected TennCare fraud by calling 1-800-433-3982 toll-free from anywhere in Tennessee, or visit the website and follow prompts that read “Report TennCare Fraud.”