Massive Scheme Laid to Rest

Calculator and stethoscope on paperwork

In a twisted scheme, a group of Texas healthcare fraudsters convinced patients they were dying and illegally enrolled them in hospice services. From 2009 to 2018, leaders of Merida Group, a chain of hospice and home health agencies throughout Texas, raked in $150 million. Operations Manager Jose Garza, Owner Rodney Mesquias, and CEO Henry McInnis sent marketers to group homes, nursing homes, and housing projects to falsely tell Medicare recipients they had months to live and pressure them to enroll in expensive Merida hospice programs. They were particularly aggressive in targeting patients with Alzheimer’s disease, dementia, and limited mental capacity. (Because these families aren’t already suffering enough.)

The vast majority of Merida Group patients were ineligible for hospice. Many victims were active individuals who were walking, driving, and working. But the schemers kept patients on hospice services for years to increase their revenue, which made patients ineligible for coverage they needed for curative care for non-terminal conditions. At the same time, the fraudsters tried to keep victims alive as long as possible to maximize their cash flow, using surgical and other interventions to extend lives. (Fighting to keep supposedly-dying people from actually dying—is that clear?)

The schemers went so far as to have chaplains lie to some patients, discussing last rites and preparations for death. (This trio might want some chaplain services themselves, as they likely have a very special spot reserved in Hell.) They created false and fictious medical records and fired employees who refused to participate in the fraud. They bribed physicians with illegal kickbacks, lavish parties, alcohol, and perks in exchange for medically unnecessary patient referrals. Then they squandered taxpayer money to live large with luxury cars and clothing, jewelry, and real estate—and to launder the illegal proceeds. (Yep, that’s how to stay under the radar and avoid getting caught.)

Mesquias and McInnis were convicted in November 2019 of six counts of healthcare fraud, and one count each of conspiracy to commit healthcare fraud, conspiracy to commit money laundering, and conspiracy to obstruct justice. Mesquias was also convicted of conspiracy to pay and receive kickbacks. Garza pleaded guilty to one count of conspiracy to commit healthcare fraud in September 2019. In December 2020 Mesquias was sentenced to 20 years in federal prison and to pay $120 million in restitution. In February 2020 McInnis was sentenced to 15 years in prison. The last of the toxic Texas trio, Garza, was sentenced in April 2021 to 27 months in prison, and ordered to pay $4.7 million in restitution.

Today’s Fraud of the Day comes from a Department of Justice press release, “Manager of Hospice and Home Care Companies Sentenced to Prison for Role in $150 Million Health Care Fraud Scheme,” dated April 21, 2021.

A Texas man was sentenced today to 27 months in prison for his role in a conspiracy at the Merida Group, a chain of hospice and home health agencies throughout Texas, to falsely convince thousands of patients with long-term incurable diseases they had less than six months to live in order to enroll the patients in hospice programs for which they were otherwise unqualified, thereby increasing revenue to the company.

According to court documents, Jose Garza, 44, of Harlingen, was the operations manager for the Merida Group and responsible for carrying out the business’s day to day operations, including overseeing the recruitment of patients at certain locations throughout the Rio Grande Valley. Garza, and others working at his direction, recruited patients at hospitals and other medical practices by touting that the Merida Group offered “hospice that you don’t have to die to use,” pursuant to the Merida Group’s corporate marketing strategy.

Additional information is from a press release from the U.S. Attorney’s Office for the Southern District of Texas, “Owner of Texas chain of hospice companies sentenced for $150 million health care fraud and money laundering scheme,” dated December 16, 2020.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.