A Perfect Fit

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Close-up Of A Doctor's Hand Analyzing Report On White Desk

While it’s typical for the owner of a company to ensure that their business is thriving, owners can also get in the way of their own success. This was the case of a North Carolina woman, Shelly Phillips Bandy, 41, who admitted to making false statements to Medicaid on behalf of her company.

Bandy owned and operated a durable medical equipment company, ‘A Perfect Fit For You, Inc’. (APFFY) in Morehead City. APFFY provided items such as powered wheelchairs, orthotic braces, diabetic shoes, powered air flotation beds, osteogenesis stimulators and more.

Between March 2015 and November 2016, employees of APFFY submitted fraudulent billing claims to Medicaid for providing durable medical equipment to Medicaid recipients. These fraudulent claims contained the personal identifying information of Medicaid recipients who had never ordered nor received any durable medical equipment from APFFY. (No surprise there. This was a typical Medicaid fraud scheme.)

Some of the patients that APFFY submitted false claims for had been deceased for years. This billing scheme resulted in an estimated loss to Medicaid of approximately $10,069,361.35. (More than $10 million, folks. This is atrocious.)

APFFY self-reported suspected fraudulent activity to the North Carolina Medicaid Investigations Division after having an appointment with a receiver and cooperated throughout the resulting investigation. (There’s no use in pretending when you know the gig is up.) On December 13, 2017, the United States and State of North Carolina filed a civil complaint under the federal and state False Claims Acts against APFFY and its owners, Margaret Gibson and Bandy.

The federal and North Carolina False Claims Acts mandate that the Governments recover triple the money falsely obtained, plus substantial civil penalties for each false claim submitted. (North Carolina isn’t playing around when folks try to mess with the government’s money.) APFFY agreed to pay $20,138,722.70 and Gibson agreed to pay $4,000,000.

As for Bandy, the United States and State of North Carolina obtained a $34,708,945.42 default judgment against her in the civil action. In addition to the civil case, APFFY pled guilty to a Criminal Information charging healthcare fraud.

On March 2, 2021, the company was sentenced to 5 years of probation and ordered to pay a $2,000,000 fine in addition to paying $10,069,361.35 in restitution to the North Carolina Medicaid Program on a charge of healthcare fraud.

On December 29, 2020, Bandy pled guilty to making false statements relating to health care matters. Bandy admitted to submitting fraudulent claims to Medicaid on behalf of APFFY. Specifically, Bandy admitted that on January 1, 2016, she billed Medicaid for 43 fraudulent claims, totaling $626,773.79. Medicaid paid APFFY $374,809.92 for the false claims.

As a result of the criminal charges, Bandy was ordered to serve 30 months in federal prison, followed by three years of supervised release. (Sounds like prison will be the perfect fit for her.) She was also ordered to make restitution of $374,809.92, jointly and severally with her company.

It’s important to note that the civil claims against APFFY and Gibson are allegations only and were resolved by settlement. There was no judicial determination or admission of liability in the civil case.

Today’s Fraud of the Day comes from a Department of Justice press release, “Co-Owner of North Carolina Durable Medical Equipment Company Sentenced to Prison for Role in Defrauding Medicaid,” published on August 27, 2021.

RALEIGH, N.C. – A Morehead City woman was sentenced today to 30 months in federal prison, followed by three years of supervised release on a charge of Making Material False Statements Relating to Healthcare Matters, in violation of Title 18, United States Code, Section 1035(a)(2).  Shelly Phillips Bandy, 41, was also ordered to make restitution of $374,809.92, jointly and severally with her company, A Perfect Fit For You, Inc. (APFFY).  Bandy is also liable for a civil judgment of $34,708,945.42 arising from the same conduct.

According to court documents, APFFY was a durable medical equipment provider located in Morehead City, North Carolina.   Durable medical equipment includes items such as powered wheelchairs, orthotic braces, diabetic shoes, powered air flotation beds, osteogenesis stimulators, pneumatic compressors, etc.  Between March 2015 and November 2016, one or more employees of APFFY submitted fraudulent billings claims to Medicaid for providing durable medical equipment to Medicaid recipients.  These fraudulent claims contained the personal identifying information of Medicaid recipients who had never ordered nor received any durable medical equipment from APFFY.   In fact, some of the patients had been deceased years before the false claims were even submitted.  This scheme resulted in an estimated loss to Medicaid of approximately $10,069,361.35.

 

 

 

 

 

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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.