When a pivotal employee resigns, responsible business owners usually scramble to fill the vacancy with a well-qualified replacement. That didn’t seem to be much of a concern for the owner of Riverside Cytology Laboratory, based in Tell City, Ind., which tested pap smear slides for public health departments in several Kentucky counties.
When the lab’s medical director resigned in July 2015, lab owner Eric Daum illegally analyzed the slides himself. (Maybe he brilliantly decided this was a golden opportunity to save money on salaries.) Then, he illegally billed the Kentucky Medicaid Program as if a qualified technician had reviewed the slides.
For more than a year, Daum continued his Medicaid fraud scheme, raking in more than $10,000 in fraudulent payments from Kentucky Medicaid. These tests are used to detect serious medical conditions, including cancer. (How many lives did he endanger by not having a qualified lab director on board?)
A Franklin County, Kentucky grand jury indicted Daum in 2018 for two felonies: one count of theft by deception over $10,000 and one count of scheming to defraud the Kentucky Medical Assistance Program of $300 or more.
In January 2021, he pleaded guilty to defrauding Medicaid of $300 or more. (Maybe his lawyer resigned, too.) In March, he was sentenced to five years in prison, probated for five years, and ordered to pay restitution of $139,797 to Medicaid. (Seems it would have been more cost-effective to hire that lab director, after all.)
Today’s Fraud of the Day comes from a Perry County News article, “Tell City lab owner sentenced in Kentucky Medicaid fraud case,” dated April 18, 2021.
A Tell City lab owner has been sentenced in Kentucky of Medicaid fraud in connection with a case that began in 2018.
Eric Daum, 46, entered a guilty plea to one count of devising or engaging in a scheme to defraud Medicaid of $300 or more, a Class D felony, in January of this year. On Friday, March 26, Daum was sentenced in Franklin Circuit Court in Kentucky to five years of probation and ordered Daum to pay almost $140,000 in restitution to Medicaid.
Additional information comes from a 14 News article, “Tell City man sentenced in Medicaid fraud case,” dated April 14, 2021.