Toxic Fraud

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Calculator and stethoscope on paperwork

Richard Graves, 49, of Greensboro, N.C., pleaded guilty to conspiracy to defraud the North Carolina Medicaid program and money laundering. He used his positions at United Diagnostic Laboratories (UDL), a urine toxicology testing laboratory, and United Youth Care Services (UYCS), a company that provided mental health and substance abuse treatment services, to carry out the $14 million scheme. (It was an inside job.)

From early 2016 to mid-2020, Graves and his co-conspirators paid illegal kickbacks to even more co-conspirators. (And all they asked for in return were urine samples from Medicaid-eligible beneficiaries.) Graves admitted that he and his co-conspirators located recruiters to target at-risk youths and other Medicaid-eligible beneficiaries. (Fraudsters never miss an opportunity to go after the vulnerable.)

The victims came from youth mentoring, housing, after-school and other programs. Once these beneficiaries were enrolled, they were required to submit urine specimens for medically unnecessary drug testing. These specimens were then provided to Graves’ two employers, UDL and UYCS. (Sounds like a self-licking ice cream cone to me.)

Graves, along with his co-conspirators, paid kickbacks to the recruiters from UYCS’s Medicaid reimbursement payments. (But wait, there’s more!) These fraudsters laundered the kickback and health care fraud proceeds through Everlasting Vitality, a company owned by one of the recruiters.

Everlasting Vitality sent fraudulent invoices to UYCS listing the hours that the co-conspirators purportedly worked for UYCS during the prior month. (These invoices listed fake services not actually provided to UYCS, such as program development and design, community engagement, motivational speaking, and college mentorship services.) The true purpose of these fraudulent invoices was to conceal the nature (not to mention the source) of UYCS’s illegal kickback payments for illegal drug testing referrals.

Graves pleaded guilty to both healthcare fraud conspiracy and money laundering conspiracy. The first charge carries a maximum prison term of five years and a $250,000 fine. The second charge carries a maximum prison term of 20 years and a $500,000 fine. (Let’s hope this toxic fraudster gets a sentence that he deserves.)

Today’s Fraud of the Day comes from a Department of Justice press release, “Greensboro Man Pleads Guilty To Conspiracy To Defraud The North Carolina Medicaid Program And Money Laundering,” dated January 25, 2022.

CHARLOTTE, N.C. – Richard Graves, 49, of Greensboro, N.C., appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to conspiracy to commit health care fraud and money laundering conspiracy for his role in a scheme to obtain more than $14 million from the North Carolina Medicaid program, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.

Joining U.S. Attorney King in making today’s announcement are Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Donald “Trey” Eakins, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS- CI), and Attorney General Josh Stein, who oversees the North Carolina Medicaid Investigations Division (MID).

 

 

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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.