Money Talks


When healthcare fraud occurs, kickbacks are often involved. (Medical kickbacks can include payment by cash, check, gift cards, luxury items, vacations, etc. in exchange for patient referrals, prescriptions or medical devices.) A Fontana, California woman, who owned and operated a La Verne-based home healthcare company, committed more than $1.25 million in Medicare fraud by paying illegal kickbacks for referrals of Medicare patients to her company.

Co-conspirators are usually needed to carry out illegal schemes of great magnitude, such as today’s case. Masterminds usually manipulate their cohorts with kickbacks. (After all, if there’s a chance to be jailed for participation, there had better be a nice kickback associated with the commitment to defraud. Money talks.) But, apparently today’s co-conspirators didn’t think beyond the benefits to the consequences of their illegal actions before participating in the ruse.

The California woman, who co-owned the home healthcare company with her parents, also relied upon a marketer, doctor and a company employee to carry out her scheme. The former COO paid physicians to refer Medicare beneficiaries to her company for in-home health services. She also paid a marketer to funnel patients to her business, and an employee to maintain a password-protected spreadsheet with Medicare beneficiary information. (Her parents helped to cover up the scam.)

Court documents show that the COO and her co-conspirators attempted to defraud Medicare of approximately $8.9 million through fraudulent home health and physician claims. Her take was approximately $4.3 million and out of that amount she paid $1.25 million in kickbacks. (Doctors were paid anywhere between $200 and $900 for referrals, while the marketer was paid between $50 and $200 for each Medicare beneficiary she referred to the agency.)

The COO was typically the person who handed out the kickbacks from her company’s bank accounts; however, her mother sometimes stepped in to help. The internal employee who maintained the password-protected database was told by the COO’s parents to keep the document a secret from other co-workers who were not aware of the kickback payments.

The 47-year-old former COO of the California in-home healthcare company pleaded guilty to Medicare fraud. She was sentenced to 30 months in prison and ordered to pay restitution of $41,930. The 54-year-old physician, who operated clinics in Palmdale, Rosamond and Ridgecrest, has pleaded not guilty to 19 charges against him.

When the COO’s 73-year-old father and 72-year-old mother found out that the Federal Bureau of Investigation was looking into the physician’s involvement in the suspected scheme, they instructed the employee who maintained the Medicare beneficiary spreadsheet to delete all evidence of the document that summarized kickbacks paid. The parents, along with the 34-year-old marketer, have all pleaded guilty to involvement in the scheme and are awaiting sentencing. (Accepting kickbacks may have sounded like a great idea to the co-conspirators at the time, but not so much now. Oh well, easy come, easy go.)

Today’s “Fraud of the Day” is based on an article entitled, “Female healthcare executive offered illegal kickbacks to doctors, sentenced to 30 months,” posted on on November 13, 2017.

A 49-year-old Fontana woman was sentenced Monday in Los Angeles to 30 months behind bars for paying illegal kickbacks to doctors in exchange for home health care referrals to her company.

Elaine C. Lat — former chief operating officer of Star Home Health in La Verne — pleaded guilty in May to her role in the conspiracy in which she paid physicians to refer Medicare beneficiaries to Star for in-home health services between August 2012 and May 2016. Star then billed the services to Medicare and provided kickbacks, according to the U.S. Attorney’s Office.

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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.