Smoke and Mirrors

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Magicians have been known to use ”smoke and mirrors” to create a distraction that leads their audience to believe magic has occurred. Fraudsters often use money laundering to create a similar effect by moving illegal proceeds between shell companies, which appear to be legitimate. (Thankfully, these illegal activities don’t cause a lovely assistant to be cut in half, but the fraudulent acts are definitely damaging nonetheless.) An article published by the Tampa Bay Journal tells how a local man used some smoke and mirrors of his own to carry out a multi million-dollar health care fraud and money laundering scheme against the government.

The article states that for nearly four years, the Tampa-area resident and his co-conspirators used three purported medical clinics to submit more than $12 million in fake Medicare claims. The criminal and his co-conspirators paid kickbacks to anyone willing to provide access to Medicare patients and their personal information. (As you might guess, the fake claims were submitted in the names of many unsuspecting victims, whose identities had been stolen.)

The scam also involved forging and falsifying documents during the Medicare enrollment process for the three clinics and billing for physician services that were not actually rendered. As a result, the ”sleight of hand” technique worked for a while and Medicare paid out more than $2.8 million for radiology, audiology, cardiology and neurology services. The illegal proceeds were hidden within shell companies and through many cash withdrawals.

The criminal in this case was found guilty by a jury for conspiracy to commit healthcare fraud and wire fraud, healthcare fraud, conspiracy to commit money laundering, money laundry and aggravated identity theft. The 45-year-old was ordered to serve 14.5 years in prison and pay more than $2.5 million in restitution.

There was nothing magical about the Medicare Strike Force’s efforts to stop this criminal from stealing more money from unsuspecting victims. They used cold hard facts and good investigative techniques to end this man’s fraudulent illusions. While this magic show has come to an end, this fraudster is forced to realize that there is no magic wand powerful enough to get him out of the mess he is in.

Source: Today’s ”Fraud of the Day” is based on the article, ”Pasco man gets 14-year prison sentence for role in fraud, money laundering scheme,” published by Tampa Bay Business Journal, on March 7, 2016.

Land O’ Lakes businessman David Brock Lovelace was sentenced to 174 months — or 14.5 years — in prison for his role in a multimillion-dollar health care fraud and money laundering scheme. Lovelace, 45, was ordered to pay more than $2.5 million in restitution.

He was found guilty for conspiracy to commit health care fraud and wire fraud, health care fraud, conspiracy to commit money laundering, money laundry and aggravated ID theft.

From June 2010 through May 2014, Lovelace and co-conspirators used medical clinics in Florida to submit more than $12 million in false and fraudulent Medicare claims.

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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.